1 AFRICAN DEVELOPMENT BANK An Outlook for Africa OECD Office Washington 22 May 2006 Celine Kauffmann Economist OECD Development Centre
2 AFRICAN DEVELOPMENT BANK African Economic Outlook 2006 African Development Bank OECD Development Centre
3 AFRICAN DEVELOPMENT BANK 1 What is the African Economic Outlook Project? African Performance: A two Speed Africa? 2 Promoting Transport Infrastructure 3
4 AFRICAN DEVELOPMENT BANK What is the AEO Project? Joint Publication of the AfDB and the OECD Development Centre – 5 th edition released on May 16. Joint Publication of the AfDB and the OECD Development Centre – 5 th 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. 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. 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. 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…) Improvements in successive editions (More intensive peer-review process, Improved modelling and data harmonisation, Broader Coverage…)
5 AFRICAN DEVELOPMENT BANK Coverage 2006: 30 African countries 90% of GDP 87% of population
6 AFRICAN DEVELOPMENT BANK 1 What is the African Economic Outlook Project? African Performance: A two Speed Africa? 2 Promoting Transport Infrastructure 3
7 AFRICAN DEVELOPMENT BANK Africa’s growth remains robust Sources: African Economic Outlook 2006, IMF, OECD Total OECD AFRICA %
8 AFRICAN DEVELOPMENT BANK Oil producing countries are leading growth Source: African Economic Outlook 2006 Performance of oil producers (%)
9 AFRICAN DEVELOPMENT BANK Oil importers performed better than expected Sources: African Economic Outlook 2006 Best Performers in 2005 (%)
10 AFRICAN DEVELOPMENT BANK Thanks to rising commodity prices and increased production Sources: African Economic Outlook 2006
11 AFRICAN DEVELOPMENT BANK Thanks to good harvest … and better internal policies Lower inflation Sources: African Economic Outlook 2006 (%)
12 AFRICAN DEVELOPMENT BANK Fiscal discipline
13 AFRICAN DEVELOPMENT BANK … and increased political stability Sources: African Economic Outlook 2006 Political Indicators
14 AFRICAN DEVELOPMENT BANK Despite recent improvements, major development challenges remain … Africa is still behind in reaching the MDGs Sources: African Economic Outlook 2006
15 AFRICAN DEVELOPMENT BANK A divided Africa
16 AFRICAN DEVELOPMENT BANK Progress in diversifying exports is varied Source: Export Diversification Index, African Economic Outlook 2006 The higher the index, the more diversified the economy Uganda Ethiopia Africa Tanzania Kenya Tunisia Morocco Algeria Cote d'Ivoire Mozambique Cameroon Senegal Madagascar SACU
17 AFRICAN DEVELOPMENT BANK Africa receives about 50 per cent of total aid Source: OECD/DAC Statistics (2006). DAC Members’ ODA: and simulations to 2006 and 2010, based on Monterrey and subsequent commitments % of GNI ODA (2004 $ billion) ODA as a % of GNI (left scale) Total ODA (right scale) Total ODA to Africa (right scale)
18 AFRICAN DEVELOPMENT BANK …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, (Source: OECD/DAC)
19 AFRICAN DEVELOPMENT BANK Composition of ODA in top ODA beneficiaries Source: OECD/DAC, 2006
20 AFRICAN DEVELOPMENT BANK Top ODA beneficiaries Zambia Angola Uganda Mozambique Madagascar Ghana Egypt Tanzania Congo, Dem. Rep. Ethiopia Equatorial Guinea (18) Liberia (17) Mauritania (16) Mozambique (15) Ghana (14 ) Sierra Leone (13) Madagascar (12) Angola (11) Namibia (10) Djibouti (9) Senegal (8) Zambia (7) Source: OECD/DAC, 2006 Net ODA Receipts (USD million) ODA per capita (USD)
21 AFRICAN DEVELOPMENT BANK Long term development requires to capitalise on windfall gains & mobilise additional resources to finance productive activities, including… transport infrastructure
22 AFRICAN DEVELOPMENT BANK 1 What is the African Economic Outlook Project? African Performance: A two Speed Africa? 2 Promoting Transport Infrastructure 3
23 AFRICAN DEVELOPMENT BANK Improve mobility Reduce prices Improve mobility Free time Women benefit the most Better supply of food, water & medicines Faster hospitalisation Better supplies & staff Better use of networks Project selection
24 AFRICAN DEVELOPMENT BANK A continent of stranded mobility? Source: Pourtier (2003)
25 AFRICAN DEVELOPMENT BANK Transport / insurance costs as % of trade value SSA Least Developed Landlocked SSA Landlocked SSA Coastal countries All land locked Developing All Developing Countries OECD Countries IMPORT EXPORT Source: Faye, McArthur, Sachs and Snow (2004) and UNCTAD (2003)
26 AFRICAN DEVELOPMENT BANK Transport in Africa & the world AfricaNorth AfricaSSA % dvping countries % world% dvping countries % world% dvping countries Population, GDP, Trade, Air transport (f), n.a. Air transport (p), n.a. Rail transport, Road transport, 2002 >24.0n.a Sea transport, Source: African Economic Outlook 2006 and various sources
27 AFRICAN DEVELOPMENT BANK 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
28 AFRICAN DEVELOPMENT BANK Source: OECD/DAC Creditor reporting System (commitments) data aggregated by sectors : Shift in ODA to social sectors
29 AFRICAN DEVELOPMENT BANK Infrastructure is back on donors’ agenda Decline in the 1990’s 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)
30 AFRICAN DEVELOPMENT BANK 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
31 AFRICAN DEVELOPMENT BANK 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
32 AFRICAN DEVELOPMENT BANK Thank you for your attention! Contacts: