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Speech by An Tánaiste at the Africa-Ireland Economic Forum

Irish Aid, Tánaiste Eamon Gilmore, Speech, Ireland, 2012

Honourable Ministers

Excellencies,

Ladies and Gentlemen,

Friends from Ireland, from Africa and from elsewhere,

Introduction

It is a great pleasure and honour to address the 2nd Africa Ireland Economic Forum.

This Forum is the result of a collaboration between the Ambassadors of African countries based here in Dublin, the UCD Smurfit Graduate School of Business and the Department of Foreign Affairs and Trade. I would like to commend all involved for their initiative in organising this important event and for bringing us together here today.  

I would also like to thank the 24 individuals who have agreed to take part in today’s event as speakers and panellists.  They include the Minister for Industry, Commerce and New Technologies of Morocco, AbdelKader Amara, as well as representatives from the world of academia and business and the African diplomatic corps. Your insights and experience will help to bridge the knowledge gap for the many Irish companies represented here today who are eager to do business in Africa.     

Context

When we held the first Africa Ireland Economic Forum last year, we did so because we felt that it was time to turn a new page in our relationship with Africa.

Over the last number of years we have witnessed a period of enormous economic, social and political change across the world. In Ireland, and much of the western world, we continue to grapple with the consequences of the financial crises.  At the same time, developing economies are becoming key drivers of global economic growth.

Africa in particular is generating remarkable economic growth, at a rate not foreseen only a decade ago.  In the first years of the new Millennium, despite the financial crisis, annual economic growth in Africa was almost 5 per cent. And with this growth and development have come opportunities for trade, and a stronger role for emerging economies in world affairs.

The Africa Strategy

At last year’s Forum I launched the Africa Strategy of the Department of Foreign Affairs and Trade.  It builds on Ireland’s longstanding relationship with Africa, based on political support and the Irish people’s commitment to working to end poverty and hunger in some of the poorest countries on the continent.  It explicitly recognises the role which greater economic and trade cooperation can make to relations between Ireland and Africa, and to development in Africa.  This morning you will have received a report on the good progress being made in the implementation of the Africa Strategy and on our objectives for the coming year.

The Africa Strategy brings together all aspects of Ireland’s relations with Africa, in a coherent and integrated way: political relations, development cooperation, and the building of opportunities for closer economic and trade relations. Through the Africa Strategy we are building strong, lasting relationships with the countries and people of Africa.  We are doing so in a collaborative way which meets their priorities, and our own.  It builds on our contribution to economic and social development and recognises the truly enormous potential for Irish – African economic and trade links over the coming years.  

We also know that the pace and extent of development across Africa is not uniform and that some countries and communities are benefiting more than others. Economic growth alone will not solve ingrained problems of poverty and hunger.  Serious inequalities persist in many regions, and we and our partners will continue to play a leading role in the concerted effort to achieve the Millennium Development Goals and to create a new framework for international development post-2015.  We will continue to prioritise the fight to eradicate poverty and hunger in sub-Saharan Africa, through our own Irish Aid programme, and through our engagement in the European Union, the United Nations and elsewhere.

African Opportunities

Underlining our strengthened focus on contacts with Africa, earlier this year I travelled to Uganda, Somalia and Kenya. What struck me most from my visit was the rapid pace of change at a political and economic level and the strong entrepreneurial spirit that I witnessed. In Kenya, for instance, I visited state-of-the-art agricultural processing facilities, which export the highest quality horticultural produce directly to some of the most prominent retail outlets around the world, including here in Ireland. I know that a representative from VegPro, one of companies I met in Nairobi, has travelled to Dublin to participate in this Forum today - you are most welcome. Thanks to investment in new infrastructure and production facilities, and the harnessing of the technological revolution, Africa is demonstrating its capacity to compete with anywhere in the race to win business. 

This positive impression from my visit is backed up by the statistics:

Africa has seen its number of democracies increase nearly eight-fold in just two decades;

Sub-Saharan Africa is the second fastest growing region in the world after Asia;

Africa has a young and increasingly well educated population. The average age in sub-Saharan Africa is 19 years compared to 32 for the BRIC countries and 41 within the EU. By 2050, it is expected that there will be 1.2 billion Africans of working age.

By 2050, over 80% of the population in 14 African countries will be living in cities. The rise of the urban middle class in Africa will fuel consumer demand, particularly in the manufacturing and services sectors.  In sectors such as agri-food, ICT and pharmaceuticals, Irish-based companies, which are among the world’s most successful and competitive exporters and solution-providers, are well-placed to play a greater role in meeting Africa’s more complex needs. 

Through my Department and our Embassies across Africa, and in close cooperation with Enterprise Ireland and other Agencies and business associations, we have committed ourselves to helping with the research, the networking and the groundwork that can identify and facilitate two-way trade and investment.  This Forum is a very concrete and important manifestation of that commitment.

Intra-Africa Trade

During my discussions with African leaders, they always encourage us to build our trade relations with Africa.  Another recurring theme is the need to unlock intra-Africa trade, which can become the real motor of Africa’s growth.

Today, just 10% of African trade is with other African nations.  This is remarkably low compared with the European Union, where over two-thirds of trade is with fellow EU member states. It has been estimated that an African free trade area could increase GDP across the continent by an estimated €45 billion a year. That's €15 billion more than the world now invests in sub-Saharan Africa in development assistance.

The theme of the 18th African Union Summit in Addis Ababa last January was “Boosting Intra-African Trade”.  It reflected the vision of the African Union to create an African Economic Community by 2028. The Minister of State for Trade and Development, Joe Costello, attended the Summit and he made it clear that we in Ireland will support African ambitions for a free trade area.

Macro-economic situation in Ireland

Focusing on Africa and other external markets is of course an integral element in the Government’s work to restore growth to Ireland’s economy.  We have been making real progress in turning around our own fortunes and restoring competitiveness and growth. The economic crisis of the past four years has been devastating for Irish people and for Ireland’s standing in the world.  But it is increasingly being recognised internationally that we have been taking the necessary, painful action and that we are now moving steadily in the right direction. After a number of years of declining GDP, last year saw the first full year of economic growth since 2007.  There is broad agreement amongst forecasters that Ireland will experience positive growth again in 2012. 

As is typical in small open economies such as Ireland’s, the traded sector is leading the recovery. Among the sectors performing particularly well are pharmaceuticals, software, financial services, business services and the food industry.    The success of Ireland’s exports – which rose by over 5% last year - reflects the significant competitiveness gains which have been achieved.    Exports of goods and services are now well in excess of pre-crisis levels.   The Irish economy has shown its inherent flexibility.   Prices and costs have fallen significantly and further improvements are in the pipeline.   The European Commission has projected that Irish unit labour costs will have improved by around 22 per cent compared to the euro area over the period from 2009 to 2013.   The strong export performance also means that our balance of payments with the rest of the world moved into surplus in 2010 for the first time in over a decade.  A small balance of payments surplus was also recorded last year.  

While there has been progress, we are not complacent about the challenges ahead. In particular there are still serious problems facing the Eurozone, and we continue to work with our partners to resolve these.  For Ireland to be successful we need to see economic stability and a return to growth and job creation in Europe, most particularly in the Eurozone.

Rebuilding Reputation  

We are rebuilding Ireland’s international reputation.  And not just our economic reputation.  The Government has recognised that the strength of our international reputation has been in its underpinning by our values and our recognised commitment to the causes of peace and justice in the world.  Our development aid programme, for instance, is focused on Africa and is central to our foreign policy; it has maintained its reputation as one of the most effective in the world.

We are determined that we will remain engaged internationally.  We will resolutely build our trading and economic links.  We will also continue take a lead in the fight to end poverty and hunger; we will promote conflict resolution, disarmament, human rights and equitable economic and social development. 

Our continuing commitment to these objectives is clear not just from the Africa Strategy and from our continuing commitment to Irish Aid, but also from our current role as Chair of the Organisation for Security and Cooperation in Europe (OSCE), and next year’s role as EU Presidency, as well as our campaign for election to the UN Human Rights Council

We are showing, in very practical ways, that the priorities of peace, human rights and development remain at the heart of our foreign policy.

Importantly, we are demonstrating that the pursuit of these goals is compatible, coherent and indeed interdependent with the priorities of global economic stability, growing international trade and investment flows and improving Ireland’s own trade and investment relationships worldwide.    

Conclusion

The theme of our Forum today is “Building on Success” and this is apt.  In the past 12 months since the first Forum, we have seen further political gains across Africa, including peaceful elections in a number of countries and the establishment of a Government in Somalia. At the same time, economic growth in the region continues to build.  

Politically and economically, Africa is building on its success of the past decade. Ireland too, continues to work its way back to full economic recovery. We believe that Ireland’s relationship with Africa will play a greater role in the future we are building for our country and its people.  I am therefore delighted to be part of this gathering today and look forward to hearing the outcomes from this important Forum.