Transcript overview of economic and social conditions in africa in 2009

OVERVIEW OF ECONOMIC AND
SOCIAL CONDITIONS IN AFRICA
IN 2009
Adam B. Elhiraika,
Chief, Macroeconomic Analysis Section, ECA
Meeting of the Committee of Experts of the 3rd Joint Annual
Meetings of the AU Conference of Ministers of Economy and
Finance and ECA Conference of African Ministers of Finance,
Planning and Economic Development
25-28 March 2010, Lilongwe, Malawi
Main Messages
1. Global crisis depressed Africa’s GDP in 2009
and slowed progress towards achieving the
MDGs.
2. Economic growth will pick up in 2010, although
falling short of what is required to achieve
significant gains in social development.
3. The prospects of achieving social development
and the overall objectives of NEPAD will be
compromised if no bold actions are taken to
ensure that African countries embark on paths
of high, sustainable and employment-focused
growth.
Global Economic Recovery and
Implications for Africa
• The world economy is recovering
 A rebound of the world economy is expected in 2010;
 Commodity prices are expected to stabilize;
 Budget deficits widened in developed countries;
 Aid flows expected to decline further.
• Implications for Africa:
 Higher export revenue through increased demand for
Africa’s commodity exports;
 Increased private capital and trade flows from China
and India are expected to simulate growth on the
continent;
 Recovery in government revenue;
 Africa’s growth declined from 4.9 % in 2008 to 1.6 %
in 2009, but is expected to recover to 4.3 % in 2010;
significant differences across countries and regions.
Africa’s economic growth
rate expected to recover in
2010
6
5
4
3
2
2009
2010
1
0
-1
-2
East Af rica North Af rica West Af rica
Af rica
Central
Af rica
Southern
Af rica
•
•
•
•
Factors Influencing Significant
Growth Deceleration in Africa
in 2009
Global demand for African commodities
dropped significantly, resulting in lower
export prices.
Low level of economic diversification in
the majority of African countries.
Declined capital inflows, especially
ODA and FDI.
Declined remittances inflows.
The Impact of the Crisis on
African Countries
• Inflation trended downwards, except in a few
countries.
• Government revenue declined in many countries.
• Lower export revenue and foreign capital inflows.
• Fiscal balances worsened in the majority of
countries.
• Real effective exchange rate appreciated in most
countries.
• Current account balances deteriorated in the
majority of countries.
• Employment situation deteriorated, particularly
among vulnerable groups.
• Poverty rates either increased or stagnated at high
levels.
Growth performance varied across
and within sub-regions
• Oil-exporting countries expanded more vigorously than
the oil-importing countries, thanks to favorable initial
conditions, including large fiscal and current surpluses,
strong external positions and low debt.
• A few Oil-importing countries showed considerable
resilience, posting GDP growth of more than 5%
because of a variety of country-specific factors.
• The fastest growing sub-region in 2009 continued to be
East Africa (3.9%), followed by North Africa (3.5%), West
Africa (2.4%), Central Africa (0.9%) and Southern Africa
(-1.6%).
Trends in social
development
• Progress in social development has been very
limited.
• Very limited headway on poverty, eradicating
hunger, maternal mortality and on addressing
disparities due to gender, income and disability.
• The number of refugees continued to decline for
the eighth consecutive year.
• 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.
Education
• While Africa is making progress towards achieving universal
primary enrolment, there are still about 46 million primaryschool-age children who are out of school.
• The number of children and young people who are out of
secondary education is alarmingly high in Sub-Saharan Africa.
• Overall participation in tertiary education is very low on the
continent as only 6% of the tertiary-education-age cohort was
enrolled in tertiary institutions in 2007 in Africa compared with
the global average of 26%.
• The major challenges affecting secondary and tertiary
education include shortage of trained teachers, and lack of
resources to cover the cost of education.
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.
Poverty and unemployment
(Cont’1)
• Both poverty & unemployment remain high and
intensified in many countries, particularly among
vulnerable groups (women, the disabled etc.).
• Key challenges faced by vulnerable groups
include:
Serious difficulties in accessing food and
ensuring food security;
Limited access to education;
Limited access to employment opportunities;
Problems in access to health serious.
Poverty and unemployment
(Cont’d 2)
• Africa needs to promote the social inclusion
of socially disadvantaged groups and to
strengthen social protection systems,
especially in the context of the recent food
crises and the global economic recession.
• African countries need to embark on paths of
high, sustainable and employment focusedgrowth and put social development at the
forefront of their development agenda.
Poverty and unemployment
(cont’d 3)
• Robust and sustainable labor-intensive
economic growth along with rising factors’
productivity could be achieved by means of
the diversification of production and
exports.
• Care must be taken to ensure that
macroeconomic policies place special
attention on real objectives, including
incentives for private investment in laborintensive activities.
Concluding Remarks
• The recent global downturn has negatively affected GDP
growth, employment and social conditions across Africa,
particularly among vulnerable groups.
• Countries that have relatively done well are those that
sustained more broad-based growth.
• Diversification is key to ensuring high and sustainable
growth and meaningful employment gains.
• Broader economic and social development requires that
the concerns of vulnerable groups be put at the forefront
of the development agenda on the continent.
Thank You!
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