Transcript Presentation-Dissemination of the Africa Economic Outlook

African Economic Outlook 2008/2009
Official Launch
Dakar May 10, 2009
UNECA
AEO
2009: an evolving partnership
Lead partner
Junior partners
UNECA
Experts Network
Consultants. think
tanks …
Financial partner
UNECA
Coverage 2009: 47 Countries
AEO
Tunisia
Morocco
New in 2009:
Burundi
Algeria
Libya
Mauritania
Egypt
Central African
Republic
Niger
Mali
Chad
Senegal
Gambia
Guinea-Bissau
Burkina
Faso
Guinea
Djibouti
Nigeria
Sierra Leone
Djibouti
Eritrea
Sudan
Gambia
Ethiopia
Togo
Côte
d'Ivoire
Central African
Republic
Ghana
Liberia
Guinea
Cameroon
Somalia
Equatorial Guinea
Uganda
Lesotho
Congo
Gabon
Kenya
Rwanda
Dem.Rep.
Congo
Mauritania
Burundi
Tanzania
99% of GDP
Angola
Seychelles
Malawi
Sierra Leone
Zambia
Mozambique
Zimbabwe
Madagascar
97% of population
Namibia
Swaziland
Botswana
Swaziland
Sudan
Lesotho
South
Africa
Togo
Source: OECD Development Centre / African Development Bank. 2008
AEO 2009
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Africa still growing but much slower than before the crisis
Growth
Real GDP Growth (%)
8
6
4
2
0
-2
-4
-6
2000
2001
2002
2003
Africa (May 2009 forecast)
2004
2005
2006
2007
Africa (February 2009 forecast)
2008(e)
2009(p)
2010 (p)
Total OECD
Source: OECD Development Centre / African Development Bank. 2008
UNECA
The crisis taking a toll on Africa’s growth prospects
Growth
Real GDP Growth (%)
7
6
April 08 projections
5
Nov 08 projections
4
Feb 09 projections
May 09 projections
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
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Growth
Regional disparities in growth
Real GDP Growth (%)
Central
East
North
South
West
Africa
Memorandum items
North Africa (including Sudan)
Sub-Saharan Africa
Oil-exporting countries
Oil importing countries
2000-05
5.7
4.9
4.1
4.1
7.1
4.8
4.2
5.2
5.4
4.1
2008(e) 2009(p) 2010(p)
5.0
2.8
3.6
7.3
5.5
5.7
5.8
3.3
4.1
5.2
0.2
4.6
5.4
4.2
4.6
5.7
2.8
4.5
6.0
5.5
6.6
4.6
3.5
2.4
2.4
3.3
4.2
4.7
4.5
4.5
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Growth
Regional disparities (May forecasts)
Southern Africa hit severely: oil (Angola) and minerals (Botswana)
2007
2008(e)
2009(p)
February
2010(p)
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
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Global Crisis
Africa is better prepared to weather the storm
Africa today is much more resilient to exogenous shocks:
• 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 declined
Nevertheless…
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Trade
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
Baltic Exchange Dry Index
USD Billion
14000
Africa Trade balance
12000
10000
150
120
90
8000
60
6000
30
4000
2000
0
- 94%
- 112%
0
-30
Source: African Economic Outlook, 2009
Source: Datastream, 2009
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Global Crisis
A global retrenchment of capital
Net capital flows to emerging economies
USD billion
1,000
800
600
400
200
0
-200
2002
2003
Direct investment
2004
2005
Portfolio equity
2006
Banks
2007 2008e 2009f
non-bank debt
Official flows
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A global retrenchment of capital
Private financial flows
• 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
Remittances
USD Billion
USD billion
Foreign Direct investment
60
Stock Markets
45
180
40
160
35
50
(MSCI price index local currency)
140
30
120
40
25
30
20
100
15
20
10
0
80
10
60
5
40
0
20
EGYPT
NIGERIA
SOUTH AFRICA
200020012002200320042005200620072008
Source: OECD Development Centre , based on UNCTAD 2009
Source: OECD Development Centre , based on World Bank, 2009
Source: Thomson Datastream 2009
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The commodity boom is over… for now
Trade
• A cold shower for hard commodity exporters
• Soft commodity exports prove more resilient
Hard commodities
400
350
300
Soft Commodities
400
Petroleum
Copper
Aluminium
Gold
350
300
250
250
200
200
150
150
100
100
50
50
0
0
Cocoa
Coffee (arabica)
Coffee (robusta)
Tea
Cotton
Source: OECD Development Centre, based on World Bank, 2009
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The emerging world is not forgetting Africa
• 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
Significant Chinese and Indian investments in
African infrastructure, up to April 2008
China-Africa trade
USD billion
120
100
80
60
40
20
India
China
0
Source: OECD Development Centre, based on China Mofcom, 2009
Source: OECD Development Centre, based on UNCTAD, Nepgen and Jansson 2009
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Food prices
After the peak of the food crisis
Food prices
Source: World Bank
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Drivers
Severe macroeconomic impact (February forecast)
% of GDP
Fiscal balance
20
15
10
5
0
-5
-10
% of GDP
Current Account
15
10
• The crisis will cause fiscal
balances to deteriorate
significantly across the
continent.
5
0
-5
-10
Inflation
• Fiscal space to adopt
countercyclical policies is
very limited in many
countries.
Source: OECD Development Centre / African Development Bank. 2008
* Excluding Zimbabwe
** Estimations for 20078and predictions for 2009/10
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Drivers
Macroeconomic balances deteriorating
Consumer Prices (inflation in percentage)
2008(e)
2009(p) February
2009(p) May
11.6
8.1
8.4
February
May
2008(e)
2009(p)
Overall Fiscal Balance (including grants) in percentage of GDP
2008(e)
2009(p) February
2009(p) May
2.8
February
2008(e)
-5.4
May
2009(p)
-5.8
External Current Account (including grants) in percentage of GDP
2008(e)
2009(p) February
2009(p) May
3.3
February
2008(e)
-4.4
May
2009(p)
-5.3
Source: OECD Development Centre / African Development Bank. 2008
* Excluding Zimbabwe ** Estimations for 20078and predictions for 2009/10
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Global Crisis
A patchwork of different impacts
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:
Growth differential
2008 - 2009
-- beverages (cocoa. tea.
- 3.1 to – 23 %
coffee) less affected by
- 2 to- 3 %
decline in global incomes.
Zero to – 1.9 %
Increased growth between
-- less integration to the
2008-09
Source: OECD Development Centre / African Development Bank
world economy
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Oil exporters and importers: making a switch?
Growth
Real GDP Growth
7
Oil exporters
6
5
Oil importers
4
3
2
1
0
2006
2007
2008
2009
2010
Oil-exporting countries (February forecast)
Oil importing countries (February forecast)
Oil-exporting countries (May forecast)
Oil importing countries (May forecast)
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
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The cost of having all eggs in one basket
Oil Exporters
Taking a hit from the oil price
fall ..
…and little room left
for manoeuvre
Angola
• Many oil exporters did not
take advantage of
commodity windfalls to
improve governance and
diversify their economies
Eq. Guinea
Sudan
Congo Rep. of
Nigeria
D. R. Congo
AFRICA
Gabon
OIL IMPORTERS
Cameroon
Algeria
2008(e)
Chad
2009(p)
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
• Nevertheless, some oil
exporters have performed
well in terms of reducing
external debt
Source: OECD Development Centre / African Development Bank
*: African Economic Outlook forecasts
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Oil Importers
Benefiting from the end of oil and food price booms
Holding up against the crisis so far…
…yet challenges rising
Oil-importing countries find it
difficult preserving pre-crisis gains.
Rwanda
Tanzania
Rising inflation and deteriorating
OIL EXPORTERS
Ghana
macroeconomic balances.
Mozambique
Good performers’ assets:
Cape Verde
Morocco
• Sustained growth; Prudent
AFRICA
macroeconomic policies;
Mauritania
Tunisia
Diversification; Decreasing
Senegal
Namibia
poverty
2008(e)
South Africa
Challenges:
2009(p)
Kenya
0
2
4
6
8
10
• Fiscal deficits; ODA dependency;
widening trade deficit; climatic
Source: OECD Development Centre / African Development Bank
& price shocks
*: African Economic Outlook forecasts
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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.
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Risks
Countries to fall further back on progress toward the MDGs
Source: OECD Development Centre / African Development Bank. 2008
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Channels
Aid commitments can make the difference
DAC members' net ODA 1990 - 2007 and DAC Secretariat simulations of
net ODA for 2008 to 2010
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Stability
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.
•
•
•
•
•
•
•
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Stability
Is long term decline in political instability continuing ?
Still some bad News
However, some concerns remain in some countries with
unresolved conflicts.
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Theme
Innovation and Information & Communication Technologies
Africa’s Exponential Growth in Mobile Telephony
Africa
Sub-Saharan Africa - Resource Rich
• The exponential growth in ICT is enabling
many African users to gain access to basic
services (education, health, banking) for
the first time.
Sub-Saharan Africa - Resource Scarce Coastal
Sub-Saharan Africa - Resource Scarce Landlocked
North Africa
• ICT is a vector for innovation, stimulating
of innovative products and business
models.
Middle East
Latin America and Caribbean
Asia and Pacific
Europe
Annual growth rate in 2008
Market penetration in 2008
• Africa is the fastest growing market in the
world. Today, 4 out of 10 Africans have a
mobile phone line.
0%
50%
100%
• As an endogenous source of growth, ICT
is particularly valuable in a time of
150%
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
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Infrastructure
Connecting Africa to the world in 2009-10
• 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.
As of March 2009
THE
MISSING
LINK
SAT3
MULTIPLE
SOLUTIONS
AT LEAST
ONE LINK
Source: World Bank Group 2008, www.manypossibilities.net (Steven Song).
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Infrastructure
Good prospects for inland networks
7,200 km in
Northern
Africa
• Connecting Africa’s capitals and major
cities will require 66.000 km of fibreoptic cables.
• Several major initiatives are already
being planned:
19,500 km in
Western
Africa
• Eastern and Southern African
Backbone.
8,800 km in
Central
Africa
30,500 km in
Eastern and
Southern
Africa
• Central African Backbone.
• Western African INTELCOM II
Backbone.
Source: ITU, 2007
• 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.
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ICTs in Africa remain attractive to investors
Crisis
Healthy Mobile Business in Africa
• Like in the dot.com burst in 2000-2001,
ICT investment will be less affected by
the crisis than other regions.
60%
50%
• Big deals have continued through late
2008 and early 2009.
40%
30%
• Capital expenditures are decreasing
and price competition for market
share is rising steadily.
20%
10%
0%
Africa
Latin
America and
Caribe
Opex / Revenue
Western
Europe
Middle East
EBITDA Margin
Asia
• Cash-rich transnational operators will
consolidate their presence.
Capex / Revenue
With publicly funded high capacity infrastructure projects underway &
private investments resilient to the crisis,
new products and business models should multiply despite the crisis
Source: Wireless Intelligence, 2008
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Innovation
Africa first to implement free roaming
Free roaming countries
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:
Zain
MTN
Safaricom Vodacom - MTN
Forthcoming
• 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.
Source: OECD Development Centre
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Innovation
Mobile banking lowering transaction costs
• 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.
30%
25%
20%
15%
10%
5%
0%
Source: Vodafone, 2009.
Mobile Phone Transactions in Kenya (%)
• 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.
Transaction Value (Ksh)
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Innovation in agriculture
Bringing people and markets together
• 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.
Bakin Birgi
(Monday)
Farmer in Niger
Home market
65 km ~ from 3 hours to 2 mins
20 km ~ 1 hour
750 km ~
from not accessible to 2 mins
Zinder
(Thursday)
Tanout
(Friday)
Niamey
(Sunday)
Source: Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger, Jenny Aker, 2008.
UNECA
Policy recommendations
For Africa to continue an innovation frontier..
ICTs in Africa has proved to be an innovation frontier by combining state-of-art
technologies 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.
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ICT
Policy recommendations for Africa
ICTs in Africa has proven to be an innovation frontier by combining state-of-art
technologies 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.
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