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An introduction to the OECD Development Centre. Javier Santiso, Deputy Director and Chief Economist, OECD Development Centre. European Commission Brussels 12 September 2006. A bridge between OECD Members and Partners …. … to engage in dialogue on development issues - PowerPoint PPT Presentation
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1 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
An introduction to theAn introduction to the OECD Development CentreOECD Development Centre
European CommissionBrussels 12 September 2006
Javier Santiso, Deputy Director and Chief Economist, OECD Development Centre
2 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
A bridge between OECD Members A bridge between OECD Members and Partners …and Partners …
… to engage in dialogue on development issues
of mutual strategic interest …
… and foster capacity building in policy development
3 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
… OECD members and partnersGoverning Board open to non-OECD: South Africa, Brazil, Chile, India, Romania, Thailand are members
… research and policyIntellectual autonomy, no obligation of consensus
… policy communitiesAll development policies, not just aid
… different actors (private, public, etc.)Informal dialogue
The OECD’s Knowledge Centre The OECD’s Knowledge Centre on Developmenton Development
A bridge between …
4 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Part of the OECD’s Part of the OECD’s Development ClusterDevelopment Cluster
OECD Development Cluster
Sahel & West Africa Club(SAH - 1975)
DevelopmentCentre
(DEV - 1962)
Africa Partnership
Forum(APF - 2006)
DevelopmentAssistance Committee(DAC - 1961)
• Club of bilateral donors
• Best practice• Peer reviews
Informal discussion Forum OECD /
ECOWAS + Mauritania & Cameroon
• Bridge OECD members and partners
• Research / policy• Intellectual autonomy
• Informal dialogue
Monitoring commitmentsG8/OECD – AU/NEPAD
5 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Programme of Work 2005-2006Programme of Work 2005-2006
Monitoring economic Performance (AEO …)
Monitoring public opinion
Development Finance
Policy coherence
Strengthening productive
capacity building
Governance,institutions
Horizontal, e.g.: Impact of China & India on Africa, Agricultural policy,
Impact of migrations …
6 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
A resource for policy makers, researchers, students, A resource for policy makers, researchers, students, investors, …investors, …
A tool for policy dialogue amongst African partners A tool for policy dialogue amongst African partners (APRM, …) and with their partners (EC, G8, OECD)(APRM, …) and with their partners (EC, G8, OECD)
An innovative product (new indicators …)An innovative product (new indicators …) An innovative process (tri-partnership OECD-ADB-An innovative process (tri-partnership OECD-ADB-
EC, network of African experts, gradual transfer EC, network of African experts, gradual transfer 2002-07…)2002-07…)
African Economic Outlook:African Economic Outlook: monitoring the performance of African monitoring the performance of African
economieseconomies
7 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
African Economic Outlook 2006African Economic Outlook 2006
European CommissionBrussels 12 September 2006
8 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
11 What is the African Economic Outlook What is the African Economic Outlook Project?Project?African Performance: A two Speed African Performance: A two Speed Continent?Continent?
22
Promoting Transport InfrastructurePromoting Transport Infrastructure33
9 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
What is the AEO Project?What is the AEO Project? Joint Publication of the AfDB and the OECD Development Joint Publication of the AfDB and the OECD Development
Centre, supported by the EC – 5Centre, supported by the EC – 5thth edition. edition. Independent, comprehensive and comparative analysis Independent, comprehensive and comparative analysis
of 30 countries, combining economic, social and political of 30 countries, combining economic, social and political review and short-term macroeconomic forecasts.review and short-term macroeconomic forecasts.
An input for African policy makers, incl. NEPAD APRM, aid An input for African policy makers, incl. NEPAD APRM, aid practitioners and investors.practitioners and investors.
Annual focus on major theme (2006: transport Annual focus on major theme (2006: transport infrastructure; 2007: access to drinking water and infrastructure; 2007: access to drinking water and sanitation).sanitation).
Improvements in successive editions (peer-review Improvements in successive editions (peer-review process, improved modelling, broader country process, improved modelling, broader country coverage…)coverage…)
10 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
AEO 2006AEO 2006
Algeria
Libya Egypt
Mauritania
Mali
Niger
Chad
Dem.Rep. Congo
Sudan
Central AfricanRepublic
Equatorial Guinea
GabonCongo
Cameroon
Angola
Guinea-BissauGuinea
Sierra Leone
Liberia
Côted'Ivoire
Tunisia
BurkinaFaso
Ghana
NigeriaTogo Ethiopia
Somalia
Djibouti
Eritrea
Kenya
Tanzania
Mozambique
SouthAfrica
Botswana
Zimbabwe
Namibia
Zambia
Swaziland
Lesotho
Malawi
Uganda
BurundiRwanda
Madagascar
SenegalGambia
Morocco
Mauritius
Coverage 2006: 30 African countriesCoverage 2006: 30 African countries
90% of GDP90% of GDP87% of 87% of populationpopulation
11 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
11 What is the African Economic Outlook What is the African Economic Outlook Project?Project?African Performance: A two Speed African Performance: A two Speed Continent? Continent?
22
Promoting Transport InfrastructurePromoting Transport Infrastructure33
12 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Africa’s growth remains robustAfrica’s growth remains robust
Sources: African Economic Outlook 2006, IMF, OECD
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1997 1998 1999 2000 2001 2002 2003 2004 2005(e) 2006(p) 2007(p)
grow
th ra
te
Total OECDTotal OECD
AFRICAAFRICA
%
13 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Oil producing countries are leading Oil producing countries are leading growthgrowth
3
4
5
6
7
19971998199920002001200220032004200520062007
Real
GDP
Grow
th
Oil Exporting Countries Total Africa
0 5 10 15 20
GabonCameroon
TunisiaLibya
NigeriaEgypt
AlgeriaChad
Equat. GuineaSudanCongoAngola
Real GDP Growth 2005Source: African Economic Outlook 2006Source: African Economic Outlook 2006
Performance of oil producers
(%)
(%)
14 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Oil importers performed better than Oil importers performed better than expectedexpected
2
2.5
3
3.5
4
4.5
5
2000
2001
2002
2003
2004
2005
2006
2007
Oil Importing Countries
0 5 10
Oil importersMadagascar
ZambiaKenya
South AfricaSenegal
MaliBurkina FasoOil exporters
UgandaGhana
EthiopiaTanzania
Mozambique
Real GDP Growth 2005Sources: African Economic Outlook 2006Sources: African Economic Outlook 2006
Best Performers in 2005 (%)
(%)
15 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
TThanks to rising commodity prices and hanks to rising commodity prices and increased productionincreased production
40
80
120
160
200
240
280
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Petroleum Gold Copper Aluminium
Sources: African Economic Outlook 2006Sources: African Economic Outlook 2006
16 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Thanks to good harvest … and better Thanks to good harvest … and better internal policiesinternal policies
Inflation is under controlInflation is under control
Sources: African Economic Outlook Sources: African Economic Outlook 20062006
(%)
02468
101214161820
Oil Importers Oil Exporters
17 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Fiscal disciplineFiscal discipline
Budget Balance to GDP Ratio Region 1997-
2003 2004 2005(e) 2006(p) 2007(p) Central Africa -0.7 1.7 6.0 5.7 5.2 East Africa -3.2 -2.7 -3.4 -3.6 -3.3 North Africa -1.6 -0.9 3.2 3.9 3.4 Southern Africa -2.9 -1.8 -0.8 -0.6 -0.5 West Africa -2.5 3.1 6.6 6.3 4.2 Total -2.2 -0.5 2.1 2.3 1.8 Memorandum items: Oil-exporting countries -1.2 1.9 6.4 7.0 5.9 Non oil-exporting countries -3.1 -2.6 -2.4 -2.7 -2.7 Note: Due to lack of data, these aggregates do not include Liberia and Somalia. Source: African Economic Outlook 2006.
18 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
… … and increased political stabilityand increased political stabilityPolitical Troubles and Hardening of the Regime
0
50
100
150
200
250
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Har
deni
ng o
f the
regi
me:
wei
ghte
d su
m o
f ev
ents
0
100
200
300
400
500
600
Polit
ical
trou
bles
: wei
ghte
d su
m o
f eve
nts
Hardening of the regime indicator Political troubles trend
Sources: African Economic Outlook 2006 Political IndicatorsSources: African Economic Outlook 2006 Political Indicators
19 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Ratio of Trade Balance to GDP Region 1997-
2003 2004 2005(e) 2006(p) 2007(p) Central Africa 11.3 19.7 27.8 28.9 26.3 East Africa -9.6 -12.3 -14.1 -14.3 -13.5 North Africa -1.7 3.5 6.9 7.0 5.0 Southern Africa 3.4 2.1 2.3 4.3 5.6 West Africa 7.2 12.9 14.3 12.9 10.3 Total 1.2 4.3 6.8 7.2 6.3 Memorandum items: Oil-exporting countries 4.4 14.2 19.8 20.1 18.1 Non oil-exporting countries -1.8 -4.2 -5.6 -5.7 -5.8 Note: Due to lack of data, these aggregates do not include Liberia and Somalia. Source: African Economic Outlook 2006.
A divided AfricaA divided Africa
20 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Despite recent improvements, major Despite recent improvements, major development challenges remain …development challenges remain …
Africa is still behind in reaching the MDGsAfrica is still behind in reaching the MDGsProgress Towards Achieving Millennium Development Goals
0
20
40
60
80
100
120
Goal 1: Halvethe% of peoplesuffering from
hunger
Goal 2: Achieveuniversalprimary
education(netprimary enrol.
ratio)
Goal 3:Eliminategender
disparity(secondaryeducation)
Goal 4: Reduceby 2/3 under 5mortality rates
Goal 5: Reducematernal
mortality by 3/4
Goal 6: Halt andreverse thespread of
Tubercolosis
Satisfactory Non Statisfactory
Sources: African Economic Outlook 2006Sources: African Economic Outlook 2006
21 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Africa receives about 50 per cent of Africa receives about 50 per cent of total aidtotal aid
Source: OECD/DAC Statistics (2006). DAC Members’ ODA: 1990-2004 and simulations to Source: OECD/DAC Statistics (2006). DAC Members’ ODA: 1990-2004 and simulations to 2006 and 2010, based on Monterrey and subsequent2006 and 2010, based on Monterrey and subsequent commitmentscommitments
0.33
0.22
0.26
0.30
0.36
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.4019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
% o
f GN
I
0
20
40
60
80
100
120
140
OD
A (2
004
$ bi
llion
)
ODA as a % of GNI (left scale)
Total ODA(right scale)
Total ODA to Africa(right scale)
22 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
……with ODA increases driven by debt with ODA increases driven by debt relief and emergency assistancerelief and emergency assistance
Total net official development assistance (ODA), non-aid official flows and private flows in Total net official development assistance (ODA), non-aid official flows and private flows in Africa, 1993-2004Africa, 1993-2004. (Source: OECD/DAC). (Source: OECD/DAC)
-5
0
5
10
15
20
25
30
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
2003 US$ billion
-5
0
5
10
15
20
25
30
other ODA Bilateral debt forgiveness Emergency aid Non-aid official flows Private flows
23 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Progress in diversifying exports is Progress in diversifying exports is variedvaried
Source: Export Diversification Index, African Economic Outlook 2006
The higher the index, the more diversified the The higher the index, the more diversified the economyeconomy
0 10 20 30 40 50
Uganda
Ethiopia
Africa
Tanzania
Kenya
Tunisia
Morocco
19962003
0 5 10 15 20 25 30
Algeria
Cote d'Ivoire
Mozambique
Cameroon
Senegal
Madagascar
SACU
1996
2003
24 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Long term development Long term development requires capitalising on requires capitalising on
windfall gains & mobilising windfall gains & mobilising additional resources to additional resources to
finance productive activities, finance productive activities, including… including…
transport infrastructuretransport infrastructure
25 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
11 What is the African Economic Outlook What is the African Economic Outlook Project?Project?African Performance: A two Speed African Performance: A two Speed Continent? Continent?
22
Promoting Transport InfrastructurePromoting Transport Infrastructure33
26 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
MDG7Environmental sustainability
MDG6Combating
diseases MDG5Improving maternal health
MDG4Reducing child
mortality
MDG3Eliminate gender
disparity
MDG2Achieve universal
1ary education
MDG 1Eradicate extreme poverty
and hunger
Transport Infrastructure
Improve mobilityReduce prices
Improve mobilityFree time
Women benefit the mostBetter supply of food, water & medicinesFaster hospitalisationBetter supplies &
staff
Better use of networksProject selection
27 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Missing links …
Source: Pourtier (2003)
28 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Transport & insurance costs as % of trade Transport & insurance costs as % of trade valuevalue
0 5 10 15 20 25 30 35
SSA Least Developed Landlocked
SSA Landlocked
SSA Coastal countries
All land locked Developing
All Developing Countries
OECD Countries IMPORTEXPORT
Source: Faye, McArthur, Sachs and Snow (2004) and UNCTAD (2003)
29 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Critical condition of all transport modesCritical condition of all transport modes
Road– Only 19% is paved (against 27% in lat Am & 43% in South Asia)– 4% of registered vehicles, 10% of total deaths– Accidents cost 3% of GDP every year in Egypt
Rail– 3.5% of developing countries passenger flows, but 20% of GDP
& population
Air– <2% of developing countries passenger and freight flows– Few airports with international standard– 4.5% of traffic, 25% of accidents
Ports– Most ports are under equipped and have reached maximum
capacity– Inefficient: ZAF (17 c.u/h), Dar es Salam (21) ≠ Brazil (42)
30 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
300
1300
2300
3300
4300
5300
6300
7300
Tota
l am
ount
($ m
illio
n 20
03)
Year
Total aid in transport Total aid in social and governance sectors
Source: OECD/DAC Creditor reporting System (commitments) data Source: OECD/DAC Creditor reporting System (commitments) data aggregated by sectors : 1980-2004aggregated by sectors : 1980-2004
Shift in ODA to social sectors
31 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Infrastructure is back on donors’ Infrastructure is back on donors’ agendaagenda
Decline in the 1990’s of bilateral ODA, not compensated by multilateral flows– Shift of attention to poverty reduction (MDGs)– Disappointment over past experiences
Renewed interest as shown by report by Commission for Africa and UN Millennium Summit
Bilateral donors insist on linkage between infrastructure & poverty reduction and leverage for private funds (ex: the Emerging Africa Infrastructure Fund)
Increased involvement of non traditional donors (China, Arab countries)
32 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
PPP experiences in transportPPP experiences in transport Prompted by lack of public finance and lack of access to
international financial markets, although second-generation second-generation road fundsroad funds and investment of windfall gainsinvestment of windfall gains are helping
Not full privatisationNot full privatisation but concession & management contracts to allow better risk sharing in volatile environment
Positive outcome with respect to transport service deliverytransport service delivery (ex: cargo handling)
Under certain conditions (high private sector stakehigh private sector stake), privatisation of infrastructure is successful (ex. toll road of Maputo corridor)
In most cases, investment in infrastructure remains public
33 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Money is not enoughMoney is not enough Strong regulation needed
– Strong commitment / negotiation skills– Autonomous regulatory body (ex. Zambia)
Better planning (ex. Master Plan for Greater Cairo)– Selection of projects and solve trade-offs– Integration in poverty reduction strategy & medium-term
expenditure framework
Community participation– Maximising employment generation and easing maintenance– Gender dimension is crucial (ensure participation)
Regional cooperation– Economies of scale– Partnering with NEPAD & regional organisations
34 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Thank you for your attention!Thank you for your attention!
Contacts:Contacts:www.afdb.orgwww.afdb.org
www.oecd.org/dev/aeowww.oecd.org/dev/aeo
35 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Top ODA beneficiariesTop ODA beneficiaries
1081.0
1144.1
1159.0
1228.4
1235.8
1357.6
1457.7
1746.0
1815.0
1823.1
Zambia
Angola
Uganda
Mozambique
Madagascar
Ghana
Egypt
Tanzania
Congo, Dem. Rep.
Ethiopia
60.662.563.165.465.767.4
73.284.6
89.190.3
102.7103.9
Equatorial Guinea (18)
Liberia (17)Mauritania (16)
Mozambique (15)Ghana (14)
Sierra Leone (13)
Madagascar (12)
Angola (11)Namibia (10)
Djibouti (9)
Senegal (8)Zambia (7)
Source: OECD/DAC, 2006Source: OECD/DAC, 2006
Net ODA Receipts (USD million) ODA per capita (USD)
36 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Composition of ODA in top ODA Composition of ODA in top ODA beneficiariesbeneficiaries
31
42
28
28
25
34
15
16
4
31
8
2
5
6
9
3
5
4
9
3
17
10
27
17
11
38
52
7
10
40
15
101
13
1
1
5
15
1
2
0% 20% 40% 60% 80% 100%
Zambia
Tanzania
Ghana
Ethiopia
Egypt
Congo Dem. Rep.
SOCIAL ECONOMICPRODUCTION MULTISECTOR
GENERAL PROGRAMME AID DEBTEMERGENCY OTHERS
Source: OECD/DAC, 2006Source: OECD/DAC, 2006
37 AFRICAN DEVELOPMENT BANKAFRICAN DEVELOPMENT BANK
Transport in Africa & the worldTransport in Africa & the world
Africa North Africa SSA% dvping countries
% world % dvping countries
% world % dvping countries
Population, 2004 20.2 2.3 3.3 11.7 16.9
GDP, 2004 19.7 2.0 12.4 1.2 7.3
Trade, 2004 6.4 0.9 2.4 1.4 4.0Air transport (f), 2004 1.8 n.a. n.a. n.a. n.a.
Air transport (p), 2004 1.9 n.a. n.a. n.a. n.a.
Rail transport, 2003 3.5 0.2 0.3 1.7 3.2Road transport, 2002 >24.0 n.a. n.a. 7.6 24.0
Sea transport, 2004 43.9 10.4 25.5 7.5 18.4
Source: African Economic Outlook 2006 and various sources