Transcript Overview of Economic and Social Conditions in Africa in 2008 by the

OVERVIEW OF ECONOMIC AND
SOCIAL CONDITIONS IN AFRICA
IN 2008
by
The Economic Commission for Africa
&
The African Union Commission
Main Messages
1. Global crisis hits hard on African
economies
2. Strong growth prior to crisis because of
policy and institutional reforms, less
conflict, and favourable external
conditions
3. Yet, not much more diversification.
Agriculture remains key sector, but low
productivity. Food crisis is still there
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Global Economic Crisis and
Implications for Africa
• The medium term outlook for the world economy remains
bleak
– World economy will shrink in 2009
– Sharply declining world trade
– Commodity prices have come down
– Increased cost of borrowing and falling private capital flows (FDI)
– Weakening aid flows
• Implications for Africa:
– Severe economic deceleration
– Lower export revenues
– Falling government revenue
– Setbacks in poverty reduction and MDG achievement
– Differences across countries
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Africa’s economic growth rate down in
2009
4.0
3.8
3.1
3.1
3.0
2.0
1.9
2.0
1.0
0.0
-1.2
-1.0
-2.0
East
Africa
North
Africa
West
Africa
Africa
Central Southern
Africa Africa
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Factors Influencing Strong African
Growth Performance before Crisis (1)
• Strong demand for African commodities, resulting in high export
prices up to mid 2008
• Improved macroeconomic management
– Improved macroeconomic stability despite pressure from oil and food
prices in the first half of 2008
– Lower levels of official external debt through debt relief (though larger
private external debt)
– Greater fiscal and debt sustainability especially for oil exporters; this is
still a challenge for most oil importers in the region.
• Increased capital inflows (especially ODA and FDI)
• Institutional reforms and improved opportunities for private sector
development
• Post-conflict recovery (Sierra Leone, Liberia, and others) and in a number
of countries where peace was consolidated (Kenya). General decline of
countries in conflict
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Factors Influencing Strong African
Growth Performance before Crisis (2)
• Strong performance in key sectors
– Agriculture: main driver of growth in many countries,
especially export agriculture. Yet food shortages remain
due to weak supply capacity and poor resilience against
weather shocks
– Mining and primary exports: strong growth supported by
high commodity prices (till mid 2008)
– Niche-sectors: some manufacturing (textiles), services
(tourism), agriculture (cut flowers, vegetables). Yet all
very fragile to swings in global markets
• No real diversification: production structure of African
economies even more unbalanced than 45 years ago.
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Regional growth mainly driven by oil
economies and varied substantially across
sub-regions
• Oil-exporters contributed 53.3% and 61.4% to
the continent’s total GDP and GDP growth rate
in 2008 respectively.
• East Africa, a non-oil sub-region with limited
mineral exports, continued to lead economic
performance in Africa for the fourth consecutive
year.
• Central Africa lagged behind all other regions
over the same period despite resource
abundance.
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Trends in social development
• Progress in social development has been
mixed
• Some concrete gains in such areas as
primary school enrolment, measles
vaccination, the use of insecticide-treated bed
nets, reductions in HIV prevalence rates in
some countries and on some aspects of
gender equality.
• Very limited headway on poverty, eradicating
hunger, maternal mortality and on addressing
disparities due to gender, income, and
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disability
Poverty and unemployment
• Both poverty & unemployment remain high.
Especially among vulnerable groups(women, the
disabled etc.)
• Key challenges to inclusion of vulnerable groups
include
– lack of implementation of the commitments and
policies;
– inadequate financial resources to support
spending on social programmes;
– technical capacity constraints & lack of relevant
data to support policies;
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– war and conflicts
Poverty and unemployment
• Africa needs to promote the social inclusion of
the vulnerable and marginalized groups and to
strengthen social protection systems especially
in the context of the recent food crises and the
global economic recession
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Education
• Remarkable increases in primary school enrolment
rates
• Although the primary enrolment rate has been improving,
the primary completion rate is an area of concernespecially
for girls. Between 1999 and 2006, the completion rate
improved from 49 per cent to 60 per cent in SSA, and from
86 per cent to 92 per cent in North Africa.
• The gross enrolment ratio (GER) in secondary education in
SSA increased from only 25 per cent in 1999 to 32 per cent
in 2006
• The major challenges affecting secondary and tertiary
education include shortage of trained teachers, and lack of
resources to cover the cost of education.
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Health
• Mixed progress in combating HIV/AIDS and other epidemics
and reducing infant, child and maternal mortality rates
• HIV/AIDS remains the leading cause of adult morbidity
and mortality on the continent.
• Overall trends in tuberculosis (TB) incidence, prevalence
and deaths have been on the increase in SSA as
opposed to North Africa
• Malaria is still the leading cause of child mortality in
Africa and of anaemia in pregnant women
• Preventable diseases and malnutrition are still the
leading causes of the high infant and under-five mortality
rates. However, the continent has witnessed a decline in
both infant and under-five mortality rates
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Policy Recommendations –
Policies for Recovery and
Growth
• Globally concerted actions towards recovery
• Improved macroeconomic management; when applicable use
commodity reserves to boost investment in infrastructure,
human capital development, public services delivery and
enhance reforms.
• Coordinated action by donors and development partners, to
sustain ODA flows, additional debt relief, and adequate
liquidity financing
• Strengthen regional coordination for successful conclusion of
trade negotiations, resist protectionist measures, fulfilment of
Aid for Trade commitments
• Sustain focus on achieving the MDGs & the inclusion of
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vulnerable & marginalized groups
THANK YOU
FOR YOUR
ATTENTION
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