Transcript The Challenge of Shared Growth in Africa

The Challenge of Shared Growth in Africa
John Page
Chief Economist, Africa Region
The World Bank
May 29, 2006
1
Growth in Africa has lagged other
regions
Per capita GDP Growth
7
6
5
East Asia
Europe
4
3
LAC
MENA
South Asia
Africa
2
1
0
-1
-2
80s
90s
2001-05
2006-15
Growth Performance
2
African per capita income is now increasing in tandem with
other developing countries . . .
Annual Change in Real per capita GDP %
Forecast
7
6
5
4
3
2
1
0
-1 1990
-2
-3
-4
Source: World Bank
Developing Countries
Developing excluding China and India
Sub-Saharan Africa
High-Income Countries
1995
2000
2005
2008
Regional Comparisons
3
And Africa’s diverse growth experience is becoming
increasingly diverse
7
% GDP growth, 1996-2005%
6
5
4
3
2
1
0
Little or no
growth
countries: 20%
of Africa's
population
Slow
growth
countries:
16% of
Africa's
population
Sustained growth
countries: 36% of
Africa's population
Oil exporters: 29% of
Africa's population
Diversity in Country Performance
4
Macroeconomic management has
improved
Inflation, 200006 (Percent)
26
22
Exporting
oil
OilCountries
18
14
Oil-
SSA
importing
countries
10
6
2000
2001
2002
2003
2004
2005
2006
Source: IMF, SSA Regional Economic Outlook.
A structural shift?
5
Structural policies have improved
80
3.40
70
3.30
60
3.20
3.10
50
3.00
40
2.90
30
2.80
20
2.70
10
2.60
0
2.50
1996
1997
1998
1999
2000
2001
2002
2003
2004
Simple average CPIA scores for
Africa
% of African countries with CPIA
scores over 3.0
Trends in African CPIA Scores: 1996-2005
2005
A structural shift?
6
There is increasing pressure for capable
and accountable states
African Political Values
Percent of responses
100%
80%
92%
69%
75%
64%
60%
WVS
40%
Afrobarometer
20%
0%
In favor of democracy
Democracy is good for the
economy
Data source: World Value Survey (1999-2002) wave, 6 countries, Afrobarometer survey, 2001-2003, 12 countries.
A structural shift?
7
And Africa’s best performers are on par
with India, Vietnam
Growth, Investment efficiency and investment gap
35%
30%
25%
20%
Incremental output/capital ratio (as
percent)
15%
Investment as % of GDP
10%
5%
0%
Africa:
Africa: Slow Africa: Little or India, 1995-2004 Vietnam, 1995Sustained growth countries no growth
2004
growth countries
countries
A structural shift?
8
But while African growth has picked
up, East Asia has soared
GDP per capita (index 1965=100): Africa and East Asia
900
841
700
East Asia & Pacific
Low income
600
Sub-Saharan Africa
500
400
300
200
219
137
126
2004
2002
2000
1998
1996
1992
1990
112
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
0
123
1994
100
1960
GDP per capita index 1960=100
800
A structural shift?
9
Africa lags other regions in the cost of doing
business
Ease of doing business rank, Simple average by region
Average Ranking of Ease of Doing Business, the lower the better
140
Ranking range 1-155
120
116
100
84
87
Latin
America &
Caribbean
Middle East
& North
Africa
79
76
80
57
60
40
20
0
Sub-Saharan
Africa
East Asia &
Pacific
East Europe
and Central
Asia
South Asia
Data sources: The World Bank Doing Business Database, 2005 survey.
Building the private sector
10
Businesses encounter more obstacles in Africa
Average ranking for Doing Business Indicators
Doing business indicator ranking 1-155
140
120
Sub-Saharan Africa
Other regions average
100
80
60
40
20
Pr
ot
ec
t
in
g
In
ve
sto
H
iri
rs
ng
an
En
d
Fi
fo
rin
rc
in
g
g
C
on
tra
ct
s
Pa
yi
D
ng
ea
lin
Ta
g
xe
w
s
ith
Li
ce
ns
es
G
et
tin
g
C
C
lo
re
si
di
ng
t
a
Bu
St
si
ar
ne
tin
ss
g
a
B
R
us
eg
in
is
es
te
r
s
in
Tr
g
ad
Pr
in
op
g
er
A
ty
cr
os
s
Bo
rd
er
s
0
Data sources: The World Bank Doing Business Database, 2005 survey.
Building the private sector
11
Exports are important but not growing
Non-oil export share of GDP (%)
40
35
30
25
20
15
10
5
0
1979-1981
1989-1991
1999-2001
E. Asia &
Pacific
Latin
America &
Caribbean
S. Asia
Creating an export push
12
But, factory floor costs compare well with India and
China
Direct cost per male shirt
$0.80
$0.65
$0.60
$0.40
$0.20
$0.29
$0.16 $0.18 $0.12 $0.16 $0.19
$0.17
$0.00
a
a
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a
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Creating an export push
13
Inadequacies of finance and infrastructure limit
competitiveness
Finance
Infrastructure
East Asia & Pacific
Europe & Central Asia
South Asia
Sub-Saharan Africa
MENA
LAC
0
10
20
30
40
50
60
70
Percent of firms
Creating an export push
14
Inequality limits the benefits of growth
to the poor
Poverty headcount/Gini, %
The Poor as Percent of Total Population and Inequality:
60
Gini-
50
Head count
40
49.8
50.5
38.3
37.7
30
33.2
32.3
46.4
31.9
20
10
2.4
3.5
9.9
14.3
MENA
ECA
LAC
EAP
0
South
Asia
SubSaharan
Africa
Data sources: The World Bank Global Poverty Monitoring Database
Shared growth
15
How does “gender” fit with this picture of the
growth challenges for Africa?



“Women make a greater
contribution to economic life than
their menfolk”
Africa Commission Report, 2005
Economic opportunity is
differentiated along gender lines
Gender differences in access to and
control of resources affect growth,
productivity, and incentives
The interface between gender and growth
16
Gender and Growth:
What’s the evidence?



Mix of macro (regressions) and
micro (case studies)
Convergence of message – gender
inequality affects growth
BUT – outside mainstream
economic analysis and debate
The interface between gender and growth
17
4
Closing the gender gap in schooling
boosts economic growth
3
(percent)
Average annual growth in
per capita GNP, 1960-1992
Actual growth rate
Projected growth rate
2
1
0
Sub-Saharan Africa
South Asia
Source: “Engendering Development” (PRR) 2001,
in WDR 2000/01, “Attacking Poverty”.
Middle East/North Africa
18
Gender and Growth: Micro



Burkina: Shifting existing resources
between men’s and women’s plots
could increase output by 10-20%
Kenya: Giving women farmers the
same agric. inputs and education
could increase yields by > 20%
Tanzania: Reducing women’s time
burdens could increase cash
incomes for women farmers by
10% & labor productivity by 15%
The interface between gender and growth
19
Economic Inclusion?
Gender & Business
Enterprises that Responded Trade License
Procedures are Obstacles to their Business
Growth


Businesses Responding that Government
Officials have "interfered" in their Business
(in %)
40%
30%
Women enterprises face
additional obstacles, esp.
in access to finance
(linked to land rights)
“How can property own
property?” (HRW 2002)
Female-headed
Enterprises
Male-headed
Enterprises
Women-Headed
Enterprises
All Enterprises
60
43
Percent
50%
40%
30%
20%
10%
0%
40
25
20
0
Women-Headed
Enterprises
All Enterprises
Type of Enterprise (By Ownership)
Source for Charts: Kirkpatrick and Lawson (2004) in Amanda Ellis et al.
“Gender and Economic Growth in Uganda: Unleashing the Power of
Women,” World Bank, Directions in Development, 2006.
Building the private sector
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What Next?


Analysis and policy prescriptions relating
to economic opportunity, incentives, and
productivity, need to address gender
disparities
World Bank Initiatives




Gender Action for Economic Empowerment of
Women under preparation
Propose Major Research Project on Gender and
Growth
Flagship Regional Report on Growth w/ Gender
Incentives to carry out engendered economic
analysis in AFR
The interface between gender and growth
21