An Outlook for Africa

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An Outlook for Africa
Celine Kauffmann Economist OECD Development Centre
OECD Office Washington ? 22 May 2006
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African Economic Outlook 2006
African Development Bank OECD Development Centre
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Africa?
3
Promoting Transport Infrastructure
4
What is the AEO Project?

• Joint Publication of the AfDB and the OECD
  Development Centre 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)

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Coverage 2006 30 African countries
90 of GDP 87 of population
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Africa?
3
Promoting Transport Infrastructure
7
Africas growth remains robust

AFRICA
Total OECD
Sources African Economic Outlook 2006, IMF, OECD
8
Oil producing countries are leading growth
Performance of oil producers
()
()
Source African Economic Outlook 2006
9
Oil importers performed better than expected
Best Performers in 2005
()
()
Sources African Economic Outlook 2006
10
Thanks to rising commodity prices and increased
production
Sources African Economic Outlook 2006
11
Thanks to good harvest and better internal
policies

• Lower inflation

()
Sources African Economic Outlook 2006
12
Fiscal discipline
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and increased political stability
Sources African Economic Outlook 2006 Political
Indicators
14
Despite recent improvements, major development
challenges remain Africa is still behind in
reaching the MDGs
Sources African Economic Outlook 2006
15
A divided Africa
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Progress in diversifying exports is varied
The higher the index, the more diversified the
economy
Source Export Diversification Index, African
Economic Outlook 2006
17
Africa receives about 50 per cent of total aid
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)
of GNI
ODA (2004 billion)
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
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source OECD/DAC Statistics (2006). DAC Members
ODA 1990-2004 and simulations to 2006 and 2010,
based on Monterrey and subsequent commitments
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with ODA increases 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
Composition of ODA in top ODA beneficiaries
Source OECD/DAC, 2006
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Top ODA beneficiaries
ODA per capita (USD)
Net ODA Receipts (USD million)
Source OECD/DAC, 2006
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Long term development requires to capitalise on
windfall gains mobilise additional resources
to finance productive activities, including
transport infrastructure
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Africa?
3
Promoting Transport Infrastructure
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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
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A continent of stranded mobility?
Source Pourtier (2003)
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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)
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Transport in Africa the world
Source African Economic Outlook 2006 and various
sources
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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
• Rail
• 3.5 of developing passenger flows, 20 of GDP
• Air
• Few airports with international standard
• 4.5 of traffic, 25 of accidents
• Ports
• 1 port operated by major company
• Most are under equipped and have reached maximum
  capacity

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Shift in ODA to social sectors
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Infrastructure is back on donors agenda

• Decline in the 1990s of bilateral ODA, not
  compensated by multilateral flows
• Shift of attention to poverty reduction (MDGs)
• Disappointment over past experiences
• Renewed interest as shown by report by Commission
  for Africa and UN Millennium Summit
• Bilateral donors insist on linkage between
  infrastructure poverty reduction
• Increased involvement of non DAC members (China,
  Arab countries)

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PPP experiences in transport

• Prompted by lack of public finance and lack of
  access to international financial markets,
  although second-generation road funds and
  innovations like the Emerging Africa
  Infrastructure Fund for the private sector are
  helping
• Not full privatisation but concession
  management contracts to allow better risk sharing
  in volatile environment
• Positive outcome with respect to transport
  service delivery, limited in the case of
  infrastructure
• Under certain conditions (high private sector
  stake), privatisation of infrastructure is
  successful (ex. toll road of Maputo corridor)
• In most cases, investment remains public

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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

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Thank youfor your attention!Contactswww.afdb
.orgwww.oecd.org/dev/aeo