Indicators for sustainable growth in Africa

Transcription

1 IHS ECONOMICS & COUNTRY RISK Global Economics & Country Risk Conference Indicators for sustainable growth in Africa 12 November 2014 ihs.com Natznet Tesfay, Head of Africa, Country Risk, IHS, Ama Egyaba Baidu-Forson, Senior Economist, Global Economics, IHS, ,

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3 Local sources: Over 1,000 carefully selected people in our global network IHS Country Risk s active source network has individuals with expertise and/or geographically located in over 100 countries, worldwide. Darker shading indicates higher source counts. We regularly stand up new incountry source networks to support customized intelligence requirements in territories/subject areas not covered by our standing network. 3

4 Tools and techniques All Source: OSINT, HUMINT, SOCMINT, IMINT Modelling: Advanced economic modelling and data analytics Audit: Multi-layered audit and challenge of all analysis to limit bias and test judgments and forecasts 4

5 Assessing growth outlook Source of growth Astute and shrewd leadership Exports Regulatory stability and policy coherency Sustainable growth indicators Fiscal and external balances Security environment Level of economic transformation Social welfare 5

6 Assessing growth outlook Source of growth Demand composition Supply side (production) Exports Intensity Diversity Markets Astute and shrewd leadership Regulatory stability and policy coherency Sustainable growth indicators Fiscal and external balances Economic stability Security environment Social welfare Level of economic transformation Productivity Technological upgrading 6

7 Sub-Saharan Africa: Solid economic growth in recent years still susceptible to inherent fragilities 14.0 Average Real GDP growth: Percent (%)

8 Ebola in West Africa Start of outbreak: Guinea, December 2013 Ebola Icon: designed by Andrew Rockefeller from the thenounproject.com Countries worst affected: Guinea, Sierra Leone, Liberia Total cases (5 th November): 13,042 (W.H.O.) Total reported deaths: 4,818 (W.H.O.) Cases and deaths continue to be underreported in this outbreak ~ World Health Organization (W.H.O.) 8

9 Ebola virus disease outbreak rages on, 11 months later Geographical distribution of new cases and total cases in Guinea, Liberia, and Sierra Leone Source: World Health Organization 9

10 Sizable GDP losses from the Ebola virus outbreak % 12.00% Ebola impact on real GDP growth (%chya) 11.52% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 6.22% 4.97% 2.00% 2.50% 0.50% Guinea Sierra Leone Liberia 2014 Q Q Real GDP losses from Ebola virus outbreak Q4 Deviations from Q1* Guinea -2.7% Sierra Leone -8.9% Liberia -5.4% *Percent difference in real GDP levels (LCU, 2013 prices)

11 ...are expected to drag on medium-term growth prospects Sector contributions to real GDP growth Guinea Sierra Leone 5.00% 4.00% 3.94% 4.00% 3.00% 2.50% 2.99% 3.00% 2.00% 2.00% 2.53% 2.00% 1.00% 1.00% 0.00% -1.00% % -1.00% -2.00% % Agriculture Industry Agriculture Industry Services Real GDP growth Services Real GDP growth Liberia 3.00% 2.00% 1.00% 0.00% -1.00% -2.00% -3.00% 2.00% 0.50% % Agriculture Services Industry Real GDP growth

12 Both fiscal and external balances deteriorate 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0% -14.0% Overall fiscal balances % GDP Guinea Liberia Sierra Leone Fiscal balances % GDP Guinea -2.7% -4.8% -5.8% -5.2% Liberia -3.8% -9.9% -12.3% -11.9% Sierra Leone -2.6% -5.0% -6.2% -6.0% Trade balances % GDP Trade balances % GDP Guinea -11.1% -12.7% -15.8% -20.7% Liberia -31.3% -39.2% -48.9% -51.4% Sierra Leone -12.6% -15.7% -19.6% -20.6% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% -70.0% -80.0% -90.0% % Sierra Leone Liberia Guinea

13 Regional economic growth sees limited impact but downside risks remain high West Africa: Real GDP levels and % shares of regional GDP* in 2013 In billions of 2010 US dollars % regional GDP* Nigeria % Ghana % Cote d'ivoire % Senegal % Guinea, Liberia and Sierra Leone % *ECOWAS Countries: Benin, Burkina Faso, Côte d'ivoire, Gambia, Ghana, Guinea, Guinea- Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo and Cape Verde Largest negative impacts: Tourism, travel

14 Assessing growth outlook Astute and shrewd leadership Power structure Prevalence of c corruption Source of growth Regulatory stability and policy coherency Institutional capacity Sustainable growth indicators Exports Fiscal and external balances Level of economic transform ation Security environment Monopoly force Social welfare Labour dynamics Equality Provision of public amenities Environment 14

15 Ebola: Factors fuelling the outbreak Social welfare and institutional capacity Three most affected countries were in bottom ten of UNDP s 2013 Human Development Index Before the outbreak, Liberia only had approx. 45 doctors for a population of 4.5 million Government denials of the severity of the outbreak delayed critical action and timely response Political instability and insecurity Sierra Leone: 11-year civil war ( ) Liberia: 14-year civil war ( ) Guinea: Reign of coup leaders ( ) Rejection of state authority Suspicions, that have been fuelled by endemic corruption, have in turn fostered rumours as to cause of outbreak 15

16 Ebola: Factors fuelling the outbreak Kissidougou Gueckedou Macenta Nzerekore 16

17 Outlook for insecurity FLA: Civil Unrest one-year outlook 17

18 Outlook for political stability and business implications Guinea Second presidential elections in Nov 2015 since the return to democratic rule. Outbreak likely to be politicised as polls approach, giving ground for: Legislative stalling, particularly the budget Violent confrontations between security forces and opposition supporters, especially if the elections are postponed. Liberia Opposition parties are likely to pressure President Sirleaf- Johnson to organise the senatorial elections Americo-Liberian hegemony: Growing perception that President Sirleaf-Johnson is preparing her son to succeed her in the 2016 presidential elections. FLA: Terrorism one-year outlook Former warlords like Nimba County Senator Prince Johnson still maintain loyal fighters, while state relies heavily on UNMIL (2015 drawdown). Legislative stalling has resulted in delay of the passage of hydrocarbon bill 18

19 Key elections in two-year outlook Nigeria (2015): Jonathan is highly likely to be re-elected in Africa s largest economy, but Boko Haram will continue to seize territory. Ethiopia (2015): Growing rivalries between military and civilian powerbrokers raises risk of disruption to industrialisation drive and moderate risk of coup. Tanzania (2015): Prospect of gas revenues is driving fractures within the ruling party while perceptions of marginalisation are fuelling radicalism DRC (2016): Stalling in natural resource sector (mining, oil and agriculture) has intensified due to competition among gatekeepers 19

20 Nigeria: Will be able to maintain its newly found status?

21 Islamist militants threatening East Africa s energy potential

22 Great Lakes region: Life presidents 22

23 Will Burkina Faso trigger an African spring? 1 OR 2 LINES ALL CAPS, ARIAL 32 PTS 23

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