Transcript Javier Presentation at the Africa Forum

23 April 2009
Africa and the global crisis:
will growth hold?
Africa Forum, Paris
5 June, 2009
Léonce Ndikumana
Director, Research Department
African Development Bank
UNECA
Africa still growing but slowdown is significant
Growth
Real GDP Growth (%)
8
6
4
2
0
-2
-4
-6
2000
2001
2002
2003
Africa (May 2009 forecast)
2004
2005
2006
2007
2008(e)
Africa (February 2009 forecast)
Source: OECD Development Centre / African Development Bank. 2008
2009(p)
2010 (p)
Total OECD
Global Crisis Taking a toll on Africa’s growth prospects
GDP growth %
Downside risk in GDP Growth projections
7
6
April 08
5
Nov 08
4
Feb 09
May 09
3
2
1
0
2007
2008(e)
2009(p)
2010 (p)
Africa (April 2008 forecast)
Africa (November 2008 forecast)
Africa (May 2009 forecast)
Africa (February 2009 forecast)
Source: OECD Development Centre / African Development Bank. 2008
Growth
Regional disparities (May forecasts)
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
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
Memorandum items
Southern Africa hit severely: Oil (Angola)
Minerals (Botswana)
The global trade collapse is now hitting Africa
Trade
• A cold shower for hard commodity exporters
• Soft commodity exports prove more resilient
• After years of boom, World Trade is expected to contract by 13% in 2009
400
350
300
250
200
150
100
50
0
Hard commodities
Petroleum
Copper
Aluminium
Gold
14000
Baltic Exchange Dry Index
12000
10000
8000
6000
4000
- 94%
2000
0
Soft Commodities
300
200
Africa Trade balance
Cocoa
Coffee (arabica)
Coffee (robusta)
Tea
USD Billion
400
Source: Datastream, 2009
150
120
90
60
30
100
0
- 112%
-30
0
Source: African Economic Outlook, based on World Bank, 2009
Source: African Economic Outlook, 2009
Private financial flows
A global retrenchment of capital
• 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
70
60
USD Billion
USD billion
Foreign Direct investment
50
Remittances
Stock Markets
(MSCI price index local currency)
45
180
40
160
35
140
30
120
40
25
100
20
30
15
20
10
10
0
Source: OECD Development Centre , based on UNCTAD 2009
80
60
5
40
0
20
Source: OECD Development Centre , based on World Bank, 2009
EGYPT
NIGERIA
SOUTH AFRICA
Source: Thomson Datastream 2009
Global Crisis A patchwork of impacts
African growth has taken a serious hit:
2008: near 6%
2009: below 3%
• Oil exporters are taking the most
severe hit
• More globally integrated
economies, such as South Africa
and Egypt, are strongly affected
Growth deceleration
2008 - 2009
Greater than 3 %
- 2 to- 3 %
Zero to – 1.9 %
Increased growth
between 2008-09
Source: African Economic Outlook, 2009
• Low-income / non-oil exporting
countries are less affected,
because:
1. decrease in energy bill
2. less integration to the
world economy
Oil Exporters
The price of having all eggs in one basket
Taking a clear hit from
the oil price fall…
…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 lowering
levels of external debt
Source: OECD Development Centre / African Development Bank
*: African Economic Outlook forecasts
Oil Importers Proving resilient… so far
…yet challenges rising
Holding up against the crisis so far…
Oil-importing countries have performed well,
diversifying their sources of growth over recent
years. While lower energy and food prices
subsequent to the crisis have helped importers,
difficult times lie ahead
Good performers’ strengths:
•
•
•
Sustained and prolonged growth
Prudent macroeconomic policies
More Diversification
Challenges:
•
•
•
•
•
Source: OECD Development Centre / African Development Bank
*: African Economic Outlook forecasts
Poor capacity in mobilizing domestic
resources
Contain fiscal and current account deficits
High dependency on ODA
Prioritise poverty reduction
Difficulty adjusting to price shocks
Crisis
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.
23 April 2009
Africa and the global crisis:
will growth hold?
Africa Forum, Paris
5 June, 2009
Léonce Ndikumana
Director, Research Department
African Development Bank
UNECA