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  2. 2. Representatives of Mr. Abdoulie Janneh, United Nations Under Secretary- General and Executive Secretary, Economic Commission for Africa (ECA); and ADB Distinguished Representatives of the Regional Economic Communities (RECs); - Senior Officials of Ministries of Economy and Finance; Members of the Diplomatic Community; Distinguished Ladies and Gentlemen; It is a great honour and privilege for me this morning to address this important Experts Meeting of the Extra- Ordinary Conference of African Ministers of Economy and Finance. On behalf of the Commission of the African Union and indeed on my own behalf, I wish to welcome and sincerely thank you all for making it to attend this Conference. Please allow me also to take this opportunity to thank the Government and People of Ethiopia, our hosts for the Conference, for the warm and fraternal welcome accorded to all the delegations since their arrival in this beautiful city of Addis Ababa, the Capital of Africa.
  3. 3. As we might all be aware, the holding of this Extra-Ordinary Conference has been necessitated by the need for African Union Ministers of Economy and Finance to deliberate on some important issues that are part of the agenda items for the African Union Summit of Heads of State and Government scheduled to take place from 26 January to 03 February 2009 here in Addis Ababa, Ethiopia. But the holding of this Conference also comes at a time when the current global financial and economic crisis has changed the environment in which African countries conduct and implement economic policies. Although the full impact of the crisis is not yet known, it is clear that it will affect the region through direct and indirect channels. So far, the direct effects have been limited to weakening exchange rates and declining stock markets for some of the major African Stock exchanges. There has also been a tightening of credit in domestic as well as international financial markets. The indirect effects will arise mostly from the impact of a decline in output in the major advanced countries on demand for African exports as well as investment flows, remittances and tourism receipts. In addition, pressures to recapitalize the banking sector and provide support for ailing industries may force developed countries to cut down on ODA flows to Africa.
  4. 4. Distinguished Ladies and Gentlemen The decline in ODA flows to Africa will be a major set-back for the region, and hence the need for Africa to focus more on the mobilization of domestic financial resources. It is for this reason that the topics for discussion at this Extra- Ordinary Conference of African Ministers of Finance and Economy, namely, "consideration of the draft Protocol on the establishment of the African Investment Bank", "the feasibility of establishing a pan-African stock exchange", the development of a road-map and plan of action for micro- finance in Africa" and "alternative sources of financing the African Union" are not only critical but also timely. In order to accelerate Africa's regional and continental integration and promote development in Africa, the Africa Union Commission, in compliance with its mandate, is in the process of establishing three continental financial institutions, as provided for Article 19 of the Constitutive Act of the African Union. The three institutions are the African Central Bank, the African Monetary Fund and the African Investment Bank. Regarding the African Investment Bank, the Commission has made significant progress. Indeed, it is now proposing to your august meeting the consideration and adoption of the Protocol and Statute establishing the Bank. Following this meeting, on Tuesday, 13 January 2009, there
  5. 5. will be a meeting of Legal Experts to consider the Protocol and Statutes from the perspective of its legal implications on Member States. The outcome of that meeting with feed into the Ministerial Conference on 14 January 2009. In light of the envisaged low foreign direct investment flows and the need to reduce recourse to external funding, the establishment of a pan-African stock exchange will assist in mobilizing financial resources for the continent and promote greater economic dynamism. The need to establish the pan- African stock exchange was highly by our Heads of State and Government, who during their 6t" Summit held in Khartoum, The Sudan, decided to mandate the African Union Commission to look into the feasibility of setting up the said stock exchange. This decision was taken consistent with the provisions of the Abuja Treaty of 1991 calling for the 2015, a well-functioning microfinance system could open a world of opportunities to the region, which is currently home to the highest number of people living without adequate food, shelter, or human security in the world. I call upon you all to assess critically the road map and action plan and make recommendations that will help to develop the microfinance sector in Africa. As we might all be aware, the African Union was established to enable Africa deal with the economic, social and political challenges confronting the continent in a rapidly globalizing world. And adequacy of financial resources is crucial for the Union to address these challenges. It was in recognition of this that the Heads of State and Government, at their Lusaka Summit of 2001, directed the OAU General Secretariat to, inter alia, "Undertake studies, with the assistance of experts,
  6. 6. on alternative modalities on financing the African Union and to make appropriate recommendations on subject" [Decisions: AHG/Dec.160 (XXXVII)]. The Durban, South Africa, Summit, which was held in July 2002, took note of the Lusaka Summit Decision and authorized "the interim Chairperson to prepare the financial implications of the structure of the Commission and undertake the necessary consultations with Member States prior to submitting them to the Executive Council and ultimately to the Assembly in July 2003" [ASS/AU/Dec.1 (I)]. In February 2004, the Executive Council took a decision requesting the Commission to further explore the proposals of the experts and submit a report on these proposals to its Sixth Ordinary Session in March 2005 [DOC.EX.CL/87 (V)]. In May 2006, the Commission held an experts meeting on Alternative Sources of Financing the African Union. In June 2006, the Executive Council decided (DOC.EX.CL/255) that the reports on the analytical work be submitted to the Conference of African Ministers of Economy and Finance for consideration and appropriate recommendations be submitted to the Executive Council in July 2007. In this respect, various experts meetings have been held to examine various options of alternative sources of financing the African Union, and assess their possible impact on the economies of Member States, as well as their viability and sustainability. It is now time for this meeting to consider this
  7. 7. study and make recommendations to the Ministerial Meeting holding on 14 January 2009. Distinguished Ladies and Gentlemen As you may have noticed, the topics before this meeting are critical in addressing African's integration and development challenges. The topics are even more critical now than ever before owing to the current global financial and economic crisis, which is likely to adversely impact on African economies, particularly during its second round effects. Therefore, I can only hope that you will devote all your time, energies and expertise to come up with concrete and actionable recommendations capable of meeting the expectations of the African Peoples and bringing Africa to becoming a master of her destiny. I wish the meeting great success and thank you all for your kind attention.