Chairperson,

 

This African Union Summit takes place when the world is facing a global economic crisis.

 

While the economic crisis has become global, its origins are in the developed countries in Europe as well as the United States.

This ongoing crisis is a latest indication of a significant shift in the economic balance of power from the North to the South, with India, China and Brazil emerging as powerful economic powers in the globe.

 

The African continent also joins the list of emerging economic powers from the South. Over the last decade, the African continent has been the fastest growing area in the world.

The recent economic forecast from the IMF indicates that the economy of the African continent will grow by over five percent on average in the next two years.

Moreover, economists from all over the world predict that Africa is going to be the next growth area in the world after Asia.

 

As the African continent we have to take important steps in order to benefit from the opportunities that have become open.

One of the critical steps we have identified is to improve intra-African trade.

 

The economic decline of the developed North demonstrates that we have to increasingly trade among ourselves and other countries in the South.

Last year SADC, COMESA and EAC signed a Tripartite Free Trade Agreement, which combines the economies of 26 countries with a population of over 600 million people.

 

The Free Trade Agreement will make trade and the movement of goods among the signatories to the agreement very easy.

We have to work towards similar agreements so that intra-African trade is enhanced. It will be important that we all work towards involving other economic regions in similar trade arrangements so that economic integration in the continent can be enhanced.

 

The other important step we have to take in order to benefit from the positive economic prospects for the African continent is to strengthen infrastructure development in the continent.

As we noted at our meeting in 2010, weak infrastructure poses a threat to intra-African trade as well as the general development of the African continent. The AU then took a decision to prioritise infrastructure development.

 

South Africa was appointed to lead the Presidential Infrastructure Championing Initiative. We were tasked in particular to champion the North-South Corridor, which is an initiative that focuses on road and rail infrastructure development.

We are here today to report on the progress we have made thus far on the North-South Corridor, stretching from Durban to Dar-es-Salaam.

 

The various projects comprising the Presidential Infrastructure Championing Initiative involve many inter-related projects that address infrastructure. These include road and railway infrastructure, physical and procedural improvements at border crossings, energy as well as information and communications technologies.

 

In summary, the progress is the following:

The entire North-South road network was physically assessed and inspected. With the exclusion of the road network in South Africa, the North-South Corridor network that was assessed amounted to 8600 kilometres;

  

We categorised roads in the Corridor into those that need immediate attention; those that need attention in the next two to five years and those in good condition which need regular maintenance.

We clearly do not need to build new roads. What is required instead is to urgently fix those roads that fall in the category of those needing immediate attention.

We also need to utilise existing infrastructure more efficiently.

The assessment also showed that in order to upgrade and maintain the North-South Corridor road network, we will need 6.9 billion US dollars, of which 4.5 billion is for capital investment and the remainder is for recurrent costs.

  

There is already work underway to upgrade and maintain the road network in some parts of the North-South Corridor. For instance, sections of the Mbeya-Dar es Salaam are being upgraded. There is also work underway in Zambia and Botswana, to mention two countries.

The assessment revealed that railway concessioning has not yielded desired results. At the top of our list of what to do must be to get the road and rail linkages to work better and more effectively.

 

The continent is a huge landmass well suited to railroads. However, during the last 50 years or so, Africa’s rail network, not being extensive to start with, has further shrunk. The necessary investments in rail infrastructure and equipment are also poor.

Therefore, the current situation is not sustainable. Serious work needs to be done to improve rail infrastructure.

 

The report, therefore Your Excellencies, shows progress but there is work to be done. But we must proceed, all of us, with a greater sense of urgency, with greater cohesion and more collaboration.

We have to challenge these issues,failing which our key differentiator to boost intra regional trade will remain inadequate and perhaps a distant dream.

 

Intra and inter-regional trade is not an option, it is an imperative.

Without trade, individuals, communities, countries and regions cannot reduce poverty or achieve economic growth. Almost all countries that have ever achieved sustained growth have done so through sustainable trade.

 

Chairperson,

 

As said earlier, the economic crisis at this particular juncture occurs under very upbeat circumstances for Africa.

Africa has recorded distinguishably high growth levels and has now become a prime focus of world attention. Having been on the fringes of the world stage it has suddenly been propelled to its centre.

Indeed, I emphasised this much just a couple of days ago at Davos and at other recently held multilateral fora.

Transitioning to a new world order with more diffuse distribution of economic power in Africa is clearly under way. Yet, capitalising on opportunity requires a system and functional network of enabling infrastructure.

 

The question to be answered is, having regard to the theme of Summit - how do we boost intra African trade, how do we foster deeper and more meaningful growth and of course regional integration?

We all know that efforts to accelerate the development and structural transformation of African economies are hindered by very substantial obstacles, particularly those related to finance and infrastructure as well as governance, and human capital.

 

But we should not wait until all of these obstacles are resolved to create productive jobs.

Other economies managed to expand production and exports while still grappling with the same sorts of constraints currently observed in Sub-Saharan Africa.

The global economic crisis and all its attendant uncertainties have had the effect that there are now an even greater number of priorities competing for public funds.

 

There is a compelling realisation that has dawned for us on the continent: traditional models of financing and delivering infrastructure must give way to new models.

We should look at different ways of financing infrastructure, with a particular focus on Public Private Partnerships.

This principle is the  foundational platforms for any sound public infrastructure project involving private sector participation.

 

In conclusion, the way in which we have decided to deal , in particular, with the Presidential Infrastructure Championing Initiative is to directly involve the three Regional Economic Communities, namely, Southern African Development Community East African Community and Common Market for Eastern and Southern Africa.

We wish to reiterate the view that the regional economic communities,together with NEPAD are the critical and eventual implementers of road and rail infrastructure in their respective regions and countries.

 

As such, we have to sharpen our framework for constructive engagement with the communities so that it can become the pre eminent delivery instrument for infrastructure implementation on the continent.

Similarly, we need to stay close to and collectively underscore the efforts of the Programme for Infrastructure Development in Africa (PIDA). It belongs to all of us.

 

Chairperson, as I close, allow me to thank my colleagues the Excellencies Presidents who are the champions and their respective Honourable Ministers who continue to give their support, resources and leadership.  

I thank you.