Transcript Slide 1

Mthuli Ncube
Chief Economist and Vice President
African Development Bank group
2 May 2011
DANIDA DEVLOPMENT DAYS, Copenhagen: 2-4 May 2011
KEYNOTE ADDRESS
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Part A: Africa Now
Part B: Africa in 50 years time
Part C: Development Challenges
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Africa Now
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African growth is strong.
Africa the 3rd fastest
growth region over 10
years
Africa did well out of
financial crisis due to
good economic
management, and
diversification
GDP level at US$1.6
billion at par with Brazil
or Russia
Growth is being held
back by factors such as
infrastructure (taking
away 2% of GDP growth)
Africa is natural resource
rich
Growth not Inclusive
Source: AfDB
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Commodity prices
Domestic consumer market
Macroeconomic policies and reforms:
Reaping the benefits of decade of
reforms
Agriculture, services and
manufacturing:
Good harvests, diversification in
some countries
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Inclusive growth
Strong demand for more accountability
and good political governance in Africa
The youth bulge deserves urgent
attention
Africa is growing but there are risks
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Tunisia (1,1%)
Egypt
Lybia
1,6%
-19%
Ethiopia
Côte d’Ivoire (-7,3%)
Nigeria
10%
6,9%
Liberia (7,3%)
DRC
Ghana (12%)
Angola
Tanzania (6,9%)
8,4%
Benin (2,5%)
6,9%
7,3%
7,7%
7,8%
Botswana
6,9%
3,6%
South Africa
Mozambique(7,7%)
Comoros (2,5%)
Madagascar (0,6%)
Zimbabwe (7,8%)
Swaziland (1,9%)
Lesotho (2,9%)
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Intra-Africa trade
remains low
compared to other
regions
 Investment in
regional transport
infrastructure and
ports, is necessary
Source: AfDB
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Poverty levels are falling
Per capita income is rising
Inequality is rising
Intra-Africa trade has risen slightly and so has
Africa’s share of world global trade
ICT access and penetration has increased
substantially
Access to water and sanitation has not
improved
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Staple food yields have not improved
Fertilizer consumption has fallen
Under-5 child mortality has fallen
Primary school completion rates are flat
Number of fragile states has dropped
Combustible renewables and waste to
generate energy is not increasing
Cost of doing business has fallen
Time required for business start-up has fallen
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87
86
85
head count ratio %
84
83
82
1980
1985
1990
1995
2000
2005
Year
12
25
20
headcount ratio
15
10
5
1980
1985
1990
1995
2000
2005
Year
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Infrastructure Coverage: SS Africa vs Other Low-income
Regions
350
Normalized units
300
Sub-Saharan Africa
250
Other low-income countries
200
150
100
50
0
Paved road Total road
density
density
Mainline
density
Mobile
density
Internet
density
Generation Electricity
capacity
coverage
Improved
water
Improved
sanitation
Sub-Saharan Africa lags behind other developing regions on all dimensions
Regional connectivity is particularly lacking
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Source: AUC,
AfDB, WB
presentation at
UN Millennium
Summit,
September 2010
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Lost production due to power outages and high regulatory costs reduce
competitiveness of African exports
Working hours lost due to
power outage , 2009
Total regulatory costs as % of
sales
Agriculture sector is
important as 60% of
population in Africa
depends on it
 Staple crop yields
remain flat
 Fertilizer consumption
low
Source: FAO
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Improvements in 3
areas of governance
 No improvement in
“voice and
accountability”
 Static in
“government
effectiveness”
Source: World
Governance
Indicators 2010
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Chart 1 : Distribution of the African Population by Classes
120%
100%
80%
6%
6%
4%
3%
28%
29%
30%
33%
66%
66%
64%
1990
2000
2010
60%
40%
67%
20%
0%
1980
Rich class(+$20)
Middle Class ($2-$20)
Poor class (- $2)
100%
32,730,783
30,944,145
28,891,136
38,268,376
134,825,301
184,963,816
245,480,873
340,385,598
322,617,685
420,952,134
540,057,920
660,141,766
1980
1990
2000
2010
80%
60%
40%
20%
0%
Poor class (-$2)
Middle class ($2-$20)
Rich class (+$20)
Destination of migrants from SSA
Source: Leveraging migration for Africa: remittances, skills and investments
2011
Recorded remittances
ODA
FDI
Private debt & portfolio equity
41.1
39.4
55.7
-10.9
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•
•
Deposits
Subscribers per 100 inhabitants
Country
Accounts per Mobile
Internet
Broadband
100 Adults
Algeria
68.3
93.8
13.5
2.3
Botswana
48.1
96.1
6.2
0.8
Congo-DR
0.6
15.4
0.5
Gambia
26.9
84
7.6
0.02
Ghana
27
63
5.4
0.1
Kenya
29.6
48.6
10
0.02
Madagascar
33.8
30.6
1.63
0.2
South Africa
78.8
92.3
8.2
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Tunisia
67.2
95
34.1
3.6
Cost of formal banking is high (in some countries minimum deposit can be as high as 50% of per capita
GDP .
Internet and broadband subscription extremely low (so internet banking remains out of reach to most)
Mobile banking a way to provide financial services to the unbanked
Africa in 50 years time!
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Africa: Total Population (thousands)
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2000
2010
2020
2030
2040
2050
2060
25
Total Population (thousands) by region
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2000
2010
Central Africa
2020
East Africa
2030
North Africa
2040
Southern Africa
2050
2060
West Africa
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Africa: Urban Population (%)
90
80
70
60
50
40
30
20
10
0
2000
2010
2020
2030
2040
2050
2060
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Under five mortality age 5 per 1000 live births by region
250
200
150
100
50
0
2000
2010
Africa
Central Africa
2020
East Africa
2030
North Africa
2040
2050
Southern Africa
2060
West Africa
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Africa: GDP at Current Price (Billion US $)
16,000
14,000
Billion US$
12,000
10,000
8,000
6,000
4,000
2,000
0
2010
2020
2030
2040
2050
2060
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Africa: GDP Per Capita (US $)
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2010
2020
2030
2040
2050
2060
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Africa: Aids Death Rate (%)
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
2010
2020
2030
2040
2050
2060
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Africa: HIV Prevalence (Million of People)
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2010
2020
2030
2040
2050
2060
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Africa: Life Expectancy at Birth (Years), Total
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2010
2020
2030
2040
2050
2060
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Africa: Literacy Rates (%)
120
100
80
60
40
20
0
2010
2020
2030
2040
2050
2060
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Africa’s Development Challenges
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Infrastructure Deficit (US$45 billion annually)
 Improving investment climate
 Development of Small to Medium Scale enterprises…as a
strategy for fostering “Inclusive growth” and “structural
transformation”
 Land Ownership reform (ownership will help development
of SMEs in agriculture)
 Effective and transparent management of natural
resource revenues< e.g Sovereign Wealth Funds
 ODA in the form of “insurance”…state contingent
 Financial inclusion
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Recognize and Support the growing middleclass in Africa
Danida to form partnership with Danish companies to invest in
Energy Infrastructure
Supporting development of Small to Medium Scale
enterprises…as a strategy for fostering “Inclusive growth” and
“structural transformation”…entrepreneurship ecosystem
Facilitate agricultural land ownership reform (ownership will help
development of SMEs in agriculture)
Effective and transparent management of natural resource
revenues, e.g Sovereign Wealth Funds
Convert ODA to some form of “insurance”…state contingent, if
certain “events” occur
Invest in Financial Inclusion in partnership with private sector, eg
M-Pesa growth in Kenya based on mobile telephony
FACILITATION rather than RESOURCE OUTLAY
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