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African Economic Outlook 2007. Water and sanitation: How can Africa fill the gaps?. Lucia Wegner Céline Kauffmann. OECD’s Knowledge Centre on Development. A bridge between …. OECD members and partners

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african economic outlook 2007

African Economic Outlook 2007

Water and sanitation:

How can Africa fill the gaps?

Lucia Wegner

Céline Kauffmann

oecd s knowledge centre on development
OECD’s Knowledge Centre on Development

A bridge between …

  • OECD members and partners

Governing Board open to non-OECD: South Africa, Brazil, Chile, India, Romania, Thailand are members

  • Research and policy

Intellectual autonomy, no obligation of consensus

  • Policy communities

All development policies, not just aid

  • Different actors: private, public, etc.

Informal dialogue

part of the oecd s development cluster
Part of the OECD’s “Development Cluster”
  • Bridge OECD members and partners
  • Research / policy
  • Intellectual autonomy
  • Informal dialogue
  • Club of bilateral donors
  • Best practice
  • Peer reviews

Development

Centre

(DEV - 1962)

Development

Assistance

Committee

(DAC - 1961)

Africa

Partnership

Forum

(APF - 2006)

Sahel & West

Africa Club

(SAH - 1975)

Informal discussion Forum OECD / ECOWAS + Mauritania & Cameroon

Monitoring commitments

G8/OECD – AU/NEPAD

slide4

1

What is the African Economic Outlook Project?

2

Africa Performance: A diverging path?

3

Access to Drinking Water and Sanitation: how can Africa fill the gaps?

african economic outlook
African Economic Outlook
  • Joint publication of the AfDB and the OECD Development Centre, supported by the EC – 6th edition.
  • Mobilising a network of in-country African experts + collaboration with WB, IMF, AFD, …
  • A resource for policy makers, aid practitioners, investors, researchers, students, …
  • A tool for policy dialogue amongst African policy makers (nationally, APRM, …) and with their partners (EC, G8, OECD)

Measuring the Pulse of Africa

african economic outlook1
African Economic Outlook
  • Comprehensive, comparative and independent analysis of 31 countries and short-term macroeconomic forecasts.
  • Annual focus
    • 2003: Privatisation
    • 2004: Access to energy
    • 2005: SME development
    • 2006: transport infrastructure
    • 2007: access to drinking water and sanitation
  • Statistical annex, including innovative indicators

An innovative product, an evolving process

coverage 2007 31 african countries

Tunisia

Morocco

Algeria

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

Madagascar

Namibia

Botswana

Swaziland

Lesotho

South

Africa

Coverage 2007: 31 African countries

AEO 2007

Cape verde

Sao Tome et principe

91% of GDP

86% of population

Comores

Mauritius

slide8

1

What is the African Economic Outlook Project?

Africa Economic Performance: A diverging Path?

2

3

Access to Drinking Water and Sanitation: how can Africa fill the gaps?

slide9

Africa continues to grow strongly

Africa

Total OECD

Sources: African Economic Outlook 2007, OECD

stable growth in oil producers in 2006
Stable growth in oil producers in 2006

Best performing net oil exporters in 2006

(%)

(%)

Source: African Economic Outlook 2007

and improving growth in oil importers thanks to good harvest and booming metal prices
And improving growth in oil importers: thanks to good harvest and booming metal prices

Best Performing net oil importersin 2001-2006

(%)

(%)

Sources: African Economic Outlook 2007

fewer bullets more ballots
… fewer bullets, more ballots

Presidential elections in 2006

Benin

Cape Verde*

Chad

Congo, Dem Rep.*

Gambia

Madagascar

Sao Tome et Principe*

Seychelles

Zambia*

Uganda

*Parliamentary elections as well

Sources: African Economic Outlook 2007, Political Indicators

challenges ahead differ oil exporters and importers on a diverging path
Challenges ahead differ: Oil exporters and importers on a diverging path?
  • Oil and Mineral exporters:
    • Capitalising on windfall gains
    • Create spillover to rest of the economy
    • Avoid Dutch Desease
  • The rest of Africa (net oil importers):
    • Containing inflationary pressure
    • Finance widening trade deficit
    • Streamline spending to prioritise poverty reduction
despite strong growth rate progress towards the mdgs remains slow
Despite strong growth rate, progress towards the MDGs remains slow

Sources: African Economic Outlook 2007

africa remains vulnerable due to its limited integration into international trade
Africa remains vulnerable…Due to its limited integration into international trade
  • Africa’s share in world trade remains minimal (1.5 per cent)
  • New actors : China’s trade with Africa has increased five-fold since 2001
  • There are opportunities but also a risk of further specialisation and of raising the bar for competing in labour intensive industries

Source: COMTRADE

Note: X indicates exports

and poorly diversified
…and poorly diversified

The higher the index, the more diversified the economy

Source: African Diversification Index, African Economic Outlook 2007

better governance and business environment are fostering fdi growth but
Better Governance and Business Environment are fostering FDI growth…but
  • Africa’s share in world FDI inflow remains small at 4 per cent
  • It is mainly concentrated in natural resources rich countries
how can africa become an active player in globalisation
How can Africa become an active player in Globalisation?

Increasing absorptive capacity of Trade and FDI: Continuing to maintain macroeconomic stability, improving business environment, and devise policies to promote diversification

Using external resources more effectively:

  • Capitalising on oil and minerals windfall gains to invest in health education and access to basic services
  • Using ODA as a catalyst: aid for trade is an instrument for enhancing Africa’s integration in the global economy.
slide22

1

What is the African Economic Outlook Project?

2

Africa Performance: A diverging path?

3

Access to Drinking Water and Sanitation: how can Africa fill the gaps?

access to water and sanitation the facts
Access to water and sanitation: the facts
  • 10 million people / year have gained access to improved drinking water over 1990-2004 in sub-Saharan Africa
  • With population growth, the number of unserved has increased by about 60 million and SSA is unlikely to reach the MDGs by 2015.
  • The situation is worse for sanitation:35 million more people annually need access to improved sanitation (current trend: 7 million)
  • If the MDGs were reached by 2015,234 million people would still lack access to safe drinking water and 317 million to improved sanitation
people w o access to drinking water ml
People w/o access to drinking water (ml)

The world is progressing. Africa’s share of unserved is growing.

Source: WHO/UNICEF Joint Monitoring Programme

people w o access to sanitation ml
People w/o access to sanitation (ml)

Idem for sanitation but proportions are 3 times bigger.

Source: WHO/UNICEF Joint Monitoring Programme

access the outstanding experiences
Access: the outstanding experiences
  • North Africa:
    • 91% have access to drinking water (highest level in developing world with Latin America).
    • Sanitation coverage up by 12% points between 1990 and 2004 (at 75%), on track to reach the 83% target by 2015.
  • Universal access to water in Mauritius and South Africa.
  • Uganda: coverage for drinking water × 3 between 1990 and 2006 (from 21 to 61 per cent).
  • Tanzania: 90% of population have access to some form of sanitation.
mainly a management issue
Mainly a management issue
  • Weak extraction capacities - except in North and South Africa
  • Inefficient use: agricultural (68%), domestic (24%), industrial (8%).
  • Industrial pollution, poor sanitation and sewage practices. In Congo, only 68% of SNE water samples comply with quality standard.
  • Wastage: unaccounted for water reaches 50% in most cities. Botswana: 46%, Mauritius: 47%, Cairo & Alexandria: 50%
introducing water demand management the municipality of windhoek
Introducing water demand management the municipality of Windhoek

Programme components:

  • Increasing public awareness
  • Implementation of block tariff system
  • Legislation to address water conservation
  • Improved maintenance and technical measures to reduce leaks
  • Re-use of water: one of the first cities to introduce recycling of effluent for drinking purposes

In 2006: unaccounted-for water fell to 10.3% (good practice: 15-20%)

the remaining challenges
The remaining Challenges
  • Implementing integrated water resource management (IWRM)
  • Strengthening local management
  • Advancing sanitation and wastewater treatment to the top of the agenda
status of national iwrm
Status of National IWRM

Source: Global Water Partnership, 2006

key management issues
Key management issues
  • Strong national water policiesand legislation.
  • Sound and autonomous regulation: monitor progress, set guidelines, design incentives to extend service provision and protect consumers (NWASCO in Zambia).
  • Strengthening capacity on the ground (partnership in South Africa between TCTA and Umgeni Water).
  • Harmonisation of different stakeholders’ interventions (SWAP in Uganda).
  • Participation of all stakeholders: improve efficiency, maintenance, avoid conflict(Ghana community approach).
  • Regional cooperation
reducing the sanitation gap
Reducing the sanitation gap
  • Increasing access to drinking water can only be safely achieved if sanitation is tackled simultaneously. Awareness rising: Senegal
  • Investments are small compared to the health and environmental costs of inaction and returns (WHO: economic benefits of meeting MDGs in Africa = $23 bl/yr).
  • Overcome the segmentation of the sector: between administrations, among providers (Durban).
  • Develop technologies adapted to communities’ needs.
  • Invest in prevention campaigns (Community health clubs in Zimbabwe).
financing a key issue for all stakeholders
Financing A key issue for all stakeholders
  • Investment needs: $20bl/yr until 2025, 1/3 for sanitation, ¼ for drinking water supply (Africa Water Vision 2025).
  • Insufficient public money (national budgets and ODA).
  • National water providers have failed to achieve financial viability.
  • Least attractive sector to private investors – but active in some countries.
financing gaps in water and sanitation rural urban
Financing gaps in water and sanitation (rural/urban)

Uganda

In million $ per year

Madagascar

Mozambique

Senegal

Benin

Burkina

Kenya

DRC

Mauritania

Source: AMCOW, AfDB, EUWI, WSP & UNDP, 2006.

strengthening utilities
Strengthening utilities
  • Financial independence:
    • cost-recovery: affordability and cross-subsidisation
    • sustainable & predictable public funding
  • Capacity building through benchmarking and partnerships (ex: UNSGAB Water Operators Partnership).
  • The role of small-scale local providers
    • Flexible, better knowledge of remote areas
    • But they need to be better regulated and their action facilitated by institutional framework (Uganda Association of Private Water Operators)
what role for the donor community

1.2

0.9

Bilateral ODA

0.6

0.3

Multilateral ODA

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

What role for the donor community?

Total Water ODA to Africa, $ billion, 2004 prices

Source: OECD/DAC

what role for the donor community1
What role for the donor community?
  • Using ODA to leverage further financing (Zambian Devolution Trust Fund).
  • Using subsidies targeted on performance, such as Output-Based Aid (GPOBA in Mozambique).
  • Develop innovative financial tools: sub-sovereign financing facility in local currency, risk mitigation through resource pooling.
  • The role of the African development Bank: African Water Facility and the Rural Water and Sanitation Initiative.