1. AFRICAN ECONOMIC OUTLOOK 2002/03 Geneva – 8 September 2003

2. The AEO project A joint product of the African Development Bank & the OECD Development Centre

3. Key features  Country level analysis, organised in a single unified framework  social and political developments along with economic performance,  set of individual countries representative of the whole continent.

4. Country coverage, 2002/03

5. Outcomes  Contributing to policy monitoring: AEO could be used in the APRM process of NEPAD  Capacity building: Progressively hand over AEO to African economists through –Training within AfDB –Constitution of a network Product Process

6. Structure of the report  A report structured around individual country notes  starting with a synthesis, highlighting the major features – –AEO 2002/03: Privatisations – –AEO 2003/04: Energy Supply  and closing with a statistical annex.

7. Main Findings 2002/2003  Growth Prospects  Poverty: Meeting the Millennium Development Goals  Focus on Privatisation

8. 1. Growth Prospects The 2002/2003 outlook  Africa performance affected by global slowdown but…  domestic factors (governance, epidemics, and agricultural outcomes) pose major challenges. 22 AEO countries Africa

9. ODA to Africa

10. Average growth rates of AEO countries

11. Best and worst performers

12. Zimbabwe Governance matters  Increasing macroeconomic imbalances  Food crisis  Political tension Political hardening Political tensions GDP growth

13. 2. Poverty Sub-Saharan Africa will miss the 2015 Millennium Development Goals (MDGs) target … while Northern Africa will achieve them

14. The income poverty target

15. Completion rate of MDGs by 2015 (by total population in the Sub region) sub-Saharan Africa

16. Impact of HIV/ AIDS

17. 3. Privatisations  Ownership of the process  Lack of local capacity  Lack of regulatory framework  Strategy  Cornerstone of SAPs but recent phenomenon in SSA Main Obstacles

18. Company Buyers (stake) Proceeds (US$) Remarks Maroc Telecom 2000 Vivendi (35%) 2.1 billion Network expanded and reduced tariffs Telkom 1997 SBC (US) & Telekom Malaysia (30%) + BEE (3%) 1.26 billion Higher investment and network improved. IPO in 2003 15 % Sonatel 1997- 98 France Telecom (33.3%) + Senegal flotation (17%) 197 million Increased profits Boost to the SE ACSA 1998 Aeroporti di Roma (20%), BEE (4%) 280 million Expansion plans Kenya Airways 1996 KLM (26%), Nairobi Stock Exchange (51%, 34% to local investors) 26 million (KLM) 48 million flotation Total 74 million Profits up, passengers + 78%

19. Challenges ahead for Africa Achieving MDGs –ability to cope with vulnerability –improved governance –ownership of structural reforms

20. Algeria Oil dependency & governance  Recovery is boosted by dominant hydrocarbon sector.  High unemployment and social unrest.  Despite fiscal expansion and high INV/GDP.  Vested interests delay badly needed structural reforms.

21. Egypt Unfinished reforms  Slow-down of RGDP growth…  … combined with unemployment and high population growth  Exogenous sources of income and spillovers from Middle East instability.  Declining foreign exchange and FTA with EU can put pressure for reforms.

22. Morocco Volatility  Successful stabilization and structural reforms  but growth is volatile,  and social indicators worsening  Challenge is achieving sustained growth to reduce unemployment

23. Tunisia Resilience to shocks  Open and highly diversified economy…  …succeeded in poverty reduction and improved human development  Despite adverse shocks, growth resumes

24. Challenges Ahead  Vulnerability : –Reduce dependency on volatile income sources – outlook for oil exporters –Security and political tensions – tourism and FDI  Integration with EU: need to raise competitiveness of private sector  Set up poverty-reduction strategies