[1]Opening Remarks by Romano Prodi at the “Africa: 54 Countries, One Union [2]” conference.
3 May 2012, Addis Ababa
Honourable Prime Minister Meles, honourable Ministers, Ambassadors, authorities, dear friends, after the interest raised by the conferences in Bologna [3] and Washington [4], it’s my great pleasure to open the third conference “Africa: 54 Countries, One Union”.
Let me begin by pointing out that peace is still fragile in the African continent.
The hopes raised by the Arab Spring have not been fulfilled yet. Instability is affecting Libya, and Egypt is still struggling for a new political order. Moreover, open conflict in Syria is a matter of great concern not only for the security of the Middle East, but for the stability of the entire Mediterranean region.
Old conflicts, like in Somalia, are still ongoing and they seem unlikely to be resolved in the near future.
New conflicts, such as between Sudan and South Sudan, are now threatening to open new spirals of violence and instability at the local and regional levels.
Additional preoccupations emerge from the increasing number of religious tensions all over Africa, which are exploited by terrorist organizations and sectarian groups.
Today, more than ever, there is a need for a strong African Union, capable of acting as an neutral intermediary among the conflicting parties.
While the AU has achieved many successes, it is still in need of help due to a variety of limits, such as inadequate financial resources.
Every state, every institution and every international organization should help the African Union in achieving its goals.
Because of my experience as the President of the European Commission, I know very well the difficulties in creating integration and cooperative links among nations.
The road toward integration is a long and difficult way, but this is only a more compelling reason to go towards this direction.
By keeping in mind that the problems of peace and security in the African continent are far from having been overcome, I would like to focus on a different but related issue: the role of infrastructure for the economic, political and social development of Africa and her populations.
Indeed I deeply believe that infrastructures are a precondition for fostering peace, development and the unity of Africa.
The present economic fragmentation of the Africa continent is unfavorable to sustained development. The creation of greater markets is a key element for the economic growth of Africa.
This point has been recognized and endorsed in the January 2011 African Union Summit, which has recommended the establishment of a Continental Free Trade Area in Africa.
This is certainly good news because continental integration can strongly contribute to create more efficient markets, foster economic growth, and increase income and living conditions in Africa.
This is exactly what happened in Europe since the 1950s. And I like to stress that at the beginning market integration produced fears in European populations and in their policymakers, but now no one raises criticism about the European common market.
However, as European history teaches, in order to fully benefit from market integration, Africa needs regional and continental infrastructure, which is capable of transforming numerous isolated economies in a real Union.
On this point, we should also keep in mind that the tremendous economic growth of China over the last two decades has been the result of huge investments in domestic infrastructure.
In Africa a variety of important infrastructures have been created in recent times.
For the sake of simplicity we might distinguish between infrastructures that need a centralized investment and those infrastructures that are created in a decentralized way without state and international intervention.
Mobile telephony, which has had a huge penetration in Africa, is a typical example of decentralized infrastructure that has been created without the need of any state intervention.
But not all decentralized infrastructures, can be left to the natural work of the market.
Indeed there is a need of better financing instruments for other fundamental decentralized infrastructures like electric energy, water supplies, and credit services in rural areas.
Over 60 percent of Africans are not connected to electricity. This situation can be significantly improved if we help people in rural areas to obtain solar panels that can produce electricity at local level.
In other words, we must make an effort to spread this relative low-cost technology through incentives and better credit services.
In relation, instead, to infrastructures that need centralized investments, we need to point out that Africa has still a low infrastructure ratio relative to other developing regions of the world.
Two thirds of the region’s rural populations have no access to roads. Flight connections between African capitals are still difficult. Sometimes it is even easier to flight among those capitals from Europe.
Despite great mobile telephony penetration, only 13 percent of Africans are connected to the internet.
Africa needs to build regional infrastructure that will promote inclusive growth and integration, and will create large and competitive economic areas that are attractive to investors and might lead to increased employment and mobility of people across borders.
When I speak of continental and regional infrastructure, however, I mean more than roads and sanitation.
Africa is in great need of regional logistic networks connecting airports and railways to industrial and agricultural districts.
African firms could achieve productivity gains approximately of 40 percent with adequate infrastructure. And GDP growth could be increased by 2 per cent per year.
Regions that are well connected by transportation, information and communication technology will increase also social inclusion. There is strong evidence of the positive relationship between investment in infrastructure and growth in GDP per capita.
Of particular importance are those infrastructure meant to manage the problem of water scarcity, which is a issue likely to increase in the near future.
We should, especially, try to foster further cooperation over water supplies, such as the Nile region, which is potentially object of political tension due to climate change and a rising African population.
Clearly, this needs huge investments because we cannot achieve this goal if we don’t heavily invest in new irrigation technologies.
Although water wars have been a rare phenomenon in history, building regional infrastructures over water supplies can eliminate the risk of future conflicts.
While infrastructure is critical for economic growth, financial support is critical for infrastructure.
Let me quote some significant data on the present financial problems concerning African infrastructure.
Around 93 billion of dollars are required annually to finance infrastructure in Africa, but current expenditure is only 45 billion dollars.
With a potential efficiency saving estimated to 17 billion, we might assess the current financial gap being 31 billion dollars.
Regardless of its economic and technical nature, the problem of financing regional infrastructure has also a political face. Developing the necessary infrastructure depends not only from financial resources but also by political will.
Indeed the present financial gap can be further reduced through cooperation among African states, donors and developing agencies.
Building regional and continental infrastructure, indeed, requires not only improved coordination among a number of African states and institutions, but also depends from cooperation among development agencies and a variety of international actors such as the United Nations, the European Union, the United States and China, and all countries with deep interests in the African continent.
Today we are exactly here to help working together on this issue.
Coordination is crucial if we want to avoid that donors and institutions focus on their own agendas, regardless of the real needs of African economic actors and populations.
Hence, we need to create a more comprehensive and coordinated approach based on complementarities among states and development institutions.
Only by doing so, we might find the path out of poverty and instability. Only through more international and African cooperation, peace and economic prosperity can be achieved.
I’m confident that this conference will develop a message able to produce ideas for concrete proposals to be presented at the next and final conference in Beijing, which the Chinese government has kindly offered to organize.
Let me, finally, wish you a productive conference and let me thank our partners of the Woodrow Wilson Centre and the Johns Hopkins University. I would like also to thank the African Union once again for hosting this opening ceremony today, UNECA for hosting us tomorrow, and the United Nations Office to the African Union for their great support.
Thank you my friends!