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African Economic Outlook 2009

Chairman:
Honorable Charles B. Rangel, US House of Representatives
Co-Chair:
Honorable Donald M. Payne, US House of Representatives

Presentation:
Dr. Charles P. Oman, Head of Strategy, OECD Development Center
Dr. Leonce Ndikumana, Director, African Development Bank,
Research Department
Mrs. Sala Patterson, Policy Results Officer, OECD Development Center

Discussants:
Mr. Julius E. Coles, President, Africare
Mr. Franklin C. Moore, Deputy Assistant Administrator, Africa Bureau, USAID
Dr. Peter M. Lewis, Director, African Studies, Johns Hopkins SAIS

Thursday, June 18, 2009
Room H-137, US Capitol Building
Washington DC, 20515
10:00-11:30 AM Presentation, 9:30 AM Registration

While the series is free of charge, space is limited. 
We ask you to please register by Wednesday, June 18.

Event Description:

The OECD Development Center and the African Development Bank will present the recently released African Economic Outlook. 

Produced annually by the Development Center and the African Development Bank together with the U.N. Economic Commission for Africa, the African Economic Outlook (AEO) is the essential economic reference on Africa. Now in its eighth year, the AEO presents a comprehensive analysis of economic, political and social developments on the continent. It is unique in applying a common analytical framework to the 47 countries it covers – accounting for 99% of the continent’s economic output and 97% of its population. The AEO is the only report on Africa produced by African institutions, in partnership with international organizations.

Key findings of the 2009 AEO include:

• Africa has been gravely affected by the global economic downturn. After half a decade at over 5%, the continent’s growth prospects will fall by almost 3 percentage points to 2.8% in 2009; they are expected to rebound to 4.5 per cent in 2010.
• The initial effects of the crisis are being felt through trade due to a fall in commodity prices (mineral and non-mineral) and plummeting demand from developed countries.
• This will have an adverse effect on Africa’s budget balances, with the regional budget deficit for 2009 predicted to be around 5.5 per cent of GDP compared to a surplus of 3.4 predicted in the AEO one year ago.
• While official development assistance (ODA) increased in 2008, there are concerns about a downward revision of pledges due to pressure on donor aid budgets during to the crisis.
• Africa is a leader in innovative uses of information and communication technologies technology. It was the first region in the world to offer free, mobile roaming services across several countries. Today, 4 out of 10 African has a mobile phone line.
• Africa is the world leader in tele-banking services. In Kenya, where only 26% of the population has a bank account, mobile-payment services have attracted over 5 million users in less than 2 years.
• The crisis will also negatively affect remittances (75% of African remittances come from the US and Western Europe) and private capital flows. Despite the fact that the rate of return on foreign investment is higher in Africa than anywhere else in the developing world, foreign direct investment decreased by about 10 per cent in 2008.
• Countries most affected by the crisis will be those that are economically most integrated into the global economy, including South Africa (1.1% estimated growth in 2009) and other oil or mineral exporters such as Algeria (0.2%), Angola (-7.2%), Botswana (2.6%), Equatorial Guinea (3.7%), Namibia (2.7%) and Zambia (2.8%).
• A group of countries is performing moderately well (growth rates above 6%) that includes highly diversified economies like Tanzania, agricultural countries like Rwanda, Malawi, and Ethiopia, and countries least integrated into the world economy like Togo, Sierra Leone and Liberia.
• The short term challenge for African governments is to find a balance between preserving general economic conditions and maintaining public expenditure in infrastructure and social sectors as government revenue decreases.
• In the longer term, the challenge will be to mobilize domestic resources, thus reducing vulnerability to external financial shocks. On average the tax/GDP ratio is 26% in Africa as compared to 36% in OECD countries. For half of the continent this ratio is less than 20%.
• Only a handful of African countries are on track to meet the target of halving the share of the population living on less than one dollar a day by 2015.
• Despite these challenges, Africa is better placed today to face the crises than it was 10 years ago thanks to macroeconomic reforms (lower inflation, lower budget deficit) and multilateral debt reduction initiatives.

With the right combination of domestic policy reforms and a strengthening of regional and South-South ties, Africa can set the stage for faster growth following the downturn. Donor countries, including the US, should not only meet but scale-up their aid commitments to the continent. And as they take measures to shore up their own economies, developed countries should avoid protectionist measures that could draw capital and trade away from Africa.

Biographies:

Congressman Charles B. Rangel, Chairman of the House Committee on Ways and Means, is serving his 20th term as the Representative from New York’s 15th Congressional District, comprising East and Central Harlem, the Upper West Side, and Washington Heights/Inwood. Congressman Rangel is also Chairman of the Board of the Democratic Congressional Campaign Committee, Dean of the New York State Congressional Delegation, and a founding member and former chairman of the Congressional Black Caucus. A graduate of New York University and St. John's University School of Law, he has spent his entire career in public service, first as an Assistant U.S. attorney for the Southern District of New York, and later in the New York State Assembly.  

Congressman Donald M. Payne has represented New Jersey’s 10th Congressional District since 1988. He is a member of the House Foreign Affairs Committee, where he serves as Chairman of the Subcommittee on Africa and Global Health and as a member of the Subcommittee on the Western Hemisphere and the Subcommittee on International Organizations, Human Rights, and Oversight. He has served twice as the Congressional Delegate to the United Nations, a position to which he was nominated by Speaker Nancy Pelosi and appointed by President Bush. A graduate of Seton Hall University, he pursued graduate studies at Springfield College in Massachusetts. He holds honorary doctorates from Chicago State University, Drew University, Essex County College and William Paterson University.

Charles P. Oman is the Head of Strategy at the Development Center of the OECD.  Author of best-selling publications on international investment, economic development, corporate and public governance, and the policy challenges of globalization and regionalization, he holds a Ph.D. in economics from the University of California at Berkeley. A native of Berkeley, he has taught economics there, at the Graduate School of Business Administration (ESAN) in Lima, Peru, and at the École Nationale d’Administration (ENA) and the Institut d’Études Politiques (Sciences-po) in France. He has served as policy advisor to the governments of Chile, Korea, Peru and South Africa, and as a corporate director.

Leonce Ndikumana is the Director of the AfDB Research Department. Formerly Associate Professor of economics at the University of Massachusetts, Amherst, and Chief of Macroeconomic Analysis at the United Nations Economic Commission for Africa (UNECA), he has contributed to various areas of research and policy analysis with a focus on African countries. He is an active member of major research networks around the world including the African Finance and Economics Association (AFEA) of which he is a former President, the African Economic Research Consortium (AERC) where he serves as resource person, and others. He holds a Ph.D. in Economics from Washington University in St. Louis, Missouri, USA.

Sala Patterson is the Policy Results Officer for the OECD Development Center’s Africa and Middle East Desk. Prior to joining the OECD, she was a communications consultant to the African Development Bank in Tunis, Tunisia, the UN International Fund for Agricultural Development in Rome, Italy and the UN Staff College in Turin, Italy. A former magazine editor, she has also worked on an environmental justice campaign for Greenpeace; a development project in Benin, West Africa; and as an English teacher in Japan. She holds a bachelor’s degree in African-American literature from Columbia University and a master’s in development studies from the University of London’s School of Oriental and African Studies.

Julius E. Coles is the President of Africare. Prior to assuming this position, in 2002, he served as the Director of Morehouse College’s Andrew Young Center for International Affairs, and as the Director of Howard University’s Ralph J. Bunche International Affairs Center. During his career of some 28 years in the foreign service as a senior USAID official, he was Mission Director in Swaziland and Senegal, and served as well in Vietnam, Morocco, Liberia, Nepal and Washington DC. Holder of a B.A. from Morehouse College and a Masters of Public Affairs from Princeton University’s Woodrow Wilson School of Public and International Affairs, he is a member of several boards and the recipient of numerous awards, including most recently the James Madison Medal from Princeton University.

Franklin C. Moore is the Deputy Assistant Administrator for the Africa Bureau at USAID. Previously Director of the Office of Environment and Science Policy within USAID’s Bureau for Economic Growth, Agriculture and Trade, he has also held positions with the U.S. Environmental Protection Agency; with Africare, where he was a regional agricultural business specialist, resident in Zimbabwe; and with the Peace Corps, where he was Associate Country Director for Agriculture in Ghana. He holds a masters degree in Agricultural Economics and a certificate in African Studies from the University of Wisconsin-Madison and a bachelor’s degree in Economics from Yale University. 

Peter M. Lewis is Director of African Studies and Associate Professor at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University. Holder of a Ph.D. in politics from Princeton University, he has authored and edited numerous publications, including Growing Apart: Oil Politics and Economic Change in Indonesia and Nigeria (2006), Deregulation and the Banking Crisis in Nigeria (2002) and Africa: Dilemmas of Development and Change (1998). He has consulted for the Ford Foundation, the Carter Center, the World Bank and USAID, and is a senior associate at the Center for Strategic and International Studies.

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