1 AFRICA DAY SYMPOSIUM 2007 United Nations University May 25, 2007 “The World Bank – Strategy for Promoting Infrastructure, Trade and Investment in Africa” Lester Dally, Acting Special Representative, Japan The World Bank

2 Private sector is key to growth…  The private sector must play a leading role in ramping up growth in Africa.  Without a strong indigenous base, it is hard to imagine that the African private sector can become a strong political constituency locally, that can protect its stakes and push for the type of changes e.g. in the investment climate, that will spur its development and influence.  Growing the indigenous private sector is thus fundamental to the overall private sector expansion and development.

3 Economic performance has improved…

4 …and is becoming more diverse  Natural Resources have gained new importance

5 Social Outcomes are improving…  Gross primary enrollment rose from 71.5% in 1991 to 96% in 2004  90% of countries have primary enrollment rates above 75%  70% of Africans live in countries where under-five mortality has dropped to between 100 and 200  Only 16% live in countries with under-five mortality rates above 200

6 …but progress toward the MDGs remains too slow Number of CountriesNumber of People No Data On TrackNo DataOff Track On TrackOff Track

7  Scaled up aid has not yet been delivered  New development partners are emerging (China, Foundations, Private Sector) The aid architecture is changing

8 Trends provide opportunities  Targeting opportunities for accelerated economic growth  Increasing support for good governance and capacity development in resource rich and slowly growing countries  Using innovative instruments to crowd in resources (e.g. private sector, commerical lending, concessional, grants)  Integrating vertical programs and new partners into sustainable country based institutions

9  Good Progress Private sector development, closing the infrastructure gap, HIV/AIDS, malaria Capable states - - EITI and public financial management Partnerships  On Track Regional integration Primary education Results framework  More Progress Needed Agricultural productivity Connecting the poor to markets Economic empowerment of women Implementation - summary assessment

10  Country results  Average penetration rates for telecommunications doubled between 2004 and 2006  20 countries are undertaking reform agendas in the water sector  $6b in private provision and management of infrastructure in 2006 (roads, energy, telecom)  Development partners’ efforts  20% increase in OECD resources in 2006 with 78% from multilaterals  Increased activity in large scale projects  10% allocated to regional infrastructure projects  World Bank Support  Delivered: 1.7 million with access to water, 28,000km roads, and several thousands of jobs  On track to deliver: Low cost international telecommunications access in 24 countries, additional 2.5 million people per year with access to water, 30,000 km of roads Infrastructure

11 I. ACCELERATING SHARED GROWTH Drivers of Growth 1. Identify the drivers of growth 2. Develop an African private sector 3. Create an export push 4. Close the infrastructure gap  Energy  Transport  Water 5. Support regional integration 6. Build skills for competitiveness and growth 7. Make agriculture more productive and sustainable Participating in Growth 8. Connect the poor to markets and reduce vulnerability to shocks 9. Scale up Human Development  HIV/AIDs  Malaria  Primary education and gender equality in education AAP PILLARS Instruments to achieve better results Governance and effective public sector Environmental management Effective development partnership 5. Improve access to and reliability of clean energy 6. Expand and upgrade road networks in transit corridors 1. Strengthen the African Private Sector 4. Raise agricultural productivity 3. Build skills for competitiveness in a global economy 8. Strengthen national health systems to prevent and treat malaria and HIV/AIDS FLAGSHIP BUSINESS LINES 7. Increase access to safe water and sanitation 2. Increase the economic empowerment of women III. SHARPENING FOCUS ON RESULTS 12. Help countries build outcome driven national strategies 13. Measure and report on progress Relevance in light of experience IV. STRENGTHENING THE DEVELOPMENT PARTNERSHIPS 14. Strengthen partnerships and deliver more effective aid II. BUILDING CAPABLE STATES 10. Strengthen capacity and public expenditure management 11. Build capacity of post conflict states to deliver essential services Progress toward results WB comparative advantages relative to development partners Global Priorities SELECTIVITY FILTERS Modifications to the AAP - More Selectivity and Focus for Increased Impact

12 Approach to Scaling up: Three Main Mechanisms  Sector Wide Approach and Programmatic Approach  Development Finance Packages and Syndications  Resource and Results Processes

13 Accelerating Development Outcomes in Africa  Development trends and implementation progress give rise to optimism  The country-based model will be maintained  WBG to help countries make the right choices and help countries help themselves  The AAP strengthens results by focusing on outcomes  Alignment budget/staffing with priorities – number of international staff to Africa country offices doubled over FY  A more focused and effective World Bank role in Africa

14 Financing Packages to Accelerate Results  The growing demand for large scale infrastructure investments to spur economic growth requires a mix of sequenced, coordinated development finance products – private and public – to achieve and sustain results.  The Bank Group’s analytic skills, operational experience, and country knowledge can be used to identify opportunities where resources from multiple sources can fill funding gaps and achieve sector wide development targets. In sectors such as energy, roads, or water supply, where governments have clearly defined sector strategies focused on a range of outcomes and a sound regulatory framework, sector wide programs or “syndications" can be developed to sale up development financing. Syndications will be prepared by the Government and supported by a lead partner, normally a multilateral or bilateral donor.  In countries with well-developed national strategies and clearly defined financing needs, the Bank Group will continue to use R7R processes to provide more comprehensive coverage of development financing needs. In all cases, the Bank Group will support countries in ensuring debt sustainability.  IDA and the Africa Catalytic Growth Fund (ACGF) will be principal means by which the Bank Group seeks to crowd in other donor support.

15 IFCMIGAIBRD/IDA EquityPolitical Risk InsuranceGuarantees A&B Loans(expropriation, transfer restriction,-Partial Risk Guaranteesbreach of contract, war & civil-Partial Credit (partial credit structuresdisturbances)-Policy Based usually for local financing) IBRD Loan Advisory IDA Credit  Similar requirements on safeguards, development impact  Joint transactions (e.g., MIGA/IFC/PFG) WBG: Pushing the frontier of private investments

16 IFC Activity Supported by the AAP Much of the progress in growth is due to the joint efforts of IDA, IFC and MIGA in private sector development.  IFC began its Strategic Initiative for Africa three years ago based on three objectives: bettering investment climates; improving support for SMEs; and supporting project development for potential IFC projects.  IFC has introduced new services and products including the SME Solution Centers, local currency lending, trade finance, and the Post-Conflict and IFC Against AIDS Initiatives. During the Strategic Initiative’s first three years, IFC’s commitments in Africa grew by 400 percent. Four sectors drove this growth: finical markets; oil, gas, mining and chemicals; information and communications technology; and telecommunications.  IFC reached 15,000 beneficiaries in MSME programs in three countries and trained 4,000 managers ( ). It has strengthened its partnerships throughout the region, and the Private Enterprise Partnership for Africa (PEP) was oversubscribed.

17 MIGA Activity Supported by the AAP  In FY06 and 07, Sub-Saharan Africa has been MIGAs most important regional priority. MIGA issued 28 guarantees for 17 new projects resulting in additional gross exposure of $245 million.  Guarantees covered projects in ten countries: Angola, Burkina Faso, Cameroon, Ghana, Kenya, Madagascar, Mozambique, Nigeria, Sierra Leone and Uganda.  Priorities were regional integration, conflict-affected countries and infrastructure.  MIGA also built its outreach program and cooperated closely with the African Development Bank (AfDB) and other institutions to identify and facilitate infrastructure projects.  Increasingly, MIGA works upstream with IFC and the Bank to improve national legal frameworks for FDI, and with investors to structure transactions and improve development impacts.

18 G8 Action Plan for Good Financial Governance in Africa (Potsdam, May 19, 2007) 1. Contributing to good financial governance through bilateral and multilateral development assistance. 2. Strengthening African tax systems. 3. Establishing transparent and comprehensive budgeting procedures. 4. Promoting accountability and transparency,, enhancing budgetary control. 5. Increasing accountability for revenues from extractive industries. 6. Securing public debt sustainability. 7. Supporting fiscal decentralization. 8. Promoting donor harmonization through knowledge management. 9. Enhancing capacities for governance in fragile states and situations. 10. Developing local bond markets in emerging market economies

19 Why TICAD is so Important? 1. Strategic Partnership among African Countries, Japan, UNDP, UNOSS, and the World Bank 2. Solid and unique global platform dedicated to the African agenda 3. Opportunity to draw international attention to Africa on the move 4. Conduit for Asia-Africa knowledge sharing, investment and development assistance 5. Process to mobilize widespread sustainable international support for Africa 6. TICAD IV is stepping stone to G in Hokkaido