1. UNECA 23 April 2009 Alex M. Mubiru Principal Research Economist African Development Bank Africa and the global crisis: Will growth hold? Kampala 23 July, 2009

2. AEO Measuring Africa’s economies since 2001 Key financial backer Junior partners UNECA Lead partner African think tanks Local consultants Experts Network 1.Economic overview & annual thematic focus 2006: Transport 2007: Water and sanitation 2008: Technical & vocational skills 2009: Innovation & ICT 2010: Fiscal Governance, Aid & Domestic Resource Mobilization 2.47 country chapters 3.Statistical annex and indicators 4.New & expanding accompanying website

3. UNECA AEO Coverage 2009: 47 Countries New in 2009: Burundi CAR Djibouti Gambia Guinea Lesotho Mauritania Seychelles Sierra Leone Swaziland Sudan Togo 99% of GDP 97% of population Seychelles Mauritiu s

4. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation 1

5. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

6. UNECA Growth Africa still growing despite the Crisis Source: OECD Development Centre / African Development Bank, 2009 Δ = - 6.6% Δ = - 4.1% Δ = -3.5% Δ = - 4.8% Real GDP Growth (%)

7. UNECA Growth Taking a toll on Africa’s general prospects Downside risk in GDP Growth projections Source: OECD Development Centre / African Development Bank. 2008 April 08 Nov 08 Feb 09 May 09

8. UNECA Growth Regional disparities (May forecasts) Southern Africa hit severely: Oil (Angola); Minerals (Botswana) 20072008(e)2009(p)2010(p) FebruaryMayFebruaryMay GDP Growth Rate in percentage Central Africa4.05.02.82.03.63.2 Eastern Africa8.87.35.55.15.75.5 Northern Africa5.35.83.33.54.1 Southern Africa7.05.20.24.63.6 Western Africa5.4 4.23.34.63.4 AFRICA6.15.72.82.34.54.0 Memorandum items Sub-Saharan Africa6.45.52.41.44.73.8 Oil-exporting countries6.86.62.42.54.54.1 Oil importing countries5.44.63.32.14.53.8

9. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

10. UNECA Trade The global trade collapse is now hitting Africa Source: African Economic Outlook, based on World Bank, 2009 Hard commodities Soft Commodities Source: Datastream, 2009 - 94% Source: African Economic Outlook, 2009 - 112% A cold shower for hard commodity exporters Soft commodity exports prove more resilient After years of boom, World Trade is expected to contract by 13% in 2009

11. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

12. UNECA Private financial flows A global retrenchment of capital Source: OECD Development Centre, based on UNCTAD 2009Source: OECD Development Centre, based on World Bank, 2009 RemittancesForeign Direct investment Flows to Africa grew by 17% to over USD 60 billion in 2008, despite the global slowdown Remittances to Sub-Saharan Africa are set to decline from between 4.5% to 8% over 2009 Stock markets have taken a severe hit Stock Markets (MSCI price index local currency) Source: Thomson Datastream 2009

13. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

14. UNECA Key Macro Numbers… …deteriorating significantly * Including grants ** Excluding Zimbabwe, Estimations for 20078and predictions for 2009/10 Source: OECD Development Centre / African Development Bank, 2008 Inflation Current Account Fiscal balance Source: OECD Development Centre, African Economic Outlook, 2009 2008 (e) 2009 (p) Feb 2009 (p) May External Current Account* (% GDP) 3.3-4.4-5.3 2008 (e) 2009 (p) Feb 2009 (p) May Overall fiscal balance* (% GDP) 2.8-5.4-5.8 2008 (e) 2009 (p) Feb 2009 (p) May Consumer prices 11.68.18.4

15. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

16. UNECA Global Crisis A patchwork of impacts Source: African Economic Outlook, 2009 Oil exporters are taking the most severe hit More globally integrated economies, such as South Africa and Egypt, are strongly affected Low-income / non-oil exporting countries are less affected, because: 1. decrease in energy bill 2. less integration to the world economy - 2 to- 3 % Zero to – 1.9 % Greater than 3 % Increased growth between 2008-09 Growth deceleration 2008 - 2009 African growth has taken a serious hit: 2008: near 6% 2009: below 3%

17. UNECA Global Crisis Exposure to the crisis for LICs

18. UNECA Global Crisis Staggered impacts are to be expected Weak fundamentals and dependent on one commodity Guinea, Eritrea, Malawi, Mauritania, DRC Stronger fundamentals but dependent on one/few commodity/ies Botswana, Algeria, Cameroon, Rwanda, Benin Weak fundamentals but less dependent on one commodity Gambia, Liberia, Sierra Leone, Ethiopia Strong fundamentals and less dependent on one commodity Tunisia, Uganda, Kenya Time

19. UNECA Oil exporters and importers Source: African Economic Outlook, OECD, 2009 Net Oil exporters: Algeria, Angola, Cameroon, Chad, Congo, Côte d'Ivoire, Congo DRC, Egypt, Equatorial Guinea, Gabon, Libya, Nigeria, Sudan Real GDP Growth Global Crisis

20. UNECA Oil Exporters The price of having all eggs in one basket Source: OECD Development Centre / African Development Bank *: African Economic Outlook forecasts …and little room left for manoeuvre Many oil exporters did not take advantage of commodity windfalls to improve governance and diversify their economies Nevertheless, some oil exporters have performed well in terms of lowering levels of external debt Taking a clear hit from the oil price fall…

21. UNECA Oil Importers Proving resilient… so far Source: OECD Development Centre / African Development Bank *: African Economic Outlook forecasts Oil-importing countries have performed well, diversifying their sources of growth over recent years. While lower energy and food prices subsequent to the crisis have helped importers, difficult times lie ahead Good performers’ strengths : Sustained and prolonged growth Prudent macroeconomic policies More Diversification Challenges: Poor capacity in mobilizing domestic resources Contain fiscal and current account deficits High dependency on ODA Prioritise poverty reduction Difficulty adjusting to price shocks Holding up against the crisis so far……yet challenges rising

22. UNECA Beyond the crisis Africa today is more resilient to exogenous shocks Over recent years, terms of trade improved and good macro management in many countries strengthened fiscal balances HIPC initiative significantly reduced debt levels and composition in many countries Politically more stable than in past decades Africa is more integrated with the world economy and less dependent on traditional OECD markets Governments’ efforts in nurturing private sector and enterprise resulted in steady improvements in business climate indicators 2000-052008(e) Fiscal balance, % GDP -1.42.8 Current Account, % GDP 0.63.3 Total trade with China has increased tenfold in the past decade to reach USD 106 billion in 2008 20052008 Total external Debt/GDP, % 110.620.8 Debt service / exports, % 20.84.7

23. UNECA Risks How will the crisis impact the MDGs? Source: African Development Bank, 2009 African Development Bank indicator of Progress Towards MDGs 2009

24. UNECA An Update on Growth Aspects of Trade Private Financial Flows Some Key Macro Numbers The Global Crisis and its Impact Some Key Messages → Outline of Presentation

25. UNECA AEO Some Key Messages Africa has been hit severely; However, the impact varies across countries and sectors Changes in the direction of trade, prudent macroeconomic policies and debt relief make Africa better positioned to weather the current crisis. African governments have to preserve the gains obtained in the recent past, by pursuing structural reforms, infrastructure development and targeting poverty reduction. With the right combination of domestic policy reforms, Africa can continue to grow despite the crisis, while setting the stage to faster growth for the future.

26. UNECA AEO.org Africa’s economic portal for policymakers The latest developments in Africa’s economies Brings together the data & research from eight years of AEO Interactive database of all AEO data and statistics Complete and updated country notes Promotes original research by African researchers and institutions www.africaneconomicoutlook.org

27. UNECA www.africaneconomicoutlook.org www.afdb.org/aec www.afdb.org THANK YOU Useful Links