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SECOND INTERNATIONAL CONFERENCE ON THE EMERGENCE OF AFRICA (ICEA-II) Abidjan, Cte dIvoire Cross-sectional analysis of case studies of selected African countries experience towards emergence: Stock-taking, lessons learned, and way forward

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Abidjan, Côte d’Ivoire

BY A BD O U L AY E M A R D I E Y E A S S I STANT A D M I NI STRATOR A N D R EG I O N AL D I R ECTO R U N D P A F R I CA

« Cross-sectional analysis of case studies of selected African countries’ experience towards emergence: Stock-taking, lessons learned, and way forward »

SECOND INTERNATIONAL CONFERENCE ON THE EMERGENCE OF AFRICA (ICEA-II)

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A.1 Rationale of ICEA-I

1980 2000 2015

g(Y) = 5.1%

Two lost development decades

g(Y) = 1.7% C (consumption) = 1/3 (Growing middle class) I (investment) = 1/3 (Better governance) X-M (trade) = 1/3 (Commodity price boom)

MDG era Agenda 2063

2030

Agenda 2030 Hi5s

T 1 / 16 Path B 5% Path A 10+ % Path C 3% Emergence trend Present Trend Commodity price bust trend

  • A. Background

Y (GDP)

era

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SLIDE 3

1990 2000 2015 Human Development

poverty e =0.328 e =-0.522 e =0.264 e =-1.237 |e|>1

Development-enhancing power of growth

Growth is

Not sufficiently inclusive

compared to: East Asia & Pacific -2.48 Latin America & Caribbean -3.08

Eastern Europe & Western Asia -4.22

Radical policies for inclusiveness needed

|e|>3

e= elasticity

t 2 / 16

A.2 Emergence Path: Human development and poverty reduction tracks

  • A. Background

MDG era

2030

Two lost development decades Agenda 2063 Agenda 2030 Hi5s

era

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SLIDE 4

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A.3 ICEA-I Model

  • A. Background

Adapted from Uganda case study

Steady state

  • f

inclusive & sustainable development

Developmental state Changes in production

and

Consumption patterns Human development

  • 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
  • A clear and shared vision
  • Equipped & strong institutional capacity
  • Attract investment to key sectors
  • Basic socio-economic services
  • Corrupt free state
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A.4 Analysis of ICEA-I Model

  • A. Background

Analysis of emergence with a focus on 13 case study countries out of 27 countries on emergence plans

Morocco Cabo Verde Senegal Equatorial Guinea Gabon South Africa Ethiopia Uganda Rwanda Tanzania Mauritius Kenya

Countries

  • n

emergence plans Countries

  • n

emergence plans

Côte d’Ivoire

Countries in green are case study countries

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.1 Typologies of Emergence Paths

Lessons learned

Waves path

t

Mauritius Cabo Verde Ethiopia

Inflexion path

Senegal Gabon Kenya Uganda

t

(N.B. Sierra Leone, Guinea, and Liberia before Ebola)

Kinked path

Côte d’Ivoire Rwanda

t i. Re-activation of under-utilized excess capacities ii. Substantial improvement in productivity iii. Strengthened resilience i.v. Sustained and deepened reforms until tipping point for inflexion is reached

  • v. Activation of new engines and

strategies of growth every cycle

  • f 10 to 15 years
  • vi. Continuous improvement of

competitiveness

  • B. Typologies
  • vii. Leadership foresight and traction
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SLIDE 7

I. Macroeconomic policies II. Structural economic transformation policies

  • III. Social and human development policies
  • IV. Governance and institutional policies

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Strategies and Policies of Emergence

(Critical success factors: lessons, challenges and way forward)

  • C. Strategies
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Strategies and Policies of Emergence

  • C. Strategies

C.1 Macroeconomic stability…BUT need to be sustained

1.

Expanding fiscal space 18%=>24%

1.

Expanding fiscal space 18%=>24%

2.

Improved fiscal account balance

2.

Improved fiscal account balance

3.

Relatively stable prices …BUT

3.

Relatively stable prices …BUT

5.

Improved current account balance

5.

Improved current account balance

4.

Improving gross national savings BUT still low

4.

Improving gross national savings BUT still low

6.

Robust net external inflows

6.

Robust net external inflows

7.

Improved external debt sustainability …BUT

7.

Improved external debt sustainability …BUT Scale symbol Scale symbol

3.05 4.69 12.71 15.40 15.70 15.97 18.18 19.57 21.71 22.41 22.54 22.59 22.91 23.72 23.74 24.44 25.27 25.48 25.49 27.23 27.58 28.03 29.38 30.12 30.45 31.32 32.05 32.94 33.12 34.39 34.73 35.31 35.90 36.95 37.03 38.70 38.88 39.74 41.12 44.78 45.25 47.80 56.97 57.50 60.77 63.46 69.42 76.10 80.08 93.57

0.00 20.00 40.00 60.00 80.00 100.00

ALGERIA SWAZILAND BOTSWANA UGANDA RWANDA BURKINA FASO MALAWI ANGOLA BURUNDI MALI ETHIOPIA MADAGASCAR TANZANIA CONGO, REP. CENTRAL AFRICAN REPUBLIC AFRICA MOROCCO LIBERIA COTE D'IVOIRE GUINEA ERITREA SOMALIA GAMBIA, THE ZIMBABWE SAO TOME AND PRINCIPE

External debt stock (% GNI), average 2010-2015

IMF Threshold (50-75%)

3.05 4.69 12.71 15.40 15.70 15.97 18.18 19.57 21.71 22.41 22.54 22.59 22.91 23.72 23.74 24.44 25.27 25.48 25.49 27.23 27.58 28.03 29.38 30.12 30.45 31.32 32.05 32.94 33.12 34.39 34.73 35.31 35.90 36.95 37.03 38.70 38.88 39.74 41.12 44.78 45.25 47.80 56.97 57.50 60.77 63.46 69.42 76.10 80.08 93.57

0.00 20.00 40.00 60.00 80.00 100.00

ALGERIA SWAZILAND BOTSWANA UGANDA RWANDA BURKINA FASO MALAWI ANGOLA BURUNDI MALI ETHIOPIA MADAGASCAR TANZANIA CONGO, REP. CENTRAL AFRICAN REPUBLIC AFRICA MOROCCO LIBERIA COTE D'IVOIRE GUINEA ERITREA SOMALIA GAMBIA, THE ZIMBABWE SAO TOME AND PRINCIPE

External debt stock (% GNI), average 2010-2015

IMF Threshold (50-75%) 0.26 1.78 8.63 8.69 8.77 8.92 9.10 9.96 11.37 12.55 12.97 13.02 13.33 13.70 14.13 14.70 14.89 14.89 15.04 15.44 15.76 16.34 16.66 17.19 18.18 18.89 19.58 19.96 20.82 23.06 25.12 25.66 28.51 30.92 35.79 42.50 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 LIBERIA NIGERIA CONGO, REP. ETHIOPIA CONGO, DEM. REP. CENTRAL AFRICAN REPUBLIC SIERRA LEONE MADAGASCAR UGANDA TANZANIA MALI RWANDA EGYPT, ARAB REP. COTE D'IVOIRE GHANA ZAMBIA MALAWI BURKINA FASO BENIN SUB-SAHARAN AFRICA KENYA ANGOLA SAO TOME AND PRINCIPE TOGO MAURITIUS SENEGAL MOZAMBIQUE SWAZILAND TUNISIA MOROCCO BOTSWANA SOUTH AFRICA SEYCHELLES NAMIBIA ALGERIA LESOTHO

Tax revenue (%

  • f

GDP), 2010-2014

UNCTAD Threshold (24%)

0.26 1.78 8.63 8.69 8.77 8.92 9.10 9.96 11.37 12.55 12.97 13.02 13.33 13.70 14.13 14.70 14.89 14.89 15.04 15.44 15.76 16.34 16.66 17.19 18.18 18.89 19.58 19.96 20.82 23.06 25.12 25.66 28.51 30.92 35.79 42.50 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 LIBERIA NIGERIA CONGO, REP. ETHIOPIA CONGO, DEM. REP. CENTRAL AFRICAN REPUBLIC SIERRA LEONE MADAGASCAR UGANDA TANZANIA MALI RWANDA EGYPT, ARAB REP. COTE D'IVOIRE GHANA ZAMBIA MALAWI BURKINA FASO BENIN SUB-SAHARAN AFRICA KENYA ANGOLA SAO TOME AND PRINCIPE TOGO MAURITIUS SENEGAL MOZAMBIQUE SWAZILAND TUNISIA MOROCCO BOTSWANA SOUTH AFRICA SEYCHELLES NAMIBIA ALGERIA LESOTHO

Tax revenue (%

  • f

GDP), 2010-2014

UNCTAD Threshold (24%)

Lesson: need to watch out for debt sustainability Lesson: need to meet the UNCTAD 24% threshold for sustainable funding of development

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Strategies and Policies of Emergence

  • C. Strategies

C.2 Macro stability: Best practices

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

South Africa and Seychelles

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

South Africa, Ethiopia, Mauritius, Uganda

Inflation is in single digits

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

Between 20-32%

in Morocco, Cabo Verde, Ethiopia,

Equatorial Guinea and Mauritius

Compared to Emerging economies (31%)

Developing Asia (41%)

Impediments to high savings rates:

IFFs  low financial deepening  low disposable income

CAB is high

in CIV, Ethiopia, Morocco, Uganda, Mauritius,

Senegal

Improved domestic production and strong surge in exports BUT income payments on FDI inflows is driving current account deficit

1.

Expanding fiscal space 18%=>24%

1.

Expanding fiscal space 18%=>24%

2.

Improved fiscal account balance

2.

Improved fiscal account balance

3.

Relatively stable prices …BUT

3.

Relatively stable prices …BUT

4.

Improving gross national savings BUT still low

4.

Improving gross national savings BUT still low

5.

Improved current account balance

5.

Improved current account balance

Many countries

are below the IMF

threshold of 50- 75%

  • Medium Term Debt

Management Strategies e.g. Kenya

  • Forward-looking

analysis of debt sustainability in Nigeria and India

FDI is high and improving

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

6.

Robust net external inflows

6.

Robust net external inflows

7.

Improved external debt sustainability …BUT

7.

Improved external debt sustainability …BUT

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5.

Cost of Production

  • n average

is still high

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Strategies and Policies of Emergence

  • C. Strategies

C.3 Improving structural economic transformation…BUT

1.

Improved multifactor productivity

7.

Improved innovation, but low investment in R&D 2. Shift from low to higher productivity sectors

6.

Progress in infrastructure development; but infrastructure gap is still a binding constraint.

3.

Enhanced global competitiveness

4.

Promoting economic resilience

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Strategies and Policies of Emergence

  • C. Strategies

C.4 Structural transformation: Best practices

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

Global competitiveness is improving

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

in Morocco, Tunisia, South Africa, Mauritius,

Kenya & Senegal

  • EPZ, tourism and business process
  • utsourcing 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

Improving Innovation Capacity

Heavy investments in technological hubs

in

South Africa Kenya Senegal and Tanzania are driving innovations

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)

The infrastructure gap is an impediment in many countries

1.

Improved multifactor productivity

2.

Shift from low to higher productivity sectors

3.

Enhanced global competitive- ness

4.

Promoting economic resilience

5.

Cost of Production

  • n average

is still high

6.

Progress in infrastructure development

7.

Improved innovation, But low investment in R&D

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Strategies and Policies of Emergence

  • C. Strategies

C.5 Social and human development policies 1.

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.

  • 2. Increased Investment

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

  • 3. 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. 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

  • 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]

  • 5. 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]

  • 4. 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
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Strategies and Policies of Emergence

  • D. Strategies
  • D1. Governance, institutional policies, and the political economy of emergence

1

Most countries with strong control on corruption have high Human Development Index Most countries with strong control on corruption have high Human Development Index

Strong correlation between good governance & supportive social norms; and between growth and human development

0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80

  • 1.50
  • 1.00
  • 0.50

0.00 0.50 1.00

Human Development Index Control of corruption

Correlation between control of corruption and human development index

Index

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  • 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
  • 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
  • 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
  • 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

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Strategies and Policies of Emergence

  • D. Strategies

D.1 Governance, institutional policies, and the political economy of emergence (cont’d)

Setting up of specialized institutions to implement emergence

3

Setting up of strong institutional coordination and monitoring of emergence

  • 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)

2 4

Public sector reforms to reduce corruption, improve efficiency, ensure service delivery

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Strategies and Policies of Emergence

  • D. Strategies

D.1 Governance, institutional policies, and the political economy of emergence (cont’d)

Digital transformation Digital transformation Good participatory process Good participatory process The imperative of social contract The imperative of social contract

  • Mobile money - MPESA in Kenya
  • Commodities exchange - Ethiopia
  • Agriculture Cadastre - Cape Verde &

Rwanda

  • Mobile money - MPESA in Kenya
  • Commodities exchange - Ethiopia
  • Agriculture Cadastre - Cape Verde &

Rwanda

  • 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

  • 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

  • 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
  • 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

5 6 7

Growth in mobile phone usage* *PWC: Disrupting Africa: Riding the wave of the digital revolution

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Enhanced framework for emergence

An ICEA-II Model

  • E. Framework
  • Stronger developmental states
  • Rapid structural economic

transformation

  • Positively impacting on human

development

Emergence is TAKING ROOT in Africa

  • 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

BUT its LONG TERM VIABILITY requires

  • Greater citizen and non-state

actors engagement

  • Inclusive political dialogue with

all actors to avoid disruptions by change of leadership

  • Building sturdy social contracts

The imperatives of its SUSTAINABILITY include

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Thank you

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