Presentation on theme: "African Economic Outlook 2004/2005 African Development Bank / OECD Development Centre."— Presentation transcript:
African Economic Outlook 2004/2005 African Development Bank / OECD Development Centre
Outline of Presentation The African Economic Outlook (AEO) Project Highlights of the 2004/2005 Report Major Development Challenges facing African Countries
The AEO Project... Joint Publication of the ADB and the OECD Development Centre Objective: Independent analysis of African countries using a common methodology and targeted at a broad audience … Core work – Analysis of individual countries, overall review of African economy, and focus on a major theme each year – SMEs in 2004/05 Improvements in successive editions: More intensive peer-review process Improved modelling and data harmonisation Broader Coverage …
Coverage 2004/2005: 29 African countries 89% of GDP, 86% of population
Africa had the best GDP growth rate in eight years...
Excluding N. Africa and S. Africa, GDP Growth Rate was even better...
Considerable regional variations were observed …
Newer oil producers are growing most rapidly 2004 (e)2005 (p) Angola 10,914,7 Chad 31,310,8 Congo 4,09,4 Equatorial Guinea59,8-4,7 Real GDP growth rates, expected (e) and forecast (p). (Source: AEO).
But reforming oil-importers are also doing quite well 2004 (e)2005 (p) Ghana5.85.9 Senegal6.06.3 Mozambique7.87.7 Tanzania6.47.0 Uganda5.95.4 Real GDP growth rates, expected (e) and forecast (p). (Source: AEO).
Despite recent improvements, major development challenges remain … Meeting the Millennium Development Goals (MDGs) remains a major challenge for most African countries African economies remain highly vulnerable to both external and domestic shocks
Further Reforms Required to Make Progress towards the MDGs Maintain stable macroeconomic framework by building on recent gains – prudent use of windfall gains is essential Push through structural reforms and improve the investment climate: –Privatization of SOEs –Governance reforms and institution building/strengthening –Financial sector reforms
Greater effort at diversification has to be made: Libya 1,17 Angola 1,19 Equatorial Guinea 1,23 Nigeria1,26 Congo 1,52 Guinea Bissau 1,61 Chad 1,65 Burundi 1,66 Gabon 1,70 Sudan1,71 Congo Democratic Republic 1,78 Africa7,73 Export Diversification Index (inverse of sum of squared shares of each exported good; lower numbers = less diversified; Source AEO).
Regional cooperation and integration efforts need to be strengthened Take advantage of the NEPAD initiative Streamline regional economic groupings Greater focus on promoting investment in addition to trade Greater effort to remove bureaucratic and other barriers that still hinder trade and investment
More efficient use of resources for human capital development Africa would also need to build its human capital to compete globally More countries are increasing their investments in education and health Improving service delivery is now a major challenge for most
External Support will remain critical ODA -- Commission for Africa recommendation of doubling ODA to Africa by 2010 -- $25 billion/year Debt Relief – UK proposal -- 100 percent debt relief on debt owed to the IFIs Trade – Doha Round: –Dismantling of remaining trade barriers; removal of agricultural subsidies –Developing Africas Capacity to trade
Conclusion Africa doing better – due to favorable external environment but, as importantly, due to internal factors Prospects for sustained improvement are good African countries would need to deepen their reforms and carry out remaining structural reforms; Africas development partners should scale up their support in line with commitments