Chairperson and hon members, like other developing countries, South Africa receives official development assistance and as a result the European financial crisis has affected us and the rest of Africa.
Although Africa is endowed with natural resources, it is known for its poverty, diseases and the many other negative things, such as a lack of infrastructure, which destroyed it in many different ways.
The EU committed to provide about 0,7% of its collective gross national income, but it has decreased in the past two years because of the Eurozone crisis. The impact is felt in Africa because EU member states are the biggest donors. This crisis affected developing and least developed countries, which are heavily dependent on the EU as an important source of foreign aid. According to our data, the EU increased official development assistance to Africa by only E5,04 billion, which was far short of its target of E15,58 billion.
The impact on South Africa is that the exposure of the South African financial sector to the Eurozone crisis currently continues to be limited, but we are not sure of the extent to which it will affect us going forward.
Official development assistance has conditions. Jeffrey Sachs states, "The poor know what to do, but they are too poor to do it." They need aid that will relieve them from poverty and economic dependence to economic development effectiveness. The official development assistance comes with conditions, also from the EU. This is a donor-recipient approach, with the imposition of priorities by donor countries. The agreements are entered into through desperation by developing countries. This leads to their accepting conditions that would be impossible to meet and lead to further suffering.
There are commitments to be honoured, but there is evidence that Africa has honoured commitments that were not honoured by the EU. The power differentials between the donor and the aid-receiving countries in turn influence development because the powerful make and implement the rules.
We can take this opportunity to look at the potential we have and what we can do in the interest of our country and the continent so that we link ourselves as a continent and a region.
South Africa has good policies that need to be implemented for economic transformation of the country and for regional investment. This will establish Africa with a common agenda, ensuring unity and sustainability, and avoid fragmentation.
We have the New Growth Path, that takes global factors and their local impact into account. South Africa can achieve more by developing cohesiveness and an equitable economy. Through this it takes into account the availability of resources by aligning public allocations with different departments.
We also have the National Development Plan that has systems to respond to the needs of our people. The diagnostic report has identified the main nine challenges that will enable us to write a different story for Africa.
As a continent, we should strengthen our mechanisms that can reduce the levels of dependency on official development assistance by some countries. A knowledge base is available through innovation, the exchange of ideas and the available experience. Science and technology need to be expanded and to address the abundance of resources we have through research and development.
Capacity-building can be addressed through the official development assistance that is still available, as capable leadership is needed with regard to indigenous knowledge. This will also address official development assistance commitments on the continent by the countries on the continent. They know their priorities and needs better than people imported from abroad who give us this aid to address our needs. We know our developmental agenda, hon members.
The peer review mechanism is one of the tools that can assist the different countries to do self-assessment and will also improve the integrity and transform the management and administration of the different African countries.