Doing Business in Africa African Development Bank Group AfDB International Economic Forum of the Americas ( June 7-10, 2010) Nkosana Moyo, Vice President & COO

1. The Context: Africa’s Economic Performance 2. Doing Business in Africa 3. Challenges to Doing Business in Africa 4. Africa’s Infrastructure and Energy Opportunities 5. Inga 1: Status Update Outline 1

 : Buoyant growth (5.6% a year).  End 2008-Early 2009: Sharp decline (2.9% a year).  End : Resumed growth (4.5% a year).  Anticipated increase in aid by 11% (between 2008 and 2010). 1. Africa’s Economic Performance 2

2.1 Doing Business in Africa  Political Governance: 33 countries with at least 2 successive elections.  Telecommunications: mobile subscriber base at million people in 2008-to reach 561 million by  Diaspora: Approximately $12 billion remittances to Sub-Sahara Africa alone in  Solid progress in Business environment reforms.  Mineral Reserves: 30% of the world’s share: Gold (40%), Cobalt (60%) and PGM(90%).

2.2 Lessons from Africa’s Mobile Phone Usage Low income earners prepared to incur high costs to access mobile phone facilities. A huge medium for extending scarce financial services to rural areas (e.g. Kenya’s M-PESA). Government’s play a critical role in dismantling artificial barriers (e.g. Tanzania). A potential avenue for knowledge management: ‘m-learning’.

2.3 Country Examples of Reforms 67 regulatory reforms registered in 29 of the 49 sub-Saharan African countries. Rwanda ranked as the world’s top reformer. Liberia, Ethiopia, Ghana and Togo: streamlining of inspection processes. Uganda, Sudan: improved customs processes. Cape Verde: improved access to credit information. Cameroon: eliminated licence tax for new businesses.

3. Challenges to Doing Business in Africa Progress in ‘overall’ ease of Doing Business Rankings remains slow. Power outages among the highest in the World. Inland transportation costs higher than other regions. Attracting FDI into diversified and higher value-added sectors still a challenge. African firms are some of the most highly taxed in the world.

4. Infrastructure and Energy Opportunities Bridging of Africa’s infrastructure gap estimated at $93 billion a year: with high returns. Oil reserves of billion barrels in 2007: (9.49 % of the world's total). Natural gas reserves of trillion cubic metres, (8.22% of the world total). 17 countries in Africa have the largest potential for solar, wind, hydro, and geothermal energy.

5. Status Update on Inga 1 Project Hydropower project co-financed with the World Bank: situated in the DRC. Components: a) Generation; b) Transmission; c) Distribution; d) Capacity Building and Governance. AfDB Grant support totals UA 35.7 Million. Rehabilitation of project delayed due to efforts to link components of Inga 1 and 2. Procurement processes currently underway to finalize selection of companies.

Thank you/Merci