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African Economic Outlook 2003/2004 Paris, 7 July 2004.

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Presentation on theme: "African Economic Outlook 2003/2004 Paris, 7 July 2004."— Presentation transcript:

1 African Economic Outlook 2003/2004 Paris, 7 July 2004

2 Background Information This is the third issue of the AEO A joint project by ADB and OECD Development Centre StructureOverview Country Notes Statistical Annex

3 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

4 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

5 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

6 Africa growth in 2003: the highest in 4 years

7 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

8 Total net ODA to Africa jumped by 35% in value between 2001/02. The upward trend is expected to continue

9 Inflation in decline

10 Fiscal Deficits Under Control (Percentage of GDP)

11 The MDG on income poverty will not be met on present trends

12 On present trends most of MDGs will not be achieved by many countries

13 The satisfactory performance ratio is highest in the case of equality in primary education

14 Country Highlights

15 Average growth rates of African countries

16 Best and worst performers

17 Western Africa

18 Southern Africa

19 Eastern Africa

20 Fiscal situation of many countries is still weak F iscal balance as % of GDP, 2003 estimate

21 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

22 The impact of the $ depreciation: Rand zone and CFA zone

23 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

24 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

25 Governance and economic performance Côte d'Ivoire Political tensions Economic performance Mali Côte d'Ivoire Burkina Faso

26 Governance and economic performance Political tensions and hardening Economic performance Zimbabwe Hardening Zimbabwe Tensions Regional Average Tensions Regional Growth Zimbabwe

27 2003/2004 focus: Energy supply in Africa


29 Huge potential… under or badly exploited - Under-utilisation of potential sources - Exports rather than national consumption - Mismanagement of resources

30 Hydroelectric power

31 Oil and NGL, largely exploited 7.3% of world reserves, 10.6% of world production

32 But mostly exported 3.6% of world refining capacity Supply of motor gasoline in Nigeria (2001)

33 Gas flaring and shrinkage 7.5% of world reserves, 5.5% of world production

34 Energy consumption in Africa (2001) Coal 7 % World structure: Biomass 14% Electricity 16% Petroleum 44 % Gas 16%

35 Electrification rates World average Developing countries average

36 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

37 Thank you

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