Transcript Mr. Michael Keating

Addressing the barriers to domestic
resource mobilisation in Africa
The Africa Progress Panel
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Supports efforts to put Africa’s development at the
heart of the global agenda
Draws attention to specific opportunities and
challenges; encourages timely action
Tracks commitments by Africa and its partners to
support progress
Progress in Africa since Monterrey
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Major increase in development finance
Domestic resource mobilisation is a success story
Foreign direct investment, remittance flows and
Official Development Aid - all up
Maintenance/increase of domestic revenues: the key to
sustained growth & development
Source: IMF, World Bank & OECD as published in ‘ Development Finance in Africa ’
prepared by the Africa Partnership Forum, 2008
The global economic slowdown is
affecting progress in Africa
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Commodity prices and trade levels down
Remittance flows down as diaspora affected
FDI in doubt as investors seek ‘safety’
Credit: cost up, availability down
Economic activity and jobs affected
ODA under pressure
lower revenue/GDP (%); reduced GDP growth
Domestic resource mobilisation threatened
The crisis has underscored Africa’s
vulnerabilities to external shocks
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Consumer demand: Asia, Europe, America
Price of fuel, and commodities
Financial governance in OECD countries
Jobs, food security, public investment and
progress on MDGs directly affected
Constraints to economic growth
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Power and energy supply
Infrastructure inadequate, not maintained,
inefficiently used
Management and implementation capacity
Dependance on primary commodities
Human resource potential untapped
375
Raising investment in infrastructure…
Number of days on which businesses suffer at least one power outage
300
225
150
0
Namibia
Mauritius
Botswana
Mali
Lesotho
China
Swaziland
South Africa
Senegal
Guinea Bissau
Zambia
Mauritania
Burkina Faso
Niger
Malawi
Benin
Madagascar
Kenya
Angola
Cameroon
Mozambique
Cape Verde
Burundi
Tanzania
Rwanda
India
Uganda
Congo, DR
Guinea
Gambia
Nigeria
75
Source: Ramachandran et al (forthcoming Center for Global Development, 2009),
calculated from World Bank Enterprise Surveys.
China
S. Africa
Angola
Congo DR
Burundi
Cape Verde
Botswana
Uganda
Mauritania
Tanzania
Guinea
Kenya
Swaziland
Lesotho
Zambia
Namibia
Rwanda
Malawi
Cameroon
Mauritius
GuineaBissau
Mali
Mozambique
Benin
Burkina Faso
Senegal
Gambia
Madagascar
Niger
Energy as a share of total cost of business
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Source: Ramachandran et al (forthcoming Center for Global Development, 2009),
calculated from World Bank Enterprise Surveys.
Businesses rank transport as a major or severe constraint
90
80
70
60
50
Large
40
SME
30
20
Source: Ramachandran et al (forthcoming Center for Global Development, 2009),
calculated from World Bank Enterprise Surveys.
Angola
BurkinaFaso
Kenya
Benin
Malawi
Rwanda
Senegal
Uganda
Mozambique
Gambia
Cameroon
Nigeria
Madagascar
Zambia
Swaziland
Mali
Congo DR
China
Lesotho
Namibia
Tanzania
Botswana
Burundi
India
0
Mauritius
10
SouthAfrica
p
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c
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n
t
a
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Investing in people
Commitments to tertiary education –
risen recently, but after substantial decline
Source: World Bank, 2008
Sustaining domestic revenues:
transformational actions
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New, upgraded and better use of infrastructure
Investment in sustainable energy generation
Output and performance based management of public
services – reduce costs, improve efficiency
Unblock local and regional barriers to trade
Improve investment climate and market ‘real economy’
opportunities in Africa
Upgrade investment in people: especially education and
women’s empowerment
How partners can assist domestic
resource mobilisation
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Better, more equitable global financial and economic
governance
International action to combat tax evasion
Successful pursuit of the Doha round
Promote innovative financing
Political support from OECD Finance Ministers to meet aid
commitments
more predictable and effective use of ODA
ODA
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Modest relative to other development flows
Affected as GNI in OECD countries levels off, political
pressure on budgets increases
Can be used to leverage/boost other flows
… and strengthen national capacities, eg for trade, revenue
collection systems, attract investment, etc
Efficiency and predictability must be greatly improved
Conclusions
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Domestic revenues the basis for sustained growth
and MDG achievement
Actions required by LDCs clear
International partners must do more to support both
short term and longer term measures