Date post: | 18-Dec-2015 |
Category: |
Documents |
Upload: | tyrone-bishop |
View: | 215 times |
Download: | 1 times |
Survey of Economic and Survey of Economic and
Social Conditions in Social Conditions in
Africa 2004-2005Africa 2004-2005 For presentation at the Conference of For presentation at the Conference of
African Ministers of Finance, Planning and African Ministers of Finance, Planning and Economic Development,Economic Development,
11-13 May 2005, Abuja, Nigeria11-13 May 2005, Abuja, Nigeria by by Prof. Augustin FosuProf. Augustin Fosu
Director, Economic and Social Policy Director, Economic and Social Policy Division, ECADivision, ECA
OutlineOutline Recent Economic performance
Growth performance by subregionsFastest & slowest performers Implications for the MDGs
Sources of growth Internal External
Some areas of concern Medium-term prospects Trends in poverty Progress towards the MDGs targets Policy interventions
African economic performance African economic performance improvesimproves
2.8
4.8 4.8
3.5
3.9
4.5
3.2
4.34.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
North Africa SSA AFRICA
2002 2003 2004
Underlying factors for improved Underlying factors for improved performance in 2004performance in 2004
High international oil prices coupled with high oil production benefited most African oil exporters
Strong global recovery increased the demand for oil and most non-oil commodities
Better performance in agriculture across the continent though locust invasion adversely affected this sector in Mauritania, Mali, Niger and Senegal
Continued sound macroeconomic management Improved political situation in many countries Increased donor support in the form of aid and
debt relief Rising FDI, expansion in the industrial sector
and growth in the tourism sector
Better performance in 3 of the 5 Better performance in 3 of the 5 sub-regionssub-regions
Central Africa led subregional performance in 2004, followed by East Africa, North Africa, West Africa and, then, Southern Africa
2.5
3.5
6.7
4.3
4.34.6
4.8
4.8
2.5
5.8
4.0
7.3
0.0 2.0 4.0 6.0 8.0
Southern Africa
West Africa
AFRICA
North Africa
East Africa
Central Africa
2004
2003
Rising oil prices for North and Central Africa
Increased agricultural production, coupled with rising commodity prices for East and West Africa
Strong global and domestic demand for South Africa, partly due to its low interest rate, benefited Southern African sub region
Sub regional performance Sub regional performance explained by…explained by…
Fastest and slowest performers in Fastest and slowest performers in AfricaAfrica
The fastest growing African countries in 2004 were Chad, Equatorial Guinea, Liberia, Ethiopia, Angola and MozambiqueChad, Equatorial Guinea & Angola – oilEthiopia – recovery in agricultural
sectorLiberia
post-conflict economy substantial external aid in support of its rebuilding efforts
Cont’d
The slowest growing economies in Africa were Zimbabwe, Seychelles, Cote d’Ivoire, Central African Republic and GabonZimbabwe - performance was hampered by
drought and an adverse political environment
Cote d’Ivoire - continuing political turmoil
Gabon -despite the discovery of new oil fields & higher oil prices, a decline in oil production due to limited investments in upgrading existing fields
Fastest and slowest performers… Fastest and slowest performers… Cont’dCont’d
Real GDP growth rates, top 10 & Real GDP growth rates, top 10 & bottom 5 African countries, bottom 5 African countries,
2004 (%)2004 (%)
-6.8
-2.0
0.9
1.4
1.7
4.6
6.6
6.6
6.8
6.9
8.3
11.5
11.6
15.0
18.3
39.4
-10.0 0.0 10.0 20.0 30.0 40.0 50.0
Zimbabwe
Seychelles
Cote d'Ivoire
CAR
Gabon
AFRICA
Gambia
Sierra Leone
Sudan
Congo DR
Mozambique
Angola
Ethiopia
Liberia
Equatorial Guinea
Chad
Achieving growth required to meet the MDGs remains a challenge for Africa
For instance, based on the recent 2000-2004 period, only four countries achieved the estimated 7% average annual growth rate required to meet MDG1: Equatorial Guinea, Chad, Mozambique, & Angola
However, 14 African countries have achieved an average annual growth rate of 5% or higher since 2000 Equatorial Guinea, Chad, Mozambique, Angola,
Sudan, Ethiopia, Rwanda, Liberia, Uganda, Burkina Faso, Mauritius, Senegal, Tanzania, & Botswana
Improved income distribution helps
Growth and MDGsGrowth and MDGs
Considerable gains by oil Considerable gains by oil exportersexporters
3.1 3.3
5.4
2.9
5.3
3.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2002 2003 2004
O il producers Non-oil producers
Internal Sources of GrowthInternal Sources of Growth
Macroeconomic stability
Inflation declined
Fiscal deficits eased
Current account improved
Tourism on the rise
Good weather prevailed
External Sources of GrowthExternal Sources of Growth
Strong global economic recovery
Rising export prices & volumes of most African
commodities
ODA on the rise
FDI flows are up
ODA hit a new peak of US$26.3 ODA hit a new peak of US$26.3 Billion in 2003Billion in 2003
13.4
All donors
26.3
15.716.116.7
21.3
23.3
24.825.3
16.5
19.2
DAC donors
10.4 10.211.211.4
13.4
9.5
11.5
13.5
15.5
17.5
19.5
21.5
23.5
25.5
27.5
FDI inflows to Africa …FDI inflows to Africa …reboundingrebounding
Due to High prices of most key commodities Enhanced investor perceptions
•But concentrated in natural resource sectors
19.6
11.8
15.0
20.0
0
2
4
6
8
10
12
14
16
18
20
2001 2002 2003 2004
Some areas of concernSome areas of concern
Risk of currency appreciation
Low domestic savings
Weak domestic investment
Growth has so far not been
translated into employment
creation or poverty reduction
Medium-term outlook is Medium-term outlook is positivepositive
Africa is projected to grow at 5% in 2005—highest in a decade
3.5
4.4 4.34.5 4.6
5.04.8
5.2
5.85.6
7.3
6.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Southern Africa West Africa AFRICA North Africa East Africa Central Africa
2004 2005
Upside factorsImproved agricultural production,
assuming continued good weather conditions
Continued macroeconomic stability
Vibrant growth in the tourism and mining sub-sectors
Continuing strong oil sector ODA, FDI and remittances are
expected to increaseContinuing improving political
stability in many African countries
Downside risksGlobal growth is expected to
slow down (mainly b/c of high oil prices)
High oil prices adversely affect oil importers by pushing up inflation
Continuing political tension (instability) in Cote d’Ivoire, Zimbabwe & Sudan
Has Africa’s growth translated Has Africa’s growth translated into unemployment or poverty into unemployment or poverty
reduction?reduction? As employment is a source of income
for the poor, increasing employment
opportunities is a critical element of
poverty reduction initiatives
However, Africa’s growth has so far
not been translated to employment
creation or poverty reduction
Trends in povertySSA had the highest poverty rate in
2003With the exception of SSA, the
poverty rate decreased substantially between 1980 & 2003 for all regions
SSA was the only region where the proportion of the “working poor” increased during 1980-2003
Therefore, GDP growth in SSA has been barely enough to absorb population growth
Progress towards the MDGs Progress towards the MDGs targetstargets
• Unsatisfactory performance of SSA in creating jobs and reducing poverty puts doubts on achieving the overall targets of the MDGs
• In fact, SSA’s overall performance (during 1990-2000) w.r.t. achieving the MDG targets has been disappointing (details later in the Issues Paper)
Policy InterventionsPolicy Interventions
To achieve high & sustainable growth and proper distribution in Africa, policy interventions will be required at different levels:economicsocialpolitical
At the economic level, priority must be given to minimizing dependency on the vagaries
of the climate reducing exposure to commodity price
shocks via export diversification consolidating macroeconomic stability mobilizing domestic savings to finance
investmentsmaximizing job creation by minimizing
constraints to private sector investments and growth
minimizing the unpredictability of ODA flows
accelerating efforts at regional cooperation
At social level, interventions must be guided by maximizing physical and financial access to health
systems by the poor addressing the adverse effects of major diseases investing in education & training addressing reproductive health & other gender-related
issues On the political front, the overriding objectives should be
securing peace and security improving governance making special provisions for the least-developed
countries and post-conflict economies optimizing global partnerships
Thank Thank you!you!