Official Launch Dakar May 10, 2009 African Economic Outlook 2008/2009 UNECA.
-
Upload
joan-chapman -
Category
Documents
-
view
215 -
download
2
Transcript of Official Launch Dakar May 10, 2009 African Economic Outlook 2008/2009 UNECA.
Official LaunchOfficial LaunchDakar May 10, 2009Dakar May 10, 2009
African Economic Outlook 2008/2009
UNECA
UNECA
Financial partner
Junior partners UNECA
Lead partner
Experts Network Consultants. think tanks …
AEOAEO 2009: an evolving partnership
UNECA
AEOAEO Coverage 2009: 47 Countries
Source: OECD Development Centre / African Development Bank. 2008
Algeria
Libya Egypt
Mauritania
Mali
Niger
Chad
Dem.Rep. Congo
Sudan
Central AfricanRepublic
Equatorial Guinea
GabonCongo
Cameroon
Angola
Guinea-Bissau
Guinea
Sierra Leone
Liberia
Côted'Ivoire
Tunisia
BurkinaFaso
Ghana
NigeriaTogo
Ethiopia
Somalia
Djibouti
Eritrea
Kenya
Tanzania
Mozambique
SouthAfrica
Botswana
Zimbabwe
Namibia
Zambia
Swaziland
Lesotho
Malawi
Uganda
Burundi
Rwanda
Madagascar
SenegalGambia
Morocco
AEO 2009
New in 2009:
Burundi
Central African Republic
Djibouti
Gambia
Guinea
Lesotho
Mauritania
Seychelles
Sierra Leone
Swaziland
Sudan
Togo
99% of GDP
97% of population
UNECA
GrowthGrowth Africa still growing but much slower than before the crisis
Source: OECD Development Centre / African Development Bank. 2008
Real GDP Growth (%)
UNECA
Real GDP Growth (%)
Source: OECD Development Centre / African Development Bank. 2008
GrowthGrowth The crisis taking a toll on Africa’s growth prospects
April 08 projections
Nov 08 projections Feb 09 projections
May 09 projections
UNECA
GrowthGrowth Regional disparities in growth
Real GDP Growth (%) 2000-05 2008(e) 2009(p) 2010(p)Central 5.7 5.0 2.8 3.6East 4.9 7.3 5.5 5.7North 4.1 5.8 3.3 4.1South 4.1 5.2 0.2 4.6West 7.1 5.4 4.2 4.6Africa 4.8 5.7 2.8 4.5Memorandum items North Africa (including Sudan) 4.2 6.0 3.5 4.2 Sub-Saharan Africa 5.2 5.5 2.4 4.7 Oil-exporting countries 5.4 6.6 2.4 4.5 Oil importing countries 4.1 4.6 3.3 4.5
UNECA
GrowthGrowth Regional disparities (May forecasts)
Southern Africa hit severely: oil (Angola) and minerals (Botswana)2007 2008(e) 2009(p) 2010(p)
February May February May
GDP Growth Rate in percentage
Central Africa 4.0 5.0 2.8 2.0 3.6 3.2
Eastern Africa 8.8 7.3 5.5 5.1 5.7 5.5
Northern Africa 5.3 5.8 3.3 3.5 4.1 4.1
Southern Africa 7.0 5.2 0.2 -1.0 4.6 3.6
Western Africa 5.4 5.4 4.2 3.3 4.6 3.4
AFRICA 6.1 5.7 2.8 2.3 4.5 4.0
Memorandum items
Sub-Saharan Africa 6.4 5.5 2.4 1.4 4.7 3.8
Oil-exporting countries 6.8 6.6 2.4 2.5 4.5 4.1
Oil importing countries 5.4 4.6 3.3 2.1 4.5 3.8
UNECA
Global CrisisGlobal Crisis Africa is better prepared to weather the storm
• Committed macro management in many countries has brought inflation under control and improved fiscal balances
• The HIPC initiative significantly reduced debt levels in many countries
• The commodity boom helped to improve terms of trade
• Business climate indicators have been improving steadily. reflecting government efforts in nurturing private sector and enterprise
• Political conflicts have declinedNevertheless…
Africa today is much more resilient to exogenous shocks:
UNECA
TradeTrade The global trade collapse is now hitting Africa
• Many African countries have been dependent on commodity exports for growth• Nominal export growth raced ahead by an annualised 34% over 2003-07• After years of boom, World Trade is expected to contract by 13% in 2009
Source: Datastream, 2009Source: African Economic Outlook, 2009
- 94% - 112%
UNECA
Global CrisisGlobal Crisis A global retrenchment of capital
Net capital flows to emerging economies
-2000
200400600800
1,000
2002 2003 2004 2005 2006 2007 2008e 2009f
USD
bill
ion
Direct investment Portfolio equity Banks non-bank debt Official flows
UNECA
Private financial flowsPrivate financial flows A global retrenchment of capital
Source: OECD Development Centre , based on UNCTAD 2009 Source: OECD Development Centre , based on World Bank, 2009
RemittancesForeign Direct investment
• Flows to Africa grew by 17% to over USD 60 billion in 2008, despite the global slowdown• Remittances to Sub-Saharan Africa are set to decline from between 4.5% to 8% over 2009• Stock markets have taken a severe hit
Stock Markets(MSCI price index local currency)
Source: Thomson Datastream 2009
UNECA
• A cold shower for hard commodity exporters• Soft commodity exports prove more resilient
Source: OECD Development Centre, based on World Bank, 2009
TradeTrade The commodity boom is over… for now
Hard commodities Soft Commodities
UNECA
The emerging world is not forgetting Africa
Source: OECD Development Centre, based on China Mofcom, 2009
• While OECD countries are dealing with their downturn, emerging countries continue to invest and strengthen ties with African countries
• Africa’s emerging country partners must not sacrifice governance and poverty reduction to strategic interests
India China
Source: OECD Development Centre, based on UNCTAD, Nepgen and Jansson 2009
Significant Chinese and Indian investments in African infrastructure, up to April 2008
UNECA
Food pricesFood prices After the peak of the food crisis
Food prices
Source: World Bank
UNECA
DriversDrivers Severe macroeconomic impact (February forecast)
* Excluding Zimbabwe** Estimations for 20078and predictions for 2009/10
Source: OECD Development Centre / African Development Bank. 2008
Inflation
Current Account
Fiscal balance
• The crisis will cause fiscal balances to deteriorate significantly across the continent.
• Fiscal space to adopt countercyclical policies is very limited in many countries.
UNECA
DriversDrivers Macroeconomic balances deteriorating
* Excluding Zimbabwe ** Estimations for 20078and predictions for 2009/10
Source: OECD Development Centre / African Development Bank. 2008
UNECA
Global CrisisGlobal Crisis A patchwork of different impacts
Source: OECD Development Centre / African Development Bank
Cost of the crisis:• Oil exporters the most hit.•More integrated
economies also strongly affected• Low-income / non-oil
exporting countries are less affected. because:-- beverages (cocoa. tea. coffee) less affected by decline in global incomes.-- less integration to the world economy
- 2 to- 3 %
Zero to – 1.9 %
- 3.1 to – 23 %
Increased growth between 2008-09
Growth differential 2008 - 2009
UNECA
GrowthGrowth Oil exporters and importers: making a switch?
Source: OECD Development Centre / African Development Bank. 2008
Net Oil exporters: Algeria. Angola. Cameroon. Chad. Congo. Côte d'Ivoire. Congo DRC. Egypt. Equatorial Guinea. Gabon. Libya. Nigeria. Sudan
Real GDP Growth
Oil exporters
Oil importers
UNECA
Oil ExportersOil Exporters The cost of having all eggs in one basket
Source: OECD Development Centre / African Development Bank
*: African Economic Outlook forecasts
…and little room left for manoeuvre
• Many oil exporters did not take advantage of commodity windfalls to improve governance and diversify their economies
• Nevertheless, some oil exporters have performed well in terms of reducing external debt
Taking a hit from the oil price fall ..
UNECA
Oil ImportersOil Importers Benefiting from the end of oil and food price booms
Source: OECD Development Centre / African Development Bank
*: African Economic Outlook forecasts
Oil-importing countries find it difficult preserving pre-crisis gains. Rising inflation and deteriorating macroeconomic balances.Good performers’ assets:• Sustained growth; Prudent
macroeconomic policies; Diversification; Decreasing poverty
Challenges:• Fiscal deficits; ODA
dependency; widening trade deficit; climatic & price shocks
Holding up against the crisis so far… …yet challenges rising
UNECA
CrisisCrisis Main messages
•Africa has been hit severely; the impact varies across countries and sectors
•Changes in the direction of trade, prudent macroeconomic policies and debt relief make Africa better positioned to weather the current crisis.
•African governments have to preserve the gains obtained in the recent past, by pursuing structural reforms, infrastructure development and targeting poverty reduction.
•With the right combination of domestic policy reforms, Africa can continue to grow despite the crisis, while setting the stage to faster growth for the future.
UNECA
RisksRisks Countries to fall further back on progress toward the MDGs
Source: OECD Development Centre / African Development Bank. 2008
UNECA
ChannelsChannels Aid commitments can make the difference
DAC members' net ODA 1990 - 2007 and DAC Secretariat simulations of net ODA for 2008 to 2010
UNECA
StabilityStability Is long term decline in political instability continuing ?
Good News• Several post-conflict countries making progress. • Major improvements in political stability and governance in Liberia and Sierra
Leone. • After 6 years of civil unrest, the situation in Côte d’Ivoire continues to stabilise. • The Great Lakes region seems to be laying the bases for an improvement in the near
future. • The conflict in Uganda has lost impetus with the elaboration of a peace agreement
in April 2008 (although not yet signed by the rebels).• Elections in Ghana leading to a peaceful transfer of power.• Regional cooperation on governance in the framework of NEPAD and APRM is
contributing to improvements in governance and stability.
UNECA
StabilityStability Is long term decline in political instability continuing ?
Still some bad News
However, some concerns remain in some countries with unresolved conflicts.
UNECA
ThemeTheme Innovation and Information & Communication Technologies
Africa’s Exponential Growth in Mobile Telephony • Africa is the fastest growing market in the world. Today, 4 out of 10 Africans have a mobile phone line.
• The exponential growth in ICT is enabling many African users to gain access to basic services (education, health, banking) for the first time.
• ICT is a vector for innovation, stimulating of innovative products and business models.
• As an endogenous source of growth, ICT is particularly valuable in a time of external crisis.
Source: OECD Development Centre, based on Wireless Intelligence, 2009.
ICTs are helping to shape an improved business environment by contributing to market development, overcoming traditional infrastructural constraints and reducing business costs
UNECA
InfrastructureInfrastructure Connecting Africa to the world in 2009-10
Source: World Bank Group 2008, www.manypossibilities.net (Steven Song).
SAT3
THE MISSING
LINK
As of March 2009MULTIPLE
SOLUTIONS
AT LEAST ONE LINK
• The East coast will be connected to the world for the first time through fibre optic submarine cables on open access, TEAMS and SEACOM; the West coast will be connected by at least 3 fibre optic submarine cables on open access, GLO1, MaIN OnE and WACS, instead of having only SAT3 on closed access.
• User prices should start decreasing between 4 to 10 times from June 2009, as inland high capacity networks are built and as wholesalers pass on price cuts, which can bring about an exponential uptake in ICT and Innovation in Africa.
UNECA
InfrastructureInfrastructure Good prospects for inland networks
30,500 km in Eastern and
Southern Africa
8,800 km in Central Africa
7,200 km in Northern
Africa
19,500 km in Western
Africa
• Connecting Africa’s capitals and major cities will require 66.000 km of fibre-optic cables.
• Several major initiatives are already being planned:
• Eastern and Southern African Backbone.
• Central African Backbone.
• Western African INTELCOM II Backbone.
• Total expenditure commitments for telecoms in Africa are set to reach $55,892,950,000 as agreed in the Connect Africa Summit, Kigali, Rwanda in October 2007
• Participants committed to completing the interconnection of all African capitals and major cities with ICT broadband infrastructure by 2012.
Source: ITU, 2007
UNECA
CrisisCrisis ICTs in Africa remain attractive to investors
Healthy Mobile Business in Africa
Source: Wireless Intelligence, 2008
• Like in the dot.com burst in 2000-2001, ICT investment will be less affected by the crisis than other regions.
• Big deals have continued through late 2008 and early 2009.
• Capital expenditures are decreasing and price competition for market share is rising steadily.
• Cash-rich transnational operators will consolidate their presence.
With publicly funded high capacity infrastructure projects underway & private investments resilient to the crisis,
new products and business models should multiply despite the crisis
UNECA
Innovation Innovation Africa first to implement free roaming
Source: OECD Development Centre
Zain
MTN
Safaricom - Vodacom - MTN
Forthcoming
Africa is the first continent in the world to implement free roaming, allowing any user in a foreign country to receive and send calls and messages at local rates.
• Zain launched the world’s first borderless network in 2006.
Free roaming is growing exponentially thanks to pan-African operators 6 operators account for 52 % of total mobile phone subscriptions in Africa by 2009:
• Middle East-based: Zain present in 15 countries and Moov in 5.
• South African-based: MTN present in 13 countries.
• European-based: Orange present in 12 countries, Tigo and Vodacom in 6.
Free roaming countries
UNECA
InnovationInnovation Mobile banking lowering transaction costs
Mobile Phone Transactions in Kenya (%)
• Excellent prospects with e-banking services quickly growing and being already present or announced in 14 Sub-Saharan and 3 North African countries.
• Overseas: Orascom and Vodafone have signed agreements with Western Union on remittances.
• Mobile-payment and mobile-banking services rely on existing distribution networks: Mobile users, village kiosk agents, eventually Western Union agents.
Source: Vodafone, 2009.
• In Kenya, M-Pesa’s mobile-payment service for domestic transfers has enabled to lower transaction costs sharply, e.g., to send 1 000 Ksh, Western Union asks 500 Ksh, M-Pesa between 30 and 75 Ksh.
• M-Pesa has won over 5 million users in less than 2 years only in Kenya and is seeking to expand to East Africa and Afghanistan.
UNECA
Innovation in agricultureInnovation in agriculture Bringing people and markets together
Source: Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger, Jenny Aker, 2008.
Bakin Birgi(Monday)
Zinder(Thursday)
Tanout(Friday)
Niamey(Sunday)
65 km ~ from 3 hours to 2 mins
20 km ~ 1 hour
750 km ~ from not accessible to 2 mins
Home market
phoner~1.gif
Farmer in Niger
• E-services such as messages and internet through mobile phones have brought together farmers and buyers by enabling access to crop prices and quantities timely and affordably.
• These services bring reductions in price differences across markets, e.g., 20 per cent in Niger, due reductions in search costs: Farmers are able to search over more markets and respond to surpluses and shortages, e.g., markets in food crisis regions with mobile phone coverage in Niger in 2005 had lower consumer grain prices than those regions without mobile coverage.
• These services are already present in 10 West and Central African countries and growing.
UNECA
Policy recommendationsPolicy recommendations For Africa to continue an innovation frontier..
ICTs in Africa has proved to be an innovation frontier by combining state-of-arttechnologies with local customs and constraints through incremental innovations.
• This has been possible through the growth in Infrastructure and Innovation in ICT in Africa, and still more can be done to move forward in delivering value added services to the poorest population :
• Expensive inland high capacity networks need to be supported and governments have to ensure that wholesale price drops are passed on, if users are to benefit from being connected to the world by low cost solutions.
• In the Connect Africa Summit commitments in Kigali in 2007, African capital and major cities are to be connected to broadband by 2012 and African villages by 2015.
• Policies on ICT and Innovation are not presently well integrated in broader development strategies: Donor targets, MDGs and PRSPs.
• Governments should do more to attract private investment and knowhow to the fixed-line by adapting convergent licensing regimes and setting symmetric regulation of termination charges.
• Many fixed-line operators are close to bankruptcy with decreasing traffic and increasing marginal costs.
UNECA
ICTICT Policy recommendations for Africa
ICTs in Africa has proven to be an innovation frontier by combining state-of-arttechnologies with local customs and constraints through incremental innovations.
However, there is still more to be done to deliver more and better value added services to the poorest population :
• Expensive inland high capacity networks require government support
• Governments have to ensure that wholesale price drops are passed on
• Policies on ICT and Innovation are not yet well integrated in broader development strategies: Donor targets, MDGs and PRSPs.
• With many fixed-line operators close to bankruptcy, governments must attract private investment and knowhow to the fixed-line sector by adapting convergent licensing regimes and setting symmetric regulation of termination charges.
UNECA
AEO.orgAEO.org Africa’s economic portal for policymakers
• The latest developments in Africa’s economies
• Brings together the data & research from eight years of AEO
• Interactive database of all AEO data and statistics
• Complete and updated country notes
• Promotes original research by African researchers and institutions
AfricanEconomicOutlook.org
UNECA
Thank You