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Africa’s future and the World Bank’s support to it 1 rebound from the crisis Average GDP growth rate 1998-2008 Liberia Mozambique Sierra Leone Rwanda Sao Tome and Princ. Ethiopia Tanzania Cape Verde Mali Burkina Faso 40% Botswana Ghana Gambia, The Mauritius Namibia Senegal Niger Benin Zambia Madagascar Percentage of total African population Growth is accelerating Equatorial Guinea Angola Chad Sudan 30% Oil countries Nigeria Cameroon Congo•Thanks Rep to continued, prudent economic policies, rapid Gabon Kenya Malawi South Africa Guinea Lesotho Swaziland Seychelles Burundi Congo, Dem. Rep. Comoros CAR Togo Cote d’Ivoire Eritrea Guinea-Bissau Zimbabwe Growth 4% or higher Growth less than 4% 30% -5.0 0.0 5.0 10.0 15.0 2 20.0 25.0 Macroeconomic policies have improved 140 45 7 6 6 7 6 5 4 2 3 2 2 40 35 13 13 100 30 80 25 60 20 33 31 33 30 32 29 31 40 20 0 24 17 27 28 31 33 15 10 5 0 Number of Countries Average Inflation Rate % 120 Inflation>20% 10%<inflation<=20% Inflation<=10% Median inflation rate Rebound after the crisis Growth in 2010 Progress towards the MDGs Population living under $1.25/day Child mortality rates Primary school enrollment rates Maternal mortality ratio 5 Dynamic private sector Private capital inflows Mobile cellular penetration Per 100 inhabitants (Billions of US Dollars) Source: ITU World Telecommunication/ICT Indicators database World Dev. Countries Africa Share of economies with at least 1 reform to make it easier to do business (%) ICT growth in Africa and the world, 2003-2008 CAGR (%) Source: Doing Business Report 2011 Fixed Phone lines Mobile cellular subscriptions Internet users Africa 2.4 47.0 30.6 World 2.5 23.0 17.0 CGAR refers to Compound Annual Growth Rates 6 Development Challenges DIVERSIFICATION HUMAN CAPITAL GOVERNANCE Focus on: WOMEN’S EMPOWERMENT YOUTH EMPLOYMENT Can we seize the recent growth and dynamism on the continent to address these development challenges? CLIMATE CHANGE 7 Strategy represents the views of stakeholders 1,500 participants in 36 countries “Africa has a very bright future... We have abundant resources which when well harnessed, with suitable governance in place, can turn the continent into one of the wealthiest.” Eliud Akanga Kenya http://www.youtube.com/watch?v=B9PwMzzb1xM&feature=player_embedded 8 The Africa Strategy Two pillars and a foundation Competitiveness and employment Vulnerability and resilience 9 Competitiveness and employment Agricultural productivity Investment climate Infrastructure Health and skills of workers Source: Briceño-Garmendia, Smits, and Foster 2008. 10 SELECTED CORRIDORS OF THE STUDY Central Africa East Africa West Africa Southern Africa France Variable costs (USD per vehkm) 1.31 0.98 1.67 1.54 0.72 Fixed costs (USD per veh-km) 0.57 0.35 0.62 0.34 0.87 Total transport costs (USD per veh-km) 1.88 1.33 2.29 1.88 1.59 14 11 12 10 5 5 5 Western Europe – long distance AfricaDurbanLusaka USA 8 AfricaDoualaNdjaména Africa – Mombasa Kampala 2 Africa- Lomé Ouagadougou 0 4 Brazil 4 2 3.5 China 7 8 6 Pakistan Average transport prices (in US cents per tkm) Average Transport Prices (in US cents per tkm) 12 Profit Margins Corridor Gateway - Destination Price (USD/ veh-km) Variable cost (USD/veh- km) Fixed cost (USD/veh- km) Average yearly mileage (‘000) Profit margin (%) Tema/Accra - Ouagadougou 3.53 1.54 0.66 30-40 80% Tema/Accra - Bamako 3.93 1.67 0.62 40-50 80% Douala - N’Djaména 3.19 1.31 0.57 60-70 73% Douala - Bangui 3.78 1.21 1.08 50-60 83% Ngaoundéré - N’Djaména 5.37 1.83 0.73 20-30 118% Ngaoundéré - Moundou 9.71 2.49 1.55 10-20 163% East Africa Mombasa - Kampala 2.22 0.98 0.35 130-140 86% Mombasa - Nairobi 2.26 0.83 0.53 90-100 66% Southern Africa Lusaka - Johannesburg 2.32 1.54 0.34 160-170 18% Lusaka - Dar-es-Salaam 2.55 1.34 0.44 160-170 62% West Africa Central Africa An interesting observation: On Central Africa corridor, trucks with lower average yearly mileage have the higher profit margins Example of the Impact of Market Deregulation: The case of Rwanda 350 900 Before liberalization liberalization Average transport prices (constant andAfter current) from Mombasa to Kigali 800 300 700 250 200 500 150 400 300 100 200 50 100 Years Current transport tariffs (left) Real transport tariffs - GDP deflator (right) 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 0 1989 0 US$/Ton US$/Ton 600 Competitiveness and employment Real Agricultural GDP Real agriculture GDP growth (28 valueweighted) weighted) (28countries countries value 5.0 4.0 3.0 # of countries > 5%/yr 2.0 1.0 8 3 4 2000-04 2001-05 5 4 0.0 100% 2002-06 2003-07 2004-2008 Women’s earnings as a share of men’s earnings 79% 51% 45% 23% Ghana Nigeria MozambiqueBurkina Faso Source: J.Arbache, A. Kolev, E. Filipiak, Gender Disparities in Africa’s Labor Markets. World Bank, 2010 15 Competitiveness and employment Agricultural productivity •Rural infrastructure •Land titling Infrastructure •Public-private partnerships •Regional projects •Policy reforms Investment climate •Support to SMEs •Access to finance •Business councils Healthy and skilled workforce •Quality and access to primary health and education •Secondary and tertiary education •Vocational training with private sector participation 16 Vulnerability and resilience Economic shocks Natural disasters Health shocks (AIDS, malaria) Violence and political conflict 17 Vulnerability and resilience Food prices (2000=100) percentage point change from baseline Poverty increase from baseline (in percentage points) due to a 25% increase in food prices 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Ghana Liberia Sierra Leone Togo DR Congo Guinea Gabon Mali Niger Nigeria Source: Wodon et al. (2008). "Potential Impact of Higher Food Prices on Poverty: Estimates from a Dozen West and Central African Countries", Policy Research Working Paper 4745. 18 Climate Change Number of floods increasing Source: WDR 2010 Source: Costs to Developing Countries of Adapting to Climate Change, World Bank, 2009. http://blogs.worldbank.org/dmblog/node/651 19 Vulnerability and resilience Economic shocks •Prudent macroeconomic policies •Social transfers Natural disasters •Early warning systems •Resilient infrastructure •Rapid transfers to victims Health shocks •Health insurance •Health systems Conflict and political violence •Institutions for shared wealth 20 Foundation of the strategy Change of CPIA Scores (2005-2009) Within clusters for oil and non oil countries Average oil Average non- oil All countries Participation through new channels 21 th grade Tanzanian 7Percentage could not of 7thstudents grade who students in Tanzania who CANNOT • Read in Kiswahili at 2nd grade level: 20% • Do a 2nd grade multiplication problem: 30% • Read English: 50% Absence rate among teachers Country Rate (percent) Bangladesh 15 Ecuador 14 India 25 Indonesia 19 Papua New Guinea 15 Peru 11 Zambia 17 Uganda 27 Uganda: When teacher is present Can't find teacher, 19.2% In class, teaching, 18.2% Out of class, break, 17.6% Administrative work, 8.1% Out of class, in school, 34.2% In class, not teacher, 2.4% With surveyor, 0.2% 24 Leakage of resources for health Country (year) % of cash/in-kind resources leaked Resource Category Kenya (2004) 38 Non-salary budget Tanzania (1991) 41 Non-salary budget Uganda (2000) 70 Drugs and supplies Ghana (2000) 80 Non-salary budget Chad (2004) 99 Non-salary budget Source: Gauthier (2006) Rwanda 2005-2008 Indicators DHS-2005 DHS-2008 Contraception (modern) 10% 27% Delivery in Health Centers 39% 52% Infant Mortality rate 86 per 1000 62 per 1000 Under-Five Mortality rate 152 per 1000 103 per 1000 Anemia Prevalence : Children 56% 48% Vaccination : All 75% 80.4% Vaccination : Measles 86% 90% Use of Insecticide treated nets among children less than 5 4% 67% 6.1 children 5.5 children Fertility Grants for primary education in Uganda Primary Education in Uganda (PETS) US$ per In 1995, survey of 250 primary schools in 19 of 39 districts; Survey repeated in 1998 and 2000. Student 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1990 1991 Intended Grant Amount 1993 1994 1995 1999 Received by School (mean) Figure 1: ADP culvert with broken top slab Figure 2: a good quality culvert prepared under the SLGDP scheme Foundation of the strategy Building demand for good governance Mobile coverage in SSA (population in weighted averages 1999 – 2009) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Jan-99 May-99 Dec-00 Jul-01 Nov-01 Mar-02 Jul-02 Mar-03 Jul-03 Mar-04 Sep-06 Mar-07 Mar-08 Mar-09 Total Urban Rural Participation through new channels 30 Implementation of the strategy Partnerships Knowledge Finance -Government -Civil society -Private sector -Other development actors •Analysis to inform policy •Evidence to nourish public debate Leverage •Domestic resources •IDA, IBRD, IFC,MIGA •Private capital Regional solutions High-impact projects: •West Africa Power Pool • Inga 3 hydro-project •North-South Corridor Beyond Infrastructure: •Agricultural research •Health •Trade integration Public Health Laboratory Network in East Africa *Source: Africa’s infrastructure: A time for transformation, World Bank 2010 32 Country Differentiation Middle-Income Countries Fast-growing low-income countries Fragile states (WDR 2011) Slow-growing lowincome countries 33 Monitoring and evaluation Three Tier Monitoring Framework: aligned with IDA16 Monitoring, Corporate Scorecard Examples of Regional Key Development Outcomes, the Strategy intends to influence • • • • Poverty headcount (PPP, % of population under US$ 1.25) from 50.9% in 2005 to under 40% in 2015 Under 5 mortality rate (# per 1000 people) from 129 in 2009 to under 93 in 2015 Maternal mortality ratio (# per 100,000 live births) from 645 in 2008 to below 500 in 2015 Annual 4% growth (%) in agricultural value added [5 year moving average] from 2010 to 2015 Integrated Reporting Framework: Painting the Full Picture of Results • • • • 5 Year Monitoring Framework allows adjustments at Strategy Mid-Term Annual Progress Reports, Dissemination through social media, blogs and AfricaWiki Drawing from CAS results Complemented by annual “IDA at Work” Results Stories Strengthen countries’ statistical capacity to monitor progress 34 Ten-Year Vision for the New Strategy Accelerated Growth and Diversification Human Capital Development and Women’s Empowerment • 20 countries average 3-4% annual per capita GDP growth • Women’s legal capacity and property rights increased • 5 countries achieve MIC status • Progress beyond MDGs to quality health and education • 15 countries register 5% or higher agricultural GDP growth per year Improving Governance • Regionally integrated infrastructure (“missing links” in ICT, energy, roads and rail reduced by at least 50%) • ICT revolution strengthening accountability in the public sector • Access to infrastructure increases (50% of households with power) Climate Change • Governance indicators steadily rising • Climate change adaptation measures in place Employment Creation and Poverty Reduction • Labor absorbed at rapid pace; SMEs growing rapidly • Decline in poverty rate by 12 percentage points Five-year results framework (presented later) based on ten-year vision Sample Benchmarks • 17 “emerging economies” plus Kenya, Malawi, Benin have averaged close to 2% or higher GDP per capita growth for 12 years • Ghana, Zambia, Mauritania , Comoros, Kenya, currently on the threshold* • 8 countries averaged 5% agricultural growth from 2002-2006 • Today, only 25 percent of African households have access to power. • Between 1995 and 2005, the poverty rate declined by about one percentage point a year. *Threshold is $1,000 per capita income 35