Digitalization, E-Commerce Progress Make Africa ‘a Case for Hope’, Deputy Secretary-General Tells Finance Ministers Conference

DSG/SM/1266-DEV/3394-ECO/302
1 April 2019

Digitalization, E-Commerce Progress Make Africa ‘a Case for Hope’, Deputy Secretary-General Tells Finance Ministers Conference

(Delayed for technical reasons)

Following are UN Deputy Secretary‑General Amina Mohammed’s opening remarks, as prepared for delivery, to the Conference of African Ministers of Finance, Planning and Economic Development:  Fiscal Policy, Trade and Private Sector Development in the Digital Era, in Marrakesh, Morocco, 25 March:

It gives me great pleasure to join you here today.  I thank the Government of Morocco for its warm hospitality and welcome.

Africa is on the move.  Africa’s growth prospects for the medium term are looking up.  Inflation has been declining, fiscal deficits have lessened and current account balances are expected to narrow.  Our sustainable development frameworks — Agenda 2063 and the 2030 Agenda for Sustainable Development — have now placed back economies and trade at the centre, changing the paradigm.

The scale required to deliver on our promises to humanity has ushered in a radical change to the narrative for financing our development strategies — the “million to trillions” discussion that will make or break sustainable development.

Africa is leading by example.  Finance Ministers meeting back to back with our Regional Coordination Mechanism sends strong signals of your commitment to break the silos and reinsert development cooperation in the broader context of economies and domestic revenues.

If the “Washington consensus” of the 1980s may have contributed to fragmenting economic and social action, the “New York consensus” of 2015 — the 2030 Agenda — has not only reconnected these critical dimensions of sustainable development, but also incorporated the much‑needed focus on the planet.

When too many places in the world are sliding back into poverty, mistrust and instability, Africa is a case for hope.  Much of the progress is driven by digitalization and e‑commerce.  The digitalization of finance is making it possible to provide access to services to low‑income and rural populations at an unprecedented scale.

Many of you in this conference room today are leading the way in using digital platforms to improve service delivery.  Many more countries are expanding their digital economies.  In some nations, the digital economy already accounts for more than 5 per cent of gross domestic product (GDP).  And it could reach 10 per cent of GDP in the near future.  And through e‑commerce, countries have the potential to generate up to $300 billion dollars by 2025.

We simply cannot miss these opportunities.  Technology could be a game‑changer if we embrace and manage this trend.  But this will not happen spontaneously.  We need to do more — collectively — to be creative, innovative and adaptive to digitalization.  And this will determine, to a great extent, our ability to deliver the ambitions we set to ourselves in Agendas 2030 and 2063.

When trust in institutions and multilateralism is at a one‑time low, I cannot overstate the importance of showing to our global citizens that we will lead the change ‑ and that there is a sense of urgency in improving their lives.

The United Nations Secretary‑General has asked me to convey to all of you his absolute determination to work with Member States to ensure that the digital economy leaves no one behind.  He launched a strategy for financing the 2030 Agenda in September last year, with three clear objectives:

First, aligning global financial and economic policies with the Sustainable Development Goals.  This is our common agenda, and it will not be met in conference rooms in the United Nations.  It will happen in countries, and Ministries of Finance and Economy will play a central role.

This is why the United Nations is also reasserting its role to work together with the international financial institutions and your Ministries to deliver more integrated results on the ground.  Our regional economic commissions will be central to this — and I am so pleased to see Vera Songwe leading our efforts here in Africa.  Moving forward, we want our teams on the ground to channel much more of the expertise available in the region.

Second, enhancing financing and investment strategies at the regional and country level.  In this region, we all know we need capacity‑building of both infrastructure and people.  This will require our renewed commitment to leave no one behind, especially our women and girls who are disproportionately at risk as markets and societies transform.

And in many ways, girls are also driving this change.  Here in Africa we have the African Girls Can Code initiative to enable girls to bridge the digital divide in the economic markets.  Thousands of girls are now part of the initiative.  They could be in the millions by 2030.

And investing in youth is an absolute necessity for a future of prosperity and peace in this continent.  Africa needs to create at least 120 million jobs for young people between now and 2030.  And this is no minor endeavour.  But all investments need to be done in an integrated way, across all dimensions of sustainable development.

Third, seizing the potential of financial innovations, new technologies and digitalization.  If we are gathered here today, it is because we share the vision for effective and fit for purpose economic policies that embrace and embed the growing digitalization of the economies.

Our work on the digital is moving fast, and we will deliver concrete recommendations and actionable strategies in the lead‑up to the High‑Level Dialogue on Financing for Development in September.  And the Secretary‑General has also constituted a High‑Level Panel on Digital Cooperation, to raise awareness and contribute to the global debate on how to cooperate and mitigate risks in a digital world.

The defining question in front of us is how African countries can achieve growth that also supports job creation, increases wealth and reduces poverty and inequality.  GDP growth is a useful statistical tool in measuring economic development, but it fails to capture the well‑being of individuals or human development of a country.  The challenges we face require that we take a multidimensional approach to poverty and economic policies that are inclusive and centred on people and planet.

Economies do not happen in isolation.  Healthier, empowered individuals will better contribute to their economies.  And a healthy planet will sustain our economies and societies over time.  It is all connected.

As Ministers for Finance, Planning and Economy, you have a hard job to do.  You need to generate resources for ambitious goals, within a tight fiscal space.  You need to make complex trade‑offs, as you service your countries and people.  We understand the difficulties and the weight you carry on your shoulders.  The stark reality is that there is simply not enough fiscal space domestically to match the development and transformational goals of the continent.  This has driven many countries to external sources of funding, leading to high debt distress.

This is not exclusive to the continent.  The Secretary‑General is determined to help all countries align investments and unlock funding to finance the Sustainable Development Goals.  We are reinvigorating our partnership with the World Bank and the International Monetary Fund (IMF) in this regard.

The opportunities ahead are enormous.  The African Continental Free Trade Area has immense potential as a major anchor for economic integration and dynamism.  This is expected to boost intra‑African trade and increase GDP by more than $40 billion.  And it will generate domestic revenues that are essential to take us forward.

And what brings us here today is the promise and potential that the digital economy can bring to the table — to the extent that many are seeing the emergence of a fourth industrial revolution.  Digitization is making it easier to access financial services, enter markets and expand reach, notably to communities living outside of the major cities and commercial centres.

But we also know that digital platforms and e‑commerce are reshaping economies faster than policymakers can keep up.  Our policy efforts must be designed to boost these opportunities.  Today’s discussions can help move the needle on how we capitalize digitization for fiscal policy and revenue generation.

We already know that countries can do more to widen tax bases.  If well managed, digital technology can contribute to both the efficiency and efficacy of tax administration.  And effective international tax cooperation can help address the challenges that your tax systems may face in avoiding profit sharing and base erosion as they adapt to e‑commerce and digital platforms.

A critical aspect of all policy reform has to be capacity‑building.  The benefits of digitization will only be fully harnessed if countries take active steps to invest in infrastructure and, above all, human capabilities.  Governments cannot do this alone.  The private and public sectors must work together to operationalize this agenda.

The benefits of digitalization can also only be realized with affordable access, and with greater investments in research and development for African countries to effectively harness the power of technologies, capacities and innovative commercial breakthroughs.

We have a unique opportunity to benefit from the digital era for inclusive growth that reduces poverty and makes a meaningful impact in the lives of the people we all serve.  For this, we need policy actions and strategies that harness the potential of youth and build their creativity and capacity for innovation and growth.  They are our greatest resource and promise.  You can count on the United Nations to accompany your efforts.

And the United Nations counts on all of you to accompany our journey towards the 2030 Agenda; to engage more actively with our country teams on the ground; and to take a leadership role in the landmark General Assembly that will take place next September.

Four years into the Sustainable Development Goals, this will be our first opportunity to review progress, catalyse action and make sure we are on track to deliver on our promises to humanity.  And at the Financing for Development summit in the same week, we will need your perspectives and insights.  We look forward to welcoming you in New York.  Thank you.

For information media. Not an official record.