BY DR. ROBERT M. OKELLO AFRICAN ECONOMIC FORUM TUNIS 27 OCTOBER 2010 Africa Strategic Vision 2050: Reponses and Policy Recommendations 1

“AN INTEGRATED, PROSPEROUS AND PEACEFUL AFRICA, DRIVEN BY ITS CITIZENS AND REPRESENTING A DYNAMIC FORCE IN GLOBAL ARENA.” – AUC STRATEGIC PLAN VISION OF THE AFRICAN UNION 2

STRATEGIC POLICY INTERVENTIONS DRIVERS OF CHANGE (12) CON SEQ UEN CES (9) 3

12 DRIVERS OF CHANGE  DEMOGRAPHICS  FISHERIES  DISEASES  FORESTS  CONFLICTS  MINERALS  CLIMATE CHANGE  MARKET CHANGE  LAND  PRODUCTION CHANGE  WATER  RULE OF THE GAME 4

POLICY RESPONSES  URBANIZATION  PRESSURE IN THE MIDDLE  MIGRATION  REGIONAL INTEGRATION  AGRICULTURE  TRADE PREFERENCES  NATURAL RESOURCES  MANAGING AID  ROOM AT THE BOTTOM 5

 POLICY ENTRY POINT  SCENARIO  KEY DRIVERS OF CHANGE  RECOMMENDED POLICY RESPONSE APPROACH 6

POLICY ENTRY POINT: MANAGING URBANIZATION SCENARIOKEY DRIVERSPOLICY RESPONSES SIGNIFICANT POPULATION SWITCH FROM RURAL TO URBAN; MAJOR DISEASES (MALARIA, HIV/AIDS) CONTROLLED; END TO ARMED CONFLICTS; DEEPER REGIONAL INTEGRATION ACHIEVED DEMOGRAPHIC CHANGE Population Policies; Decentralization; Infrastructure; Urban Planning; Youth Employment BURDEN OF DISEASES Implementation of AU Commitments; International Collaboration in vaccine development. CONFLICTSImplementation of REC and AU Peace and Security Agreements 7

8 POLICY ENTRY POINT: MANAGING URBANIZATION (Cont) SCENARIOKEY DRIVERSPOLICY RESPONSE SIGNIFICANT POPULATION SWITCH FROM RURAL TO URBAN; MAJOR DISEASES (MALARIA, HIV/AIDS) CONTROLLED; END TO ARMED CONFLICTS; DEEPER REGIONAL INTEGRATION ACHIEVED LAND AND WATERInvestments in Water and Sanitation Infrastructure CHANGE IN STRUCTURE OF PRODUCTION

POLICY ENTRY POINT: MANAGING MIGRATION SCENARIOKEY DRIVERSPOLICY RESPONSE Greater Migration within and Outside Africa; Increased Rural-Urban Migration; Greater Demand for African Services in Developed Countries; Greater Mobility of Workers; Other Movements due to Natural Disasters; Migrant Remittances Increasingly Significant in African Economies DEMOGRAPHIC CHANGE Decentralization; Regional and Continental Protocols; Deeper Regional Integration BURDEN OF DISEASES International Agreements on Communicable Diseases CLIMATE CHANGEGreater African Voice in International Agreements. STRUCTURAL CHANGE IN GLOBAL MARKETS International Agreements on Migration 9

POLICY ACTION POINT: ADAPTING AGRICULTURE SCENARIOKEY DRIVERSPOLICY RESPONSE Increased Agricultural Productivity in Africa; Greater Impact of Technological Innovation; Greater Competition from Northern Countries Due to Climate Warming; Low Agricultural Prices Demographic ChangeModernization of Agricultural Production; Structural transformation of Economies from Agric to Industries Burden of DiseasesIntegrating HIV/AIDS Programmes into Agricultural Development Climate ChangeAdaptation of resistant crops; intensive agriculture; irrigation; Diversification. Land and SoilsLand Reforms; Adaptation of New Technologies; Fertilizers. 10

POLICY ACTION POINT: ADAPTING AGRICULTURE (Cont) SCENARIOKEY DRIVERSPOLICY RESPONSE Increased Agricultural Production in Africa; Greater Impact of Technological Innovation; Greater Competition from Northern Countries Due to Climate Warming; Low Agricultural Prices WaterWater Preservation Technologies; Adoption of IWRM National/Regional FisheriesCapacity Building; Technology; Sustainable Management. ForestryForest Conservation and Tree Planting; Intensive Agriculture. Structural Change in Production GM Crops; Technology Innovation; Structural Change in the Global Market New Markets in Emerging Economies 11

POLICY ENTRY POINT: MANAGING THE RESOURCE CURSE SCENARIOKEY DRIVERSPOLICY RESPONSE Current Known Resources will be Depleted; New Sources will be discovered; Decline in Value of Natural Resources (Technology Change and Depletion). ConflictsSpecial Needs of Local Population; Regional “Compacts” on Peace and Security. ForestryImproved Institutions for Sustainable Mgt.; Alternative Energy MineralsValue Addition; Institutional Capacity for Effective Mgt.; Avoid Dutch Disease 12

POLICY ENTRY POINT: MANAGING THE RESOURCE CURSE (Cont) SCENARIOKEY DRIVERSPOLICY RESPONSE Current Known Resources will be Depleted; New Sources will be discovered; Decline in Value of Natural Resources (Technology Change and Depletion). Structural Change in Global Market - Energy Adequate Governance Institutions; Enabling Environment; Develop Value Chains (Upstream/Downstream); Structural Change in Production Avoid Dutch Disease; Good Geological Surveys; Credible Regional Institutional Framework 13

POLICY ENTRY POINT: BREAKING IN AT BOTTOM SCENARIOKEY DRIVERSPOLICY RESPONSE Well Established Policies in Place; Private Sector Developed; Industrial Agglomeration in Mega Urban Clusters; Efficient Infrastructure; Technological Innovation; Global Competitiveness Burden of DiseaseIntegrate HIV/AIDS into national programmes. Structural Change in Global Markets Improve competitiveness; Diversification of economies; Industrial Agglomeration; Technology and innovation. Structural Change in Production Develop Trade in Tasks; Technological Adaptation and Innovation; Institutional Transformation for Capital Deepening 14

POLICY ENTRY POINTS: MOVING UP THE MIDDLE SCENARIOKEY DRIVERSPOLICY RESPONSE Africa’s Middle Income Countries Achieved Industrial Agglomeration and Competitiveness and Expanded Trade. DemographicsImplement Policies for Demographic Transition. Institute Capacity Development for Youth. Structural Change in Global Markets Accelerate Productivity; Diversify manufacturing Structural Change in Production Invest in Local Knowledge; Increased Public and Private Investment. 15

POLICY ENTRY POINTS: REGIONAL INTEGRATION SCENARIOKEY DRIVERSPOLICY RESPONSE AEC Fully established and Deeper Integration Achieved. Free Movement of People Results in Mega-Urban Areas in Coastal Areas. Peace and Security Largely Achieved. Africa Fully Integrated into Global Market Including Linked Infrastructure. WaterStrengthen Riparian Agreements; Implement IWRM Systems at Basin Level; Improve Water Transport Systems, including PPP Operations. EnergyDevelop Joint Regional Facilities: Oil Refineries; Oil/Gas Pipelines; Power Generating and Distribution. Develop Regional Transport Systems. Structural Change in Production Develop Manufacturing in Coastal Mega Urban Areas; Implement PIDA including TAH and Railways; Connect Africa to Europe and Asia. 16

POLICY ENTRY POINT: TRADE PREFERENCES 17 SCENARIOKEY DRIVERSPOLICY RESPONSE Africa Reduces its Dependence on Markets in Developed Countries. Special EU and US Trade Preferences with Africa Less Significant. WTO Rules More Relevant. Rules of the GameTrade Negotiations Include Trade in Tasks. Consistency Between EPA/AGOA and WTO

POLICY ENTRY POINT: MANAGING AID 18 SCENARIOKEY DRIVERSPOLICY RESPONSE Influence of G8 Significantly Diminished. Aid to Africa from Former Colonial Countries Less Significant. Relative Poverty of Africa Much Reduced. Rules of the GameIncreased Levels of Public and Private Savings to Boost Domestic Investment and Growth. Efficient Taxation System.

 SUPPORTING GOOD GOVERNANCE  BUILDING TECHNICAL SKILLS AND CAPACITIES  PROMOTING PRIVATE SECTOR  SUPPORTING REGIONAL INTEGRATION  INFRASTRUCTURE DEVELOPMENT AFDB STRATEGIC ORIENTATION 19

IMPLEMENTATION AGREED REGIONAL PROGRAMMES (APRM, INRM/IWRM PROGRAMMES) STRENGHTHENING FRAGILE STATES ADB STRATEGIC ORIENTATION: Supporting Good Governance 20

BUILDING NATIONAL AND REGIONAL CENTRES OF EXCELLNCE PROMOTING PPP IN AFRICA ADB STRATEGIC ORIENTATION: Building Technical Capacity 21

PROMOTE ENABLING ENVIRONMENT FOR INVESTMENT AND ENTREPRENEURSHIP DIRECT SUPPORT TO KEY SECTORS INCLUDING AGRICULTURE AND INFRASTRUCTURE DEVELOPMENT OF MORE ROBUST BANKING AND FINANCIAL SERVICES 22 ADB STRATEGIC ORIENTATION: Promoting Private Sector

DEVELOPMENT OF ECONOMIC AND SOCIAL INFRASTRUCTURE ADVOCATE FOR GREATER AFRICAN VOICE IN INTERNATIONAL FORA SUPPORTING RECS IMPLEMENT AGREED PROGRAMMES (HARMONIZATION OF REGULATIONS, PRACTICES 23 ADB STRATEGIC ORIENTATION: Supporting Regional Integration

CONTINUE LEADING INFRASTRUCTURE PROGRAMME UNDER NEPAD SCALE UP OWN AND LEVERAGE OTHER INVESTMENT IN INFRASTRUCTURE DEVELOPMENT PROVIDE TECHNICAL ASSISTANCE TO MEMBER STATES AND RECS SUPPORT DEVELOPMENT OF CONSTRUCTION INDUSTRY 24 ADB STRATEGIC ORIENTATION: Infrastructure Development

25 AFRICA IN 2050