AFRICAN ECONOMIC OUTLOOK AFRICAN ECONOMIC OUTLOOK 2002/032002/03
Geneva – 8 September 2003Geneva – 8 September 2003
The AEO projectThe AEO project
A joint product of A joint product of the African Development the African Development
BankBank& &
the OECD Development the OECD Development CentreCentre
Key featuresKey features
Country level analysis, organised Country level analysis, organised in a single unified frameworkin a single unified framework
social and political developments social and political developments along with economic performance,along with economic performance,
set of individual countries set of individual countries representative of the whole representative of the whole continent.continent.
Country coverage, Country coverage, 2002/032002/03
OutcomesOutcomes
Contributing to policy Contributing to policy monitoring: AEO could be used monitoring: AEO could be used in the APRM process of NEPADin the APRM process of NEPAD
Capacity building: Progressively Capacity building: Progressively hand over AEO to African hand over AEO to African economists througheconomists through
– Training within AfDB Training within AfDB
– Constitution of a networkConstitution of a network
ProductProduct
ProcessProcess
Structure of the reportStructure of the report A report structured around A report structured around
individual country notesindividual country notes
starting with a synthesis, starting with a synthesis, highlighting the major features highlighting the major features – AEO 2002/03: Privatisations– AEO 2003/04: Energy Supply
and closing with a statistical annex.and closing with a statistical annex.
Main Findings 2002/2003Main Findings 2002/2003
Growth ProspectsGrowth Prospects
Poverty: Meeting the Millennium Poverty: Meeting the Millennium Development GoalsDevelopment Goals
Focus on PrivatisationFocus on Privatisation
1. Growth Prospects1. Growth ProspectsThe 2002/2003 outlookThe 2002/2003 outlook
0
1
2
3
4
5
6
7 Africa performance Africa performance affected by global affected by global slowdown but…slowdown but…
domestic factors domestic factors (governance, (governance, epidemics, and epidemics, and agricultural agricultural outcomes) pose outcomes) pose major challenges.major challenges.
22 AEO countries
Africa
ODA to AfricaODA to Africa
0
5
10
15
20
25
1996 1997 1998 1999 2000 2001
US
$ b
illio
ns
0
0.1
0.2
0.3
0.4
perc
enta
ge
ODA to Af rica Af rica's share in ODA
Average growth rates of Average growth rates of AEO countriesAEO countries
REGION AVERAGE 1995-2000
2001 2002(E) 2003(P)
Central 2.7 4.7 5.7 4.7
East 4.3 4.7 2.6 5.3
North 4.2 3.8 2.9 3.3
South 3.0 2.4 3.4 2.9
West 3.6 3.0 1.1 2.4
Total 3.6 3.3 2.9 3.3
Best and worst performersBest and worst performers
-20
-10
0
10
20
30
40
GD
P gr
owth
2003
2002
Central East North South West
Gabon
Equatorial Guinea
Madagascar
Madagascar
Zimbabwe
Angola
Mozambique
Nigeria
Mali
Cote d'Ivoire
Sierra Leone
Mali
ZimbabweZimbabweGovernance mattersGovernance matters
- 15
- 10
- 5
0
5
1019
95
1996
1997
1998
1999
2000
2001
2002
(e)
2003
(p)
Increasing Increasing macroeconomimacroeconomic imbalances c imbalances
Food crisisFood crisis
Political Political tensiontension
02468
10121416
1996
1997
1998
1999
2000
2001
2002
Political hardening
Political tensions
GDP growth
2. Poverty2. Poverty
Sub-Saharan Africa Sub-Saharan Africa
will miss the 2015 will miss the 2015
Millennium Development Goals Millennium Development Goals (MDGs) target …(MDGs) target …
while Northern Africa will while Northern Africa will achieve themachieve them
The income poverty targetThe income poverty target
46.7
39.3
23.9
47.7
0
25
50
1990 1995 2000 2005 2010 2015% o
f p
eo
ple
liv
ing
be
low
1 U
SD
a d
ay
SSA Actual SSA projected SSA path to goal
Completion rate of MDGsCompletion rate of MDGs by 2015 by 2015
(by total population in the Sub region)(by total population in the Sub region)
sub-Saharan Africa
-100%
-50%
0%
50%
100%
HalvePoverty
Primaryschool
completion
Genderequality in
school
Childmortality
Maternalmortality
HIV/AIDSprevalence
no datanoyes
Impact of HIV/ AIDSImpact of HIV/ AIDS
3. Privatisations3. Privatisations
Ownership of the processOwnership of the process
Lack of local capacityLack of local capacity
Lack of regulatory frameworkLack of regulatory framework
StrategyStrategy
Cornerstone of SAPs but recent Cornerstone of SAPs but recent phenomenon in SSAphenomenon in SSA
Main Obstacles
CompanyCompany Buyers (stake)Buyers (stake) Proceeds Proceeds (US$)(US$)
RemarksRemarks
Maroc Maroc Telecom 2000Telecom 2000
Vivendi (35%)Vivendi (35%) 2.1 billion2.1 billion Network Network expanded and expanded and reduced tariffsreduced tariffs
Telkom 1997Telkom 1997 SBC (US) & SBC (US) & Telekom Malaysia Telekom Malaysia (30%) + BEE (3%)(30%) + BEE (3%)
1.26 billion1.26 billion Higher Higher investment and investment and network network improved. IPO improved. IPO in 2003 15 % in 2003 15 %
Sonatel 1997-Sonatel 1997-9898
France TelecomFrance Telecom
(33.3%) + (33.3%) + Senegal flotation Senegal flotation (17%)(17%)
197 million 197 million Increased Increased profitsprofits
Boost to the SEBoost to the SE
ACSA 1998ACSA 1998 Aeroporti di Aeroporti di Roma (20%), BEE Roma (20%), BEE (4%)(4%)
280 million 280 million Expansion Expansion plansplans
Kenya Kenya AirwaysAirways
19961996
KLM (26%), KLM (26%), Nairobi Stock Nairobi Stock Exchange (51%, Exchange (51%, 34% to local 34% to local investors)investors)
26 million 26 million (KLM)(KLM)
48 million 48 million flotationflotation
Total 74 Total 74 millionmillion
Profits up, Profits up, passengers + passengers + 78%78%
Challenges ahead for AfricaChallenges ahead for AfricaAchieving MDGsAchieving MDGs
– ability to cope with vulnerabilityability to cope with vulnerability
– improved governance improved governance
– ownership of structural reformsownership of structural reforms
Algeria Algeria Oil dependency & Oil dependency &
governancegovernance
0
1
2
3
4
5
6
1995
1996
1997
1998
1999
2000
2001
2002
(e)
2003
(p)
Rea
l GD
P g
row
th
Recovery is boosted Recovery is boosted by dominant by dominant hydrocarbon sector.hydrocarbon sector.
High unemployment High unemployment and social unrest.and social unrest.
Despite fiscal Despite fiscal expansion and high expansion and high INV/GDP.INV/GDP.
Vested interests Vested interests delay badly needed delay badly needed structural reforms.structural reforms.
Egypt Egypt Unfinished reformsUnfinished reforms
0
1
2
3
4
5
6
7
1995
1996
1997
1998
1999
2000
2001
2002
(e)
2003
(p)
Rea
l GD
P g
row
th
Slow-down of RGDP Slow-down of RGDP growth…growth…
… … combined with combined with unemployment and unemployment and high population high population growth growth
Exogenous sources of Exogenous sources of income and spillovers income and spillovers from Middle East from Middle East instability. instability.
Declining foreign Declining foreign exchange and FTA exchange and FTA with EU can put with EU can put pressure for reforms.pressure for reforms.
Morocco Morocco VolatilityVolatility
-10
-5
0
5
10
15
Rea
l G
DP
gro
wth
Successful Successful stabilization and stabilization and structural reformsstructural reforms
but growth is volatile,but growth is volatile,
and social indicators and social indicators worseningworsening
Challenge is Challenge is achieving sustained achieving sustained growth to reduce growth to reduce unemploymentunemployment
Tunisia Tunisia Resilience to shocksResilience to shocks
0
1
2
3
4
5
6
7
8
1995
1996
1997
1998
1999
2000
2001
2002
(e)
2003
(p)
Rea
l GD
P g
row
th
Open and highly Open and highly diversified diversified economy…economy…
……succeeded in succeeded in poverty reduction poverty reduction and improved and improved human human development development
Despite adverse Despite adverse shocks, growth shocks, growth resumesresumes
Challenges AheadChallenges Ahead
Vulnerability :Vulnerability :
– Reduce dependency on volatile income Reduce dependency on volatile income sources – outlook for oil exporterssources – outlook for oil exporters
– Security and political tensions – tourism and Security and political tensions – tourism and FDIFDI
Integration with EU: need to raise Integration with EU: need to raise competitiveness of private sectorcompetitiveness of private sector
Set up poverty-reduction strategiesSet up poverty-reduction strategies
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