United Nations


General Assembly

Distr. GENERAL  

11 October 1995


Fiftieth session
Agenda item 24


Report of the Secretary-General


1.   The  Secretary-General was  requested,  in  paragraph 21  of resolution
49/142, to submit to  the General Assembly at its fiftieth session a  report
on  the  implementation  of  the  resolution.    The  present  report, which
comprises two  sections on  background and on  action taken  by the  parties
concerned, responds to this request.


2.   In accordance with  paragraph 35 of  the United  Nations New Agenda for
the  Development  of  Africa  in  the  1990s  (UN-NADAF)  (General  Assembly
resolution  46/151, annex  II),  the Secretary-General  transmitted  to  the
General Assembly at its forty-eighth session  a report prepared by  the Food
and Agriculture  Organization of  the United  Nations on  the  need for  and
feasibility  of the  establishment of  a  diversification fund  for Africa's
commodities  (A/48/335, annex, and Add.1 and 2).  The report recommended the
establishment  of a  diversification  facility to  finance  the  preparatory
phase  of   diversification  projects  and   programmes,  and  of   national
diversification councils at the country level.

3.   To  further  its consideration  of  the above  proposals,  the  General
Assembly,  in its  resolution  48/214, requested  the  Secretary-General  to
prepare background documents for intensive consultation involving  concerned
and  interested States  together with  relevant financial  institutions  and
United  Nations  organizations. This  second  report,  entitled  "Issues  of
diversification of  African economies, specifically  the establishment of  a
diversification fund for Africa's

95-30685 (E)   261095/...
 commodities" (A/48/914),  clarified and  amplified certain  aspects of  the
proposals made by the Secretary-General in his first report.

4.   At its  forty-ninth session,  the General  Assembly adopted  resolution
49/142 in  which it recognized the  urgent need to  respond to the  specific
problems  of African States  in their  efforts to  diversify their economies
and reduce dependence on  a few primary commodities.  More specifically,  in
paragraphs 12, 16 and 18 of its resolution 49/142, the General Assembly:

  (a)   Invited State  participants in  the African  Development Fund  (ADF)
existing  within  the African  Development  Bank  (AfDB)  to pay  particular
attention  to the  diversification of  African  commodities  with a  view to
accelerating  this  process  and  to consider  urgently  making  an  initial
adequate special contribution  to finance the preparatory phase of commodity
diversification projects and programmes in African countries;

  (b)  Requested the Secretary-General to  ensure that the Inter-Agency Task
Force  for the  Implementation of  the  United Nations  New Agenda  for  the
Development  of   Africa  in  the  1990s   accords  high   priority  to  the
consideration of  the  diversification  of  African  economies  and  to  the
coordination of  activities of the relevant  organization and programmes  of
the United Nations system in  this field, and invited the Task Force to make
available  advisory services  to the  African Development  Bank on questions
related to the diversification of Africa's commodities;

  (c)  Invited the  African Development Bank to elaborate a set of  criteria
for the identification of diversification projects  and to extend any  other
assistance as appropriate.


A.  Action by the African Development Bank

5.   In order to ensure  that donor countries  participating in the  African
Development Fund existing within the African  Development Bank take steps to
make  the required  special  contribution,  the United  Nations invited  the
African  Development   Bank  to  elaborate  a   set  of   criteria  for  the
identification  of  diversification   projects  and  to  extend  any   other
assistance  as  appropriate.   In  response,  the African  Development  Bank
indicated that:

  (a)   Consultations on the replenishment  of the  African Development Fund
were  still  under  way  and  many  issues   including  the  level  of   the
replenishment were  still to  be settled.   It  was, therefore,  appropriate
that  the next  replenishment  meeting  of the  Fund raise  the matter  of a
special  contribution from  State participants  to finance  the  preparatory
phase of commodity  diversification projects and programmes in  ADF-eligible
countries.    It  was  also  recommended   that  in  the  final   report  of
representatives of  States participants in  the Fund, resources  permitting,
the issue of commodity diversification be  specifically included in the ADF-
VII lending programme;

   (b)  It welcomed the  invitation to the United  Nations Inter-Agency Task
Force  to make  available to  the Bank  its  advisory services  on questions
relating to commodity diversification.  Such  assistance could be especially
beneficial not only to diversification projects  themselves, but also to the
broader range  of Bank Group lending, especially in the areas of agriculture
and agro-industry;

  (c)     It  concurred   strongly  with   the  view   that  the  successful
implementation  of a  diversification  programme  requires that  appropriate
criteria be  established for the identification of the appropriate projects.
AfDB  also  expressed  its  readiness to  put  in place  mechanisms  for the
elaboration of such  criteria in cooperation  with other  institutions, both
national and international, in order to move this initiative forward.

6.  The African Development Bank reiterated the view that the  establishment
of  national  diversification councils  was  an  important  initiative  that

merits broad  international support.  The  close involvement  of the private
sector, including  the Private Sector Development  Unit of the  Bank, in the
design and  implementation of diversification was  welcomed.   AfDB, for its
part, should prepare a suitable infrastructure to establish the facility.

B.  Action by the United Nations system

7.  The United Nations system undertook follow-up action  within the System-
wide Plan  of Action for  African Economic Recovery  and Development.   This
plan makes diversification of African economies a key priority issue.

8.   The  Economic  Commission  for Africa  (ECA) was  selected as  the lead
agency   for   the   United   Nations   system's   support   programmes   on
diversification of African  economies.  Collaborating organizations for  the
various programmes include:

  (a)   Identification of  national policies  conducive to  diversification:
United  Nations  Conference  on  Trade and  Development,  ECA,  World  Bank,
International Monetary  Fund  (IMF), United  Nations Industrial  Development
Organization, Organization of African Unity;

  (b)   Establishment  of a  diversification fund  for African  commodities:

  (c)    Regional and  national  workshops  or  seminars  to strengthen  the
structures for and  ensure the development of diversification projects  that
could benefit from existing funding mechanisms:   World Bank, UNCTAD, UNIDO,

  (d)   Diversification oriented to national  and subregional  needs:  UNDP,
FAO, ECA, UNIDO, United Nations Development Fund for Women;

  (e)  Building capacities to process  natural resources (World Bank, UNIDO,
Department  for Development  Support and  Management Services,  ECA,  United
Nations Environment Programme).

9.    A United  Nations  inter-agency  workshop  on  the diversification  of
African economies was held at Yaounde from 13  to 17 February 1995.   It was
organized  by ECA in collaboration  with the Government  of Cameroon and the
support of the  Office of the Special Coordinator  for Africa and the  Least
Developed  Countries.  Discussions  at  the  workshop,  which  involved  six
African countries  and various  entities of  the United  Nations system  and
African   subregional   organizations,  focused   in   particular   on   the
diversification strategy,  enabling environment  and the  funding mechanisms
of the process.

10.  The workshop made the following recommendations:

  (a)  The diversification  of the African economies is a long-term goal  to
be  achieved  in  the  context  of  the  overall  national,  subregional and
regional strategies rather  than in terms of  the execution of  several non-
integrated projects.  It should encourage  the development of private  small
and  medium-size  enterprises  and,  where  possible,  the  development   of
transnational African enterprises  in the sectors of production,  processing
and marketing of domestic commodities;

  (b)  The establishment  of a special facility  for the diversification  of
African  commodities is  an issue  to be  solved and  should complement  the
already  established  multilateral   mechanisms.    However,  its  mode   of
management and  level of  initial resources  should be  reconsidered in  the
light of  expressed  needs.    In  addition,  instead of  using  the  fund's
resources solely  for the preparation of  pre-investment projects, the  fund
could  also  serve  as  an  underwriting  fund  for  small  and medium-scale
enterprises.    The  international  community  should  also  assist  African
countries   in   devising   their   national,   subregional   and   regional

diversification strategies;

  (c)   National diversification councils  should coordinate the  activities
of private operators  in addition to selecting  projects.  They shall  cease
to exist when structures such as the chambers of commerce are in a  position
to take over these functions.

11.  Within the  framework of the United Nations System-wide Plan of  Action
for   African  Economic   Recovery   and  Development,   organizations   and
specialized  agencies  should increase  their  activities  with  respect  to
diversification  of African  economies.   The  United Nations  should assist
African  Governments  and  subregional  economic  communities  to  formulate
diversification strategies.

12.   In addition  to  the above  recommendations  of  the workshop,  it  is
recommended  that the organizations  and specialized  agencies of the United
Nations continue  to  assess  the impact  of the  Uruguay  Round on  African
economies.  On the  basis of such studies,  the United Nations  system could
initiate measures to enhance the diversification of African economies.

C.  Action by Member States

13.  One year after the  adoption of resolution 49/142,  the diversification
facility is yet to  start its operation.   Special initial contributions  by
Member States would facilitate the commencement of the facility.

 14.     In   order  to   demonstrate  their   resolve  to  carry   out  the
diversification  process,  African   countries  should  prepare,   in  close
collaboration  with   the  private  sector   and  with   the  assistance  of
international institutions, national strategies  for the diversification  of
their economies.   They  should also include  the themes  and objectives  of
their  diversification  strategies in  the  sectoral,  economic  and  social
development plans.



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Date last posted: 18 December 1999 16:30:10
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