More Investment in Africa Must be Channelled into Vital Development Needs,

 

Secretary-General Says at General Assembly Debate

 

Following are UN Secretary-General Ban Ki-moon’s remarks at the General Assembly’s high-level debate on investment in Africa, in New York today:

Thank you for inviting me to speak at this important debate.

I have visited many African countries as Secretary-General and before.  Last month I visited Namibia, Equatorial Guinea, for the African Union Summit, and Kenya, for the first UN Environment Assembly.  In each country, once again I saw the dynamism and promise of this vast continent.

Last year I went to Ethiopia to celebrate 50 years of African unity and achievement.  I said then that I saw a confident new narrative of hope.

Across most of Africa, we see stability, economic growth and impressive efforts towards many of the Millennium Development Goals.

In recent years, Africa’s economic growth has been higher than in many other regions.  Even at the peak of the global financial crisis, the continent continued to drive forward.  United Nations economists estimate that Africa’s overall growth will exceed 5 per cent in 2015, driven especially by domestic demand and solid commodity prices.  But, this positive performance must not let us become complacent.

Serious obstacles still exist to more inclusive and sustainable economic and social development.  Poverty and inequality remain widespread.  Unemployment and underemployment are high, especially among youth.  Basic infrastructure, from health care and sanitation to energy and transport networks, is lacking.

As we shape a post-2015 development agenda that will deliver a life of dignity for all, it is plain that Africa needs significant investment.

To end extreme poverty and provide inclusive prosperity, Africa needs three things:  Enabling environments that promote investment and reduce risk; the right kind of investment; and wise management of the proceeds so they support sustainable development.

Foreign direct investment in Africa, including investment from other African countries, has steadily increased since the turn of the century.  It now exceeds official development assistance (ODA).  But, much of this investment has been related to resource extraction and exports, with not enough being channelled into vital development needs.

There are many critical financing gaps, especially in agriculture, infrastructure and industrialization, which are now the focus of Africa’s development agenda.

African smallholder farmers need to increase their agricultural yields and move up the agricultural value chain to address food security and poverty.  To do that they require better access to technology, fertilizer, irrigation and finance.  They need functional road and rail systems.  And, they need modern energy.

Electricity is a key element of poverty reduction and successful industrialisation.  Businesses cannot be competitive in the international market when their energy costs are high.

Africa is desperately energy-poor.  Less than a quarter of the people have access to electricity.  If we exclude South Africa, Africa’s electricity output is little more than half of the 40,000 megawatts available to New York City.  Yet Africa has vast untapped resources.

Africa is now poised to take advantage of a new energy revolution and promote low-carbon growth.  New technologies for renewable resources such as solar and wind power are becoming much more affordable.  New gas discoveries and major hydropower projects can also help Africa’s development, especially if allied to investment in creating pathways for countries to sell their power to others.

Another major aid to Africa’s growth is the rapid deployment of communications technology.  Mobile phone networks are changing lives and ways of doing business.  In some African countries, mobile networks now facilitate more individual and small business transactions than traditional banks.  And across the continent, the number of Internet users has grown at seven times the global average, opening a new world of information and opportunity.

The conclusion from these examples is that investment is essential, and when it is the right investment, it can be effective, benefitting people, businesses and Governments alike.

That is why this year’s Dakar Financing Summit for Africa’s Infrastructure emphasized how the public and private sectors share responsibility for realizing the goal of an interconnected and integrated continent.  And it is why, in the Common African Position on the post-2015 development agenda, African Governments have highlighted the importance of private sector investment, public-private partnerships and enabling environments.  African leaders have also stressed the importance of private sector investment in their discussions on Agenda 2063, the continent’s 50-year transformative development vision.

Our discussion today is critically linked to the process to define the sustainable development goals and their means of implementation.

In a year’s time, the Third International Conference on Financing for Development in Addis Ababa will provide an opportunity to review the implementation of commitments made in Monterrey and Doha, and reinvigorate the financing for development follow-up process.

Countries must remain committed to fulfilling ODA commitments.  But harnessing all sources of investment and finance — public and private; domestic and external — and ensuring they complement each other is essential.  The United Nations is committed to supporting Africa’s transformative development agenda and to helping to promote private sector engagement in that vision.

We are helping support the right kinds of investments and helping Governments create enabling environments for them.  As an example, the Sustainable Energy for All Initiative has galvanized key stakeholders to develop a Sustainable Energy Fund for Africa.  The Fund focuses on unlocking private investments in small to medium-sized sustainable energy projects and supporting the public sector to manage them.

By taking such a comprehensive approach to promoting investment, I am convinced that we can achieve far-reaching and sustainable improvements to Africa’s development prospects.  Success hinges on the engagement of a range of actors, including Governments, business, finance and civil society.  The United Nations stands ready to serve as a facilitator to drive this process forward.

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