Tomorrow, in Entebbe: 25th Nile Basin Council of Ministers meeting

Joseph Stiglitz will deliver the inaugural Babacar Ndiaye Lecture: From manufacturing led export growth to a 21st Century inclusive growth strategy for Africa (15 October, Washington)

Advance notice: Aid and Development Africa Summit (27-28 February 2018, Nairobi)

Call for papers, ASAUK 2018 stream: New perspectives on African regions and regionalisms

The 2017 Africa Prosperity Conference: conference report ( PACCI)

The following list of the main recommendations of the 2017 Africa Prosperity Conference was compiled during the two day meeting held in Accra, 12-13 September. It highlights the business communities’ proposals to advance the CFTA. It also provides an opportunity to reflect and bring a critical perspective on Africa’s economic potential and challenges. The meeting’s recommendations (pdf) on engaging the private sector:

(i) PACCI should take the lead to draft the proposal to create the African Trade and Investment Panel that represents the various private sector interests, such as the Chambers of Commerce and Industry, business councils, industry associations, and other similar business support organizations established for aggregating and articulating the views of the private sector, identify priority areas and advice to promote economic cooperation and integration in continental policy formulation. The ATIP will be composed of members of the business community, designated by national chambers of commerce in consultation with other equivalent business associations and government agencies. (ii) Each national Chamber of Commerce, in consultation with equivalent business organizations and the appropriate government agencies should designate up to three business leaders who will be called to consult or provide inputs to the CFTA negotiations. (iii) The PACCI shall serve as Secretariat of ATIP to support the objectives and activities of the Panel. References to the African Trade and Investment Panel should be included in the CFTA. (iv) Efforts should be made by PACCI to convene the First African Council on Business before the end of 2018. Key issues discussed: Role of regional business associations in advancing the CFTA; Dispute-resolution; Implications of EPA, AGOA and other trade agreements on the CFTA; Ensuring that women can participate and thrive with the CFTA; CFTA’s potential impacts on youth employment. [Download the French version, pdf].

Africa’s Pulse: latest edition (World Bank)

Fiscal space has narrowed significantly for most countries in the region in recent years amid rising debt burdens. The (median) increase in general government debt to GDP in 2015–16 compared with 2010–13 was about 15 percentage points. Over the same period, fiscal conditions tightened for 36 (of 44) countries in the region. In these countries, the (median) number of tax years needed to repay the debt fully has increased by 1.1 years; in the Central African Republic, The Gambia, Mozambique, and the Republic of Congo, the increase in this indicator exceeded 2.5 years. Analysis of fiscal sustainability gaps shows that the pattern of debt sustainability in Sub-Saharan Africa is comparable to that of other commodity-exporting regions. Fiscal balances in the region fluctuate with the commodity price cycle. Prior to the global financial crisis, the region recorded primary surpluses, thanks to rising commodity prices. Although debt levels remain below those in the late 1990s—when several international debt relief initiatives were implemented—they have been rising more rapidly than in other regions since 2009. The primary sustainability gap, on average, has been negative in the post-crisis period, reflecting the current debt sustainability challenges facing the region.

Extract (pdf): Figure B1.1.2 shows the estimated forward amortization of outstanding bonds by country. About $3.7bn in debt per year is set to mature in Sub-Saharan Africa during 2019-20. The amount of maturing debt reaches over $8bn in 2024. Countries with bond debt maturing in the coming years could face greater refinancing risks if international financial market conditions tighten and global investors lose interest in rolling over existing debt or purchasing new debt issuances.

African Transformation Report 2017: agriculture powering Africa’s economic transformation (ACET)

Two consistent themes run through the report. The first is that the institutional environment of African agriculture is changing from one involving mainly farmers and governments, supported by donors, to a more diverse and dynamic mix involving farmers, governments, donors, the private sector, foundations, and nongovernmental organizations. The many actors provide opportunities, but also some challenges. The second theme encompasses emerging opportunities for technological leapfrogging, particularly those arising from advances in information and communication technology. This option is vital, considering that many countries’ agricultural extension systems have been severely weakened and are unlikely to be revived soon, if at all. Mobile phones, used increasingly by multiple actors in Africa, especially the private sector and nongovernmental organizations, can provide a cheap and practical way to reach farmers. Similarly, satellites, geographic information systems, and advances in data analytics are making detailed soil maps affordable and allow farmers to receive location-specific recommendations for agronomic practices, including customizing fertilizer application to local soil conditions. Exports and balance of payments (pdf):

Agriculture’s share in the exports of African countries, like its share in GDP, has been falling. It is now under 10%, down from around 30% in the 1970s (figure 1.5). The comparator countries have experienced a similar decline, but the causes differ. For them, agriculture’s declining share in exports reflects manufacturing’s rising share, while in Africa it reflects the rising export share of natural resources, mainly oil and gas. The ratio of agricultural exports to agricultural GDP has also been falling in Africa, in contrast to the sharp rise in the comparator countries since 1991 (figure 1.6). In recent years some countries in Sub-Sahara Africa, particularly Kenya and Ethiopia, have been able to diversify their agricultural exports from traditional tropical beverages like tea and coffee to include horticultural products, particularly cut flowers, and fresh vegetables. Apart from South Africa, no African country is a significant exporter of agro-processed products. Despite agriculture’s continuing importance in exports, the agricultural balance of payments in Africa is negative, largely because of rising agricultural imports, particularly of food. Agricultural imports in Africa in 2013 were around $88.5bn, with food accounting for more than three-quarters of the imports ($67.9bn). In a reversal from the 1970s, when the value of Africa’s agricultural exports was more than double the value of its agricultural imports, today agricultural imports are double agricultural exports (figure 1.7). Ironically, in the more industrialized comparator countries, the value of agricultural exports is double the value of agricultural imports, and the trend has been rising since 2000, not falling as in Africa. [This report is also available in French]

Sub-Saharan Africa is projected to be the leader in global rice imports (USDA)

After the global price spike of 2007/08 left many SSA countries unable to import rice, they began to adopt national rice development programs that sought to double SSA rice production from 2008 to 2018 and reach self-sufficiency by 2025. Nigeria and Senegal’s self-sufficiency target date is 2017; Côte d’Ivoire’s is 2020. With public, private, and donor participation, the strategy calls for improving rice quality and increasing productivity through generating new seed varieties, expanding irrigation, improving rice processing, reducing post-harvest losses, and facilitating marketing through narrowing the supply chain. By 2026, total SSA rice consumption is projected to reach 35 million tons. To attain self-sufficiency by 2025, rice production, currently at 15 million tons, would need to grow at least 10 percent per year for the next 10 years. Given that SSA rice production over the last 5 years has averaged just 3 percent annual growth, an annual 10 percent growth is unlikely. Thus, imported rice is expected to continue to be an important component of SSA food supply.

Dani Rodrik: Growth without industrialization? (Project Syndicate)

Low-income African countries can sustain moderate rates of productivity growth into the future, on the back of steady improvements in human capital and governance. But the evidence suggests that, without manufacturing gains, the growth rates brought about recently by rapid structural change are exceptional and may not last. [Dani Rodrik: An African growth miracle?, pdf]

Branko Milanovic: Ending inequality between countries - not by trade alone (The Globalist)

The gap between German GDP per capita (proxy for that of Western Europe) and Sub-Saharan Africa’s today is 13 to 1. (German’s GDP per capita is about $45,000 vs. population-weighted Sub-Saharan GDP per capita of $3,500; all in purchasing power parity dollars). With Africa’s population expected to more than double by 2050, do we really see Africa able in the next three or four decades to repeat Chinese growth experience? Note that replicating Chinese per capita growth and given the projected population growth in Sub-Saharan Africa of 2.4% per annum, would require African countries to grow on average by almost 11% per year for approximately half a century. And how did Sub-Saharan Africa fare during the last, relatively good, decade? Its overall GDP grew by 4.5% per annum. Thus, even under the most favorable and implausible assumptions of convergence, income gaps are unlikely to be eliminated for at least three to four generations.

UNCTAD Secretary-General Mukhisa Kituyi: Investor uncertainty looms over sustainable development goals

But transforming the international investment regime, Dr. Kituyi said, requires countries to also review the legacy of the past - the 2,500 or so investment treaties signed before 2010, which account for about 95% of all IIAs in force. “It is universally agreed now that the old stock of first generation investment agreements is not only outdated but unsustainable,” Dr. Kituyi said. “And across the world, in different groups, everyone is owning up to the fact that we cannot put new wine into the old wineskins anymore.” First generation agreements, often 20 to 25 years old, typically contain broad definitions, substandard provisions and few safeguards, and are behind 90% or so of the more than 800 known treaty-based investor-state dispute settlement cases. Governments have numerous policy options at hand to modernize their stock of first generation IIAs, and this year’s World Investment Report analyzes the pros and cons of 10 options, including terminating existing treaties. Some 80 countries and regional groupings have reviewed or are reviewing their treaty networks, according to an UNCTAD preliminary survey, with at least 29 old-generation IIAs being terminated in the past two years. “Some countries have made unilateral decisions, declaring sunset closures to existing treaties, and others have been coming up with newly concluded IIAs, which are more modern models reflecting more sustainability initiatives,” Dr. Kituyi said. ”But while this progress is lauded, much more needs to be done,” he said. “We are all aware that a global investment regime cannot be based on solo actions by individual countries alone.”

Zambia: IMF concludes 2017 Article IV consultation

Public debt has been rising at an unsustainable pace and has crowded out lending to the private sector and increased the vulnerability of the economy. The outstanding public and publicly guaranteed debt rose sharply from 36% of GDP at end-2014 to 60% at end-2016, driven largely by external borrowing and the impact of exchange rate depreciation. Increased participation of foreign investors in the government securities market has eased the government’s financing constraint but has made the economy more vulnerable to swings in market sentiments and capital flow reversals. The medium-term outlook for the economy is contingent on policies.

Ethiopia devalues currency by 15% to boost exports (Reuters)

“The devaluation was made to prop up exports, which have stagnated the last five years owing to the birr’s strong value against major currencies,” Yohannes Ayalew, the bank’s vice governor, told a news conference in the capital Addis Ababa. Ethiopia has operated a managed floating exchange rate regime since 1992.

Place small and medium businesses at the centre of India’s export strategy (The Wire)

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