Abuja Treaty; African Renaissance & International Co-operations Fund Bill: briefing

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Meeting report

ECONOMIC AFFAIRS SELECT COMMITTEE
9 October 2000
ABUJA TREATY ESTABLISHING THE AFRICAN ECONOMIC COMMUNITY; AFRICAN RENAISSANCE AND INTERNATIONAL CO-OPERATION FUND BILL

Relevant Documents:
Abuja Treaty establishing the African Economic Community
African Renaissance and International Co-Operation Fund Bill [B 65B-2000]

Chairperson: Mr M Moosa. Present were Mr Lucas (Northern Cape, ANC), Mr Kolweni (North-West, ANC), Mr Durr (Western Cape, ACDP), Dr Conroy (Gauteng, NNP) and Mr Theron (Gauteng, DP). Also present were Mr Sibeko and Mr Meyer of the Department of Foreign Affairs.

SUMMARY
The Committee was divided on the Abuja Treaty and did not vote on it. Although all agreed the Treaty is not well-considered, part of the Committee advocated the Treaty should be ratified so that South Africa can influence its progress. South Africa is signatory to the Treaty, but has not yet ratified. South Africa cannot participate in the re-negotiation of the Treaty without having ratified it. It was suggested that Committee make a report, raising its reservations about the Treaty.

The African Renaissance and International Co-Operation Fund Bill both establishes a fund and repeals the 1968 Economic Co-operation Promotion Loan Fund Act. The new fund will provide the basis and framework to enhance the African Renaissance. As Africa is the main focus of South Africa's foreign policy, this fund would allow South Africa to confirm its commitment to Africa's development. The Committee discussed a technical amendment and did not vote on the Bill.

MINUTES
The Chairperson asked the secretary to take note of Members who were not present and send a letter to the Chief Whip, informing him of their absence.

Abuja Treaty Establishing the African Economic Community
The Chairperson said South Africa's main issue of concern in terms of the Abuja Treaty is the impact it might have on South Africa "down the line", ie after 2020 when a common African currency is expected to be introduced and other institutions the Treaty calls for are put in place. The Chair said that, in his opinion, the Southern African Development Community (SADC) is already ahead of the rest of the African continent in terms of regional union and will probably drive the processes of the Abuja Treaty and be a leader.

Dr Conroy (Gauteng, NNP) asked for clarification of an issue that had been raised at the 20 September 2000 joint meeting on the Abuja Treaty concerning the domestic legislation to allow for the Bill's implementation after its ratification. Dr Conroy wanted to know if all legislation required was in place.

Mr Durr (Western Cape, ACDP) said that he is "at variance with the Treaty", calling its goals "pie in the sky", "lofty" and "grandiose". He compared it to the European Treaty, and said there was "no chance of success within the time frames" set out by the Treaty. He said the call for a monetary union was "totally unrealistic" and said he would support something that was more along the lines of a slow and gradual "common development strategy" with the rest of the continent. This Treaty, as written, he said, is "impossible". He also wanted to know if those agencies that would be affected by the Treaty had been contacted, such as transport and airways, and if they thought the goals of the Treaty were achievable.

Mr Meyer of the Department of Foreign Affairs said the Abuja Treaty was negotiated before 1991 and came into force in 1994. South Africa did not sign until 1997 and has not yet ratified it. It is therefore not a party to the Treaty and cannot influence its stipulations. The proposed African Union will absorb the current Organisation of African Unity and is to be launched in March 2001. The Abuja Treaty also calls for the formation of a Pan-African Parliament (which is now being finalised), an African Monetary Union, an African Central Bank and an African Court of Justice. Mr Meyer warned that all of these things will take place whether South Africa is part of the process or not. At this point, South Africa is not a party to the Treaty and so has no say or influence over the establishment of these institutions and their functioning. Mr Meyer pointed out that South Africa can only influence these institutions by becoming a party to the Treaty and participating in the re-negotiation of the Treaty. He noted that South Africa was exerting a heavy influence on the Pan-African Parliament.

Mr Meyer also mentioned that the Department of Foreign Affairs had not yet received responses from line function departments it had requested input from. Further since South Africa is not a party to the Treaty, no legislation has gone through yet.

Mr Lucas (Northern Cape, ANC) asked what role the existing African Development Bank would play with the proposed African Central Bank. He also asked about the implications of the African Monetary Union and the proposed single currency. "Think of the amount of debt other African countries are in. This will have an impact on us." He asked how they could ensure no one in the process would really suffer.

Mr Durr warned they should not rush into this matter. He said the Treaty had not been properly thought of in the first place and they were "giving up sovereignty on a massive scale to something we haven't been party to".

The Chair agreed they had not been involved in drafting the Treaty and added that it would "look different" if they had. He agreed they were "coming in at the tail end" and that aspects of the Treaty were not well-considered. He called the Treaty "wishy-washy". However, he said, if they did not ratify the Treaty, South Africa would have no opportunity to re-negotiate and influence the Treaty. He asserted that South Africa needed to enter the process in order to influence it. He added that the common currency was not due to come into being until 2025; in the meantime, South Africa can influence the Treaty.

The Chair noted the Treaty had already been approved by the National Assembly but recommended the Select Committee draft a report indicating its discomfort and unease with the Treaty.

Mr Lucas agreed, saying they should make specific recommendations and thrash them out before presenting them to the rest of the continent.

Mr Meyer noted that Africa is the prime foreign policy focus of South Africa and reiterated the importance of South Africa being a party to the Abuja Treaty in order to have influence over it. The Chair agreed, saying next year's Abuja Treaty talks would take place without South Africa if they did not ratify.

Mr Durr said he did not like the expediency of joining the Treaty in order to influence it. He asked if the Abuja Treaty violated any other of South Africa's treaty obligations.

The Chair interjected that the Committee was clearly divided on the question and would not pass the Treaty today. He noted that he was sympathetic to Mr Durr's expediency argument, but said that in international politics you cannot stay out of the process but must stay in to influence it. He suggested the Committee make a report, raising its reservations about the Treaty.

African Renaissance and International Co-Operation Fund Bill
Mr Meyer explained this Bill is both to establish a fund and to repeal the 1968 Economic Co-operation Promotion Loan Fund Act. The new fund will provide the basis and framework to enhance the African Renaissance. He repeated that Africa is the main focus of South Africa's foreign policy and that this fund would allow South Africa to confirm its commitment to Africa development.

The objects of the Fund, as enumerated in Clause 4, are to promote democracy and good governance, prevent and resolve conflict, promote socio-economic development and integration and to offer humanitarian assistance and human resource development. The Fund is not for peacekeeping or for infrastructural projects (these are expensive and would deplete the Fund too quickly).

Mr Meyer compared the 1968 Act to the new Bill. The 1968 Act, he said, was bilaterally aimed and limited to the intention of "buying friends for South Africa". The new Bill has a multi-lateral approach and is aimed at the whole continent of Africa. The new Bill, he said, is not about buying friends but about promoting development in Africa and devising development strategies.

Mr Theron (Gauteng, DP) asked the extent of the current fund's reserves.

Mr Meyer responded it consisted of about R240 million, not counting what is owed to South Africa. He added it was unlikely these debts would ever be re-cooped.

Mr Durr asked what was meant by the terms "promotion of democracy and good governance". He wondered if this meant South Africa could play partisan political games. He was concerned there is no qualification against party politics and asked what limits and controls were in the Bill to guard against this.

The Chair indicated Clause 5(4) as covering Mr Durr's concern. While drawing attention to this, the Chair noticed a technical problem in the drafting of Clause 5(3) and (4). He noted that, as drafted, it means all loan are subject to recommendation and agreement, so the exclusion of good governance and democracy means these are not subject to agreement and recommendation. The Chair considered this to be a serious legal contradiction. He recommended correcting it by adding the words "or disbursed" to clause 5(3) after the word "available" and by changing clause 5(4) to read as follows:

"Loans or other financial assistance must be rendered in accordance with an agreement entered into between the relevant parties, excluding assistance for the promotion of democracy and good governance or the prevention or resolution of conflict."

Clause 5(b) is deleted.

Mr Durr returned to his ideological problems with the possibility of funding for partisanship. Mr Meyer explained that promoting democracy and good governance is always linked to a multi-lateral instrument; for example, the Lusaka Agreement. It is always a written contract, he said. He added that, at the same time, they did not want to exclude the possibility of bilateral assistance, such as to Mocambique during the recent floods.

The Chair said they were not ready to vote on the Bill and suggested they meet again later in the week to go over both the Abuja Treaty and the Bill again.

The meeting was adjourned.

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