Download 2016 Africa Human Development Report

SECOND INTERNATIONAL CONFERENCE ON THE
EMERGENCE OF AFRICA (ICEA-II)
Abidjan, Côte d’Ivoire
« Cross-sectional analysis of case studies of selected
African countries’ experience towards emergence:
Stock-taking, lessons learned, and way forward »
B Y A B D O U L AY E M A R D I E Y E
A S S I S TA N T A D M I N I S T R AT O R A N D R E G I O N A L D I R E C T O R
UNDP AFRICA
A. Background
Path A 10+ %
Emergence trend
A.1 Rationale of ICEA-I
Two lost
development decades
Y (GDP)
MDG era
Agenda 2030
Agenda 2063 era
Hi5s
Path B 5%
Present Trend
Path C 3%
Commodity
price bust trend
g(Y) = 5.1%
g(Y) = 1.7%
C (consumption)
I (investment)
X-M (trade)
= 1/3
= 1/3
= 1/3
(Growing middle class)
(Better governance)
(Commodity price boom)
T
1980
2000
2015
2030
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A. Background
Development-enhancing
power of growth
A.2 Emergence Path: Human development and poverty reduction tracks
Two lost
development decades
MDG era
e =0.264
e =0.328
e =-0.522
1990
era
|e|>1
Radical policies for
inclusiveness
needed
Human
Development
poverty
Agenda 2030
Agenda 2063
Hi5s
Growth is
e =-1.237
e= elasticity
|e|>3
Not sufficiently inclusive
compared to:
East Asia & Pacific -2.48
Latin America & Caribbean -3.08
Eastern Europe & Western Asia -4.22
2000
t
2015
2030
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A. Background
A.3 ICEA-I Model
•
•
•
•
•
A clear and shared vision
Equipped & strong institutional capacity
Attract investment to key sectors
Basic socio-economic services
Corrupt free state
•
•
•
•
•
•
•
Industrialization
Conducive climate for business
Strong & competitive financial & banking system
Technology & innovative driven economy
Green economy
Regional integration
Expansive tax base/revenue
•
•
•
Improving rural incomes
Creating social safety nets & cash transfers
An education system that improves attitude &
behavior
Health planning systems
Urbanization
•
•
Adapted from Uganda case study
Developmental state
Changes in production
and
Consumption patterns
Steady state
of
inclusive
&
sustainable
development
Human
development
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A. Background
A.4 Analysis of ICEA-I Model
Analysis of emergence with a focus on 13 case study countries out of 27
countries on emergence plans
Morocco
Cabo Verde
Senegal
Ethiopia
Côte d’Ivoire
Equatorial Guinea
Gabon
Kenya
Uganda Rwanda
Tanzania
Mauritius
Countries in
green
are case study
countries
Countries
on
emergence
plans
South Africa
Criteria for selection:
(i) Have emergence plan
(ii) Regional consideration
(iii) Development context: SIDS/LLDCs
(iv) Resource/non-resource dependence
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B. Typologies
B.1 Typologies of Emergence Paths
Lessons learned
Kinked path
Waves path
Inflexion path
Côte d’Ivoire
Rwanda
(N.B. Sierra Leone, Guinea,
and Liberia before Ebola)
t
i. Re-activation of under-utilized
excess capacities
ii. Substantial improvement in
productivity
iii. Strengthened resilience
Senegal
Gabon
Kenya
Uganda
Mauritius
Cabo Verde
Ethiopia
t
i.v. Sustained and deepened
reforms until tipping point for
inflexion is reached
t
v. Activation of new engines and
strategies of growth every cycle
of 10 to 15 years
vi. Continuous improvement of
competitiveness
vii. Leadership foresight and traction
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C. Strategies
Strategies and Policies of Emergence
(Critical success factors: lessons, challenges and way forward)
I.
Macroeconomic policies
II. Structural economic transformation policies
III. Social and human development policies
IV. Governance and institutional policies
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C. Strategies
Strategies and Policies of Emergence
C.1 Macroeconomic stability…BUT need to be sustained
External debt stock (% GNI), average 2010-2015
ZIMBABWE
GAMBIA, THE
SOMALIA
GUINEA
COTE D'IVOIRE
LIBERIA
MOROCCO
AFRICA
CENTRAL AFRICAN REPUBLIC
CONGO, REP.
TANZANIA
MADAGASCAR
ETHIOPIA
MALI
BURUNDI
ANGOLA
MALAWI
BURKINA FASO
RWANDA
UGANDA
BOTSWANA
SWAZILAND
ALGERIA
0.00
40.00
60.00
2.
18%=>24%
Improved
external debt
sustainability
…BUT
Improved
fiscal
account
balance
Scale symbol
6.
3.
Relatively
stable prices
…BUT
Robust net
external
inflows
5.
4.69
3.05
20.00
Expanding
fiscal space
7.
47.80
45.25
44.78
41.12
39.74
38.88
38.70
37.03
36.95
35.90
35.31
34.73
34.39
IMF Threshold
33.12
(50-75%)
32.94
32.05
31.32
30.45
30.12
29.38
28.03
27.58
27.23
25.49
25.48
25.27
24.44
23.74
23.72
22.91
22.59
22.54
22.41
21.71
19.57
18.18
15.97
15.70
15.40
12.71
ERITREA
Tax revenue (% of GDP), 2010-2014
1.
93.57
80.08
76.10
69.42
63.46
60.77
57.50
56.97
SAO TOME AND PRINCIPE
80.00
Lesson: need to watch out for
debt sustainability
100.00
Improved
current
account
balance
4.
Improving
gross
national
savings BUT
still low
LESOTHO
ALGERIA
NAMIBIA
SEYCHELLES
SOUTH AFRICA
BOTSWANA
MOROCCO
TUNISIA
SWAZILAND
MOZAMBIQUE
SENEGAL
MAURITIUS
TOGO
SAO TOME AND PRINCIPE
ANGOLA
KENYA
SUB-SAHARAN AFRICA
BENIN
BURKINA FASO
MALAWI
ZAMBIA
GHANA
COTE D'IVOIRE
EGYPT, ARAB REP.
RWANDA
MALI
TANZANIA
UGANDA
MADAGASCAR
SIERRA LEONE
CENTRAL AFRICAN REPUBLIC
CONGO, DEM. REP.
ETHIOPIA
CONGO, REP.
NIGERIA
LIBERIA
42.50
35.79
30.92
28.51
25.66
25.12
23.06
20.82
19.96
19.58
18.89
18.18
17.19
16.66
16.34
15.76
15.44
15.04
14.89
UNCTAD Threshold
14.89
(24%)
14.70
14.13
13.70
13.33
13.02
12.97
12.55
11.37
9.96
9.10
8.92
8.77
8.69
8.63
1.78
0.26
0.00
5.00
10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00
Lesson: need to meet the UNCTAD 24% threshold
for sustainable funding of development
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C. Strategies
Strategies and Policies of Emergence
C.2 Macro stability: Best practices
1.
Expanding
fiscal space
18%=>24%
Fiscal space is more than 20%
Lesotho, Algeria, Namibia, Senegal, Seychelles,
South Africa, and Tunisia
compared to OECD average 34.4%
UNCTAD 24%
Innovative revenue collection and open budget tracker in
4.
Improving
gross
national
savings BUT
still low
South Africa and Seychelles
2.
Improved
fiscal
account
balance
Overall Fiscal Balance is improving in
Morocco, South Africa, CIV, Ethiopia, Rwanda,
Tanzania and Uganda
Integrated Financial Management Information System
Kenya, Ethiopia, Tanzania etc.
Fiscal transparency
3.
Relatively
stable prices
…BUT
Senegal, Morocco, CIV, Gabon, Equatorial Guinea, Mauritius,
Rwanda, South Africa (etc.)
Increase in food production and low oil prices
are important drivers (e.g. Senegal and Rwanda)
Tight monetary and fiscal policies in South Africa
in Morocco, Cabo Verde, Ethiopia,
Equatorial Guinea and Mauritius
7.
Improved
external debt
sustainability
…BUT
Compared to Emerging economies (31%)
Developing Asia (41%)
Impediments to high savings rates:
IFFs  low financial deepening  low disposable income
CAB is high
5.
in CIV, Ethiopia, Morocco, Uganda, Mauritius,
Improved
current
account
balance
Senegal
South Africa, Ethiopia, Mauritius, Uganda
Inflation is in single digits
Between 20-32%
Improved domestic production and strong surge in
exports
BUT income payments on FDI inflows is driving current
account deficit
FDI is high and improving
6.
Robust net
external
inflows
in South Africa, Tanzania, Equatorial Guinea, Uganda and Kenya
Improved macroeconomic environment
Ethiopia, Rwanda and Cote d’Ivoire
Improved business environment
(e.g. investment and labour laws), CIV, Senegal
Improved infrastructure (e.g. energy) South Africa, Mauritius
Many countries
are below the IMF
threshold of 5075%
•
•
Medium Term Debt
Management
Strategies e.g. Kenya
Forward-looking
analysis of debt
sustainability in
Nigeria and India
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C. Strategies
Strategies and Policies of Emergence
C.3 Improving structural economic transformation…BUT
1.
2.
Shift from
low to higher
productivity
sectors
Improved
multifactor
productivity
6.
7.
Progress in
infrastructure
development;
but infrastructure
gap is still a binding
constraint.
Improved
innovation,
but
low investment
in R&D
5.
Cost of
Production
on average
is still high
3.
Enhanced
global
competitiveness
4.
Promoting
economic
resilience
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C. Strategies
Strategies and Policies of Emergence
C.4 Structural transformation: Best practices
1.
Improved
multifactor
productivity
2.
Shift from
low to higher
productivity
sectors
TFP is rising
in a number of countries through
institutional transformation
Continuous state reform programme in Cabo Verde
National Productivity Institutions in
Tanzania, Kenya, Uganda and South Africa
SSA experienced serious deindustrialization
(2000-2015) with the
share of manufacturing falling by 7.5% BUT
things are improving
The Phakisa is driving value chains in South Africa
Local content policies in Oil and Gas in Tanzania and Uganda
Entrepreneurship as an accelerator of emergence in Mauritius
3.
Global competitiveness is improving
Enhanced
global
competitiveness
especially in South Africa, Rwanda, Morocco, Kenya and
CIV
Transparent and responsive institutions in Rwanda
Technological readiness and goods and labour markets
efficiency in Cabo Verde, Morocco and South Africa
Economic diversification is improving
4.
Promoting
economic
resilience
5.
Cost of
Production
on average
is still high
in Morocco, Tunisia, South Africa, Mauritius,
Kenya & Senegal
•
EPZ, tourism and business process
outsourcing in Mauritius
•
Horticultural production in Senegal
•
Tourism, telecoms and textile in Morocco
Low lending rate is vital to economic
transformation:
single digits in
CIV, Senegal, Mauritius, South Africa
but still as high as 31% to 57% in some countries.
Low inflation rates make low lending rates
possible in these countries
6.
Progress in
infrastructure
development
Africa Infrastructure Index is highest
In South Africa, Mauritius, Morocco &
Cabo Verde
High infrastructure spending accounts for this
(e.g. 15% of GDP in Cabo Verde)
7.
Improved
innovation,
But low
investment
in R&D
Improving
Innovation
Capacity
Heavy investments in
technological hubs
in
South Africa
Kenya
Senegal and Tanzania
are driving innovations
The infrastructure gap is an impediment in many countries
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C. Strategies
Strategies and Policies of Emergence
C.5 Social and human development policies
1.
2. Increased Investment 3.
In most
emerging
countries,
structural
economic
transformation
has been
accompanied by
improvement in
human
development
and vice-versa –
e.g. Mauritius,
Gabon and
South Africa.
in education is yielding
enhanced results (e.g. in
Cote d’Ivoire, Ethiopia and
Kenya) BUT quality,
transition rates and skill
development deserve
strategic priority
Expanded investment
in health sectors is
producing dividends (e.g.
Mauritius and Cape Verde),
YET accelerated action is
urgently needed for a
healthy and productive
population.
5.
4.
6. Youth empowerment and
development is a vital tool for
accelerating emergence. [The Youth
Connekt in Rwanda, the National
Youth Service Scheme in Nigeria, and
the Shongai Project in Benin]
Aggressive pursuit of
social inclusion and
community development
programs [PUDC –
Senegal; decent work
programs in South
Africa; Rwanda’s VUP;
Kenya’s Equalization Fund;
Zanzibar pension scheme,
Tanzania]
Expanding social
protection programmes
and coverage are
promoting inclusiveness
and helping to reduce
poverty and income
inequality
7. Africa has continued to close the gender gap, YET gender inequality in the labor market alone
Good examples of social
protection in Africa
•
•
•
•
•
•
•
Cabo Verde‘s expansion of the
pension system;
Senegal’s Family
Allowance and universal
healthcare coverage
Tanzania Social Action Fund
Ethiopia’s Productive Safety
Net Program
Uganda’s Social Assistance
Grant for Empowerment
Programme
Mauritius’ Basic Retirement
Pension
South Africa’s broad-based
Social Protection Scheme
8/#
D. Strategies
Strategies and Policies of Emergence
D1. Governance, institutional policies, and the political economy of emergence
Correlation between control of corruption
and human development index
0.80
0.75
1
Strong correlation between
good governance &
supportive social norms;
and between growth and
human development
Most countries with
strong control on
corruption have high
Human Development
Index
Human Development Index
0.70
0.65
0.60
0.55
0.50
0.45
0.40
0.35
0.30
-1.50
-1.00
-0.50
0.00
0.50
1.00
Control of corruption
Index
12 /
D. Strategies
Strategies and Policies of Emergence
D.1 Governance, institutional policies, and the political economy of emergence (cont’d)
2
Setting up of strong
institutional coordination and
monitoring of emergence
3
Setting up of specialized
institutions to implement
emergence
4
Public sector reforms to reduce
corruption, improve efficiency,
ensure service delivery
• President’s Office in Senegal
• National Steering Committee in Rwanda
• National Planning Commission in Ethiopia, Tanzania
• Vision Delivery Board in Kenya
• Operation Phakisa in South Africa (Malaysian experience)
• Big Results Now – BRN in Tanzania (Malaysian experience)
• Industrial Parks Development Corporation – and Metal and Engineering
Corporation in Ethiopia
• Investment Promotion entities in Senegal (APIX) and Cote d’Ivoire (CEPCI)
• Special Economic Zones and Industrial and Manufacturing Zones in Kenya
• Performance Contracts in Kenya and Rwanda
• Using private sector to run government business enterprises – Rwanda
• High Authority Against Corruption - Cape Verde
• OFNAC (Anticorruption office) - Senegal
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D. Strategies
Strategies and Policies of Emergence
D.1 Governance, institutional policies, and the political economy of emergence (cont’d)
Growth in mobile phone usage*
5
6
7
Digital transformation
• Mobile money - MPESA in Kenya
• Commodities exchange - Ethiopia
• Agriculture Cadastre - Cape Verde &
Rwanda
•
Good participatory process
The imperative of social
contract
•
•
National Umushyikirano Council – NUC (a forum that brings together the President of the Republic
and citizens’ representatives to debate issues that affect the citizenry and the nation at large) Rwanda
Citizen participation in policy formulation and budgeting in Kenya
Strong decentralization and devolution policies in Kenya and Senegal
• Ihimigo Performance Contract (signed between the President and Local
Government institutions) in Rwanda
• Social Accountability Programme (holding local leaders and service providers
accountable at the community level) in Tanzania
*PWC: Disrupting Africa: Riding the wave of the digital revolution
14 / 16
E. Framework
Enhanced framework for emergence
An ICEA-II Model
The imperatives of its
SUSTAINABILITY
include
BUT its LONG TERM
VIABILITY requires
Emergence is TAKING
ROOT in Africa
• Stronger developmental states
• Rapid structural economic
transformation
• Positively impacting on human
development
• Expanding fiscal space for state to drive
development forward
• Continuous innovation to lift
productivity to higher plateau
• Regional integration and cooperation to
promote regional goods and synergies
• Greater citizen and non-state
actors engagement
• Inclusive political dialogue with
all actors to avoid disruptions
by change of leadership
• Building sturdy social contracts
15 / 16
Thank you
16 / 16