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African Economic Outlook 2006 African Development Bank / OECD Development Centre

African Economic Outlook 2006 African Development Bank / OECD Development Centre. Prof. Louka T. Katseli, Director, OECD Development Centre www.oecd.org/dev Hellenic-African Chamber of Commerce & Development and ADGI-INERPOST Athens, 1 December 2006. 1.

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African Economic Outlook 2006 African Development Bank / OECD Development Centre

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  1. African Economic Outlook 2006African Development Bank / OECD Development Centre Prof. Louka T. Katseli, Director, OECD Development Centre www.oecd.org/dev Hellenic-African Chamber of Commerce & Development and ADGI-INERPOST Athens, 1 December 2006

  2. 1 What is the African Economic Outlook Project? 2 African Performance: A two Speed Africa? 3 Promoting Transport Infrastructure

  3. What is the AEO Project? • Joint Publication of the AfDB and the OECD Development Centre, supported by the EC – 5th edition released on May 16. • Independent, comprehensive and comparative analysis of 30 African countries, combining economic, social and political review and short-term macroeconomic forecasts. • An input for African policy makers, incl. NEPAD APRM, aid practitioners and investors. • Analysis of individual countries, comparative synthesis review and focus on a major theme each year – promoting and financing transport Infrastructure in 2006 issue. • Improvements in successive editions (More intensive peer-review process, Improved modelling and data harmonisation, Broader Coverage…)

  4. Tunisia Morocco Algeria AEO 2006 Libya Egypt Mauritania Niger Mali Senegal Chad Sudan Eritrea Gambia Guinea-Bissau Burkina Faso Djibouti Guinea Togo Nigeria Ethiopia Côte d'Ivoire SierraLeone Central African Republic Liberia Cameroon Ghana Somalia Equatorial Guinea Uganda Congo Gabon Kenya Rwanda Burundi Dem.Rep. Congo Tanzania Angola Malawi Zambia Mozambique Zimbabwe Mauritius Madagascar Namibia Botswana Swaziland Lesotho South Africa Coverage 2006: 30 African countries 90% of GDP 87% of population

  5. 1 What is the African Economic Outlook Project? 2 African Performance: A two Speed Africa? 3 Promoting Transport Infrastructure

  6. Africa’s growth remains robust % AFRICA Total OECD Sources: African Economic Outlook 2006, IMF, OECD

  7. Oil producing countries are leading growth Performance of oil producers (%) (%) Source: African Economic Outlook 2006

  8. Oil importers performed better than expected Best Performers in 2005 (%) (%) Sources: African Economic Outlook 2006

  9. Thanks to rising commodity prices and increased production Sources: African Economic Outlook 2006

  10. Thanks to good harvest … and better internal policies Lower inflation (%) Sources: African Economic Outlook 2006

  11. Fiscal discipline is maintained

  12. … and increased political stability Sources: African Economic Outlook 2006 Political Indicators

  13. Despite recent improvements, major development challenges remain…

  14. Africa is still behind in reaching the MDGs Sources: African Economic Outlook 2006

  15. Africa is divided…

  16. For oil & metal producers: Taking advantage of windfalls revenue is a major priority • Different ways of using the oil surplus • Increasing saving (Nigeria) • Investing in diversification (Algeria) • Repaying external debt in (Congo, Gabon) • Oil-sector transparency and good management • Many countries commit to international standards for transparency (Nigeria, Angola, Chad, Gabon, Congo and Sao Tome) • Congo publishes its oil contracts, audit of the national oil company and other information on the Web

  17. For most non oil and metal exporters: major challenge to manage aid effectively 0.40 0.36 140 0.35 0.33 120 0.30 0.30 0.26 100 ODA as a % 0.25 of GNI 80 (left scale) ODA (2004 $ billion) % of GNI 0.22 0.20 Total ODA 60 (right scale) 0.15 40 0.10 Total ODA to 20 0.05 Africa (right scale) 0.00 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1996 2007 1990 1991 1992 1993 1994 1995 2008 2009 2010 Source: OECD/DAC Statistics (2006). DAC Members’ ODA: 1990-2004 and simulations to 2006 and 2010, based on Monterrey and subsequentcommitments

  18. …driven by debt relief and emergency assistance Total net official development assistance (ODA), non-aid official flows and private flows in Africa, 1993-2004. (Source: OECD/DAC)

  19. For all African countries: need to sustain resource mobilisation for development • Strengthen national development strategies and associated operational frameworks • Promote investment to diversify and strategically position the economy • Improve infrastructure • Responsively restructure of public expenditures • Reform the tax system

  20. …diversify exports further and… Morocco Tunisia Kenya Tanzania Africa Ethiopia 1996 2003 Uganda 0 10 20 30 40 50 The higher the index, the more diversified the economy SACU Madagascar Senegal Cameroon Mozambique Cote d'Ivoire 1996 2003 Algeria 0 5 10 15 20 25 30 Source: Export Diversification Index, African Economic Outlook 2006

  21. …promote transport infrastructure Improve mobility Free time Improve mobility Reduce prices Better use of networks Project selection Women benefit the most Better supply of food,water & medicines Better supplies & staff Faster hospitalisation

  22. 1 What is the African Economic Outlook Project? 2 African Performance: A two Speed Africa? 3 Promoting Transport Infrastructure

  23. A continent of stranded mobility? Source: Pourtier (2003)

  24. Transport / insurance costs as % of trade value IMPORT OECD Countries EXPORT All Developing Countries All land locked Developing SSA Coastal countries SSA Landlocked SSA Least Developed Landlocked 0 5 10 15 20 25 30 35 Source: Faye, McArthur, Sachs and Snow (2004) and UNCTAD (2003)

  25. Critical condition of all transport modes • Road • Only 19% is paved (against 27% in lat Am & 43% in South Asia) • 4% of registered vehicles, 10% of total deaths • Accidents cost 3% of GDP every year in Egypt • Rail • 3.5% of developing countries passenger flows, but 20% of GDP & population • Air • <2% of developing countries passenger and freight flows • Few airports with international standard • 4.5% of traffic, 25% of accidents • Ports • Most ports are under equipped and have reached maximum capacity • Inefficient: ZAF (17 c.u/h), Dar es Salam (21) ≠ Brazil (42)

  26. Shift in ODA to social sectors

  27. Money is not enough • Strong regulation • Strong commitment / negotiation skills • Autonomous regulatory body (ex. Zambia) • Better planning (ex. Master Plan for Greater Cairo) • Selection of projects (between the different transport means, trade-off between developing rural road networks and investing in corridors serving established higher density routes) • Integration in poverty reduction strategy & medium-term expenditure framework • Community participation • Maximising employment generation and easing maintenance • Involving women • Regional cooperation • Benefiting from economies of scale • Partnering with NEPAD & regional unions

  28. Last but not least…

  29. African countries need to… • Maintain social safety nets during economic restructuring • Formalise the informal sector • Promote local development, employment and service delivery • Forge a coherent growth and social-policy agenda and…

  30. Provide effective leadership and governance focal points • Build wide-scale ownership of a continuous reform process • Strengthen feasible regional initiatives • Provide institutional empowerment and policy leadership

  31. Thank youfor your attention!Contact:www.oecd.org/dev/aeo

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