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Vincent Palmade
World Bank
Africa Open for Business
Africa as the next growth pole?
2
Recovery from crisis: Projected GDP growth
Source: Africa Action Plan
Growth has been widespread
Primary school enrollment ratesPopulation living under $1.25/day
Child mortality rates Maternal mortality ratio
Progress in Human Development in Africa
Source: Laeven and Valencia (2010)
Africa has come a long way in terms of improving financial stability . . .
WORLD BANK’S DOING BUSINESS RANKINGS 2011
Source: Doing Business 2011
Rwanda was the world’s top doing business reformer in 2009SSA was the most active among all regions in enacting reforms
aimed atfacilitating start-ups and registering property in 2010 SSA had some of the most comprehensive investor protection
reforms e.g. Botswana, Mozambique, Rwanda, Sierra Leone, Swaziland,
Tanzania
Business climate is improving across the continent
Dynamic and Transformative Private Sector
5 game-changers
New heavy-hitting investors offer critical mass
Brazil, China, Brazil;private investors, foundations
1 2Regionalization is creating new large-scale marketsIntra-regional trade growing; new regional common markets
Greater macro stability and increased voice makes Africa more attractive for investorsDemocratic elections gaining ground; conflicts steadily declining
3Spread and growth of ICT offer significant productivity gains
World’s fastest mobilephone penetration
4Climate change creates opportunities for a green economy
Africa has low carbon legacy; chance for green leadership
5
• Mining resources could finance power and
transport infrastructure
• Urban development to fuel economic
transformation, not slums
• Africa to become the world’s food basket 75% of cultivable land unused
• ICT to play a transformative role (remote
services, e-government)
• Wages five times lower than in China –
manufacturing could come
• Unique cultural and natural tourism assets
waiting to be leveraged
ICT
Light manufacturing
Mining
Agribusiness
Construction
Tourism
6 Key Export Industries
Leveraging Mining
• Expanding established areas – e.g. Zambia, Nigeria
• Large new emerging areas – e.g. Mozambique, Guinea, DRC
• Good prospects – e.g. Burkina Faso, Cameroon
• Opportunity to develop infrastructure through mining
Normalized units
Sub Saharan Africa-Low Income Countries
Other Low Income Countries
Paved Road Density 31 134 Total road density 137 211 Main line density 10 78 Mobile density 55 76 Internet density 2 3 Generation Density 37 326 Electricity Coverage 16 41 Improved water 60 72 Improved sanitation 34 51
Africa’s Infrastructure Gap
0.0
1.0
2.0
3.0
4.0
5.0
2000-04 2001-05 2002-06 2003-07 2004-2008
Real Agricultural GDP (28 countries value weighted)
48 5
34
#of countries > 5%/yr
Growth in Agricultural Productivity
Source: WITS, and Whitaker and Kolavalli, “The how to technological change for faster growth in floriculture in Kenya, October 2004 .
424
479
538
570
607
283
350
403
473
528
166
196211
245
299
100
200
300
400
500
600
700
2002 2003 2004 2005 2006 2007
Exp
ort
s, m
illio
n U
S$
Coffee, tea, matï andspices.
Cut flowers and otherplants
Edible vegetables andcertain roots
• Smart Support: Government facilitated arrival of strategic investors.
• Spillovers: Success of foreign companies in floriculture led to entry of other investors, including Kenyans.
• Deregulations: Compared to the highly regulated agricultural sector
• Trade Logistics: Leverage of Kenya Airways
Kenya horticulture story
14
Source: Mallika Shakya, A note on Lesotho success story .
• Key bottleneck: Land acquisition for foreign investors is difficult and cumbersome.
• Policies to address the bottleneck: Industrial zones and serviced factory shells.
• On the job training of workers: Similar productivity at lower wages than in Asia.
• Trade Logistics: Leverage of Durban port
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1995
1996
1997
1998
1999
2000
2001
2003
2004
2005
2006
Mill
ion
Mal
oti
Non-manufacturedexports
Manufactured exports(of which 60% onaverage are apparels)
Lesotho apparel story
Gorilla tourism in Rwanda
Opportunities in Health
World Bank Group
International Bank for Reconstruction and Development (IBRD)
1944
International Development Association (IDA)
1960
International Finance Corporation
1956
Multilateral Investment Guarantee Agency
1988
International Center for the Settlement of Investment Disputes
1966
Knowledge
Finance
Partnerships
Leveraging:•Domestic res.•IDA, IBRD, IFC,MIGA•PCGs, enclaves, etc.
•Link analysis to policy•Political economy•Evidence to nourish public debate
-Governments-AfDB, AU, RECs- Civil society- Private sector- Development partners
18
World Bank’s Support to Africa
South AfricaICT sectorX% job growth
The World Bank - AFTFP 2010
Public-private partnerships (PPP) Address the infrastructure deficit
Entrepreneurship, knowledge and skills: Raise productivity and create new markets
Finance for development: Increase access to finance and supply long-term capital, especially for SMEs
1
2
3
4
Business environment reforms: Reduce cost and risk of doing business
Focusing World Bank Support on Main Opportunities
Beyond Infrastructure:•Agricultural research•Health•Trade integration
Public Health Laboratory Network in East Africa
High-impact projects:• West Africa Power Pool• Inga 3 hydro-project • North-South Corridor
Regional solutions