Forging Partnerships for the Future: Canada and Africa in a Globalizing Economy

Notes for Remarks by Hon. David Kilgour, Secretary of State (Africa and Latin America), MP Edmonton Southeast
May 4, 2000 - Africa Direct Dinner, Chateau Laurier, Ottawa

Excellencies, distinguished guests, ladies and gentlemen,

A common viewpoint brings us all here this evening: the conviction that this new century offers enormous opportunities for partnership and collaboration in trade and investment between Canada and Africa. Representatives from Ghana, Mauritius, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda and Canada are assembled here to explore possibilities for the future.

As John Stuart Mill once said, "Someone with a vision is worth a thousand who only have interests." Africa Direct embodies both a vision and the means to achieve it. The notion we share is building bridges between Canada and Africa. These will spur economic growth, create jobs, and help alleviate poverty -- in all of our nations.

Afrique en direct est le produit d’une collaboration étroite entre deux institutions canadiennes ayant une longue expérience en Afrique -- l’Agence canadienne de développement international et le ministère des Affaires étrangères et du Commerce international. Le programme est complet et comprend des échanges, des conférences, des tables rondes, des visites de sociétés comme et, plus important encore, une possibilité de réseautage pour le nouveau millénaire. Afrique en direct s’achèvera par la Conférence de Montréal, que doit ouvrir le président du Nigéria, M. Obasanjo, et que concluera le président algérien, M. Bouteflika.

We are all here to ensure that the recent successes in African countries are better known to Canadians. Over the last few years, it has been countries in Sub-Saharan Africa, not Asia or Latin America, that have led the world in percentage economic growth. Africa is now considered one of the last regions with high economic and social growth potential. The IMF forecasts that Africa’s overall GDP should grow by 5% in 2000, an improvement from 3.1% in 1999. Angola, Uganda and Botswana already stand among the ten fastest growing economies globally.

The opportunities for Canadian trade and investment in Africa are immense. In the area of telecommunications alone; there are 750 million inhabitants on the continent, and only 14 million phone lines. There are more phones in downtown Tokyo than on the entire continent of Africa. The Department of Foreign Affairs and International Trade has taken steps to assist Canadian companies looking to engage in these potentially lucrative markets. Canada-based staff in Sub-Saharan Africa has been increased by three people this year, in addition to the commercial officer who has just been hired in Lagos Nigeria.

Resource extraction also presents extensive opportunities. Oil reserves on the continent are only beginning to be tapped. Angola alone is predicted to produce more oil in the year 2015 than Kuwait. Africa has dominance in the world diamond industry; it contains about 54% of the world’s gold reserves. Currently half of all mining exploration in Africa is carried out by groups which include Canadian companies. Barrick Gold recently made a significant long-term investment in Tanzania; Placer Dome made a similar investment in South Africa.

En Afrique occidentale, Hydro-Québec International est le principal partenaire stratégique dans la privatisation de SENELEC - producteur d’énergie du Sénégal. Les sociétés d’ingénieurs-conseils et les sociétés de services canadiennes sont très présentes sur le continent. Plusieurs d’entre elles travaillent, par exemple, au Projet de pipeline entre le Tchad et le Cameroun, que finance la Banque mondiale. Le pétrole et le gaz, les télécommunications, la production et la transmission d’électricité, et le traitement du bois sont tous des secteurs auxquels participent les entreprises canadiennes. Les échanges bilatéraux du Canada avec la région africaine s’élèvent à 2 milliards $ par an, et nos exportations ont doublé entre 1993 et 1998.

A very encouraging development on the continent is the formation of economic trading groupings, which has been a central characteristic of the emerging world order. Canada supports regional economic cooperation, which will create large markets representing good opportunities for trade and investment. As Nigeria and other West African nations strengthen their regional ties, develop common transportation and energy infrastructure, and eliminate internal tariffs, the lure of doing business there increases for Canadian and other foreign investors. The West African Monetary Union and the Economic Community of West African States have been instrumental in integrating the region on a number of levels.

A free trade area should be established in Southern Africa by 2002. The Southern African Development Community represents a large market with a population of 186 million people and a combined GNP of US$ 178 billion. The free trade agreement will encourage economies of scale, creating competitive SADC-wide industries. This will increase intra-regional trade and boost foreign investment to the region. SADC states are richly endowed with natural resources, from the natural gas opportunities in Mozambique and Tanzania, to the agricultural potential of Zambia and the rich mineral wealth of most countries in the region. A number of SADC states are involved in privatization initiatives and providing easier access for foreign investors to established markets.

In East Africa, we have the emergence of the East African Community and the Common Market for East and Southern Africa. These groupings will strengthen the bargaining power of African countries. Canada has developed an action plan to co-ordinate trade promotion in several of these regions. This plan will support activities among federal and provincial agencies in Canada, and assist in strengthening trade and business ties generally.

De plus en plus de Canadiens reconnaissent le potentiel des marchés africains. J’espère que les commentaires que je fais ici, ce soir, serviront à mettre en évidence des histoires de réussites en Afrique et à bien faire comprendre au Canada que ce continent offre d’excellents endroits où investir. Faute de temps, nous ne pourrons approfondir une vue d’ensemble des florissantes économies africaines, mais quelques exemples peuvent suffire.

Botswana is often cited as a major African success story. At independence, it was one of the poorest countries in the world, but has been the fastest growing economy in the world since 1965, with an annual GNP growth rate of 13%. For years the country has enjoyed a budget surplus, large foreign reserves, low taxes, stability and a high standard of living - a situation albeit made possible in large measure by the country’s diamond deposits. Botswana’s industrial sector has been the fastest growing in the world, and its services sector the world’s second fastest growing since 1965.

Another example of impressive economic performance has been Mauritius - a virtual miracle in the Indian Ocean over the last 16 years. Not only has its economy grown by 6% per year, but between 1982 and 1998 its economic success was exceeded only by Botswana. The success of this island nation can be attributed to good fiscal governance which has kept the country from falling into the debt trap. Throughout this period, the government managed to keep in tact budgetary allocations for free education, health care, and generous social safety nets.

Le Mozambique est également l’une des économies au monde dont la croissance est la plus rapide, avec un PIB de 10 % par an. Ces dernières années, il a attiré des afflux massifs d’investissements étrangers, à tel point que les entrées de capitaux étrangers liées à des projets d’une valeur d’un milliard de dollars dépassent actuellement la valeur de l’aide. Il reste encore beaucoup à découvrir dans le secteur de l’industrie minière, et l’extraction de titane est un nouveau secteur prometteur. Le gouvernement a adopté un programme de grande envergure, portant sur le dégrèvement fiscal et sur d’autres incitatifs pour les investisseurs.

Excellencies, distinguished guests, ladies and gentlemen:

In South Africa we see a new ‘African capitalism with a conscience.’ President Mbeki is striving to overthrow the apartheid economy with its racial hierarchy and replace it with a modern African capitalist state based on a skilled work force and a growing number of black entrepreneurs. This has been branded ‘Mbekonomics.’ The aim is for South Africa to leap from a low growth, export-commodity-driven and protected economy, to a fast growing, diversified, and competitive one. As an economic power house on the continent, South Africa’s success will have major ripple effects.

These positive comments must be tempered by highlighting some of the challenges which Africans and Canadians nations must strive together to overcome. The gap between North and South now seems to be widening, not narrowing, in part due to the unequal access to the new knowledge economy and high tech industry. Today the rapidly globalizing market is dominated by information technology and knowledge-based service industries, which will lead to a transformation of traditional export markets.

It is up to all of us to ensure that globalization is made to benefit all of humanity, or it will exacerbate the already shocking inequality which became so common in the old economy. Part of our challenge is to ensure that the benefits and opportunities of the new electronic age are not confined to an educated few. When only 0.1% of Sub-Saharan Africans are linked to the internet, closing the knowledge gap becomes critical to development. In this new century, the industrial economy of any country will only be as strong as the skills of its workforce. We live in a world in which a web site is created every 4 seconds!

Canada is a leading provider of information technology. We have just seen the last school in this country connected to the internet. Our NGO sector is now trying to connect schools in Africa to the internet. I led a Learning and Technology mission to South Africa in March of this year, and for one week leading educators, private sector companies and human resource trainers developed links with South African counterparts. This is part of our long term strategy in education capacity building in Africa, with a trade component attached. Canada can build on South Africa’s strengths - let’s not forget that 80% of Africa’s internet users are evidently found in South Africa -- and now we need to replicate such missions in other parts of the continent.

Canada has funded numerous education initiatives in Africa, alongside its substantial development assistance to Africa as a whole. The Government of Canada has allocated out of its current fiscal budget $807 million for aid to Africa.

Before concluding, a word must be said on the political environment in Africa. For all the crises and disasters which have beset the African continent in recent times, we must not forget the bright spots or overlook the achievements, which have made parts of the continent increasingly attractive to investors. This decade has witnessed the founding of more political parties in Africa than at any time since the decolonization period. Democracy has taken root in Botswana, Mali, Mozambique, Tanzania, South Africa, Ghana, and Mauritius to name but a few. These have been major African success stories in terms of political freedom.

Nigeria’s peaceful transition to civilian rule has been applauded everywhere, and the activism of its parliament praised. Prime Minister Jean Chrétien was able to convey personally Canada’s support for the new government during a visit with President Obasanjo in Abuja last November. Senegal’s elections earlier this year, and President Diouf’s gracious hand over of power is just another example of the spread of democracy.

In 1999, 32 of 54 heads of state were chosen in elections against rivals backed by opposition parties; in 1975 only three were chosen that way. We should also remember that less than 50 years have passed since the first black African country gained independence from colonial rule. Another positive sign was witnessed during the OAU Summit in Algiers last year, when African states shifted away from previous positions, and resolved to oppose any government that comes to power by military means. These developments bode well for the future stability of a number of African countries, many of which can boast rapidly developing economies.

We stand at the dawn of a new century, full of promise and opportunity for Africans and Canadians alike. Economic diplomacy will be the engine which drives forward the African Renaissance. Today the right conditions do exist to transform this visionary dream into a practical program of action. Let us emerge as partners, building strong economic and trade links that will enrich the fabric of our nations.

A wise person once said: ‘there are three kinds of people in this world, those that make things happen, those that watch things happen, and those who wonder what happened.’ I believe I am talking tonight to a room full of people who make things happen. Africa Direct can therefore be nothing but a success.

Thank you.