African Economic Outlook
2003/2004
Paris, 7 July 2004
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
Coverage: 22 African countries
Tunisie
Maroc
Algerie
Other Countries
Lybie
Egypte
AEO Countries
Mauritanie
Niger
Mali
Senegal
Tchad
Soudan
Erytree
Gambie
GuinneeBissau
North Africa: Algeria, Egypt,
Morocco and Tunisia
Burkina
faso
Guinee
Djibouti
Togo
Nigeria
Serrea Leone
Republique
Centraafricaine
Liberia
West Africa: Burkina Faso, Côte
d’Ivoire, Ghana, Mali, Nigeria and
Senegal
Central Africa: Cameroon and
Gabon
Ethiopie
Côte
d'Ivoire
Cameroun
Ghana
Somalie
Guineequatoriale
Ouganda
Congo
Gabon
Kenya
Rwanda
Burundi
Republique
Democratique
du Congo
Tanzanie
Angola
Malawi
Zambie
East Africa: Ethiopia, Kenya,
Mauritius, Uganda and Tanzania
Southern Africa: South Africa,
Botswana, Mozambique, Zambia
and Zimbabwe
Mozambique
Zimbabwe
Madagascar
Namibie
Botswana
Swaziland
Lesotho
Afrique
du Sud
Maurice
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
Africa growth in 2003:
the highest in 4 years
6.0
5.7
5.3
5.0
4.0
3.2
3.0
2.8
2.0
1.0
1.8
1.4
0.8
3.1
3.1
3.0
2.6
3.5
3.2
2.9
3.7
3.0
2.8
3.6
3.6
2.9
3.2
3.3
2.5
3.6
3.2
4.0
3.8
3.5
1.5
0.7
0.3
-0.1
0.0
-1.0
1990
1991
1992
1993
1994
Africa
1995
1996
1997
1998
AEO Countries
1999
2000
2001
Linear (Africa)
2002
2003
2004(p)
2005(p)
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
Total net ODA to Africa jumped by
35% in value between 2001/02.
The upward trend is expected to continue
25
40
30
15
20
10
10
5
0
0
1996
1997
1998
ODA to Africa
1999
2000
2001
2002
Africa's share in ODA
percentage
US$ billions
20
Inflation in decline
6.0
5.0
5.0
5.4
4.4
4.0
3.0
3.9
3.4
3.7
3.4
2.9
2.0
1.0
0.0
2002
2003 (e)
Inflation- Average
2004 (p)
2005 (p)
Inflation- Median
The MDG on income poverty will
not be met on present trends
50
46.7
47.7
39.3
25
23.9
0
1990
1995
SSA Actual
2000
2005
SSA projected
2010
2015
SSA path to goal
On present trends most of MDGs will
not be achieved by many countries
The satisfactory performance ratio
is highest in the case of equality in
primary education
Country Highlights
Average growth rates
of African countries
REGION
Central
AVERAGE
1996-2001
2.7
2002 2003(E) 2004(P) 2005(P)
4.1
4.2
7.1
7.0
East
4.3
1.7
2.4
4.9
4.6
North
4.5
3.3
4.9
3.5
4.2
South
2.8
3.3
1.8
2.8
3.1
West
3.5
1.0
4.5
3.9
4.0
Total
3.6
2.7
3.6
3.6
4.0
Best and worst performers
50.0
Chad
2004
40.0
30.0
20.0
Equatorial
Guinea
2003
Angola
Mozambique
Ethiopia
Madagascar
10.0
Sierra Leone
0.0
-10.0
Gabon
-20.0
Cote d'Ivoire
Ethiopia
Seychelles
Zimbabw e
-30.0
Central
East
North
South
West
Western Africa
10
5
growth
2003
growth
2004
0
ia ne gal so Mali enin ana eria rde iger inea ogo sau oire
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B Gh Nig Ve N Gu T Bis d'Iv
Ga rra Le Senkina F
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r
e
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i
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B
Gu
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Southern Africa
15
10
5
0
i ola bia ho
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a
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n
t
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i
-5 iqu wa
g
o
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a
n
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M
A
a th A waz mba
Za Le
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N
a
u
B
z
S
Zi
o
o
S
M -10
-15
-20
growth
2003
growth
2004
Eastern Africa
10
5
growth
2003
growth
2004
0
i
r
ca ritrea zania anda ritius bout oros enya iopia elles
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D
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E
T
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Ma
-5
Fiscal situation of many countries
is still weak
Fiscal balance as % of GDP, 2003 estimate
Gabon
9%
Seychelles
6%
Algeria
3%
Angola
0%
Togo
-3%
-6%
-9%
Sao Tome
Ethiopia
Egypt
Guinea Bissau
Zambia
- 12 %
Central
East
North
South
Sierra Leone
West
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
The impact of the $ depreciation:
Rand zone and CFA zone
120
110
Euro
100
Rand
90
80
70
60
50
40
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
The impact of the $ depreciation:
Rand zone and CFA zone
• 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
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
Governance and economic
performance
Political tensions
30
Côte d'Ivoire
25
20
Mali
15
Burkina Faso
10
5
0
1997
-5
1998
1999
2000
2001
2002
2003
Economic performance
14
12
10
8
6
4
2
0
-2
1997
-4
-6
Mali
Burkina Faso
Côte d'Ivoire
1998
1999
2000
2001
2002
2003 (e)
Governance and economic
performance
Political tensions and hardening
Zimbabwe
Hardening
20
15
Zimbabwe
Tensions
10
5
Regional Average Tensions
0
1997
1998
1999
2000
2001
2002
2003
Economic performance
Regional Growth
10
5
0
1997
-5
1998
1999
2000
2001
2002
2003
-10
-15
-20
Zimbabwe
2003/2004 focus:
Energy supply in Africa
Improving
people's lives
Development
Efficiency of
of economic
public
activity
intervention
Energy plays a significant role in poverty alleviation and development
Huge potential… under or
badly exploited
- Under-utilisation of potential
sources
- Exports rather than national
consumption
- Mismanagement of resources
Hydroelectric power
6000
TWh/year
5000
4000
3000
2000
1000
0
Asia
South Europe
America
Africa
technically exploitable capability
North Oceania Middle
America
East
actual power generation
Oil and NGL, largely exploited
50
100
40
80
30
60
20
40
10
20
0
0
Middle South Africa
East America
production
Asia Oceania Europe North
America
reserves/production ratio
years of production
million barrels/day
7.3% of world reserves, 10.6% of world production
But mostly exported
3.6% of world
refining capacity
Supply of motor gasoline
in Nigeria (2001)
26%
40%
60%
74%
Consumed locally
Exported
Local production
Import
Gas flaring and shrinkage
7.5% of world reserves, 5.5% of world production
Total Europe
Total Asia
Total Oceania
Total North America
Total Middle East
Total South America
Total Africa
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Energy consumption in Africa
Electricity
8%
(2001)
Coal
4%
Petroleum
25%
World structure:
Biomass 14%
Electricity 16%
Gas
4%
Biomass
59%
Coal 7 %
Petroleum 44 %
Gas 16%
North
Africa
SubSahara
Africa
Developing
Asia
Latin
America
Middle East
100
90
80
70
60
50
40
30
20
10
0
Transition
economies
OECD
Electrification rates
World average
Developing countries average
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
Thank you