Presentation by Steve Radelet Chief Economist for USAID Median - - PowerPoint PPT Presentation

Presentation by Steve Radelet Chief Economist for USAID

Median Real Income, Sub- Saharan Africa

250 270 290 310 330 350 370 390 (in constant 2000 USD)

Growth in GDP per capita,1996 - 2008

Emerging Countries Other Countries Oil Exporters Botswana 4.1 Burundi

• 0.8

Angola 7.6 Burkina Faso 2.8 Central African Republic

• 0.5

Cameroon 1.7 Cape Verde 4.0 Comoros

• 0.3

Chad 3.4 Ethiopia 4.1 Congo, Dem. Rep.

• 1.1

Congo, Rep. 1.3 Ghana 2.6 Cote d'Ivoire

• 0.9
• Eq. Guinea

23.6 Lesotho 2.3 Djibouti

• 0.4

Gabon

• 0.7

Mali 2.5 Eritrea

• 1.7

Mauritania 1.1 Mauritius 3.7 Gambia, The 1.5 Nigeria 2.3 Mozambique 5.4 Guinea 1.7 Sudan 4.7 Namibia 2.4 Guinea-Bissau

• 2.3

Rwanda 3.7 Niger 0.6 Sao Tome and Principe 5.0 Madagascar 0.9 Seychelles 2.6 Somalia n.a. South Africa 2.0 Swaziland 1.9 Tanzania 3.0 Togo 0.2 Uganda 3.8 Zimbabwe

• 2.9

Zambia 1.8 Threshold Countries Benin 1.3 Kenya 2003-08 2.4 Liberia 2005-08 3.1 Malawi 1.2 Senegal 1.4 Sierra Leone 2003-08 3.7

Average Per Capita Income

40 60 80 100 120 140 160 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Average GDP per capita (1977=100) Emerging Oil-Exporters Other SSA

Growth in Per Capita Income

• 2.00
• 1.00

0.00 1.00 2.00 3.00 4.00

1961-1977 1978-1995 1996-2008

Average GDP per capita growth Emerging Oil Exporters Other SSA

Gross Capital Formation (Investment)

50 100 150 200 250 300 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Gross Capital Formation, 1995=100 Emerging Other SSA

Total Trade

50 100 150 200 250 300 350 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

T

• tal Trade, 1995=100

Emerging Other SSA

Productivity Growth

T

• tal Factor Productivity Growth in SSA (3 year

rolling average)

• 3.0
• 2.0
• 1.0

0.0 1.0 2.0 3.0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Productivity growth (%) Emerging Countries Other SSA

Agricultural Production

50 70 90 110 130 150 170 190 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Constant USD, 1988=100 Other SSA Oil-Exporters Emerging

Infant Mortality

60 70 80 90 100 110 120 1980 1985 1990 1995 2000 2005

Infant Mortality Rate (per 1,000 live births)

Emerging Oil-Exporters Other SSA

Primary School Enrollment

50 55 60 65 70 75 80 85 1999 2001 2003 2005 2007

Net Primary Enrollment (%)

Emerging Not Emerging Oil-Exporters

Population Growth Rate

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 Population Growth Rate Emerging Oil-Exporters Other SSA

Poverty Rates in the Emerging African Countries

Share of population with incomes less than $1.25/day

10 20 30 40 50 60 70 1981 1993 2005 Percent Below the Poverty Line

Changes in Commodity Prices

40 60 80 100 120 140 160 180 200 1980 1985 1990 1995 2000 2005 T erms of Trade (2000=100) Emerging Oil-Exporters Other SSA

Five Fundamental Changes

• 1. The Rise of Democracy and Improved

Governance

• 2. Stronger Economic Policies
• 3. The End of the Debt Crisis and

Improved Donor Relations

• 4. The Rise of New T

echnologies

• 5. The Emergence of a New Generation

Major Changes in the Emerging Countries: Economic Policy Reform, Political Change, and Per Capita Income

60 80 100 120 140 160 7 6 5 4 3 2 1 5 10 15 20 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Democracy: Political Rights and Civil Liberties Policy Reform: Number of Anti-Growth Syndromes Economic Performance: Income per capita (1977=100)

African Democracies

5 10 15 20 25 30

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Number of Democracies

Freedom House Scores

Average of Political Rights and Civil Liberties Scores

1 2 3 4 5 6 7 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Freedom House Scores

Emerging countries Other SSA

Freedom House and Polity IV Scores

Freedom House Polity IV Score 7 = worst score

• 10 = worst score

1 = best score +10 = best score Emerging Countries 1989 2008 1989 2008 Botswana 1.5 2 7 8 Burkina Faso 5.5 4

• 7

Cape Verde 5.5 1 N/A N/A Ethiopia 7 5

• 8

1 Ghana 5.5 1.5

• 7

8 Lesotho 5.5 2.5

• 7

8 Mali 6 2.5

• 7

6 Mauritius 2 1.5 10 10 Mozambique 6.5 3

• 7

6 Namibia 3.5 2 6* 6 Rwanda 6 5.5

• 7
• 3

Sao Tome and Principe 5.5 2 N/A N/A Seychelles 6 3 N/A N/A South Africa 5.5 2 4 9 Tanzania 6 3.5

• 6
• 1

Uganda 5 4.5

• 7
• 1

Zambia 5.5 3

• 9

7 Threshold Countries Benin 7 2

• 7

7 Kenya 6 3.5

• 6

6 Liberia 5.5 3.5

• 6

6 Malawi 6.5 4

• 9

6 Senegal 3.5 3

• 1

8 Sierra Leone 5.5 3

• 7

7

Incidence of Domestic Conflict

Average number of incidents per year per country group

26 21 12 5 20 9 5 10 15 20 25 30 Emerging Non-emerging Oil exporters 1980-1995 1996-2008

African Leaders Departure From Power

Source: Daniel N. Posner and Daniel J. Young, 2007, “The Institutionalization of Political Power in Africa,” Journal of Democracy 18-3 (July), pp. 128.

Governance Indicators

Source: World Bank Institute

Rule of Law Regulatory Quality Year Emerging Non-emerging Emerging Non-emerging 1996

• 0.47
• 0.77
• 0.49
• 0.64

2008

• 0.24
• 0.99
• 0.25
• 1.01

Government Effectiveness Political Stability Emerging Non-emerging Emerging Non-emerging 1996

• 0.46
• 0.71
• 0.39
• 0.40

2008

• 0.29
• 1.10

0.01

• 0.84

Control of Corruption Voice & Accountability Emerging Non-emerging Emerging Non-emerging 1996

• 0.49
• 0.55
• 0.10
• 0.69

2008

• 0.15
• 0.80

0.03

• 1.19

• 2. Stronger Economic Policies

Prevalence of “Anti-Growth Syndromes”

5 10 15 20 25 number of syndromes Emerging Oil Exporters Other SSA

Currency Overvaluation: The Real Exchange Rate

50 100 150 200 250 300 350 400 450 1970197219741976197819801982198419861988199019921994199619982000200220042006 Real Exchange Rate (2000=100) Emerging Oil-Exporters Other SSA

Average Import Tariff Rates

25.0 26.6 22.2 17.4 19.2 18.7 11.4 15.8 15.4 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Emerging Oil-Exporters Other SSA 1981-1995 1996-2003 2004-2007

Changes in Agricultural Policies: The Nominal Rate of Assistance

• 0.2
• 0.18
• 0.16
• 0.14
• 0.12
• 0.1
• 0.08
• 0.06
• 0.04
• 0.02

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Nominal Rate of Assistance (T

• tal Agriculture)

Emerging Other SSA

Costs of Starting a Business

0% 50% 100% 150% 200% 250% 300% 350% 400% Emerging Oil-Exporters Other SSA % of income per capita 2003 2009

• 3. The End of the Debt Crisis and

Change in Donor Relationships

0% 100% 200% 300% 400% 500% 600% 700% 800% 900% 1000% 1970 1975 1980 1985 1990 1995 2000 2005 External Debt/Exports Emerging Oil-Exporters Other SSA

Official Financing for the Emerging African Countries

2000 4000 6000 8000 10000 12000 1988 1998 2008 in constant 2008 USD, millions Non-Concessional Loans Concessional Loans Grants

• 4. The rise of new T

echnologies:

Mobile Subscriptions (per 100 people)

5 10 15 20 25 30 35 40 2000 2007 Emerging Oil Exporting Other SSA

Internet Subscriptions (per 100 people)

1 2 3 4 5 6 7 8 9 2000 2007 Emerging Oil Exporting Other SSA

• 5. The Emergence of a New

Generation