african economic outlook 2003/2004 paris, 7 july 2004
TRANSCRIPT
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African Economic Outlook African Economic Outlook 2003/20042003/2004
Paris, 7 July 2004Paris, 7 July 2004
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AEO Challenges• Making the AEO a reference point for
individual country analysis• Making the AEO an important background
document for the African Peer Review Mechanism
• Monitoring progress towards the MDGs• Improve knowledge on strategic issues for
Africa:– Privatization 2002/03– Energy Sector 2003/04
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Other Countries
AEO Countries
Algerie
Lybie Egypte
Mauritanie
Mali
Niger
Tchad
RepubliqueDemocratiquedu Congo
Soudan
Republique Centraafricaine
Guineequatoriale
Gabon
Congo
Cameroun
Angola
GuinneeBissau
Guinee
Serrea Leone
Liberia
Côted'Ivoire
Tunisie
Burkinafaso
Ghana
NigeriaTogo Ethiopie
Somalie
Djibouti
Erytree
Kenya
Tanzanie
Mozambique
Afriquedu Sud
Botswana
Zimbabwe
Namibie
Zambie
Swaziland
Lesotho
Malawi
Ouganda
BurundiRwanda
Madagascar
Senegal
Gambie
Maroc
Maurice
North Africa: Algeria, Egypt, Morocco and Tunisia
West Africa: Burkina Faso, Côte d’Ivoire, Ghana, Mali, Nigeria and Senegal
Central Africa: Cameroon and Gabon
East Africa: Ethiopia, Kenya, Mauritius, Uganda and Tanzania
Southern Africa: South Africa, Botswana, Mozambique, Zambia and Zimbabwe
Coverage: 22 African countries
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Contents of the Overview
• International Conditions Impacting on Africa
• Macroeconomic performance, 2003 and outlook for 2004/05– Monetary management– Fiscal policy
• Progress towards achieving the MDGs
• Governance/Political issues• This year’s focus:
– Energy Supply in Africa
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Africa growth in 2003: the highest in 4 years
0.8
1.8
-0.1
2.63.1
5.3
4.0
2.8
1.4
0.3
5.7
2.5
3.82.9
3.6
3.23.03.23.5
0.7
3.63.6
3.53.3
3.7
2.82.9
3.13.0
3.2
1.5
3.2
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004(p) 2005(p)
Africa AEO Countries Linear (Africa)
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Improved growth performance in 2003 explained by domestic and
external factors• Internally:
– Most African governments continued to follow prudent macroeconomic policies
– Restoration of peace in some parts of Africa, albeit fragile.
• Externally:– Improvements in the prices of major primary
commodities.– Africa’s exports in value terms increased by
some 17% and 4.8% in volume.– Increase in ODA and Debt Relief under HIPCs
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Total net ODA to Africa jumped by 35% in value between 2001/02. The upward trend is expected to continue
0
5
10
15
20
25
1996 1997 1998 1999 2000 2001 2002
US
$ b
illi
ons
0
10
20
30
40
per
cen
tag
e
ODA to Africa Africa's share in ODA
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Inflation in decline
3.9
2.9
5.4
5.04.4
3.73.4 3.4
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2002 2003 (e) 2004 (p) 2005 (p)
Inflation- Average Inflation- Median
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The MDG on income poverty will not be met on present
trends
46.7
39.3
23.9
47.7
0
25
50
1990 1995 2000 2005 2010 2015
SSA Actual SSA projected SSA path to goal
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On present trends most of MDGs will not be achieved by many countries
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The satisfactory performance ratio is highest in the case of equality in primary education
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Country Highlights
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Average growth rates of African countries
REGION AVERAGE 1996-2001
2002 2003(E) 2004(P) 2005(P)
Central 2.7 4.1 4.2 7.1 7.0
East 4.3 1.7 2.4 4.9 4.6
North 4.5 3.3 4.9 3.5 4.2
South 2.8 3.3 1.8 2.8 3.1
West 3.5 1.0 4.5 3.9 4.0
Total 3.6 2.7 3.6 3.6 4.0
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Best and worst performers
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.02004
2003
Central East North South West
Gabon
Equatorial Guinea
Madagascar
Zimbabwe
AngolaMozambique
Cote d'Ivoire
Sierra Leone
Chad
Seychelles
Ethiopia
Ethiopia
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Western Africa
-5
0
5
10
Gambia
Sierra LeoneSenegal
Burkina Faso Mali
BeninGhana
Nigeria
Cape VerdeNigerGuinea
Togo
Guinea Bissau
Côte d'Ivo
ire
growth2003
growth2004
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Southern Africa
-20
-15
-10
-5
0
5
10
15
growth2003
growth2004
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Eastern Africa
-5
0
5
10
growth2003
growth2004
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Fiscal situation of many countries
is still weak
Fiscal balance as % of GDP, 2003 estimate
-12%
-9%
-6%
-3%
0%
3%
6%
9%
Central East North South West
Gabon
Seychelles
Algeria
Sao Tome EthiopiaEgypt
Zambia Sierra Leone
Guinea Bissau
Angola Togo
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The impact of high oil prices
• Higher growth in oil exporters- Strong fiscal gains- First increase in Gabon oil production
since 1997 due to vigorous investment in oil sector
• More inflation elsewhere– Burkina Faso (increased transport cost)– Ethiopia, Zambia in spite of good harvest
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The impact of the $ depreciation: Rand zone and
CFA zone
40
50
60
70
80
90
100
110
120
Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04
Euro
Rand
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The impact of the $ depreciation: Rand zone and
CFA zone• Western Africa was partly shielded from
the depreciation of dollar– Most trade with Euro zone – Little competitive industry– However…strong negative fiscal impact
• South Africa in front line: fall in competitiveness but less inflation and moderate fiscal impact
• Other Southern Africa in the shadow of South Africa: Intra regional trade Imported inflation
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Agriculture: still a matter of vulnerability
Despite good 2003/04 harvest, East and Southern Africa continue to suffer from a structural food crisis
Food aid needed by: – 5 ml people (39% pop) in Zimbabwe– 7ml people (10% pop) in Ethiopia– 1 ml people (3% pop) in Kenya
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Governance and economic performance
-5
0
5
10
15
20
25
30
1997 1998 1999 2000 2001 2002 2003
-6-4-202468
101214
1997 1998 1999 2000 2001 2002 2003 (e)
Côte d'Ivoire
Political tensions
Economic performance
Mali
Mali
Côte d'Ivoire
Burkina Faso
Burkina Faso
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Governance and economic performance
0
5
10
15
20
1997 1998 1999 2000 2001 2002 2003
-20
-15
-10
-5
0
5
10
1997 1998 1999 2000 2001 2002 2003
Political tensions and hardening
Economic performance
Zimbabwe Hardening
Zimbabwe Tensions
Regional Average Tensions
Regional Growth
Zimbabwe
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2003/2004 focus: Energy supply in Africa
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Improving
people's lives
Efficiency of
public
intervention
Development
of economic
activity
Energy plays a significant role in poverty alleviation and development
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Huge potential… under or badly exploited
- Under-utilisation of potential sources- Exports rather than national consumption- Mismanagement of resources
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Hydroelectric power
0
1000
2000
3000
4000
5000
6000
Asia SouthAmerica
Europe Africa NorthAmerica
Oceania MiddleEast
TWh/
year
technically exploitable capability actual power generation
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Oil and NGL, largely exploited 7.3% of world reserves, 10.6% of world production
0
10
20
30
40
50
MiddleEast
SouthAmerica
Africa Asia Oceania Europe NorthAmerica
mill
ion
barr
els/
day
0
20
40
60
80
100
year
s of
pro
duct
ion
production reserves/production ratio
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But mostly exported
3.6% of world refining capacity
Supply of motor gasoline in Nigeria (2001)
74%
26%
Consumed locally Exported
60%
40%
Local production Import
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Gas flaring and shrinkage7.5% of world reserves, 5.5% of world production
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Total Africa
Total South America
Total Middle East
Total North America
Total Oceania
Total Asia
Total Europe
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Energy consumption in Africa (2001)
Coal 7 %
World structure:
Biomass 14%
Electricity 16%
Petroleum 44 %
Gas 16%Biomass
59%
Electricity8%
Coal4%
Petroleum25%
Gas4%
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Electrification rates
0102030405060708090
100
OE
CD
Tra
ns
itio
ne
co
no
mie
s
Mid
dle
Ea
st
La
tin
Am
eri
ca
De
ve
lop
ing
As
ia Afr
ica
Su
b-
Sa
ha
ra
No
rth
Afr
ica
World average
Developing countries average
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Challenges for developing the electricity sector
• Serving a scattered, rural population• Repairing and modernising power
facilities• Extending the network• Achieving effective, sequenced
reforms• Co-ordinating at regional and
continental level towards integrated power pools
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Thank you