1. 1 AU/EU Joint Summit Lisbon 8 th December 2007 African Economic Outlook 2007 Measuring the Pulse of Africa Louis Kasekende Chief Economist, African Development Bank Javier Santiso Chief Development Economist, OECD Development Centre 8 December 2007 Africa EU Summit

2. 2 AU/EU Joint Summit Lisbon 8 th December 2007 The African Economic Outlook Project 1 Africa’s Economic Performance 06/07: Multifaceted Growth 2 Measuring The Pulse of Africa 3

3. 3 AU/EU Joint Summit Lisbon 8 th December 2007 Main Financial Partner Junior partners Lead partner Consultants, think tanks … Experts Network AEO Africa, EU, OECD: a unique partnership UNECA

4. 4 AU/EU Joint Summit Lisbon 8 th December 2007 AEO An innovative product Comprehensive, independent analysis Short-term macroeconomic forecasts Special annual focus 2003: Privatization 2004: Energy 2005: SMEs 2006: Transport 2007: Water and sanitation 2008: Technical & vocational training 1.Overview & annual thematic focus 2.Comparable country chapters 3.Statistical annex and indicators

5. 5 AU/EU Joint Summit Lisbon 8 th December 2007 AEO 2007 Sao Tome et principe Mauritius Comores Cape verde Benin New in 2008: Cape Verde Liberia Libya Equatorial Guinea AEO Coverage 2007: 31 African countries 91% of GDP 86% of population

6. 6 AU/EU Joint Summit Lisbon 8 th December 2007 The African Economic Outlook Project 1 Africa’s Economic Performance 06/07: Multifaceted Growth 2 Measuring The Pulse of Africa 3

7. 7 AU/EU Joint Summit Lisbon 8 th December 2007 Growth Africa continues steady growth Growth is becoming more broad- based: 23 countries achieved GDP growth rate of above 5 % in 2006 15 countries achieved GDP growth rate between 3% to 5% in 2006 In 2006, real GDP growth exceeded 5% for the third consecutive year Total OECD Africa Source: AfDB/OECD

8. 8 AU/EU Joint Summit Lisbon 8 th December 2007 Growth The commodity boom: a key role Global commodity prices 2001-2007 Source: World Bank

9. 9 AU/EU Joint Summit Lisbon 8 th December 2007 Growth Vibrant and Stable in oil-producing countries 26.9 % Source: AfDB/OECD

10. 10 AU/EU Joint Summit Lisbon 8 th December 2007 Growth Gaining momentum in oil-importing countries (%) Source: AfDB/OECD

11. 11 AU/EU Joint Summit Lisbon 8 th December 2007 Growth The rewards of economic reform Public finance management is generally good and improving Greater macroeconomic stability attained : Fiscal balance is positive Inflation is stable Africa: inflation and fiscal balance ( 2000-2006) Source: AfDB

12. 12 AU/EU Joint Summit Lisbon 8 th December 2007 Growth Improved economic management Source: AfDB

13. 13 AU/EU Joint Summit Lisbon 8 th December 2007 Governance Fewer bullets, more ballots Presidential elections in 2006 Benin Cape Verde* Chad DRC* Gambia Madagascar Sao Tome et Principe* Seychelles Zambia* Uganda *Parliamentary elections also *Weighted sum of events

14. 14 AU/EU Joint Summit Lisbon 8 th December 2007 Governance MDGs: slow progress despite growth

15. 15 AU/EU Joint Summit Lisbon 8 th December 2007 Aid Over the « hump » of debt relief Source: OECD

16. 16 AU/EU Joint Summit Lisbon 8 th December 2007 Aid … but aid is still falling short of Gleneagles commitments of doubling assistance to Africa by 2010 … there is little new aid beyond debt relief and humanitarian aid ODA & debt relief have helped stimulate growth

17. 17 AU/EU Joint Summit Lisbon 8 th December 2007 Outlook Oil exporter & importers: divergent paths? Oil and Mineral exporters Challenges: Capitalise on windfall gains Maximise spillover to rest of the economy Avoid Dutch Disease Trade Balance Inflation Growth Fiscal Balance Oil importers Challenges: Contain inflationary pressure Finance widening trade deficit Streamline spending to prioritise poverty reduction Source: AfDB/OECD

18. 18 AU/EU Joint Summit Lisbon 8 th December 2007 The African Economic Outlook Project 1 Africa’s Economic Performance 06/07: Multifaceted Growth 2 Measuring The Pulse of Africa 3

19. 19 AU/EU Joint Summit Lisbon 8 th December 2007 AEO An African / European partnership A Maturing Relationship An EU/OECD initiative with the African Development Bank Combining OECD approach (best practice, peer review) and AfDB regional expertise 2008: AfDB takes over as lead partner A tool for business, finance & policy actors Expanding country coverage Improved modelling, forecasts & indicators Feeding into the policy-making process Supporting operational activities Increased co-operation with local institutions

20. 20 AU/EU Joint Summit Lisbon 8 th December 2007 20 Comparative, up-to-date and forward- looking tool Monitoring progress towards MDGs of African countries: 31 countries in 2007 and 35 in 2008! Analysing crucial themes for Africa development Previous years: privatisation, energy, SME financing, transport, water AEO 2008: “Technical Skills Development in Africa” Deeply rooted in African realities Network of local experts, constant dialogue with stakeholders Quality peer review involving AfDB country and sector economists Sound Statistical analysis and data computation Original indicators (political troubles, diversification) and macro forecasts New background research: Working papers on political indicators, privatisation, etc. AEO An indispensable tool

21. 21 AU/EU Joint Summit Lisbon 8 th December 2007 AEO A strong African voice in policy dialogue Promoting public debate on economic policies At national level (African policy makers) At regional and continental level (input for African Peer Review Mechanism) Building indicators tracking main APRM areas of focus Promoting best practice and lessons learned through experience Supporting the International Dialogue on Africa’s Development Monitoring capacity-building in infrastructure, trade, institutions Monitoring policy reforms, financial flows for development Millennium Development Goals Monitoring progress in 31 countries in 2007, 35 in 2008 AEO, a joint AfDB/OECD/UNECA contribution to Goal 8

22. 22 AU/EU Joint Summit Lisbon 8 th December 2007 AEO Net Progression in Media Impact Citations in mainstream media Source: OECD

23. 23 AU/EU Joint Summit Lisbon 8 th December 2007 AEO Practical involvement in policy outcomes Water Inefficiencies not in resources, but in management Transport Infrastructure Reverse neglect through strategic PPP projects drawing on exterior funding Energy Coordination of regional energy investment structures SME financing Facilitation of SME-business friendly environments The AEO contributes to the issues debated at today’s EU-Africa Summit

24. 24 AU/EU Joint Summit Lisbon 8 th December 2007 AEO Questions for the Summit How can the African Economic Outlook help develop African economies? How can the AEO contribute to reinforce the co- operation between Africa and Europe? How can African input more effectively into the AEO process?

25. 25 AU/EU Joint Summit Lisbon 8 th December 2007 Thank you Obrigado More information: www.oecd.org/dev/aeo