Developing the Regions of Africa and Europe - Urbanization by Africa Newsit

Developing the regions of Africa and Europe 4th edition - Urbanization: Challenges and Opportunities

This study was prepared by The European House-Ambrosetti for the Fondazione Banco di Sicilia. The study included the participation of a Steering Committee whose members are: Caleb Fundanga (Governor, Central Bank of Zambia) Nunzio Guglielmino (Vice Governor Delegate, Council of Europe Development Bank) Josep Piqué (President, Mixta Africa; formerly Spanish Minister of Foreign Affairs) Giovanni Puglisi (President, Fondazione Banco di Sicilia) Andrea Riccardi (Founder, Comunità di Sant’Egidio) Vincenzo Schioppa (Italian Ambassador to the Great Socialist People’s Libyan Arab Jamahiriya; former Minister Plenipotentiary, Ministry of Foreign Affairs) Bernard Spitz (Founder and Managing Director of BSConseil; member of the Council State) The European House – Ambrosetti Working Group: Paolo Borzatta (Senior Partner) Marina Mira d’Ercole (Project Leader) Lorenzo Tavazzi (Project Coordinator) Elena Antiga Mattia Beda Francesca Migliavacca Special thanks to the following individuals for their suggestions, contributions and collaboration: Gianpaolo Bruno (Director, Johannesburg Office ICE [Italian Trade Commission]), Sheila Butungi (Veterinary Officer, National Animal Genetic Resources Centre & Data Bank in Uganda), Giuseppe Ceccarini (Institutional Relations and Communications Manager, ENI [Italian oil and gas company]), Matimba H. Changala (Zambia Development Agency), Ellah Chembe (Deputy Executive Director, Zambia National Farmers’ Union), Prisca M. Chikwashi (Chief Executive Officer, Zambia Association of Chambers of Commerce and Industry), Alessandra Ciulla (Foreign Projects and International Relations, Italian Association of Building Contractors – ANCE), Carmelo A. Cocuzza (Head of Regional Representation East and Central Africa, European Investment Bank and Director of FinAfrica), Andrea Colantonio (Research Officer, LSE Cities London School of Economics and Political Science), Daniele Cristallini (Technical Office Vice Minister for International Trade, Ministry of Economic Development), Charles Dadié Dago (Foreign Office, Italian Livestock Raisers Association – AIA), Roberta Dall’Olio (Head of European and International Affairs, ERVET [Emilia Romagna Development Agency]), Pierluigi De Angelis (Chief Financial Officer, Parmalat), Marco Felici (Sole Director, AtePi), Francesco Fiermonte (Internationalization Project Head, OICE [Italian Association of Engineering, Architectural and Technical-Economic Consulting Organizations]), Mario Giro (Head of International Relations, Comunità di S.Egidio), Lucien Godin (Founder, Groupe Huit), Giovanni Grasso (Director General, OICE), Gastone Guerrini (Sole Director, Guerrini Costruzioni Generali), Shuller Habeenzu (Chief Executive Officer, Zambia Business Forum), Dick M. Kamugasha (Director Technology Development Centre [TDC], Uganda Industrial Research Institute), Dominic Kangongo (Economist, Ministry of Commerce, Trade & Industry, Zambia), Maggie Kigozi (Executive Director, Uganda Investment Authority), Charles G. Kwesiga (Executive Director, Uganda Industrial Research Institute), Paolo Lucci Chiarissi (Senior Programme Officer, Field Programme Development Service [TCAP], Technical Cooperation Department, FAO), Stefano Manservisi (Director General of Internal Affairs, European Commission), Andrea Marsanich (Director, Institutional Relations and Communications, ENI [Italian oil and gas company]), Federico Masier (Chief Operating Officer, Netdish), Marco Mattia (Foreign Projects and International Relations, Italian Association of Building Contractors – ANCE), Roseta Mwape (Chief Executive Officer, Zambia Association of Manufacturers), Jessica Mwiinga Chombo (Manager-Investment Promotion, Zambia Development Agency), Silim Nahdy (Executive Director, National Agricultural Advisory Services in Uganda), Braccio Oddi Baglioni (President, OICE [Italian Association of Engineering, Architectural and Technical-Economic Consulting Organizations]), Joseph Oryokot (Technical Services Manager, National Agricultural Advisory Services in Uganda), Leonardo Palombi (Professor of Epidemiology, Università di Tor Vergata and Scientific Director of the DREAM program, Comunità di S.Egidio), Marcela Pinedo (National Expert Investment and Technology Promotion Office, United Nations Industrial Development Organization – UNIDO), Carlo Ratti (Director, SENSEable City Laboratory, Massachusetts Institute of Technology), Pablo Recalde (WFP Representative/Country Director, The United Nations World Food Programme in Zambia), Franca Roiatti (Journalist and author of Il nuovo colonialismo), Pier Giorgio Romiti (Managing Director, Lotti & Associati), Paolo Sormani (Director General, Variopinto), Hannington Sengendo (Associate Professor, Department of Geography, Makerere University), Jose Soler (First Counsellor - Head of Co-operation, European Union in Uganda), Jean-Fabien Steck (Maître de Conference, Science Po), Emanuela Stefani (Director, Association of Italian University Rectors – CRUI), Piet Theron (Managing Director, Parmalat Zambia), Denis Tredese (Netdish). We would also like to thank for their time, support and interest: Hassan Abouyoub (Ambassador, Embassy of the Kingdom of Morocco in Italy), Georgina Bridget Adzo Djameh (Minister Plenipotentiary, Embassy of the Republic of Ghana in Italy), Carlos Alberto Amaral (Counselor, Embassy of the Republic of Angola in Italy), Pietro Ballero (Ambassador, Italian Embassy in Kampala), Amal Belcaid (Business Attaché and Minister Plenipotentiary, Embassy of the Kingdom of Morocco in Italy), Guido Bilancini (First Secretary, Italian Embassy in Lusaka), Lorenzo Cumbo (Counselor, Embassy of the Republic of Mozambique in Italy), Joao B. Da Costa (Minister-Counselor, Embassy of the Republic of Angola in Italy), Messaoud Kerroum (Diplomatic Secretary, Embassy of the Republic of Algeria in Italy), Robert Kobia (Second Counselor, Embassy of the Republic of Kenya in Italy), Margaret Kyogire (Minister-Counselor and Vice Head of Mission, Embassy of the Republic of Uganda in Italy), Senate Barbara Masupha (Counselor, Embassy of the Kingdom of Lesotho in Italy), Alessandra Molina (Primo Counselor – Economic Attaché, Italian Embassy in Berlin), Giuseppe Morabito (General Director for Sub-Saharan Africa, Ministry of Foreign Affairs), Thenejiwe Ethel Mtinso (Ambassador, Embassy of the Republic of South Africa in Italy), Lucy Mungoma (former Ambassador, Embassy of the Republic of Zambia in Italy), Paul Munyao Kaliih (Counselor, Embassy of the Republic of Kenya in Italy), Hope Mwesigye (Minister, Ministry of Agriculture, Animal Industry & Fisheries of Uganda), Stefano Pontecorvo (Vice General Director for Sub-Saharan Africa, Ministry of Foreign Affairs), Mohamed Ashraf G.E. Rashed (Ambassador, Embassy of the Arab Republic of Egypt in Italy), Abdessattar Rebey (Counselor, Embassy of the Republic of Tunisia in Italy), Alaa Roushdy (Counselor, Embassy of the Arab Republic of Egypt in Italy) Deo K. Rwabita (Ambassador, Embassy of the Republic of Uganda in Italy), Lucio Alberto Savoia (Secretary General, Commission of UNESCO), Pietro Sebastiani (Permanent Representative for the United Nations Organization [FAO-IFAD], Ministry of Foreign Affairs), Maurizio Serra (Permanent Represent for Italy at UNESCO), Trevor Sichombo (First Secretary, Embassy of the Republic of Zambia in Italy), Helene Tchuente Kom (Second Secretary, Embassy of the Republic of Cameroon in Italy), Diegane Sambe Thioune (Minister-Counselor, Embassy of the Republic of Senegal in Italy), Adolfo Urso (Vice Minister of Economic Development, Ministry of Economic Development), Michele Valensise (Ambassador, Italian Embassy in Berlin), Abebe Kelemu Workneh (Trade Attaché, Embassy of the Federal Democratic Republic of Ethiopia in Italy). © Fondazione Banco di Sicilia and The European House-Ambrosetti – 2010

Table of contents

Table of contents Preface

10-point summary

Executive Summary 1. Africa is in motion: an overview 2. The “Developing the regions of Africa and Europe” project 3. The focus topic for 2010: Urban development in Africa 4. Africa and the “South of the World” 5. Europe-Africa relations observatory 6. The economic development of Africa 7. “Understanding” Africa: the Ambrosetti Development of Africa Map (ADAM)

15 18 20 26 30 37 41

1. Introduction: the reawakening of Africa 2. The “Developing the regions of Africa and Europe” project 3. Project phases to-date and results 4. Summary remarks

49 52 55 66

Chapter 1 - The “Developing the regions of Africa and Europe” project: Goals, phases, results

Chapter 2 - Urban development in Africa: current status, trend and opportunities 1. Introduction 2. Urbanization: growth perspectives and development scenarios 3. Urban transition in Africa: a vision in brief 4. Summary remarks and opportunities for urban development in Africa

71 75 79 111

Chapter 3 - Africa Observatory: current trends, future prospects and performance of the individual countries 1. Introduction: Africa after the crisis 2. The economic situation in Africa 3. Africa as a political entity: representation and unification 4. Africa and the struggle to meet the “Millennium Development Goals” (MDG) 5. The Ambrosetti Development of Africa Map – ADAM” analytical tool of the growth of the African countries 6. Africa’s development traps 7. Summary remarks

123 125 133 141 151 178 187

Chapter 4 - Africa’s relations with South of the world 1. An overview on the african awakening 2. The South-South Axis 3. Summary remarks

193 197 213

Chapter 5 - Relations between Europe and Africa 1. Europe rethinks its strategy 2. Trade, the difficult road to partnership 3. Focus on individual countries 4. Africa-Usa 5. Summary remarks

219 230 234 246 249

Databook

253

Bibliography

285

Preface

Developing the regions of Africa and Europe Preface by Prof. Giovanni Puglisi President, Fondazione Banco di Sicilia

Authoritative, concrete and with a wealth of innovative material. These are the attributes I would use to describe our Taormina Forum which, now in its fourth year, makes Sicily the ideal platform from which to nourish, once a year, the global debate around the major issues connected with the social/cultural and economic growth of Africa. Authoritativeness is not an innate gift and it must always be won on the field by demonstrating reliability and credibility to all. In fact, from the very beginning, the initial proposals were serious ones when, nearly five years ago, the Fondazione Banco di Sicilia, with the support of The European House-Ambrosetti, began to lay the basis for a long-term project aimed at stimulating business relations between Europe and Africa. Said today, this sounds easy, but back in 2006 it was not at all. In fact, back then, very few would have placed bets on the potential of the great “Dark Continent”. Equally as serious has been the ensuing journey. Year after year, the Forum has grown and blossomed. The number of participants has continued to increase (foreign attendees have risen from 15 to 22% over three years), the quality of the presentations has evolved and, as a result, media attention has intensified. But the credibility of the projects, as well as the intent behind them, is also measured and evaluated on the basis of subsequent events. And, at least as far as we are concerned, things have happened. And so we arrive within the sphere of concrete activity. First of all, I think it only right to note that because of the Taormina Forum—or, more precisely, the Forums—major entrepreneurial projects are in the process of taking shape in Africa, in a range of fields, involving international players. For the record, let me list them briefly here. - Telemedicine and long-distance training project This initiative was created to extend the telemedicine activity of the DREAM project of the Comunità di Sant’Egidio, which for years has been fighting AIDS and malnutrition in Africa, as well as expand the remote training programs for local technical, medical and nursing personnel. Thanks to a bid tender of the European Space Agency, the first three centers will soon be set up in Malawi, Mozambique and the Democratic Republic of the Congo.

Preface

- Creation of the Sénghor Agency for African talent Through the creation of a center to promote European universities, the goal is to train in Europe the African ruling class of tomorrow. Thanks to the involvement of the Fondazione Banco di Sicilia, the Fondazione Giorgio Cini Onlus, the Fondazione CRUI, the Italian National Commission for UNESCO/Italia and the Association for the National Commission for UNESCO/Italia (including The United World College of the Adriatic), the Fondazione Sénghor has been established which will soon be indicating the steps required to make the Agency operational during the year 2011. - Agro-industrial Park The goal is to create an integrated agro-industrial park for production and initial industrial processing for local markets and exportation. The park must be energy self-sufficient, connected to a local infrastructure network, and must be equipped to ensure industrial processing of products on-site. There are a number of positive signs on the horizon: in Uganda the project has been included in the Development Strategy and Investment Plan of the Ministry of Agriculture, as well as the 2011-2014 National Development Plan. This year, we have decided to give our event a new name. And I believe it to be a good decision. Developing the Regions of Africa and Europe encapsulates well the intent and results and, at the same time, is able to express in a direct manner our desire to finally see a relationship between equals created between these two continents. To be clear, in order to progress, Africa has greater need of agreements than aid. It is also for this reason that we have entrusted the Forum with the goal of stressing the need for Europe to change its method of approach in working with the African continent. For years, China, India, Arab countries and Japan, have been showing considerable interest in the African continent with major investment and across-the-board political and economic relations. In the face of this, Europe, on the other hand, is reducing its allocations for Africa after having been its no. 1 trade partner for nearly fifty years. As I mentioned at the beginning, there is also another aspect which it is generally felt characterizes the Taormina Forum: its extraordinary ability to take on social-cultural issues and propose model solutions that foster and prepare the way for economic progress. Each October, in Taormina, businessmen, economists and managers meet to discuss the future and destiny of Africa, in a balanced way, like communicating vessels, with scientists, politicians and experts from all over the world. The Forum is unquestionably a driver for business, but it is also—and perhaps above all—an extraordinary source of material, ideas and stimuli where, in complete harmony with the UNESCO spirit, “things are done and stimulated to be done”. I would like to take this opportunity to mention that Mrs. Lalla Aïcha Ben Barka, who has the extremely important role of UNESCO’s Vice Director General of the Africa Department, has honored us with her presence this year and, creating space in her busy calendar, has agreed to make a presentation during one of the sessions at the two-day Taormina event. A major new theme providing stimulus for this fourth Forum is that of urbanization in Africa and phenomena related to it.

Preface

Still today, as impossible as it may seem, the majority of the African population lives in villages or small population centers; nonetheless, urbanization is undergoing dizzying growth. In fact, the populations of most large African cities have doubled in the space of just over a decade. We have before us a two-sided coin: while on one side, it has been ascertained that cities, especially those in countries in the South of the world represent the driver for economic and social growth, on the other it is unfortunately evident that the methods of urban development adopted in Africa have too often proven to be veritable multipliers of negative factors. The result is that, today, 43% of the African urban population lives below the poverty line. Cultural maladjustment, deterioration in social relationships, lack of respect for the environment and basic standards of health and hygiene jeopardized by over-population: these, in addition to the plague of AIDS, are the main adversities faced by the African urban fabric. In the wake of these considerations—and on the basis of detailed, in-depth study conducted by The European House-Ambrosetti—the Fondazione Banco di Sicilia is presenting in Taormina this year a concept of integrated residential neighborhoods that are multifunctional and self-sufficient, and could represent a pilot project to be freely replicated. The goal is to lay the basis for creating in Africa an experimental urban area which, planned for approx. 10,000 people, could guarantee good quality of life for all. In Renaissance Italy, the rediscovery of classical texts stimulated reflection on the possible creation of a perfect State sustained by scholars and based on architectural canons seen as being suitable to guaranteeing harmonious living between its citizens. This gave rise to the concept of the “Ideal City”. There were those who actually designed it, calling it “Sforzinda”, and those who attempted to paint it after having envisioned it in their minds. In Urbino, at the National Gallery in the Marches, there is a tempera painting on wood that depicts the Ideal City. It is a splendid work whose attribution is uncertain, although some say it shows the style and brushwork of Piero della Francesca. What will be presented at the Forum is certainly not the utopian dream of Sforzinda. It is the plan of a tangible, realizable neighborhood designed to foster the upgrading of decayed urban areas in order to promote construction sustainability, to support urban growth in Africa through the spread of specialist Italian/European know-how and make available to African partners state-of-the-art technologies. So, the challenge continues. Each year it becomes increasingly complex to design a project which leaves the sphere of dreams to lend reality a taste for what is possible and utopia the fascination of the impossible. Once again this year, our project has been designed to provide something that is possible, to approach reality and banish utopia. The outcome is never a given. It depends on the strength of the ideas and the convinced awareness of those involved: the former are strong and clear, the latter know no boundaries. So, ad maiora, or, better, ad meliora!

Prof. Giovanni Puglisi President Fondazione Banco di Sicilia

Taormina, San Domenico, october 2010

10-point summary

1. Africa is growing at one of the fastest rates in the world. Despite the slowdown in 2009, the African economy has once again begun growing at rates above 5%, equal to those seen during the period 2000-2008. Overall, GDP has reached levels comparable to those in Russia and Brazil and the growth in per capita wealth has been stably above the global average.

2. Africa’s importance in international trade is growing: trade with the rest of the world has quintupled in the last decade, while its enormous availability of raw materials, agricultural land, natural resources and manpower are making it a preferential target for international investment which has quadrupled since 2002.

3. Among the most active protagonists in economic and political relations with Africa are the main emerging economies—China, India and Brazil, in particular—who see in Africa a strategic supplier of raw materials indispensable for feeding their growth, a promising export market and an important player to involve in global issues regarding development or representation in international gatherings.

4. The increasingly persistent presence of new players and reinforcing of relations and alliances with other countries in the “South of the world” have pushed Europe to re-think its relations with Africa. In 2005, in the commitments made in Gleneagles, emphasis was still placed more on the necessity to increase aid (although important) than on the urgency of considering economic growth as a means for Africa to lift itself out of poverty. With the Africa-EU strategic partnership launched in Lisbon in 2007, a new course in EuropeanAfrican relations was embarked upon, based on a strategy of partnership and an action plan focused on the entire continent (rather than an aggregation of ACP countries). This strategy also contains other new aspects: the emphasis on multilateralism, strengthening of relations between the European Union and the African Union, support for regional integration within Africa and the need to set relations between Europe and the African Union within a long-term framework. An initial assessment of this approach will be made in Libya in 2010.

10-point summary

5. Europe is the primary trade partner, primary investor and primary supplier of development aid for Africa. Despite this, Europe’s strategic role as a unified entity is not seen as being very relevant by African countries. The energy and determination being shown by other countries in their relations with Africa require the European Union to shift into higher gear, while simplifying its actions and making them more incisive, defining strategic priorities and launching major initiatives that are more concrete and coordinated in order to regain a central economic and cultural role vis à vis the continent.

6. The role of emerging economies, starved for resources and raw materials, as well as foreign demand, have been decisive in activating the process of economic development in Africa. Equally as decisive in enhancing and consolidating these effects have also been numerous endogenous factors: reinforcement of democratic institutions, structural reforms introduced on a national and supranational level, progressive integration on a regional scale, and emergence and establishment of a middle class are at the basis of the structural changes that have occurred and which are taking place in a number of African contexts. Sectors such as manufacturing, transport and agrifood have begun to both create and diversify the portfolio of economic activity in many countries.

7. Not all African countries “run” at the same speed or in the same way. Africa is a continent comprised of 53 countries, each with its own characteristics and singularities. The Ambrosetti Development of Africa Map (ADAM), which we have developed over the years, is a conceptual framework for “interpreting” the specific nature of the economic development of individual countries. ADAM contains within a single, synthesizing tool, all key information for evaluating the “resilience” of the growth courses of individual African countries. For this reason, it comprises a reference tool for those active in the economy, investors and the public sector wishing to establish trade and mutually-beneficial relations with Africa.

8. Africa still offers many shared challenges. Among these is urbanization. Following years when it was afforded scarce political attention, the urban question—in all its various facets— has erupted into the core of the political agenda of numerous African states who, today, have begun to recognize its potential contribution to the development of the national economy. A fulcrum of economic activity, as well as the preferred venue for trade and intercultural exchange, cities are today a strategic setting filled with opportunities—including economic—and fertile ground for innovative experimentation.

9. Within this context, European capital, planning and initiative can play a key role in determining the future of the mega-cities and the new forms of agglomeration (such as urban corridors and city-regions) that are already developing in Africa. The high level of European investments expected from now to 2030 to finance urban infrastructures is an example. How these urban nuclei will react to growing urbanization, organize themselves on an institutional level, be able to maintain their cohesion and establish themselves as the multipliers of economic development within their countries and thus gain an important international role, is still to be determined.

10-point summary

10. Within the new planning approach of “urban reformulation” that already includes within its number many construction sites such as those in Luando and Lagos, to name just two examples, is our proposed initiative for year four of the “Developing the regions of Africa and Europe” project. Among its goals is the design of a concept of an experimental integrated residential neighborhood (construction, utilities, infrastructure, services, etc.), which should also be multifunctional (homes, offices, service sector businesses and public services, etc.) and self-sufficient (e.g. from the energy standpoint) that could represent a repeatable pilot project for the development of other residential modules in those African countries which are interested.

Executive summary

CONTENTS

1. Africa is in motion: an overview

2. The “Developing the regions of Africa and Europe” project

3. The focus topic for 2010: Urban development in Africa

4. Africa and the “South of the World”

5. Europe-Africa relations observatory

6. The economic development of Africa

7. “Understanding” Africa: the Ambrosetti Development of Africa Map (ADAM)

EXECUTIVE SUMMARY

1. Africa is in motion: an overview 1. Africa is in motion. From the end of the 1990s, following two decades of economic contraction, the continent embarked on a phase of economic acceleration with the GDP growing an average of over 5% per year.1 This has brought it to be, today, the no. 3 region of the world in terms of speed of growth.

Fig. 1 GDP growth rates (Source: TEH-Ambrosetti based on IMF data)

2. Africa is increasingly at the center of world interests. The tremendous availability of raw materials/minerals/metals, 2 agricultural land, 3 natural resources and manpower are in the process of making it a favored destination for international investment which has quadrupled since 2002.

Fig. 2 Direct Investment in Africa, billions of Dollars (Source: TEH-Ambrosetti based on UNCTAD data)

3. Africa is undergoing structural change. Signs of this process can be seen in the strengthening of democratic institutions in many countries in this region, in the economic and social reforms implemented on a national and supra-

1. In particular, oil exporting countries experienced double-digit growth rates. 2. Over 60 types. For some, Africa is the no. 1 supplier in the world

for gold, platinum, diamonds, uranium, manganese, chromium, nickel, bauxite, cobalt, oil and natural gas. 3. The well-known phenomenon of â&#x20AC;&#x153;land grabbingâ&#x20AC;?.

EXECUTIVE SUMMARY

national level, in the progressive integration between regions (although still to be realized), and in the consolidation of the middle class with purchasing power comparable to that in other developing areas. Fig. 3 Africa today and tomorrow: key statistics regarding change in the continent; (*) 16.6% of world population; (**) Income > $10,000/yr (2005 PPP) (Source: TEH-Ambrosetti based on International Monetary Fund, World Bank, United Nations, UNCTAD data)

Yesterday (2000) Population (million)

Today (2010)

Tomorrow (2020)

8,16

955

1.270*

African consumer spending (Billion Euros)

270

420

820

GDP (Billion Euros)

490

790

1.400

GDP growth rate (Annual average over the years)

2,6

4,9

6,0

400

Middle class** (million families)

Foreign direct investments (Billion Euros) African companies with a turnover > 2 billions Euros

4. In recent years, Africa has regained a central standing in the global political agenda. This is seen in recent international approaches and long-term intervention strategies with collaborative relations on a number of levels, initiated by key geopolitical players, not the least of these being Europe with a new strategy for Africa launched in Lisbon in 2007.4

5. Africa is increasingly becoming an active player in its process of development. The dynamism of African regional and supranational organizations—together with the strengthening of South-South relations5 and infrastructural connections and interconnections6 —is moving in the direction of proposing a new development model for the continent that goes beyond the traditional approaches which have characterized the relationships between Africa and the rest of the world in recent decades, including in terms of the policies of “indiscriminant” aid (over 700 billion Euros since the 1950s7).

4. The goal is to go beyond the traditional “donor-recipient” relationship (Europe is the no. 1 donor of Africa) and develop partnership relationships with Africa. At the upcoming EU-Africa summit in Sirte (November 2010), the status of the progress made in this process will be evaluated. 5. Political, economic and cultural relations between countries in the “South” of the world (see Chapter 4).

6. For example, the major transnational corridors currently being realized. 7. La cooperazione internazionale (foreign aid) è uno strumento ad alto costo: per ogni Euro speso per aiutare l’Africa, si stima che meno del 20% venga effettivamente utilizzato per progetti di sviluppo (il resto serve per pagare i costi delle organizzazioni multilaterali e di cooperazione).

EXECUTIVE SUMMARY

6. Although not always easy to decipher and despite numerous unknowns and uncertainties, Africa does represent a tremendous opportunity.

7. And the major international players — China, India, the United States and Japan—are fully aware of this and for years have been s howing signific ant interest in this part of the world through major investment and strategic relations in all areas.

Fig. 4 Aid to Africa and African per capita GDP growth rate (Source: World Bank)

8. Europe, the continent closest culturally and geographically to Africa, is still not present (or perceived) enough as a leading player and unique political and economic point-of-reference.

9. Despite its traditional relations with Africa (in particular countries on the southern shore of the Mediterranean8), Italy has been late in relaunching its interests in this area9 and with a strategy that is still not incisive, especially regarding sub-Saharan Africa.

8. Italy is the no. 1 trade partner with this area and depends on these countries for a number of strategic supplies, e.g., energy. 9. For example, the Africa Plan (2008) of the Ministry for Economic Development. The goal of the plan is “to stimulate interest of

Italian players in the African continent by offering both business and investment opportunities, especially in those countries with greater market attractiveness and recognition and in which the influence of other countries is lower”.

EXECUTIVE SUMMARY

2. The “Developing the regions of Africa and Europe” project

10. The “Developing the regions of Africa and Europe” project is part of this scenario. In 2006, with the goal of contributing to strengthening strategic relations between Europe/ Italy and Africa, and to stimulate debate and the interest of institutions and players on this theme, the Fondazione Banco di Sicilia10 commissioned The European House-Ambrosetti11 to launch a major long-term study to: - Creating in Sicily a permanent forum12 for the political and business leadership of Europe and Africa. - Exploring through in-depth research and analysis the potential cultural, social and trade relations between Europe and Africa, and identifying the areas and means to strengthen them. Fig. 5 Time frames and key initiatives in the ”Developing the regions of Africa and Europe” project

10. The Fondazione Banco di Sicilia is one of the leading Italian banking foundations. 11. The European House-Ambrosetti is a leading European consulting firm. 12. The forum is held in Taormina (Sicily) each year during the first week of October. 13. The development challenge is also an economic-industrial one.

For this reason, one of the key objectives of the “Developing the regions of Africa and Europe” project is to foster the development of long-term relations between Africa and Europe (and Italy) through identification of mutual areas of interest in which to plan specific European/Italian operations that involve companies and public and private institutions on the two continents to mutual benefit, producing concrete results for a number of selected issues/sectors.

EXECUTIVE SUMMARY

- Promoting, each year, activation of concrete initiatives in key, targeted development sectors that profitably involve (first and foremost) priv a t e p l aye r s a s well as public, both African and European.13

Fig. 6 Key points of support in the “Developing the regions of Africa and Europe” project

11. The project is now in its 4th year. This year’s goals are to: - Analyze the theme of urban development in Africa - from all relevant standpoints, including: - urban planning, construction and housing policies; - utilities (energy, water and sewers, infrastructure, urban transport and waste disposal); - telecommunications; - attracting foreign investment for urban development. Chapter 2 of the report is dedicated to this theme. - Update the ADAM strategic map (Ambrosetti Development of Africa Map) of the situation in African countries and in-depth look at a number of key countries. Details are presented in Chapter 3. - Launch an Observatory on Europe-Africa relations and strategic alliances (which will also monitor and evaluate the flow of aid, investment and the extent to which pledges are maintained) and Africa and the rest of the world (especially the South-South axis). Refer to Chapters 4 and 5 for this. - Continue the operational implementation of previously-launched initiatives: DREAM T&EAM project (telemedicine and instructure), Sénghor Agency project (education and training), integrated agro-industrial park (agro-industry).14 - Launch a new initiative involving the theme of urban development: this involves an experimental urban area pilot project for a new approach to urban planning in Africa and to attract/activate investment in the construction and utilities sectors.15

12. Overall, the “Developing the regions of Africa and Europe” project originates from these premises, with the goal - through its initiatives and opportunities for discussion between European and African leaders (especially the Forum) - to contribute to reinforcing the cultural and business ties between Europe and Africa in a way that is profitable and sustainable for both.

14. For details, see Chapter 1. 15. A status report on the initiatives and conceptual model of the

urban development project are to be presented at the Taormina 2010 Forum (October 7-8, 2010).

EXECUTIVE SUMMARY

3. The focus topic for 2010: Urban development in Africa

13. The 21st century is the century of cities and urbanization. According to the United Nations16 almost 3 billion people live in urban agglomerates today; in 2015, this figure is expected to rise to over 4 billion, incrementing by over 500,000 individuals each day.

14. Cities are the driver for global economic development and determine the competitiveness of areas. Todayâ&#x20AC;&#x2122;s urban systems produce over 50% of world GDP (as of 2030 it will be over 75%) and consume more than 80% of global resources.

15. These processesâ&#x20AC;&#x201D;and the economic, social and strategic challenges connected to the management of increasingly large and complex urban systemsâ&#x20AC;&#x201D;involve the entire world. In developing countries and in the third world, given the contextual conditions, these challenges will reach higher critical peaks. In these areas, by 2050, the urban population will double from 39% to 67%17 of the total, with a rate of growth ten times higher than that of cities in the North.

16. Africa is (and will continue to be) one of the areas in which the tensions generated by these processes will be most extreme. In Africa, urbanization is faster than in any other part of the world; according to forecasts, by 203018 the following situation will exist: - more than 750 million Africans will be living in cities (more than the urban population of the entire western hemisphere), 45% more than current figures.19 - The rapid growth of the urban population will be absorbed chiefly (2/3) by

Fig. 7 Urban population (millions) (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data

16. State of the World Population. 17. Source: TEH-Ambrosetti based on UN-HABITAT 2008 data. 18. Source: UN-Habitat estimates, World Bank.

19. If these growth rates are confirmed, by 2050 there will be more people in African cities than in the cities and rural areas (summed together) of the western hemisphere.

EXECUTIVE SUMMARY

the smaller cities in which already more than 50% already resides. - Mega-cities with more than 10 million inhabitants will increase from the present figure of 1 (Cairo) to 3 (Cairo, Kinshasa and Lagos); cities with more than 1 million inhabitants will also increase from 52 to 75.

Fig. 8 Urban population in Africa (millions) (Source: TEH-Ambrosetti based on UN-HABITAT data)

17. The most significant strategies and projects for development and urban redesign will focus on Africa. The order of magnitude of urbanization currently underway and the rapidity with which it is occurring have contributed to creating imbalances and malfunctions in African cities which have steadily lost full control of their own space and approach to internal evolution: - In numerous African countries, the majority of people, activities and resources are concentrated in a single city that has thus developed disproportionately to the others (â&#x20AC;&#x153;urban primacyâ&#x20AC;?). - Despite the fact that African cities are responsible for 55% of the continentâ&#x20AC;&#x2122;s GDP, 43% of the urban population still lives below the poverty line. According to the recent UN-Habitat report, African cities have the highest percentage in the world of people living in slums (71.9%) and the highest levels of inequality of income (see figure below). Fig. 9 GINI coefficient in some African cities; minimum=0, maximum=1 (Source: United Nations)

18. Following years of lack of political interest and poor choices, the urban question today has become a central and important issue on the agendas of many African countries who

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have begun to realize the importance of the potential of developing urban agglomerates and taking on what are considered to be the 6 urban development challenges in Africa.

19. 1) Spatial challenges: - Integrated urban planning able to limit the progressive fragmentation, separation and specialization of the functions and uses of the cities and mitigate the growing differences between the better-off and the poorer areas. - Response to the housing crisis generated by the limited financial and planning capacities of local authorities and by the intervention of the private sector, limited to housing designed for the medium-to-high income bracket.

20. 2) Infrastructural challenges: - Extension of access to water and basic sanitation facilities. - Relieving of the congestion of transport networks, extension and improvement of the fleet of public transport vehicles, control of the use of private cars and promotion of alternative channels to road transport. - Definition of new financing instruments capable of providing incentive to get private players involved in filling the infrastructural deficit of the majority of African cities.

21. 3) Environmental challenges: - Researching of more efficient urban development models than those adopted by the developed countries given the limited availability of resources. - Solving of environmental burdens (air pollution, waste management) tied to the spread of urban lifestyles. - Prevention and management of environmental risks generated by climate change, with particular regard to the rise in sea level (11.5% of the African urban population is located near the coast, in areas that are at high risk for flooding).

22. 4) Economic challenges: - Upgrading of services (accountable for more than half of the African GDP) as the driving force for urban economic development. - Legitimization of the informal sector (61% of jobs in urban areas and 40% of the nonagricultural GDP) and regulation of its functioning.

23. 5) Social challenges: - Reduction in urban poverty. - Adoption of social integration and cohesion policies aiming at limiting the fragmentation of urban areas and at facilitating interchange between social groups. - Prevention of urban violence and crime. - Curbing and reduction of inequality levels in the distribution of income among the urban population in order to promote the economic growth of the territory and create the prerequisites for sustainable development.

24. 6) Governmental challenges: - Upgrading of the financial capacities (fiscal autonomy and recourse to the credit market) of local authorities which, in the more global process of decentralization of competence

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areas from the central level, still do not have enough resources to provide the services and make the investments required for the sustainable development of the urban areas. - Reduction of the structural weaknesses of the local government bodies which do not have the technical skills and tools required to manage the complexities of the urban areas. - Broadening of public decision-making processes through the involvement of various stakeholders. - Development of a systemic approach to strategic planning able to integrate the territorial dimension with the social and economic one.

25. Within the new African context, taking on these challenges provides new investment and development opportunities. There are five main reasons for this.

26. 1) The continent’s wealth will manifest itself above all in urban centers. Today the urban economy in Africa generates approx. 55% of the total GDP; by 2030 this is expected to rise to 75%. This is also due to: - greater increase in productivity in urban areas as opposed to rural ones; empirical research carried out on a number of African countries has revealed that the increase in productivity is attributable, to a large degree (between 20% and 50%, depending on the specific context), to the shift in employment from rural to urban areas. - greater job creation in the cities as opposed to the rural areas. By 2040, the African workforce is expected to rise to 1.1 million people, greater than the Chinese or Indian workforce.20 If efficient development policies are adopted, 2/3 of the new jobs would be created in urban areas.

27. 2) The urban areas will be chiefly occupied by the middle class (in addition to the “rich”) - the so-called “urban consumer class” - with the capacity to purchase homes, services, primary and capital goods, etc. This will be the real key to development. It is currently estimated that roughly 40% of this bracket of the population lives in African cities;21 in the near future (2030), even allowing for the margins required in this type of forecast, these values could rise to 60-65%. Still with reference to the year 2030, recent forecasts suggest that the 18 largest African cities will have a combined spending power of over 1,300 billion Euros.

28. 3) This growing urbanization will require housing. Considering an increase in the African urban population by 300 million people by 2030, and assuming the average family size to be 5 persons (a conservative estimate), 60 million new houses would have to be built in the next 20 years (3 million a year; 8,200 a day). Assuming an average value of 30,000 Dollars per housing unit,22 the potential market accumulated over 20 years could total to 1.8 trillion Dollars, i.e. 90 billion Dollars per year (without considering the building required to replace old housing).

20. Over the last 20 years in Africa, 75% of GDP per capita growth has been brought about by the increase in the workforce (Source: MGI) 21. In 1980, the percentage of the middle class living in cities was approx. 28%.

22. The average construction cost per unit for 28,500 housing units in Nigeria at the start of the 1990s was $27,000. Source: “ The need for urban housing in Sub-Saharan Africa”, African Affairs, 1994.

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29. Investments in infra-

Fig. 10 % of African urban population with access to services (Source: TEH-Ambrosetti based on IBRD data)

s t ruc ture will require similar amounts. It is wellknown that, apart from some specific exceptions, the infrastructure gap is one of the most crucial problems for African cities. African governments and private investors are making massive investments, over 70 billion Dollars a year. In particular, private sector investment is increasing significantly (volumes have tripled, arriving at nearly 20 billion Dollars a year between 2006 and 2008) thanks to large-scale national investment programs, channeling of international funds into these projects, good rates of return on investment23 and future prospects, and progressive opening and structural reform aimed at attracting the private sector (investment and management).24 However, the infrastructure deficit to be bridged is still substantial.25 In the next 10 years, simply to maintain the per capita income and the current living conditions in African cities, it is estimated that infrastructure investments in the broad sense totaling 20 and 30 billion Dollars per year will be required.26

30. 5) Economic and financial constraints are loosening. Lack of sufficient funds for different types of investment, starting with that for housing and infrastructure, has been one of the major problems the strategies for urban development in Africa have had to face. Some studies have estimated that in the 1990s, on average, African governments had enough funds to finance less than one-fourth of new urban projects. The situation is also greatly changed in these areas. - The African economy is growing, as is the solidity and availability of public funds: public spending in sub-Saharan African countries has gone from 66 billion Dollars27 in the 1990s to the current 140 billion, with an increase not only in absolute amounts, but also % of national GDP (22% in the 1990s; 29% today); there have also been similar trends in North African countries (1990s public spending of 79 billion Dollars; currently, 142 billion).28

23. For example, costs of services in Africa are higher than average ones in developing areas: energy costs ($ per KWh) in Africa: 0.02-0.46; DCs: 0.05-0.10; water costs ($ per m3) in Africa: 0.866.56; DCs: 0.03-0.6; mobile phone rates ($ per month for equal traffic) in Africa: 2.6-21; DCs: 9.9; internet rates ($/mo) in Africa: 6.7-148; DCs: 11. Source: IBRD. 24. For example, as regards water for city systems, approx. 80% of the African countries have implemented structural reforms in order to create fertile conditions for attracting private investment. In the interests of completeness, it should be pointed out that the

process is still in course and that the room for improvement is still considerable. 25. Overall, it is estimated that in order to fully meet Africa’s needs, over 93 billion Dollars per year in investment will be required. V. Foster, C. Briceno, “Africa’s infrastructures – a time for transformation”, IBRD, 2010. 26. Source: estimates of the International Monetary Fund, United Nations, MCGI. 27. In 2000 international Dollars. 28. Source: ReSAKSS, working paper N° 28, April 2009.

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- Also growing is the level (% of total public budget) of investment in housing and infrastructure (roads, energy, ICT, etc.). For example, for transport and communications, in the 1990s, sub-Saharan African countries spent 4.5% of their national budgets; today that share has risen to over 6% on average. If the energy and water sectors are also included, this percentage rises to 12%. - The middle class is stronger, in number and purchasing power. Already today, African nuclear families with a purchasing power of over 10,000 Dollars per year29 number around 30 million30 (they were less than 20 in the early 2000s). If these trends were to hold true to 2020, there could be over 45 million families which represent a major core of consumers - mainly located in cities - capable of paying rent, purchasing houses and services, etc. - Private investment would increase, as stated above. Fig. 11 African urban development: challenges, constraints and opportunities

29. Purchasing power weighted to 2005 values.

30. Source: MGI.

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4. Africa and the “South of the World”

31. Africa is increasingly at the center of international interests. This is reinforcing its geopolitical role within a broader process of rebalancing political and economic relations between Africa and the rest of the world that is aimed at having African players take a greater role, as well as developing partnership and strategic collaboration in all areas.

32. Africa is faced with the opportunity of transforming its destiny, thanks above all to the impulse from emerging economic powers—China and India in the forefront, but also Brazil, Turkey and Korea.

33. The expanded commer-

Fig. 12 Percentage breakdown of African world trade, 1990-2008 (Source: International Monetary Fund)

cial relations bet ween countries in the South of the world (just twenty years ago they accounted for 7.8% of global trade, but in 2008 they were 19%31) - stimulated economic growth in Africa before the advent of the financial crisis, and they are also one of the primary reasons why the continent is emerging from the recession more quickly than other regions.

34. The intensification of South-South relations has challenged the supremacy of developed countries not only in their economic, but also their political relations with Africa. In the mid-1980s, trade with the European Union was 55% of African trade, while in 2008 it was less than 40%.

Fig. 13 Commercial trade with Africa (billions of Dollars) (Source: TEH-Ambrosetti based on UNCTAD, World Bank data)

35. FDI in African developing countries between 1995 and

31. Source: “Perspectives on Global Development”, OECD 2010.

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1999 were 17.7% of the total, with the share rising to 20.8% between 2000 and 2008.32 Despite the dominating role of search for raw materials, investment has become increasingly directed towards creating markets for Indian, Chinese and Brazilian companies, including through greenfield projects, mergers and acquisitions.

36. What began during the 1950s as a cooperation relationship between developing countries wishing to work together to reduce their dependence on industrial powers, has become transformed into an economic axis capable of changing Africaâ&#x20AC;&#x2122;s future.

37. Starting in 2000, African countries began to negotiate a series of alliances with other countries in the South of the world on the basis of predominantly economic interests; however political collaboration, especially at international meetings, has an importance in this new diplomatic arrangement.

38. Countries in the South of the world are becoming increasingly more important donors for Africa: as of 2006, the Official Development Assistance (ODA) of China, India, Korea, Brazil, Turkey and Arab countries towards Africa was 2.8 billion Dollars, 6% of the total flow of aid to the region.33 There are a number of characteristics that distinguish these types of aid and which they share: - The flow of aid is often connected with promoting trade and investment. - Countries in the South of the world tend to focus their initiatives on infrastructure, as opposed to DAC donors34 who concentrate primarily on the social sector. - Developing countries also 14 Commercial trade with Africa (billions of Dollars) give aid to countries that Fig. (Source: TEH-Ambrosetti based on WTO data, Chatham House) are weak or in conflictâ&#x20AC;&#x201D; countries ignored by traditional donors. - Technical cooperation is an important aspect of aid. - Unlike traditional donors, developing countries do not set conditions, such as implementation of economic or political reform.

39. Some countries in the South of the world already play an absolutely primary role in

32. Source: UNCTAD, 2010. 33. ODA only includes official aid under the form of facilitated loans or contributions whose primary purpose is to promote the economic and social development of the receiving country. OFs (Official Flows) represent the total official disbursements of a country and also include those forms of cooperation that do not fall directly under the category of development aid.

34. Development Assistance Committee. Created in 1961, it brings together the major bilateral donors with the goal of rendering development aid more effective. It is comprised of 22 member countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and United States.

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Africa. Among these is China, which today (2010 forecasts) is the no. 2 trade partner on the continent.35 Given current growth trends, within 5 years it will become no. 1.

40. Even at the height of the crisis, China continued to announce new projects in Africa. Importing low-cost merchandise has sometimes had dramatic effect on the economies of some African countries which have not been able to withstand competition from Chinese products. Nonetheless, China is climbing back up the value chain and is expanding production and export of capital goods, with a potential two-fold effect on the economies of medium- and low-income countries. The first is to lower prices of goods used in production and the second is to open the door to the consumer goods industry, including in Africa.

41. China has succeeded in creating a place for itself in Africa through the use of “soft power” tools, i.e., using persuasion, rather than the political or economic pressure that characterizes “hard power”. China has preferred to “woo” African countries (first of all, those rich in raw materials, but not only) with frequent high-level state visits and forums, but also assistance in a number of fields, including health, training and agriculture. Above all, China has become the promoter of an alternative development model that has been dubbed the Beijing Consensus, as opposed to the Washington Consensus:36 a development formula that has brought about improvement in the living conditions of millions of people, as opposed to the rigorous rules imposed by the major financial institutions.

42. Alongside China,, other major players in the South of the world are establishing their own interests in Africa: - India. The level of trade between India and Africa is still a long way from that between China and Africa, but it is accelerating. In 2000 it was just 7.3 billion Dollars, by 2008 it had reached 18.6 billion Dollars, but the Indian government expects it will exceed 70 billion by 2020. Today, trade between India and Africa is 6.9% of total Indian trade and India is in the top five suppliers of foreign merchandise for one-third of African states.37 The list of India’s main African trade partners reveals the fact that New Delhi is also attracted by the continent’s raw materials: oil, as well as minerals and coal. To-date, India’s penetration into the African market has occurred differently than China’s. While Beijing has initiated a more coherent and aggressive strategy based on the workings of large state-owned companies, India’s progress has been made primarily by individual private companies. Between 2003 and 2009, Indian multinationals invested in 130 projects in Africa, compared with 86 Chinese compa-

35. Source: UNCTAD, 2010. 36. The Washington Consensus is a list of ten political and economic reforms with a neo-liberal stamp and aimed at financial rigor, prepared in 1989 by John Williamson, economist at the Institute for International Economics, in response to the Latin American debt crisis. They involve priorities for public spending, reform of the tax system, trade liberalization, currency exchange and interest management and privatization. This manifesto was called the Washington Consensus because the US administration and international financial institutes have their headquarters in the

US capital and it soon became the plan of action recommended, imposed or adopted in many developing countries. Source: Cfr. John Williamson, “ What Washington means by policy reform”, Washington, Peterson Institute for International Economics, 1990; Joshua Cooper Ramo, “ The Beijing consensus”, The Foreign Policy Centre, 2004. 37. Source: UNCTAD, 2010; India-Africa Conclave to help prepare roadmap for next Forum Summit, Confederation of Indian Industry, 2010; Simon Freemantle, Jeremy Stevens, Africa: BRIC and Africa, Standard Bank, 2009.

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nies.38 Today, many large Indian groups are active throughout Africa with investments reaching 5 billion Dollars. They include a range of sectors, including oil, mining, infrastructure, telecommunications, pharmaceutical distribution and agriculture. Indian agrobusiness companies are very active in purchasing land and starting up production, ranging from cut flowers to tea, vegetables and dairy products.39 - Brazil. With the presidency of Inacio Lula da Silva in 2003, Brazil has taken on a more much dynamic international profile. And although its relations with Africa cannot be compared to those the continent has developed with India and China, this South American country is rapidly growing in importance as one of Africa’s partners. During his term in office, President Lula has visited Africa nine times (more than any other non-African head of state), visiting over twenty countries. From 1990 to 2008, trade between Brazil and Africa jumped from 700 million to 31.1 billion Dollars. A leap tied, above all, to the export of oil and mineral resources from a handful of countries that comprise Brazil’s leading trade partners: Nigeria (32%), Angola (16%), Algeria (12%) and South Africa (10%). Emerging markets are becoming an increasingly important destination for Brazilian agricultural exports. But the most urgent question for the big state-owned companies, leaders in the production of ethanol, growers of sugar cane and manufacturers of agricultural machinery and equipment, is to boost the global demand for biofuels. Brazil would like to take advantage of the economic growth and industrialization of Africa to stimulate ethanol production and consumption. - Arab nations. For countries such as Saudi Arabia, the United Arab Emirates, Kuwait or Qatar, the sharp rise in the price of food has become a question of national security. Saudi Arabia and the other countries in the region have scarce water reserves and land unsuitable for cultivation. For this reason, they import 60% of their food needs. Although they possess significant financial resources, the prospect of having to face such high costs, but, above all, the protectionism of countries producing agricultural raw materials, has pushed governments to purchase land abroad on which to produce food to export back into the homeland. This just accelerated and broadened a process which in some African countries had already begun with cultivation of horticultural products for export and biomass for biofuels. Between 2004 and 2009, in five countries alone—Mali, Ethiopia, Sudan, Ghana and Madagascar—at least 2,492,684 hectares of land ended up in the portfolios of companies and sovereign wealth funds.

38. Source: OECD 2010. 39. Tata group has invested around 1.6 billion Dollars in 12 African countries, in telecommunications, chemical products, the food industr y, automobile industr y and mining. Archelor Mittal has massively entered into South African mining; Bharti Airtel acquired the African portfolio of the Zain Group for 10.7 billion Dollars, the largest telecommunications deal signed by

an Indian company. Other agreements and acquisitions have occurred in the pharmaceutical and energy sectors. Cfr Francesca Marino, In Sudafrica l’India gioca per vincere , Limes; Indrajit Basu India Inc woos Africa, Asia Times online; Sanusha Naidu India stepping up the ante in Africa Relations , Panbazuka news; Shani Duttagupta and Sutanuka Ghosal, The Economic Times, 2010.

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5. Europe-Africa relations observatory

43. The European Union (EU) is Africaâ&#x20AC;&#x2122;s major trade partner and its largest donor (even if its commitment has lessened). Fig. 15 Commercial trade with Africa, Aid, FDI (billions of Dollars) (Source: TEH-Ambrosetti based on ONE and European Commission data)

44. Its clout is waning, however, in favor of emerging powers, while other complex aspects of Europe-Africa relations, such as immigration and security, remain.

45. This is the basis for the necessity to rethink the entire nexus of relations with the African continent. An initial step was t aken in 20 05 following the G8 summit in

Fig. 16 Aid: pledges vs. appropriations (billions of Dollars) (Source: TEH-Ambrosetti based on ONE and European Commission data)

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Gleneagles,40 with the launching of the EU strategy for Africa. But it was at the summit between the EU and African countries held in Lisbon December 8 -9, 20 07 that Europ e made a decided turn.

Fig. 17 Commercial trade with Africa (billions of Dollars) and growth rates of various international players (Source: TEH-Ambrosetti based on WTO data)

46. The cornerstone of this new structure is the Africa-EU St rategic Pa r t ner s hip, 41 based on a number of principles which sanction African unity, mutual dependence between Africa and Europe, shared responsibility, respect for human rights, democratic principles, rule of law and right to development.

47. The goals of this new strategy can be summarized in four macro areas: - Peace and security; - Democratic governance and human rights; - Business and regional integration; - Key development issues. Fig. 18 European strategy towards Africa: key stages

40. At the G8 summit in Gleneagles, the heads of state committed themselves to increasing aid to Africa by 25 billion Dollars per year by 2010, a doubling of 2004 levels. 41. The Africa-EU Strategic Partnership is the follow-up to the

EU Strategy for Africa prepared in 2005 in order to lend greater coherence to European aid to Africa and create a framework in which long-term relations between Europe and Africa could develop.

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48. These areas include “transversal” issues, such as: - reinforcement of institutional ties and response to common challenges, such as peace and security, migration and environmental protection; - promotion of democratic governance, basic human rights, sustainable development and meeting of the Millennium Development Goals (MDG); - promotion of an effective multilateral approach and reform of the United Nations and other international institutions.

49. The emphasis on human rights and governance underscores the difference in approach (compared with China) the EU intends stressing in its relations with Africa. At the same time, the declarations regarding multilateralism and the importance of strengthening dialogue between the two continents demonstrate Europe’s intention of recognizing Africa’s growing political importance.

50. The Joint Africa-EU Partnership was created to provide enhanced coherency and coordination in EU policies involving Africa. However, many of the economic and political cooperation instruments used previously continue to exist, thus raising questions about the actual extent of the “revolution” announced in Lisbon. Added to this is the recent launching of European diplomacy with the granting of new responsibilities for foreign policy to the High Representative for the Union of Foreign Affairs, the impact of which on formulating and managing African policies is as-yet unclear.

51. This leads to both positive and negative results (see figure below). 52. In fact, there exist a number of critical structural aspects, the most significant being: - Lack of direct connection between development cooperation and the actions of the High Commission (foreign policy and initiatives); - Negotiation with regional blocks that have not yet been formed (or are in embryonic form, but with regional blocks which are not coherent); - Lack of harmonization in financial instruments pre- and post-Lisbon (divided into “ACP/ Asia-Caribbean-Pacific” rather than “Africa” and Euromed Neighbourhood Policy42); - High level of fragmentation of initiatives with lack of clarity regarding action priorities.

53. From the standpoint of trade, Europe puts much emphasis on the EPAs (Economic Partnership Agreements), the mutual market liberalization agreements which must replace the preferential tariff systems as established by the WTO. It considers them an opportunity to make trade a driving force in the African economy, a goal the protective measures offered by the Lomé conventions have not achieved. And it is ready to accompany the path towards

4 2 . In c l a s s i f y i n g d e v e l o p m e n t a i d a n d i m p o r t- e x p o r t agreements, Brussels still thinks in terms of African-Caribbean-Pacific (ACP) countries: a group of 79 countries comprised of 48. sub-Saharan African states, 16 Caribbean countries and 15 Pacific nations. All signers of the Cotonou agreement which calls for cooperation in economic and political development. Relations with countries in northern Africa are governed by the

European-Mediterranean Partnership, Euromed. A distinction which would appear in contradiction to the importance given relations between the two continents in the Joint Africa-EU Partnership, as well as the view of Africa as a unified entity and efforts to implement increasingly close collaboration with the AU, an approach that was reaffirmed in the second revised Cotonou agreement reached in March 2010.

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Fig. 19 Progress of the European strategy for Africa; qualitative evaluation (Source: TEH-Ambrosetti based on preliminary European Commission assessment)

Focus area of the EU strategy for Africa.

Results

Peace and Security Democratic governance and human rights Trade and regional integration Key topics for development

- Millennium Development Goals (MDG) - Energy (Sustainable development) - Climate (environmental protection) - Migration, Employment, Education - Science and technology, ICT and space - Institutional cooperation KEY: HIGH • LOW •

signing of the EPAs with aid for trade packages. This road is proving to be quite rocky, but, most of all, it once again indicates the problem of thinking of Africa as a unified whole, on a regional as well as a continent-wide scale. Given the lengthy negotiations required to reach signing of regional agreements, the EU has chosen to sign many interim agreements with individual countries, thus risking to damage the intra-African trade framework which Europe, itself, contributed in building.

54. To a certain extent, this new perception of Africa has also “infected” some member states of the European Union. - In its guidelines, Germany clearly affirms that Africa’s new direction requires new policies. And in its actions it is strongly committed in terms of cooperation (in 2008, it was the no. 5 donor of the Development Assistance Committee - DAC for Africa), but, above all, with an increasingly-large presence of its companies on the continent (686 to-date, with approx. 164,000 employees). In 2008, export of German goods to Africa was 28.6 billion Dollars, almost 20% higher than in 2007. Also in 2008, Germany decided to reinforce cultural relations with the African continent by launching the “Aktion Afrika” project, with financing of approx. 40 million Euros. Between

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2000 and 2008, German Foreign Direct Investment (FDI) in Africa increased 38% to 6.3 billion Euros. - France, traditionally the European country with the most cultural and economic influence on the continent, affirmed its desire at the most recent Françafrique summit (2010) to change direction from a political standpoint and pay more attention to especially the economic requests of its African partners, also announcing the creation of an African agriculture fund of 120 million Dollars (when fully-operational, 300 million Dollars), designed to sustain development of agricultural projects and commodity distribution. The emphasis on the economic aspect of French-African relations had been underscored earlier in 2008 when in a discussion to the South African parliament French President Nicolas Sarkozy announced three new components of the French commitment towards the continent: creation of a 250 million euro investment fund to acquire shares in other mixed or thematic funds in order to develop African companies; establishment of a 250 million euro guarantee fund to facilitate credit access of small- and medium-sized African companies; and doubling of the activity of the French development agency for the private sector to the extent of 2 billion Euros over 5 years. Today, France is the third largest trade partner on the continent, the no. 2 exporter (behind China) and the no. 4 importer (behind the US, China and Italy).43 In 2008, French exports to Africa totaled 36.9 billion Dollars, an increase over the previous year of almost 18%, against imports from Africa which, between 2007 and 2008, increased 36% for a value of 38.4 billion Dollars. - Great Britain is far and away the country that has committed itself most in terms of development cooperation, making Africa a moral question. This is seen in initiatives such as the Commission for Africa launched by former premier Tony Blair, the “Make Poverty History” campaign, and the commitments made at the Gleaneagles G8 summit held in 2005 during the British presidency. This position was seen concretely in a considerable increase in aid that today totals 0.43% of GDP, compared with a DAC country average of 0.3%. The change in government marked the start of a profound change in the aid system which, in the Conservative view, will be aimed at definite goals and priorities and, above all, towards enhanced efficiency and transparency. It still remains to be seen if and how trade relations will be revised and reinforced. Great Britain increased trade with Africa by 16% between 2007 and 2008, arriving at a level of 36.6 billion Dollars. 38% of trade was with South Africa, with which Great Britain has 9.3 billion Dollars in imports and exports 4.7 billion Dollars. - Spain is creating for itself an increasingly more important role in relations with the African continent, aiming above all at improving relations with its “geographical neighbors” and defusing potential crisis situations, but also promoting Spain as a political and trade partner. Spain is Africa’s sixth-largest trade partner (ahead of Great Britain). In 2009, Spanish exports to Africa were 9.3 billion Euros (5.9% of the

43. Nonetheless, if in the 1960s trade with Africa was 40% of French foreign trade, today that percentage has dropped to around 5%.

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total) and imports from Fig. 20 EU15 Overseas Development Aid (ODA) EU15 to Africa (millions of Dollars) (Source: TEH-Ambrosetti based on European Africa reached 16.7 bil Commission and World Bank data) lion (8% of the total). The instrument through which Spain develops policy towards the continent is its Africa Plan44 which sets goals and priorities for initiatives and was created out of the desire to act on the basis of a regional and more coordinated approach to Africa: In line with European choices, Spain is focusing on cooperation with the African Union and regional communities, with special attention towards ECOWAS. In collaboration with the African Development Bank and Danish cooperation, Spain has also financed the African Guarantee Fund (with capital of close to 500 million Dollars for a period of five years) to increase credit access to small- and medium-sized companies on the continent. An important part of Spanish efforts is directed at regulating the flow of immigrants and fighting illegal immigration.45 - Italy has finally adopted a number of instruments, such as the Africa Plan, which indicate an awareness of the importance the continent can play in the Italian economy. However, concrete indications of this new course of action remain limited. Italy is currently the fourth largest trading partner with the continent (the no. 1 in Europe) but with trade strongly skewed in favor of northern Africa because of imports of oil and natural gas. For this reason, Libya is the most important trading partner,46 followed by Algeria. South of the Sahara, the main trading partner is South Africa, but other countries are growing, such as Cameroon which, in the first four months of 2010, registered an jump of 34% in trade with Italy.47 In July 2010, at the second “Italy & Africa Partners in Business” forum organized by the Ministry for Economic Development and SIMEST, Vice-Minister Urso stressed that the goal is to “double in three years the value of exports and investment in sub-Saharan Africa, arriving at, respectively, 9 billion Euros and 150 million Euros”. Also in the field of development cooperation, for the first time, a document laying out the guidelines for the three-year period 2009-2011 was prepared. Given Italian commitment to reaching Millennium Development Goals, the priority sectors for bilateral action are identified as agriculture and food security; environment, land and management of natural resources, with

44. The first covered the period 2006-2008 and the second the four-year period 2009-2012. 45. Madrid has signed agreements on immigration with Cape Verde, Gambia, Guinea-Conakry, Mali and Niger, as well as a Memorandum with Senegal and an agreement on immigration

flows with Mauritania. 46. Almost 50% of Italian imports from Africa come from Libya. 47. ICE data; Vice-minister Urso led a trade mission with 50 companies to Cameroon in July 2010.

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s p ecial emp hasis on Fig. 21 2008 trade of main European countries with Africa (billions of Dollars) (Source: TEH-Ambrosetti based on WTO, European Union data) water; health; education; governance and civil society, including in terms of support of e-government and information and communication technologies (ICT) as a tool for combating pover t y; s u p p o r t f o r m i c r o -, small- and medium-siz e d c o m p a n i e s . To improve aid management and transparency, in 2009 the Ministry of Foreign Affairs drew up a national plan for aid effectiveness and created a group of experts in 12 thematic working groups.

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6. The economic development of Africa

55. The global economic crisis has slowed, but not halted, Africaâ&#x20AC;&#x2122;s growth. Although lower than 2008 figures (5.4%), the continentâ&#x20AC;&#x2122;s economy showed an increase of 2.9% in 2009,48 above the world average.

56. The crisis in Africa was initially felt by the countries whose financial markets are more integrated into the world economy (e.g., South Africa), after which it expanded, following the collapse of world trade, to the oil exporting countries (e.g., Angola) and to the commodity exporting countries (e.g., Botswana and Zambia). The sharp decline in the exports of raw materials was greater than the Fig. 22 GDP growth rates (%) drop in imports, leading to a (Source: TEH-Ambrosetti based on International Monetary Fund data) wor sening of the tr ade balance and current account.

57. In 2008, Africa witnessed an increasing flow of foreign direct investments, reaching +27% compared to 2007, totaling 72 million Dollars; while in 2009, with the fall of the markets it experienced a 36% decrease in inflows of investments, which stopped at 59 billion Dollars.

58. The African economies proved themselves to be extremely resistant to the crisis, on the whole, and thanks to the coordinated action of the African central banks, an upturn of 4.5% is predicted for 2010 and of 5.2% for 2011, also thanks to the recovery in world trade49 and rise in commodity prices.

59. After the 2.5% drop in 2009, African exports are expected to grow by 3.2% in 2010 and by 5% in 2011. The recovery will also contribute to reducing the tax deficits, from 4.4% of the GDP in 2009, the average deficit of African countries is expected to decrease to approx. 3.3% in 2010, and even to 1.9% in 2011. 50 By the end of 2011, 2 African countries out of 5 should have deficits of less than 3% or even surpluses. The trade balance of the majority of African countries is also expected to improve

48. Source: OECD, African Economic Outlook, 2009. 49. Also private investments, remittances and private consumption are expected to recover, but with more difficulty than

trade. 50. Some oil producing countries (Libya, Democratic Republic of the Congo, Equatorial Guinea) might even register a tax surplus.

EXECUTIVE SUMMARY

Fig. 23 Expected GDP growth in 2010-2011 per geographical area (Source: International Monetary Fund)

and return to positive figures due to the upswing in demand and in the prices of commodities. 51

60. Apart from the crisis, one of the

Fig. 24 Evolution of the emerging African middle class in millions of people 2008 (Source:TEH-Ambrosetti)

main structural elements of the decade of continuous growth in Africa is the emergence of a new social-economic bracket of the “middle class”, comprised of professionals, doctors, teachers and public sector workers and found primarily in urban areas; this group is estimated to be about 100 milion 52 people, approx. 12% of the entire African population. The growth of the middle class and its consumption of both goods and services is the key to Afric an development bec ause it sustains internal demand for consumer goods and services and helps to boost the development of the African manufacturing industry and stimulate the growth of the service and construction sectors (see above).

51. Oil expor ting countries will register the greatest trade surpluses. Some states (Seychelles, Sa?o Tomé and Principe and Liberia) will continue to have ver y negative trade balances.

52. “The middle classes moving on up”, The Africa Repor t 2010. Those belonging to the “global” middle class are not included.

EXECUTIVE SUMMARY

61. Significant progress has been made in reaching Millennium Development Goals, â&#x20AC;&#x153;globalâ&#x20AC;? goals53 all countries have set themselves in order to improve the living conditions of their populations. Fig. 25 Number of Millennium Development Goals met by country, as of 2007 (Source: TEH-Ambrosetti based on United Nations Statistic Division data)

0 out of 7 Angola Central African Republic Ciad Dem. Rep. of Congo Guinea -Bissau Nigeria Somalia Sudan

1 out of 7 Cameroon Ivory Coast Equatorial Guinea Niger Swaziland

2 out of 7 Seychelles Tanzania Zambia Zimbabwe

3 out of 7 Botswana Burkina Faso Burundi Cape Verde Comore Congo Eritrea Ghana Lesotho Madagascar Mali Sao Tome & Prencipe Mozambique Mauritania Senegal Sierra Leone South Africa Togo

4 out of 7 Algeria Djibuti Egypt Gabon Gambia Guinea Kenya Liberia Malawi Mauritius Namibia Rwanda

5 out of 7 Benin Morocco Uganda

6 out of 7 Ethiopia Libia Tunisy

62. Africa is attempting to overturn the traditional approach to development through the creation of conditions for internal economic growth instead of looking first and foremost at relations and trade with the rest of the world to facilitate development (as was the case in the past). From this standpoint, the G8 has given Africa a great deal of space in the last 8 summits, helping to cancel part of the African debt and increase the budget allocated for aid. Conversely, the same amount of attention has not been reserved for the theme of Africa on the agenda of the G20. In fact, Africa lacks representation in many international forums: South Africa, which is often present, cannot be considered a spokesman for the entire continent. In the absence of a recognized leadership, the most authoritative African organization is the African Union. The recent election of the President of Malawi, Bingu wa Mutharika, as its leader has considerably increased its credibility and representativeness.54

63. Alongside this continental integration process, African countries have joined into organizations called Regional Economic Communities (RECs) to create sub-regional economic integration processes.

53. 1) Eradicate extreme poverty and hunger; 2) Achieve universal primary education; 3) Promote gender equality and empower women; 4) Reduce child mortality; 5) Improve maternal health; 6) Combat HIV/AIDS, malaria and other diseases; 7) Ensure environmental sustainability. Added to these is the goal of minimum

aid which developed countries have committed themselves to pursuing. 54. The previous President of the African Union, Gheddafi, was not a credible partner and representative of the whole of Africa in the G20.

EXECUTIVE SUMMARY

This is the context in which the logic of transnational corridors is developing as an initiative for development: it involves the pooling of resources for the construction of major infrastructure projects that increase mobility, connections and trading between nations and communications and energy supply, thus contributing to increasing competitiveness and development of the region involved in the initiatives.55

55. The impor tance of these corridors was also expressed during the 12 th summit of the heads of state of the African Union held in Addis Abeba in February 2009, during which the belief was reiterated that continent-wide integration is not just a que-

stion of political choices and openings, but that a continental communications network must be created through direct action involving the mobility and transport and telecommunications networks.

EXECUTIVE SUMMARY

7. “Understanding” Africa: the Ambrosetti Development of Africa Map (ADAM).

64. The Ambrosetti Development African Map-ADAM is a tool we have developed for analyzing and interpreting development in African countries.

65. The special feature of ADAM lies in the multi-aspect approach adopted for describing and understanding the key factors driving the development of different African countries, making it possible to monitor progress over time and, to some extent, to predict it.

66. In order to arrive at a more complete interpretation, account has been taken not only of variables of an economic nature,56 but also other factors affecting growth sustainability and development: the supply of natural resources, minerals and infrastructures and the level of risk of a country in terms of the overall situation regarding governance, taken as referring to both political stability and the efficiency of the administrative and legislative machinery.

67. ADAM is not limited to viewing and monitoring the dynamics of the relative positions of the countries over the years; the map can be used as a tool with significant predictive value that makes it possible to project the evolutional course of the various countries in the medium-term, thus indicating both the current players and most attractive potential players of tomorrow.

68. ADAM is aimed at those in the public and private sector who require accessible analytical tools in order to guide and support their investment decisions, identify future economic and trade partners or define priorities in establishing closer bilateral relationships.

69. In constructing ADAM, the following types of variables were correlated: - economic variables 57 found in the economic performance indicator (Y-axis of the matrix); - resource “patrimony” - natural and mineral resources, mobility infrastructure, socialhealth infrastructure58 - were channeled into the assets indicator (X-axis of the matrix). - political-administrative aspect,59 highlighted in different colors (green for positive situations; yellow for problematic situations; red for critical political-administrative situations).

56. We are, in fact, convinced that the measurements linked to the GDP are not sufficient to describe the growth of an African country. 57. 3 indices: GDP and per capita GDP growth rates, as well as the level of per capita GDP attained. 58. 16 indices: metal and fuel production, diamond production, lumber production, presence of arable land, miles of roads and rail, concentration of airports, level of electrification, number

of doctors, nurses and volunteers, primary school enrollment, percentage of primary school completion, internet use per 1,000 inhabitants, mobile phone use per 1,000 inhabitants, number of telephone lines per 1,000 inhabitants, personal computer per 1,000 inhabitants. 59. 6 indices: political stability and absence of violence, government effectiveness, regulatory quality, rule of law, corruption, voice and accountability.

EXECUTIVE SUMMARY

70. Two relevant areas can be

Fig. 26 Adam structure

seen using ADAM: - Vulnerability zone, delimited by the Y-axis and perpendicular line passing through the limit value of the first quartile of the asset axis, in which are found endemic ally poor countries (third quadrant) characterized by lack of resources, low growth and impossibility to intervene, or else they have undergone growth in the absence of solid assets (fourth quadrant). - The safe zone, delimited by the Y-axis and perpendicular line for the limit value of the third quartile of the asset axis, is ideally that in which a country not only has an economic development index above the average, but has also reached a level of infrastructural solidity such that, despite cyclical variation, it can consider that its economic situation will only improve.

71. Given below are the results of the four years of ADAM: 2001, the reference year against which all other data were compared; 2004, 2007 and 2008 which is the year for which the most recent data is available.

72. Looking at the map tables for the 4 reference years, the course of development of African countries can be seen: - In 2001, there was a net concentration around the median of all countries, except those of the Maghreb, islands, South Africa and Botswana. - 2004 showed an initial change in relative positions. Some countries began to emerge from the group around the median to go towards the 3rd quartile. - This trend was consolida Fig. 27 ADAM, 2001 (Source: TEH-Ambrosetti elaboration) ted in 2007, especially for those countries which show e d t h e m s e l ve s t o b e good per formers from a p olitic al -ad minis tr ative standpoint. - In 2008 the countries that entered the third quartile are further confirmed, raising the value of the two medians even higher, a sign of constant growth for the entire continent.

EXECUTIVE SUMMARY

73. Looking at the positions

Fig. 28 ADAM, 2004 (Source: TEH-Ambrosetti elaboration)

of the countries in the four quadrants, a group of countries with similar characteristics as regards economic performance and assets can be identified: - The “virtuous developing” countries (in quadrant I), with economic performance and supplies of assets superior to the me dian. T here are 16 countries included in this group: The Seychelles, South Africa, Mauritius, Botswana, Tunisia, Cape Verde, Egypt, Morocco, Gabon, Namibia, Algeria, Lesotho, Ghana, Tanzania, Gambia and Kenya. The countries in this group have a substantially positive political situation in common. - The “problematic” countries (quadrant II), with supplies of assets superior to the median but economic performance inferior to it. These are the countries which, despite being rich in resources, are unable to transform them into growth, often due to a situation of weak governance (Swaziland, the Comoros Islands, Cameroon and Republic of the Congo). Others are countries with extremely poor raw material resources which are concentrating their efforts on creating “man-made assets” (mobility and social-sanitary infra-

Fig. 29 ADAM, 2007 (Source: TEH-Ambrosetti elaboration)

Fig. 30 ADAM, 2008 (Source: TEH-Ambrosetti elaboration)

EXECUTIVE SUMMARY

structure) but which have not yet managed to draw on them to stimulate economic development (Benin, Gambia and Senegal). - The “trapped” countries (quadrant III), with supplies of assets and economic performance inferior to the median. This group includes the countries that are either endemically poor (Central African Republic, Niger, Burundi, Mali, Republic of the Congo, Eritrea, Guinea, Togo, Djibouti, Guinea Bissau and Liberia) or which have resources - oil, gold or diamonds - the revenue from which is not invested in the country. This is the case of the Ivory Coast, Chad, Democratic Republic of Congo, Madagascar and Zimbabwe. None of the countries in this quadrant has a positive political-administrative situation and frequently they are victims of authoritarian governments. - The countries classed as “runners with feet of clay”, (in quadrant IV) with assets inferior to the median but economic performance superior to it. Most of the countries included in this quadrant experienced a period of major growth thanks to the discovery of a natural resource (oil or gas), but have not yet transformed this wealth into infrastructural and social investments that will permit the harmonious growth of the country. These countries are Equatorial Guinea, Ethiopia, Sierra Leone and Sudan (and also Angola, although it is in another quadrant). In the same quadrant are countries which, despite being poor in resources, have nonetheless managed to increase their performance thanks to improvements in governance and attraction of capital investment: e.g., Mozambique. - Countries “in transition”, located around the intersection of the medians (Zambia, Uganda, Tanzania, Gambia, Rwanda, Mozambique). These countries have been advancing along a path of progressive improvement towards the first quadrant since 2001. All Fig. 31 ADAM; situation in 2008 with quadrants highlighted (Source: TEH-Ambrosetti)

EXECUTIVE SUMMARY

of these countries have in common a positive, or at least improving, political-administrative situation.

74. The entire interpretive system of the map is based on the thesis that the 4 traps, considered to-date to be serious impediments to African development, can, today, be removed thanks to a new approach to governance, greater awareness in applying economic tools by the political-administrative system, new technologies and also a different approach from international organizations to the continent of Africa.

Chapter 1 The â&#x20AC;&#x153;Developing the regions of Africa and Europeâ&#x20AC;? project: Goals, phases, results

CONTENTS

1. Introduction: the reawakening of Africa

2. The â&#x20AC;&#x153;Developing the regions of Africa and Europeâ&#x20AC;? project

2.1 Goals

2.2 Time frames, structure and players

2.3 Activities

3. Project phases to-date and results

3.1 Phase 1 (2006/2007): 7 proposals for Africa

3.2 Phase 2 (2007/2008): focus on telemedicine, education, tourism

3.3 Phase 3 (2008/2009): focus on agro-industry

3.4 Phase 4 (2009/2010): focus on urban development

4. Summary Remarks

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

1. Introduction: the reawakening of Africa

1. Africa is in motion. From the end of the 1990s, following two decades of economic contraction, the continent embarked on a phase of economic acceleration with the GDP growing an average of over 5% per year.1 This has brought it to be, today, the no. 3 region of the world in terms of speed of growth. Comparing African economic trends with global ones, it is clear that in recent years Africa has shown consistently better results.

2. Africa is undergoing struc tural change. Signs of this process can be seen in the strengthening of democratic institutions in many countries in t his region, in t he economic and s ocial refor ms implemented on a national and supranational level, in the progressive integration between regions (although still to be realized), and in the consolidation of the middle class with purchasing power comparable to that in other developing areas.

Fig. 1 Per capita GDP in Africa, 1990 Dollars (Source: TEH-Ambrosetti based on A. Maddison data)

Fig. 2 GDP growth rates (Source: TEH-Ambrosetti based on IMF data)

1. In particular, oil exporting countries experienced double-digit growth rates.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

Fig. 3 Africa past and future: key statistics regarding change in the continent; (*) 16.6% of world population; (**) Income > $10,000/yr (2005 PPP) (Source: TEH-Ambrosetti based on International Monetary Fund, World Bank, United Nations, UNCTAD data)

Yesterday (2000) Population (million)

Today (2010)

Tomorrow (2020)

8,16

955

1.270*

African consumer spending (Billion Euros)

270

420

820

GDP (Billion Euros)

490

790

1.400

GDP growth rate (Annual average over the years)

2,6

4,9

6,0

Foreign direct investments (Billion Euros)

400

African companies with a turnover> 2 billions Euros

Middle class** (million families)

3. Africa is increasingly at the center of world interests. The tremendous availability of raw materials/minerals/metals,2 agricultural land,3 natural resources and manpower are in the process of making it a favored destination for international investment which has quadrupled since 2002.

4. In recent years, Africa

Fig. 4 Direct Investment in Africa (billions of Dollars) (Source: TEH-Ambrosetti based on UNCTAD data)

has regained a central standing in the global political agenda. This is seen in recent international approaches and long-term intervention strategies with collaborative relations on a number of levels, initiated by key geopolitical players, not the least of these being Europe with a new strategy for Afr ic a launched in Lisbon in 2007.4

2. Over 60 types. For some, Africa is the no. 1 supplier in the world for gold, platinum, diamonds, uranium, manganese, chromium, nickel, bauxite, cobalt, oil and natural gas. 3. The well-known phenomenon of “land grabbing”. 4. The goal is to go beyond the traditional “donor-recipient”

relationship (Europe is the no. 1 donor of Africa) and develop partnership relationships with Africa. At the upcoming EU-Africa summit in Sirte (November 2010), the status of the progress made in this process will be evaluated.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

Fig. 5 Key stages in Europe’s strategy for Africa

6. Although not always easy to decipher and despite numerous unknowns and uncertainties, Africa represents a tremendous opportunity. And the major international players—China, India, the United States and Japan—are fully aware of this and for years have been showing significant interest in this part of the world through major investment and strategic relations in all areas.

7. Europe, the continent closest culturally and geographically to Africa, is still not present (or perceived) enough as a leading player and unique political and economic point-of-reference. 8. Despite its traditional relations with Africa (in particular countries on the southern shore of the Mediterranean7 ), Italy has been late in relaunching its interests in this area8 and with a strategy that is still not incisive, especially regarding sub-Saharan Africa.

5. This refers to the political, economic and cultural relations between countries in the “South” of the world (see Chapter 4). 6. For example, the major transnational corridors currently being realized. 7. Italy is the no. 1 trade partner with this area and depends on these countries for a number of strategic supplies, e.g., energy.

8. For example, the Africa Plan (2008) of the Ministry for Economic Development. The goal of the plan is “to stimulate interest of Italian players in the African continent by offering both business and investment opportunities, especially in those countries with greater market attractiveness and recognition and in which the influence of other countries is lower”.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

2. The “Developing the regions of Africa and Europe” project

2.1 Goals 9. The “Developing the regions of Africa and Europe” project was initiated in 2006 with the goal of contributing to reinforce strategic relations between Europe/Italy and Africa, and to stimulate debate and interest of institutions and other players on this issue.

10. The Fondazione Banco di Sicilia9 entrusted The European House-Ambrosetti10 with initiating a broad-ranging project aimed at: - Creating in Sicily a permanent forum11 in which the political and business leadership of Europe and Africa can meet. - Exploring the cultural, social and trade relations between Europe and Africa, and identifying the areas and means to strengthen them. - Promoting, each year, activation of concrete initiatives in key, targeted development sectors that profitably involve (first and foremost) private players as well as public, both African and European.12

2.2 Time frames, structure and players 11. This project, given its goals and complexity of issues, is by nature long-term and includes a series of progressive phases connected by an underlying logic as shown in the figure 6.

12. The project rests on three “pillars” that interact synergically and are interdependent: - The research report, which each year exams a key theme in African development and of strategic interest for Europe.

9. The Fondazione Banco di Sicilia is a leading Italian banking foundation whose principal scope is to promote the social, cultural and economic growth of Sicily. The Fondazione is involved in promoting the heritage of Sicily, supporting its cultural resources and education, providing incentive for scientific research, stimulating sustainable development and encouraging social initiatives. The Fondazione is also committed to promoting the economic and social development of the Mediterranean region; among its initiatives in this area is the annual “Developing the regions of Africa and Europe” project and international forum. 10. The European House-Ambrosetti is one of Europe’s leading consulting firms, founded in 1965. Today, it has seven offices in Italy and twelve foreign offices and other partnerships around the world. It provides consulting and continuous updating and orientation for corporate management and organizes top-level

events and forums. 11. The forum is held in Taormina (Sicily) each year during the first week of October. 12. The development challenge is also an economic-industrial one. Without activating initiatives that can act as the driving force for African production and create structural conditions for development, long-term sustainable growth becomes highly problematic. For this reason, one of the key objectives of the “Developing the regions of Africa and Europe” project is to foster the development of long-term relations between Africa and Europe (and Italy) through identification of mutual areas of interest in which to plan specific European/Italian operations that involve companies and public and private institutions on the two continents to mutual benefit, producing concrete results for a number of selected issues/sectors.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

Fig. 6 Time frames and key initiatives in the “Developing the regions of Africa and Europe” project

- The initiatives, i.e., ideas for launching concrete projects in selected sectors of mutual interest for Europe and Africa. - The Forum, which provides an opportunity for discussion and initiatives involving economic, political and cultural relations between Europe and Africa.

13. The project involves numerous players - both public and private from Europe/Italy and Africa - in order to: - activate joint and shared processes; - make strategic decisions and implement them; - guarantee the success of initiatives which are designed and launched each year. Fig. 7 Players involved in the “Developing the regions of Africa and Europe” project.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

2.3 Activities 14. The project includes a number of activities which are “custom-made” depending on the level of intervention and players involved: - Missions to Africa to examine the understanding of the basic context, requirements and concrete opportunities.13 - Periodic meetings with: - The project Steering Committee (3 meetings per year), comprised of top-level individuals in order to gather their expert contributions and suggestions on how work should be organized; - Ambassadors of African countries in Rome (2 meetings per year), to keep them informed of project developments, promote relations with their countries and receive suggestions and indications of interest for the individual initiatives. - Meetings with European and Italian officials to keep them updated and involved in activities. - Workshops in selected European countries14 to present the project and gather information and involvement in related initiatives. - One-to-one meetings with targets—European/Italian and African—regarding project initiatives about to be launched or in the start-up phase. - Interviews with opinion leaders and international experts to examine, at the highest level, certain aspects or relevant issues.

13. From the project’s inception, missions have been made to Mozambique, Malawi, South Africa, Ethiopia, Zambia, Uganda

and Angola. 14. To-date, in Germany, Spain, France and Portugal.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

3. Project phases to-date and results

15. The project, launched in 2006, is now in its fourth phase.15 Provided below are: - a summary of the main objectives, proposals and initiatives launched in the first three years; - the main features of phase 4 (this year’s) in terms of research goals for priority themes, a progress report of the initiatives launched in previous years and new planning ideas.

3.1 Phase 1 (2006/2007): 7 proposals for Africa

Fig. 8 7 Action Proposals for Africa

16. The first phase of the project had the following goals: - “Understand Africa” to produce an interpretive framework of the actual situation of the African continent, its needs and opportunities for development. - “Understand Europe”, to identify the competencies and interests Europe can contribute to Africa. - Plan activity in a number of priority sectors to propose to European/Italian and African institutions and businesses to reinforce strategic relationships that are of mutual advantage to all players involved.

Fig.9 Approach behind the proposals and initiatives

17. From the work in this phase there emerged 7 action proposals for Africa in seven priority sectors. The aim was to draw up non-aid-oriented initiatives—along with the involvement of public and private bodies and business— that could produce benefits for Africa, while at the same time generate opportunities for Europe. For each proposal, general guidelines for implementation, an initial estimate of the parameters involved and expected benefits were prepared. A brief summary follows.16 15. All research repor ts may be freely dow nloaded from www.ambrosetti.eu

16. Please refer to the 2007 report for a detailed presentation.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

18. Proposal 1: “More and more health” Theme: Investment for sustainable development of Africa (involving healthcare). Proposal: “To create in Sicily a center to bring together the medical expertise available in Europe to provide telemedicine services (remote consultation, remote care and distance training) and creation of care projects (infrastructure planning, creation and implementation) in Africa.” Motivation: Health-related problems, in particular the AIDS pandemic afflicting the African continent, are one of the most serious constraints to sustainable development. Implementation of the proposal centers around reinforcing the infrastructure of DREAM centers (Drug Resource Enhancement against AIDS and Malnutrition) of the Comunità di Sant’Egidio in Africa. This proposal, with due modifications and adjustments, was developed in more detail in Phase 2 of the project, and is currently in the operational start-up phase.

19. Proposal 2: “Human capital with European competencies” Theme: Training and human resources. Proposal: “Build a European agency to attract/select African students in a number of academic subject areas; design/implement a program to place African students in European universities and corporate internships; promote the return of trained African students to their home countries.” Motivation: Human resources is one of the key elements in developing an area. Africa has many problems (infrastructure for training, scarcity of trained personnel, the brain drain,17 etc.) that undermine the prospects for concrete future development. The goal of the project concept is to contribute to filling the training gap in the emerging African middle class while at the same time strengthening relations with Europe to enhance future political and business relations. This initiative is also in the operational start-up phase.

20. Proposal 3: “Italian banks” Theme: Financial and credit system. Proposal: “To promote the presence of the Italian (and European) banking system in all the areas of involvement of Italian companies working in Africa. In other words, convince the main Italian banks to develop their own strategic presence on the African continent.” Motivation: One of the factors propitious to development is an efficient banking-financial system, as part of major international circuits, that can provide support to businessmen and companies for their development. With only a few exceptions (such as South Africa or Maghreb countries), Africa is strongly lacking in this area.18 In recent years, many African countries have initiated major efforts to open up and modernize this sector. These efforts, backed by the growth of many local economies, are opening up major opportunities. With just a few exceptions, the European banking system can profitably reinforce its presence, also in order to assist European companies enter the African markets that interest them.

17. It is estimated that each year, 70,000 qualified persons leave Africa to resettle permanently elsewhere. 18. According to recent estimates (see, for example, the publi-

cation Jeune Afrique ), the top two-hundred African banks considered as a single banking group would place 23rd in the classification of banks worldwide.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

21. Proposal 4: “European (Italian) and African cities together” Theme: Decentralized cooperation. Proposal: “To promote the drawing up of agreements on specific issues between major cities (or urban areas) in Europe and a number of major African cities (or urban areas).” Motivation: This proposal centers on promoting the creation of forms of decentralized cooperation between European and African cities in specific projects. In fact, experience from a number of initiatives already launched in the past with good results, supports the belief that this mode of cooperation19 can generate significant positive effects in selected spheres.

22. Proposal 5: “Piloting into legal waters” Theme: Legal system. Proposal:20 “Create a major law firm (ideally in Sicily21 ) with offices in many African countries to provide legal advice to European, Italian and Sicilian companies wishing to operate in Africa.” Motivation: The legal-juridical system is a key mechanism in development (as is the credit system). For a potential investor, the presence of efficient mechanisms for protection of investments and legal property, application and respecting of contracts, etc., is essential. The more a given legal-juridical system is in-line with the most modern international thought, the more economic activity (and social relations in general) will benefit. Through adapting and improving already-existing models,22 this proposal aims at building a European/Italian law firm with strong presence in Africa that would handle commercial law23 in order to aid European/Italian companies in their activities in Africa.

23. Proposal 6: “More and more energy” Theme: Energy. Proposal: “To create a European-wide think tank as support for African countries in their development and creation of local initiatives for efficient energy production based on renewable sources and distribution on a local level.” Motivation: Energy is one of the sectors in which the challenge of global growth is played out.24 Despite an enormous energy potential (above all oil and natural gas reserves, but also renewable resources which, currently, are little exploited25 ), Africa suffers from a large energy

19. Among its strong points are attention to the actual development needs of local communities, fruition of specific expertise of the areas involved in the project, enhanced control over the projects themselves (implementation in areas that are smaller in size and of greater interest given the results) and involvement of a number of players and society at-large. 20. This proposal is the result of numerous contacts and meetings with individuals and institutions in Sicily, Italy and Africa. 21. Sicily’s “candidacy” is based on its deep-seated roots in the area of law and jurisprudence and the special competencies of excellence found there. 22. A possible choice could be the model of Backer&McKenzie, a leading US law firm which, starting in the 1950s, provided support to numerous US companies for their entry into Europe.

Today, Backer&McKenzie is present in 38 countries with a network of 70 branch offices, 23 of which are in Europe. 23. “Commercial law” basically refers to international corporate law, international commercial law, international tax and duties law and international private comparative law. 24. According to the International Energy Agency, over the next 30 years, world energy demand will quintuple. 25. According to figures of the International Energy Agency (IEA), the Rift Valley, which extends from Egypt to Mozambique, has a potential for geothermal energy of over 6 GW, of which only 121 MW are actually produced in facilities in Kenya. Similarly, in Africa, the sun’s rays could produce between 5 and 7 kWh/m2 per day, a situation similar to that in other major solar power-producing countries, but only 1.3% of the world’s solar energy-producing capability is installed in all of Africa.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

deficit, with situations that are particularly serious in rural areas. In this context, as part of the proposed project, the think tank (composed of high-level experts and researchers into energy issues), along with major Italian and European companies, would be involved in the organization and start-up of energy projects for the production, selling and distribution on a local level (in Africa) and, potentially internationally, of the energy produced.

24. Proposal 7: “Cursing violence” Theme: Human rights. Proposal: “To create an Observatory involved in monitoring the phenomena which generate and spread violence in Africa, while also highlighting the extent of the phenomena and the resulting social-economic damage.”26 Motivation: This issue is of extreme importance in Africa. The proposal is aimed at creating an Observatory to monitor violence and act in two ways: after the fact, quantifying the economic and social damage tied to the conflicts, or before the fact, informing international bodies as well as various players involved in the scenarios related to potential outbreaks of violence. Ideally, the Observatory could be linked to an international organization and be guided by a top-level advisory committee in order to attain the same prestige, authority and credibility as bodies such as Amnesty International or Transparency International. The goal is to be seen as a neutral body of recognized authority that can exert moral suasion on governments of African countries most at risk, in order to contribute to the spread of rule of law.

3.2 Phase 2 (2007/2008): focus on telemedicine, education, tourism 25. Following the first phase aimed at getting an overall idea of Africa, the second phase of the project was oriented towards greater focus and operational aspects. Specifically, the objectives were: - Provide a more detailed business plan for the telemedicine and education initiatives launched the previous year. - Launch a new initiative in Africa in the area of cultural tourism.27 - Develop a tool for analyzing and interpreting development progress in African countries to provide support for those with potential interest in the continent and who would like to “become oriented”: the Ambrosetti Development of Africa Map (ADAM). Summarized briefly below: - the features of the telemedicine and education initiatives, currently in the operational start-up phase; - the main features of the Ambrosetti Development of Africa Map. - DREAM’s T&EAM initiative (Telemedicine and distance learning)

26. Wars and conflicts and use of conventional and non-conventional arms, relationship between the state and individual, crime and corruption, manipulation of public opinion. etc. 27. The project consists of developing a for-profit, value-creating European agency that would be involved in four basic activities: a) In close collaboration with the African countries involved from which the agency would obtain permission to operate, identify in

Africa the areas of potential tourist interest with special focus on culture-related ones; b) Develop integrated, tourism-based initiatives (overall plans for territorial growth and competitiveness from a tourism approach); c) Search for investors and sell the projects; d) Support and assist in project implementation (if requested).

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

DREAM’s T&EAM initiative (telemedicine and distance learning) 26. The mission of the DREAM’s T&EAM initiative is to expand telemedicine and distance learning activities within the DREAM program28 of the Comunità di S. Egidio.

27. The goals are: - In five years, equip 20 DREAM centers in Africa with the infrastructure29 required for telemedicine and distance learning activities.30 - Create a technological and technical-computer pole of excellence31 involving telemedicine and AIDS treatment through the DREAM center in Messina,32 connected with the university for graduate medical-computer degrees. Fig. 10 DREAM’s T&EAM initiative (Telemedicine and distance learning)

28. DREAM represents a model of excellence in the fight against AIDS that is recognized on an international scale for the efficiency of its approach, adoption of quality standards, use of available technologies and the results it has obtained. Some figures relating to the program (2009): 1,000,000 have benefited in some way from the DREAM program; 65,000 seropositive individuals treated in DREAM centers (of these 15,000 under age 15); 37,000 in antiretroviral treatment (3,500 under age 15); 64,000 who have undergone HIV tests in DREAM centers; 350,000 medical exams in DREAM centers since 2002; 98% of children born HIV-free to seropositive mothers thanks to antiretroviral treatment within a global approach; 95% adherence (the highest figure in sub-Saharan Africa, close to, or better than that in European countries and the United States); 150,000 viral loads processed in DREAM molecular biology labs since 2002; 400,000 CD4 tests processed in molecular biology labs since 2002; 31 DREAM centers already active or in the process of being activated in Africa; 18 molecular biology labs active or in the process of being activated; 3,300 African professionals trained (doctors, nurses, biologists, lab technicians, center coordinators, home care personnel). 29. Video conference equipment, internet connection, satellite and local communications and solar panels for energy self-sufficiency of centers and laboratories. 30. Thanks to this infrastructural development, it will be possi-

ble to provide distance diagnosis and treatment for patients, as well as training courses, all of which will benefit the entire area through intensive use of the infrastructure created. 31. Activities in which the pole will be involved include: advanced operational research (including connected with other centers of excellence worldwide); software development for data processing in real time and specialized artificial intelligence programs for AIDS treatment; collection and processing of epidemiological data (including database maintenance and updating). 32. A nucleus of the Comunità di S. Egidio is already active in Messina that develops the software necessary for telemedicine activities and gathers, processes and distributes the information. 33. Initially, standard structured courses and specialist courses (in order to examine specific theoretical and practical themes) are planned for: computer technicians to manage the databases and computer programs; doctors who intend working in public health; lab technicians specifically involved in molecular biology labs. A period of on-the-job training at DREAM centers and biology labs is planned, with a program to hire at least 20% of those participating. Over the long-term, the initiative calls for the organization of more specialized university courses, partly distance and partly residential, with academic recognition of the qualifications awarded, in agreement with universities and other scientific entities.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

- Develop and start up structured training programs for medical personnel, paramedics and technical-computer personnel in Africa.33

28. The fight against the AIDS

Fig. 11 Patients being treated in Africa (DREAM countries): current figures and with the contribution of the DREAM’s T&EAM initiative

health emergency is also an issue of sustainability for economic growth, in which treatment of the disease is extremely important and prevention alone (the traditional approach) is insufficient. To-date, almost 70% of those suffering from AIDS in the world (33 million people according to the UNAIDS agency) live in sub-Saharan Africa where it is the no. 1 cause of death. Those groups especially hit are children34 and adults between 15 and 49 years of age.35 This leads to concrete risk of seeing seriously affected those groups of people of working age and the younger generations—in essence, the very capacity for development of the country itself. The figure below shows the contribution the DREAM’s T&EAM initiative makes in the fight against AIDS.

Senghor Agency initiative for African talent (Education) 29. The mission of the Senghor Agency36 is to be the center for promoting European university training in Africa to prepare the new African ruling class in Europe and provide support for its academic, specialist and corporate training, thus reinforcing cultural ties and relationships between Europe and Africa.

30. The Agency’s activities include: - Marketing and promoting European universities in Africa. - Providing information to potential African students. - Distance counseling. - Bureaucratic and administrative assistance. - Selecting students for the universities. - Offering corporate internships. - Recruiting for African and European companies for positions in Africa (to reduce the brain drain).

34. Of the 370,000 new cases recorded worldwide during 2007, 90% of those under age 15 live in sub-Saharan Africa (globally, they have risen from 1.6 million in 2001 to 2 million in 2007). 35. In some countries, over 25% of the population is seropositive.

36. Over fifty years ago, Leopold Senghor, Senegalese poet and president, created the expression “Eurafrica”, in reference to a long-term vision that alludes to just how intertwined the destinies of these two continents are.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

31. The Agency’s “clients” are European universities and specialist training centers who pay for the services provided by the agency, while Agency users are: - Students with a secondary school diploma who intend enrolling in a university degree course. - Level I or II university graduates who intend continuing their studies (master/doctorate). - University students who, as part of their degree course, participate in an internship at a European company or university. - African university instructors who want to enhance their knowledge in Europe.

32. It is expected that in seven years, the Agency will be able to attract approx. 15,000 African students, i.e., 15% of African students who currently come to Europe to pursue their studies.

Fig. 12 African students by destination area: current figures and contribution of the Senghor Agency

33. African students studying abroad number close to 200,000, of which 102,019 study in Europe (approx. 53% of the total). In Europe, this flow is directed primarily to four main countries (France, 43%; UK, 25%; Portugal and Germany, with a 10% share each). Italy is still not that attractive, with less than 5,000 students in its universities.37 Mobility of African students is gradually orienting towards Asia, especially China, encouraged by the policy of increasingly close ties. China currently attracts more than 15,000 African students each year. The strategy announced during the most recent SinoAfrican summit in Beijing provided for a substantial increase in this number. Other Asian countries are also starting up cultural and training initiatives with Africa, for example India, Malaysia and Thailand.

Fig. 13 African students abroad by destination area (Source: TEH-Ambrosetti based on UNESCO data)

37. The primary home countries of African students in Italy are Cameroon (30%), Morocco (21%), Tunisia (12%), Egypt (5%), Repu-

blic of the Congo (4%) and Democratic Republic of the Congo (3%).

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

The Ambrosetti Development of Africa Map (ADAM) 34. Africa is a continent comprised of 53 countries, each with its own characteristics and singularities. It is a reality which is highly composite in nature and getting an overall reading on development trends in each country is quite complex.

35. Specifically, the main problem arises in having to understand when (and if) a country is following a structural and sustainable path to growth.

36. There have been in the past (and continue to be) actual local situations that have imploded over a short period after years of explosive growth, completely wiping out the progress that was made. But there are also examples of countries which have set out with solid bases for growth, but are virtually ignored internationally (starting with investors).

37. The Ambrosetti Development of Africa Map (ADAM) is an operational tool developed to: - Provide a high-level, clear summary of the current situation in African countries with an overall analysis of all relevant social, economic and political factors. - Provide information about how “resilient” the development courses of individual African situations are. - Provide perspectives on foreseeable developments over the medium-term (5 years). Fig. 14 Ambrosetti Development of Africa Map (ADAM): summary overview

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

38. ADAM is updated each year and represents an informational resource available to all those interested in Africa (investors, policy makers, institutions, etc.)

39. ADAM details and results are presented in Chapter 3. The figure below provides an overall summary of the map.

3.3 Phase 3 (2008/2009): focus on agro-industry 40. On the basis of the project approach and work already in-progress, Phase 3 objectives were the following: - Study the agro-industrial sector in Africa, identify its development opportunities and potential areas of intervention for Europe (and European companies). - In this area, launch a new partnership initiative with one or more African countries: the idea being to create a pilot project for an integrated agro-industrial/fishing park for products and first-phase processing, for, primarily, the local market, as well as export (see below for further details). - Update the Ambrosetti Development of Africa Map to further develop this tool and reinforce its analytic and predictive capacity. - Examine a number of strategic issues for Africa that are of particular current relevance: impact of the international crisis and transnational corridors.38

The integrated agro-industrial park initiative 41. This project is designed to invol-

Fig. 15 Conceptual layout of the Park

ve—from an economic standpoint— European and African players and has a number of distinctive features39 that make it an innovative model to be replicated.

42. The basic concept behind the initiative is to select a sufficientlylarge area in which to create the conditions for maximizing agricultural, livestock and fish production to be channeled into an industrial fabric specially created for the processing, preservation and commercialization of food products.

38. These are the major infrastructure projects to reinforce trade on a regional basis. 39. Among the main ones are: modular and scalable approach; focus on agricultural, fish and zootechnic production and local processing; state-of-the-art technologies, including energy

(generated within the center from renewable sources); training programs and transfer of know-how; research and development within the center involving local products/production; strategic location near a transnational corridor for accessibility to interregional markets and to foster export.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

43. Overall, the project

Fig. 16 Operational structure of the food processing park

calls for the creation of b a s i c i n f r a s t r u c t u r e 4 0 (water resources, communications, utilities) in the region involved in the initiative, as well as upgrading the productivity of agricultural and livestock farming to high levels (irrigation systems, agricultural infrastructure).

44. Located within the confines of the park will be the basic services which lend quality to the project. These include: - an agricultural school; - an agricultural research center; - a center for renting and maintaining farm equipment; - processing industries; - service industries required for producing and exporting products.

45. The project involves a special model of public/private operation and running of the park, necessary to ensure the long-term success of the initiative (see Figure 17 which illustrates this).

46. This is a relevant aspect because it is the governance of these processes which has constituted the weak part of similar experiences.

47. At the time this report went to press, the park feasibility study for locating it in Uganda (first pilot country) was in the start-up phase.

3.4 Phase 4 (2009/2010): focus on urban development The fourth phase (the current one) of the project involves: - In-depth focus on a theme—urban development in Africa—examined in all its relevant aspects, including: - urban planning, construction and housing policies; - utilities (energy, water and sewers, infrastructure, urban transport and waste disposal); - telecommunications; - attracting foreign investment for urban development.

40. The costs of this infrastructure are to be borne by the project’s host country.

CHAPTER 1 - The â&#x20AC;&#x153;Developing the regions of Africa and Europeâ&#x20AC;? project

Chapter 2 of the report is dedicated to this theme. - Updating of the ADAM strategic map (Ambrosetti Development of Africa Map) of the situation in African countries and in-depth look at a number of key countries. Details are presented in Chapter 3. - Launching of an Observatory on Europe-Africa relations and strategic alliances (which will also monitor and evaluate the flow of aid, investment and the extent to which pledges are maintained) and Africa and the rest of the world (especially the South-South axis). Refer to Chapters 4 and 5 for this. - Continuation of the operational implementation of previously-launched initiatives: DREAM T&EAM project, Senghor Agency project, integrated agro-industrial park. - Launching of a new initiative involving the theme of urban development: this involves an Experimental urban area pilot project for a new approach to urban planning in Africa and to attract/activate investment in the construction and utilities sectors.

48. A status report on the initiatives and conceptual model of the urban development project will be presented at the Taormina 2010 Forum (October 7-8, 2010). Fig. 17 Park operation and management model

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

4. Summary Remarks

49. Africa holds tremendous potential for itself and for Europe. In fact, the growth figures for this continent provide a particularly interesting prospect for the near future. - The growth in GDP, which in the early 1990s was, on average, less than 1% per year, in the first years of the new millennium was stable around 5-6%. And not only. Prior to the recent world crisis, estimates of the International Monetary Fund forecast a rate of growth of over 6.5% for the next few years. Even after the crisis hit, although lower, the forecasts are still positive and definitely above those of other geographical macro-areas. - From 2000 to 2009, the flow of foreign investment and loans into Africa rose from 16 to 58 billion Dollars, peaking at 72 billion in 2008. - In terms of the war on poverty, an endemic plague on this continent, Africa has made important progress: according to recent forecasts, if current trends continue to hold, the share of the population today below the poverty line (1 or 2 Dollars of income per day) should clearly decrease thanks to the efforts of all governments to reach the goal of 38% by 2015 (in 2007, the percentage of those at the poverty level compared with the total population was 51%).

50. There is general awareness of the opportunities offered by the continent of Africa, as can be seen from the major initiatives by key international players who increasingly look to the African countries as strategic partners and the central role of Africa within the international scenario.

51. Another equally important indication of the new awareness regarding the African continent is the acknowledgement that the approach taken to-date to “aid” Africa has not produced the desired results. Aid alone—over 700 billion Euros since the 1960s—has not been adequate to overcome the “poverty trap”.41 Foreign aid has also proven to be a very costly tool: for each euro spent in aid to Africa, only a small part—it is estimated less than 20%—is actually utilized for development projects (the rest goes to pay the costs of the multilateral and aid organizations). Therefore, overall, aid to Africa, which is, of course necessary (although it could be better directed), by itself is not sufficient and can create distortions.

52. It is also from this perspective that the new strategies towards Africa, both multilateral and other forms, must be seen. And these increasingly show a net change in orientation compared with the approaches (utilized in the past) of purely aid or exploitation of “African

41. The situation in which the sample of pro capita capital diminishes from one generation to the next due to levels of population growth that exceed the net accumulation rate of the capital itself.

In fact, the “poverty trap” is a condition of underdevelopment from which a country/geographical area cannot emerge independently by embarking on a process of self-fed growth.

CHAPTER 1 - The “Developing the regions of Africa and Europe” project

assets”, moving towards an approach based on a search for mutual advantage for the various players involved, African and non-African.

53. The “Developing the regions of Africa and Europe” project originates from these premises, with the goal (through its initiatives and opportunities for discussion between European and African leaders) of contributing to reinforce the cultural and business ties between Europe and Africa in a way that is profitable for both.

CHAPTER 2 Urban development in Africa: current status, trends and opportunities

INDICE 1. INTRODUCTION

2. Urbanization: growth perspectives and development scenarios

3. Urban transition in Africa: a vision in brief

Main background information

The challenges of urban development in Africa

4. Summary remarks and opportunities for urban development in Africa

111

CHAPTER 2 - Urban development in Africa

1. Introduction

1. More and more often, cities are the main engines of social and economic development in the world today. This is easy to understand if we look at the figures: - over 50% of the world population lives in cities; in 2030 that figure will rise to over 75%; - over 60% of the GDP is produced in cities; - the cities consume almost 90% of the resources produced. Cities are responsible for the competitiveness of entire territorial systems – regions, states, supranational areas – that are struggling in the globalized world to secure the necessary human and financial resources for their development. The rapid process of urbanization currently in progress is the underlying cause of all the strategic challenges with which the institutional and entrepreneurial world will have to deal in the years to come: from infrastructures to services, from new consumers to new supply sources for business, from permanent education to styles of governance, etc.

2. The unquestioned leaders of this trend are the emerging countries where, by 2030, the urban population is expected to grow from 39% to 50%1 . This will open a scenario with challenges and opportunities that will be particularly significant in the areas of the south of the world, with Africa in the forefront.

3. The most significant strategies and projects for development and urban redesign will focus on this continent. African cities already showed the highest rate of growth from 2005 to 2010 (3.3%2 ), but during that time development schemes (in general) were not sustainable and tended to serve as multipliers of negative external factors; urban planning, thus far, has not been able to achieve a coherent and advantageous integration of the territorial dimension with the economic and social ones. This situation has changed now: after years of bad decisions and the failure of politics to devote sufficient consideration to the problem, cities are starting to gain a more central position in the agendas of many African governments. The challenge is clear: what remains to be defined is the manner in which Africa’s urban agglomerates will have

1. Source: TEH-Ambrosetti based on UN-HABITAT 2008 data.

2. Source: TEH-Ambrosetti based on UN-HABITAT 2008 data.

CHAPTER 2 - Urban development in Africa

to be designed, in order to withstand demographic pressure and the challenges of governance, balancing the needs of economic development with those of social inclusion and sustainability. The infrastructural projects, urban functions and services have to be planned coherently, taking account of specific local peculiarities and needs. This opens up significant opportunities for investment and business in a number of sectors. European capital and initiative can undoubtedly play a key role in contributing to the future of the great African mega-cities and the new forms of agglomeration such as Urban Corridors and City-Regions that are already developing in Africa.

4. In the light of the above considerations, the aim of the chapter is to illustrate the key aspects of the urban transition in progress, outlining the strategic challenges connected with it in the African countries, pointing out the structural constraints to be taken into account and conceiving a project initiative able to respond in a systemic and integrated manner to the major critical issues affecting the majority of Sub-Saharan African cities and which channel the competitive advantages and the particularities of the European approach towards urban development.

5. Spatial challenges - Integrated urban planning able to limit the progressive fragmentation, separation and specialization of the functions and uses of the cities and mitigate the growing differences between the better-off and the poorer areas. - Regulation of the urban sprawl consisting of informal and illegal housing settlements with inadequate living conditions (slum). - Response to the housing crisis generated by the limited financial and planning capacities of the local authorities and by the intervention of the private sector, limited to housing designed for the medium-to-high income bracket.

6. Infrastructural challenges - Extension of access to water and basic sanitation facilities to the entire urban population. - Relieving of the congestion of transport networks, extension and improvement of the fleet of public transport vehicles, control of the use of private cars and promotion of alternative channels to road transport. - Defining of a public and private waste collection system for coping with the needs of the growing population and identification of sustainable forms of waste disposal other than dumps. - Designing of new financing instruments able to motivate the involvement of private players and close the infrastructural deficit of the majority of the African countries, thereby aiding the economic and social development of their own cities.

7. Environmental challenges - Researching of more efficient urban development models than those adopted by the developed countries given the limited availability of resources. - Solving of environmental liabilities (Brown Agenda) deep-seated in the continuous spread of urban lifestyles, including air pollution, both external and domestic, and the management of solid waste, deemed to be one of the major health hazards in many African cities.

CHAPTER 2 - Urban development in Africa

- Prevention and management of environmental risks generated by climate change, with particular regard to the rise in sea level (11.5% of the African urban population is located near the coast, in areas that are at high risk for flooding). - Spreading of the principles of environmental sustainability in the planning and design of urban projects.

8. Economic challenges - Development of urban economic activities in order to meet the substantial demand for work expressed by the population resident in the urban areas, who are still unemployed today. - Upgrading of services (accountable for more than half of the African GDP) as the driving force for urban economic development. - Legitimation of the informal sector and regulation of its operation in view of the significant role (61% of jobs in the urban area and 40% of the non-agricultural GDP) it plays in the African economic scenario.

9. Social challenges - Reduction of urban poverty, for which Africa today has the highest levels in the world (43% of the urban population lives below the poverty line3â&#x20AC;&#x2030;) and this is bound to increase over the years to come. - Adoption of social integration policies aiming at limiting the fragmentation of the urban areas and at facilitating interchanges between social groups with similar characteristics. - Prevention of urban violence and crime. - Curbing and reduction of inequality levels in the distribution of income among the urban population in order to promote the economic growth of the territory and create the prerequisites for sustainable development.

10. Governmental challenges - Upgrading of the financial capacities (fiscal autonomy and recourse to the credit market) of local authorities which, in the more global process of decentralization of competence areas from the central level, still do not have enough resources to provide the services and make the investments required for the sustainable development of the urban areas. - Reduction of the structural weaknesses of the local government bodies which do not have the technical skills and tools required to manage the complexities of the urban areas. - Broadening of the public decision-making processes through the involvement of various stakeholders. - Creation of forms of wide-area government designed to promote urban development at a territorial level on the same scale as the urbanization currently underway. - Development of a systemic approach to strategic planning able to integrate the territorial dimension with the social and economic one. - Creation of a city hierarchy to limit the disproportionate concentration of resources or the duplication of functions and in order to promote more rational and sustainable development of the country.

3. Source: TEH-Ambrosetti based on UN-HABITAT 2008 data.

CHAPTER 2 - Urban development in Africa

11. Meeting the challenges posed by growing urbanization in Africa also means taking into consideration a series of structural constraints that complicate the implementation of urban development projects in the territory: - Limited availability of financial resources at a local level, due to a process of partial decentralization that is still largely controlled at a central level and due to the progressive cuts in the funding of structural adjustment programs, has focused public investment decisions on the resolving of the most urgent critical issues. - Limited availability in local government of personnel specialized in urban management due not only to the lack of consideration given to urban areas over past years but also to the structural adjustments of the 1980s which made substantial cuts in public personnel in order to relieve the crisis situation of the countries in difficulty. - Absence of insightful players with transversal skills in charge of urban management and responsible for wide-area government. - Lack of memory in African society, the rarity of archives containing information stored over prolonged periods of time and the consequent difficulty in retrieving accurate data to support the drawing up of suitable public policies.

12. This context provides the backdrop for the proposal advanced by us and refined in the course of this development project in an experimental, integrated and multifunctional urban area which represents an innovative model for confronting and resolving the critical issues raised by growing African urbanization. The initiative is characterized by its systemic approach and tackles, in different ways, each of the challenges described above: - Spatial challenges: promotion of urban density through the conceptualization of a model with a high population density and with vertical development thereby limiting urban sprawl. - Infrastructural challenges: involvement of the local and Italian/European private sectors in the infrastructural investments required to sustain urban growth, by favoring the spread of specialized Italian and European know-how and by making advanced technological solutions available to the African partners. - Economic challenges: integration of the development of informal activities in the formal economic fabric and increasing of its attraction for business by creating a fertile terrain for investment in the sector; - Environmental challenges: development of an urban area that would be self-sufficient from the energy standpoint and sustainable in the long term (energy consumption, emissions etc.) in respect of local construction techniques and materials. - Social challenges: planning aimed at social integration through the building of housing for the emerging middle class next to those of the poorer population groups and the creation of public spaces for social relations and aggregation. - Governmental challenges: the creation of an agency for the development of multi-disciplinary skills responsible for drawing up guidelines for the development of the urban project, coordinating the public and private players involved and monitoring the progress of the project in accordance with a series of parameters established in advance.

CHAPTER 2 - Urban development in Africa

2. Urbanization: growth perspectives and development scenarios

13. The world in which we

Fig. 1 The urban development trend (1950-2050) (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

live is a place dominated by the ur ban dimension. In 2008, humanity reached a epoch-making goal: for the first time in history half of the world population, i.e. 3.3 billion people, now live in urban areas. In certain regions of the world, such as Europe, North America or Latin America, the urban transition 4 took place decades ago, as far back as the ‘50s and ‘60s, and today over 70% of the population lives in the city. In other regions such as Asia and Africa, the process is still in its early stages, as the territories in question are still predominantly rural with 40% and 38.7% of the population, respectively, living in urban areas. Globally, the urbanization level is expected to continue grow over the next 40 years, to reach the threshold of 70% in 20505 . The small, medium and large cities of the South, like the North, reached an overall growth of 1.8% between 1990 and 2000. This means that the world urban population will have increased to 5 billion by 2030 and that, by 2050, it will have reached 6.4 billion. So the proportions of this phenomenon certainly deserve consideration: each day 193,107 new citizens are added to the world urban population: this is a rate of 2 persons per second!

14. Although these aggregate data serve, on the one hand, to highlight a phenomenon which, on a global scale, is becoming important and acquiring steadily increasing proportions, on the other they fail to reveal the specific territorial features of the exponential growth in the urban population.

4. The transition process that gradually changes the identity of a territory, facilitating the shift from a predominantly rural dimension to an urban one, and showing a progressive and con-

stant percentage increase of the population resident in urban areas. 5. Source: UN Population Division, 2007.

CHAPTER 2 - Urban development in Africa

Fig. 2 The urban population trend (1950-2050) (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

Fig. 3 Urban population in developing countries 2007 and 2050 (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

Not all regions are, in fact, equally affected by this rapid growth trend and the forecasts made suggest that it will be the emerging countries that will, for the most part, bear the brunt of absorbing the increase in urban population in the years to come6 . In these countries, the overall increase of the urban population will be in the region of 5 million inhabitants p e r m o n t h ag ai n s t t h e 500,000 inhabitants of the developed countries. Growth in the cities of the emerging countries will, therefore, be 10 times greater than that of the cities of the North. The differences identifiable in the analyses of the growth rates that affect the urban transition in course are moving in the same direction: in the ’90s, the cities in the developing countries grew at the remarkably high annual rate of 2.5% compared to an annual rate of 0.3%7 in the cities of the developed countries, in which moderate growth or decrease have now become the norm.

15. The total of the world ur ban population in the developed world should, therefore, remain substantially unchanged over the next two decades rising from almost 900 million to just over 1 billion by 2050.

6. 95% of the increase in urban population over the next forty years will be absorbed by the cities of the developing countries (Source: UN-Habitat, State of World’s Cities 2008/2009). 7. This growth rate only considers cities with more than 100,000

inhabitants between 1990 and 2000. The growth of the world’s urban population was estimated at 2.67% for developing countries and at 0.54% for developed countries in the years 2000-2005.

CHAPTER 2 - Urban development in Africa

Growth will derive essentially from the immigration of people from the poorer countries as opposed to natural growth of the population which, in these countries, tends to be low or even on the decrease.

16. In contrast, by the mid-21st century, the urban population in the developing countries will have more than doubled, rising from 2.3 billion in 2005 to 5.3 billion in 2050. Asia will be the home to 63% of the global urban population while Africa will accommodate 23%, and overall, 95% of the growth in the world urban population over the next 40 years will be absorbed by the cities of the developing countries. Although these changes reflect an important evolution in economic activities and in the structure of employment, marking the transition from agriculture to industry and services, they are taking place on such an unprecedented scale that, if not efficiently managed, they run the risk of obstructing the development process of these countries.

17. Notwithstanding the continuous growth of urbanization, a gradual drop in the urban population growth rate in these countries is starting to be observed, although it is still among the highest in the world. Over the decades to come, in fact, the urban population is expected to increase at an annual average rate of just over 2%, a drop in comparison to the 3.8% of the ’80s or the 4% of the ’50s and ’60s. The inverse relationship between the urbanization levels and the urban growth rates, together with the significant growth recorded by some cities and signs of reduction by others, seems to herald the beginning of a new urbanization cycle in developing countries, which could lead – although it is still too early to say – to a greater alignment with the tendencies observed in the developed countries.

18. The timeframes and characteristics of the rapid urbanization in course in the developing countries varies considerably from region to region. Asia is the region with the greatest number of mega-cities8 (9, Japan included); urbanization is taking place rapidly. Half of the population will already be living in cities before 2025, and in the years to come Asia will continue to be the continent with the largest percentage of the world’s urban population9 . The very large cities are the ones growing at the fastest rates (between 1990 and 2000, they showed an annual growth rate of 3.9%, i.e. twice the world average) with the smaller ones following on behind. This growth can be explained partially by the very high growth rate in the population (between 2 and 4%) and partially by a series of factors including: the adoption by governments of a “pro urban” approach 10 towards economic development, passing from an economic system that is planned and controlled by public authorities to a market system; the administrative reclassification of predominantly rural settlements as cities, and immigration.

19. Latin America and the Caribbean form the most heavily urbanized region among the developing countries with 77% of the population living in urban areas. The growth of

8. Urban nucleus the population of which exceeds 10 million inhabitants, (UN-Habitat). 9. Asia is expected to be home to 63% of the world’s urban population by 2050. (Source: UN-Habitat, State of World’s Cities 2008/2009). 10. A distinctive feature of the process of urbanization in Asia

is that with varying degrees of success, and often of failure too, the construction and the development of intermediate cities have been used as mechanisms for the redistribution of the population and for regional development, for the purpose of slowing down the growth of metropolitan cities.

CHAPTER 2 - Urban development in Africa

this region began in 1940, reaching its peak in the 1960s – with an annual growth rate of 4.6% – and starting to fall off from 1980 onwards, coinciding with the drop in the growth of population over the last three decades. An important feature of urbanization in this region is the disproportionate size of the cities. Four of the world’s largest mega-cities (Mexico City, Sao Paulo, Buenos Aires and Rio de Janeiro) are in this region and are home, collectively, to 14.1% of the population. This data contributes to defining another factor for urban development in this region: urban primacy11 i.e. the high percentage of the urban population (approx. 20%)12 concentrated in the largest cities with more than 5 million inhabitants. In contrast with Asia, significant growth rates are observed not so much in the large cities but in the smaller ones (between 100,000 and 500,000 inhabitants) which not only show the region’s highest growth rates but have also taken in almost half of the new citizens between 1990 and 2000.

Box 1-The new forms of urbanization The rapid growth of the urban population expected over the next decades will bring with it, not only the extending of the dimensions of alreadyexisting cities but also new forms of urban agglomerates that, developing in length, will give rise to huge metropolitan regions in which the transport infrastructure will be the critical variable that will determine the success of the area. If in 2025 there will be 26 mega-cities – 7 more than today – (Kinshasa, Lagos, Jakarta, Guangzhou Guangdong, Lahore, Shenzhen, Chennai), we shall also witness the construction and development of the so-called “Urban Corridors” and “CityRegions”. Recent research by the United Nations has revealed a current trend in many countries to promote synergies between the major urban areas in expansion, orienting their development in a lengthwise direction so as to fill the distance separating the two metropolises with strategic infrastructure. Either under the aegis of the public authorities or spontaneously springing up as the most immediate response to the exponential growth of neighboring

11. In urban studies, the term urban primacy refers to the concentration in a city of a significant proportion of the population of a country, as well as of the functions for controlling capital

cities, this urbanization process already exists in a number of concrete examples. As far as urban corridors are concerned, according to the latest UN-Habitat report, around forty currently exist, accommodating 18% of the world’s population, 66% of economic activity and 85% of scientific and technological innovation. Some of the most important are listed below: - San Paolo-Rio De Janeiro - Ibadan-Lagos-Accra - Mumbai-New Delhi - Pechino-Tokyo-Pyongyang-Seul - Nagoya-Osaka-Kyoto-Kobe - Hong Kong-Shenzen-Guangzhou - Kuala Lampur-Klang As regards city-regions, the most important are: - San Paolo (with a surface area of 8,000 sq. m.) - Cape Town (the metropolitan area of which is 100km in length) - Bangkok (which will be 200km in length by 2020) - Bangkok (200km di lunghezza nel 2020)

flows and financial transactions, industrial production, the wealth produced and other similar indicators. 12. This percentage is 18% in Asia and 15% in Africa.

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3. Urban transition in Africa: a vision in brief Main background information

Fig. 4 Urban development trend in the regions of Africa (1970-2050) (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

20. The growth rates of the urban population in Africa are the highest in the world.13 The region’s urbanization potential is still extremely high: Africa, with 38.7% of the population resident in the city, is still in the initial stages of the urbanization process14 and still has extremely high fertility rates (4.7%)15 if compared to the global average (2.5%). According to the forecasts, this region will have the highest rates of urban growth in the world in the decades to come. By 2030, the majority of Africans are expected to be living in cities and, in absolute terms, the number of African cities will have more than doubled.

Fig. 5 The urban and rural population in the regions of Africa 2007 (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

21. The urban population, which currently totals to 373 million inhabit ant s, is d i s t r i b u te d throughout the territory in an irregular manner. Some of the regions are highly urbanized, e.g. nor th Africa (51%) and south Africa (46%), while others, such as east Africa, are still predominantly rural (20.4%).

13. 3.3% per annum between 2005 and 2010 - Source: TEH-Ambrosetti based on UN-HABITAT 2008 data. 14 .With 38% of the population resident in cities in 2007 and 39.1% in the course of 2008, Africa is the least urbanized region in the world

- Source: TEH-Ambrosetti based on UN-HABITAT 2008 data. 15. In certain areas of Sub-Saharan Africa, fertility rates are even higher. Central Africa, for example, recorded a fertility rate of 6.1% in 2007 (Source: The World Bank).

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22. The rapid growth of the urban population will be absorbed chiefly (2/3) by the smaller cities (<500,000 inhabitants) in which already more than 50% of the population already resides. It thus appears of fundamental importance for national and local political decisionmakers to concentrate on this type of urban agglomerate with a view to coping better with the growth expected in the near future.

23. The large cities (>1 million inhabitants) will also grow rapidly, at a slower rate than the small cities but nonetheless higher than the average of the developing countries. These cities will absorb the remaining 1/3 of population growth expected in the decades to come and their number will increase from 43 (2005) to 59 in 2015. By 2025 two of these (Kinshasa and Lagos) will be classifiable as mega-cities, with a population of over 10 million inhabitants.

24. Among the distinctive features of African urbanization is that of urban primacy, as per Latin America in the past, i.e. a disproportionate concentration of people, activities, investments and resources in the largest cities of the country, to the detriment of the other cities. This feature gives rise to economic distortions and imbalances, to problems such as congestion, environmental degradation and wide-area planning. A second feature is the expansion of urban fringe areas16â&#x20AC;&#x2030; an increasingly more frequent characteristic in the development schemes of African towns.

25. Despite the fact that the African cities are responsible for 55% of the global GDP, 43% of the urban population still lives under the poverty line17â&#x20AC;&#x2030;. This data highlights the nature of African urbanization, an urbanization that is strongly characterized by social-humanitarian features and by poverty and not by a social-economic transition deriving from industrialization, as was the case in the other regions of the world. African urbanization is closely connected with the emergence of slums18â&#x20AC;&#x2030; or other informal types of habitat, as indicated by the rates of urban growth: between 1990 and 2000, the slums increased at a rate of 4.53% while the towns showed an overall growth of 4.58% during the same period.

26. In parallel with the growth trend of the urban population, it is important to underline how, consistent with the general tendency in course in the developing countries, the first signs of a slowdown in growth are being observed in Africa too. This fact, together with the redistribution of the population towards the small and medium-sized cities may be interpreted as a sign of saturation and of the reaching of the maximum capacity of some of the towns, and could be interpreted as an indicator of the need for systemic intervention in order to relaunch urban growth.

16. Many large cities are expanding at a brisk pace, absorbing nearby rural areas and small agglomerates, thereby creating concentric urban fringes. This is essentially a haphazard process, driven by the efforts of low-income families attempting to secure themselves a piece of land at an affordable price and in a strategic position. The new residential belts resulting from this expansion are, moreover, not in compliance with legal requirements and public regulations and, most of them do not even have access to basic services. 17. In many Sub Saharan African countries, this percentage rises

above 50%. 18. A nearby settlement in which the inhabitants do not have proper housing or basic services. Slum dwellers are defined as such when their living conditions are characterized by at least one of the following privations: no access to safe drinking water, no access to sanitation services, temporary housing, insufficient living space, unsafe buildings. Slums are often not recognized and considered by the public authorities as an integral part of the city. -Source: (UN-Habitat).

CHAPTER 2 - Urban development in Africa

27. The scale of the urban

Fig. 6 Urban growth rates in Africa (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data).

development trends described above together with the forceful emergence of imbalances and malfunctions have succeeded in bringing the urban issue to the centre of the agenda of numerous African countries which are beginning to start up strategic reflections and project initiatives up to the standard of the challenges that the future will bring. There is a growing number of noteworthy dynamic business enterprises that have succeeded in making their own cities the drivers for the development of the territory, and there are also numerous examples of cities that have successfully used the growth trend to create themselves an image and use economies of scale and learning to the best advantage in the building of the towns. Box 2-The origin of African cities: three urban generations In Africa at least three urbanization models can be distinguished, summing up three radically different urban realities, each of which is based on specific needs which require custom-made tools and considerations. The Arab-Muslim cities of the Maghreb An ancient type of urban development, very much influenced by Arab urban culture. Most of the cities develop around a fortified old-town (medina) where an intricate labyrinth of alleys and small commercial workshops prevents vehicles from entering. The wave of urbanization subsequent to French and British colonization added planned, geometrical urban spaces outside of the medina. The gap between the two was progressively filled up by bidonvilles (in fact this term was actually coined to describe the forms of illegal and spontaneous residential areas that sprang up in Casablanca) South African cities Here urban development is relatively recent

and is oriented around industrial development. The urban development model is based on racial segregation. The cities have, in fact, been created by and for white people and have been planned according to the principles of residential separation. Thus, residential areas have been created for the black population (townships) separate from the white districts and far from the city center. Many cities also have a Central Business District. Central African cities Urban development takes place completely externally, a result of colonialism which looked on the cities as political and administrative control centers and sor ting bases for rural produc t s heading tow ards the metropolis. There is no old-town as such and the centre of the cit y corresponds to the old European settlement which has, over the course of time, been transformed into the political and economic center.

CHAPTER 2 - Urban development in Africa

The challenges of urban development in Africa 28. The urban development underway in Africa appears even more remarkable considering its relatively late start. In fact, the real urban explosion really only commenced in 1945 (or thereabouts, depending on the country). In those years the cities began to grow rapidly, reaching values that were unheard of for the majority of cities in the North. Subject to sudden, large-scale demographic growth, the African cities gradually lost full control over their own space and internal development logic, leading to the creation of imbalances and malfunctions. The increase in the urban population was so rapid that the public authorities responsible for urban management did not have enough time to plan the occupancy of the areas or equip new districts with the necessary infrastructure and facilities (schools, hospitals, leisure facilities etc.) to guarantee a decent standard of living. With the outlook of decades of steady growth â&#x20AC;&#x201C; albeit at a slower pace â&#x20AC;&#x201C; and increasingly burdened by the continuously delayed responses, African cities, both small and large, have been reflecting for some time now on the development paths to undertake in order to guarantee sustainable growth over time. Gradually the decision makers seem to have become aware of the development potential of the urban agglomerates and have begun, in a variety of ways, to meet what have now proved to be the greatest urban development challenges in Africa, devising innovative solutions and not necessarily following the development paths undertaken in the North.

29. In this perspective, the key aspects to be tackled in the coming decades by the African cities in order to guarantee the harmonious and sustainable development of the urban areas will be described below in order to highlight, for each of the same the factors that render them particularly critical in the African context and, whenever possible, to report the initial reflections and the most important projects launched in order to provide a response.

CHAPTER 2 - Urban development in Africa

I. SPATIAL CHALLENGES 30. The rapid urban development process has brought local governments up against new forms and spatial processes. The changes have substantially led to more marked fragmentation, separation and specialization of the functions and uses of the cities and a polarization of the employment market (Central Business District, informal markets and workshops) which has gradually led to increasing differences between the better-off and the poorer areas. Over the course of time, marked contrasts arose between the high income and the suburban residential areas, between the ethnic enclaves and ghettos as well as between the areas destined for advanced services and the production sector, for the sale of luxury products and for recreational structures and the areas accommodating the old industrial estates, factories and informal activities. If, on the one hand, these spatial inequalities were the result of the action of market forces on the cities and of property and land speculation, on the other hand, they were also the response to the local policies which had been aiming at the revival of the global competitiveness of the cities in order to attract new investments concentrating initiatives in the urban areas of interest. Box 3-The land issue The setting up of informal districts is also the result of the poorly regulated practices for the purchasing of land in Africa. Since, in traditional African law, the concept of private property does not exist, the development of the cities took place in parallel with the creation, by the colonizers, of land rights along the lines of those of the Northern metropolises. Once the area to be urbanized had been identified, the lands became the proper ty of the administration (i.e. of the land registry) which gradually defined the various methods for authorizing the purchase of urban land. Excessively complex and costly procedures led to the establishment of a legal system based on cus-

tom, generally modeled on the concept of “first occupant”. The increase in the demand for housing has multiplied the sales of lots by the latter type of owner, leading to the creation of huge residential areas, all of which, however, have no legal value for the State, which considers itself the only real owner of building land. This dual procedure for purchasing land has given rise to the “legal city” and “illegal city” dichotomy. In consideration of the high numbers of the population resident in the latter areas, the administrative authorities ended up recognizing a situation of de facto occupation and, in absence of clear regulations, the conflicts are generally resolved either through negotiation or force.

31. Various forms of spatial fragmentation may be observed. In many cities, the new forms characterizing the expansion of the cities are largely determined by the desire and by the efforts of low-income families to secure themselves a piece of land at an affordable price, in a position close to their workplace and with access to basic services. This expansion process mainly involves the countryside and rural suburbs which, often not having been subject to regulations, become an area for experimenting totally new forms of urban development. Most of the rapid urban development underway in developing countries takes place, in fact, in non-planned urban fringe areas and takes the form of the construction of extended areas of slums.

CHAPTER 2 - Urban development in Africa

Fig. 7 Population resident in slums (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

Fig. 8 Percentage of the urban population resident in slums (Source:TEH-Ambrosetti based on UN-HABITAT 2008 data)

32. One inhabitant out of three in the cities of developing countries lives in a slum. According to UN-Habitat (2005) estimates, more than half of the population living in slums is situated in Asia, followed by Sub-Saharan Africa and by Latin America and the Caribbean. The predominance of slums is greater, however, in Sub-Saharan Africa where 62% of the urban population lives in slums19 or suffers at least one of the five privations (see note 13) defining the living conditions typical of slum life.

33. In some parts of the world such as Buenos Aires, San Paolo, Santiago, Johannesburg and Pretoria, the parallel phenomenon of spatial segregation, inspired by completely different objectives, exists. In these cities, fear of crime and feelings of insecurity have led medium-to-high income bracket families to resort to gated communities or other types of high security residential complexes, creating increasingly more evident barriers with respect to the rest of the city.

34. After gaining independence, many African countries formulated public policies designed to promote homogeneous development in residential areas and supply housing to the poorer of f. However, as the rapid rates of growth characterizing the initial stages of African urbanization persisted, these policies met with little success and

19. The average growth rate of slums in Sub-Saharan Africa and in Africa is 4.48% and 4.53%, respectively. Specifically, the highest growth rates of the continent are in Nigeria - Source: TEH-Ambrosetti based on UN-HABITAT 2008 data. 20. For example: in the Ivory Coast, SICOGI (Société Ivorienne de

Construction et de Gestion Immobilière) which built 5,000 housing units per year between 1971 and 1979 and SOGEFIHA (Societé de Gestion Financière de l’Habitat) which made 30,000 housing units available between 1965 and 1979 have discontinued their activities (R. Pourtier Villes Africaines, 1999).

CHAPTER 2 - Urban development in Africa

soon came up against financial and management problems20 . As time passed, it became clear that the countries no longer had the resources to be able to provide sufficient housing, and often lacked even the resources to maintain already-existing housing.

35. The lack of financial resources for building and for large scale urban development processes is the reason underlying the housing crisis21 that exists in Sub-Saharan Africa today. Thus, new forms of public intervention on the subject were tested through, for example, the planning and infrastructural equipping of vast landholdings, after which the initiative and responsibility for the construction of the buildings was left to private initiative22 , or alternatively, through new systems of partnership between private entities and financial institutions set up for the purpose of developing the market and responding to the needs of the apparently less tempting slice.

36. It may be seen, in fact, that while the housing designed for the medium-to-high income bracket represents a market of growing interest for private investors and financial intermediaries prepared to assume the connected risks in consideration of practically certain future returns, the greatest challenge that African cities face today is the task of providing suitable housing for the medium-to-low income bracket of the population23 . This sizeable 24 slice of the population represents, in fact, the largest segment of the market as regards requests for urban areas and, given its limited financial resources and the absence of structured public intervention, it is increasingly more inclined to seek to resolve its sustenance and housing problems through informal channels, transforming the cities on the basis of its own needs, which are often in conflict with the legislation in force and with urban development plans. The “self-managed” urbanization that ensues gives rise to frequent friction between municipal government and the inhabitants of the informal settlements, which are considered external to the main urban fabric. With regard to these areas, many different approaches have been taken over time by the various local governments, starting with an initial phase of indifference (1960s), followed by a period of eradication and demolition of buildings (1970s) on the grounds of non conformity with urban planning regulations or lack of documentation, confirming the status of illegal possession, finally ending with the tacit acceptance (1980s) of the phenomenon. It is only when the “slum upgrading” programs, financed by the World Bank get underway that the African governments really started to consider the renewal of the most downgraded urban areas, promoting infrastructural initiatives (roads, water supply and purification of waste waters) and the improvement of the living standards of the resident population.

21. In south Africa, there is a backlog demand of 3 million housing units. In Zimbabwe, for example, at the peak of the period of support for housing programs, at the end of the ‘90s, 18,000 houses per year were built against an overall requirement of 84,000 units. Since then production has dropped (Source: UN-Habitat, State of African Cities, 2008). 22. An example of this urban development process which, while allowing room for free private initiatives, involves public intervention for the planning and infrastructural equipping phases is Dakar, specifically Pikine, a new urban space 15 km from the CBD (named Plateau) created out of nothing by the public authorities in order to reduce congestion in the center and encourage the settling of those families removed from the center for urban renewal purposes.

23. The unprecedented expansion in recent years of the urban population in Africa has led to a rapid increase in the demand for urban land in the face of which the local authorities have failed to make a real commitment in terms of infrastructural fitting out of the areas annexed from the rural community. The long time frames for the extension of the urban infrastructures together with the difficulties involved in purchasing the new areas of land to be urbanized have led to a gradual increase in market prices, which have become unaffordable for the medium-to-low classes and virtually only viable for the small slice of the market occupied by the medium-to high income classes. 24. 43% of Africans still live below the poverty line (1US$ per day).

CHAPTER 2 - Urban development in Africa

37. The scarcity of housing for the poorer classes, and hence the increase of informal settlements is, moreover, the result of a lack of strategic and systemic vision on the subject by governments and local authorities, of limited institutional capacities for the management of increasingly more complex built-up agglomerates and of the lack of a clear-cut political strategy in confronting the issue of informal housing estates25 .

Box 4- Building housing for the medium-to-low income brackets of the population: two experiments. South Africa Between 1995 and 2005, South Africa granted subsidies for 3.5 billion US$ to families with a monthly income of less than 580 US$ in order to encourage mortgage lending institutions to enter the subsidized housing market. Although this was an enterprising initiative, the subsidy scheme planned by the Government encountered numerous obstacles which thwarted its efficacy right from the outset. First and foremost, the families in the name of which the mortgage was registered had to pay interest and service costs irrespective of whether their spending power had increased. Secondly, the majority of the subsidized housing was built in suburban areas (leading to high ancillary costs) and was in a state of deterioration (70% of the buildings constructed between 1994 and 1999 were declared inadequate in terms of surface area, waterproofing, heating, positioning and design). The last critical issue involves the credit institutions. These institutions are traditionally reluctant to grant loans to families with low incomes due to the high risk levels involved and to the said families’ poor understanding of the specific financial mechanisms, requirements and conduct of the various players operating in the property market. So even when state subsidies were granted, the credit institutions still found the property market for the low income bracket (unemployed, informal sector workers etc.) impracticable for the use of the traditional mortgage instruments. Similarly, the families had difficulty in understanding the underlying financial conditions and considered the mechanism proposed too risky. The difficulty

25. The programs aiming at tackling the question of informal housing settlements are often instrumentalized for political ends

in contracting a mortgage loan with the banks led to a shift towards the use of microfinance for the property sector, and the setting up and spread of non-bank credit institutions, giving rise to an innovative method of financing for the sector in question. Zimbabwe Following independence, the government set up the National Housing Fund for the purpose of granting loans to local entities or to individual operators at the concessional interest rate of 11.25%, refundable in 30 years. Before the fund was closed, in the mid ’90s, funds were earmarked (Z$ 2.466,8) for the building of approx. 500,000 houses, while the local authorities had equipped 106,003 land holdings with the necessary infrastructure. Prior to the economic crisis at the end of the ‘90s, Zimbabwe seemed to have managed to unfreeze the mortgage granting mechanism for the low income brackets of the population, by encouraging the participation of private players in the housing sector (often financed by donors or public funds). The key difference compared with the previous experiment is that government support and the donor subsidies to encourage the participation of the private sector were not allocated directly to the families but used to reduce the structural costs in the largest property and construction market. From 1987 onwards, Housing Guarantee Loans (USA aid and government subsidies) together with the Zimbabwe Private Sector Housing Programme did their utmost to influence housing allocation policy in

inserted among the priorities of the political manifestos in election periods, and set aside immediately afterwards.

CHAPTER 2 - Urban development in Africa

order to reduce bottlenecks in the delivering of the low cost housing connected with areas to be urbanized, financial instruments, construction materials and the increase of economic accessibility of the housing for the low income brackets of the population. This mechanism has, moreover, contributed to increasing the volume of the mortgage loans and the land areas equipped with basic infrastructure. Equally important is the fact that, in order to make the purchase of a house accessible for the “not so poor” classes, as was the case in this experiment, can bring benefits to all of the

low income groups as it increases the number of houses in which the poorer-off can rent rooms or occupy the courtyard with shacks at a lower risk than that of contracting a mortgage that they might not be able to pay. In Zimbabwe, given the increase in the number of mortgage loans granted and their advantageousness from the ’90s onwards, credit institutions were set up and managed by local people, with products tailored to the purchasing power of the low income brackets of the population, and in competition with the traditional financial institutions.

II. INFRASTRUCTURAL CHALLENGES 38. In order to allow Sub-Saharan Africa’s cities to increase their productivity levels and become engines of the region’s economic development, it is essential for the urban areas to provide a context that stimulates the setting up of business communities and facilitates the interaction of the same. On the basis of evidence emerging from recent research carried out by the World Bank 26 , for the majority of African countries, the negative impact deriving from lack of infrastructure is equivalent to that associated with crime, corruption and financial market constrictions. The lack of safe drinking water, adequate sanitation services, a congested transport network or poor waste disposal facilities are, in fact, elements that influence the decisions of investors to the same extent as the safety of the reference urban context, the existence of a regulatory framework to protect the activities carried out and the cultural dynamism of the life developed in this context.

39. 64% of the African population (341 million people) have access to safe drinking water, 27 a significant improvement compared to the 56% of 1990. More specifically, roughly 50% of the rural population and 85% of the urban population. Overall, 26 of the 54 African countries are close to reaching the reference Millennium Development Goal28 and between 1990 and 2006, 245 million Africans were guaranteed access to safe drinking water. With regard to basic sanitation, in 16 countries coverage is still less than 25% and, with the exception of north Africa, it is difficult for the other countries to reach the Millennium Development Goal for 2015.

26. Source: Vivien Foster Africa Infrastructure Country Diagnostic (Source: World Bank, 2008). 27. The latest data available regarding access to safe drinking water and sanitation facilities are from WHO/Unicef Joint Moni-

toring Programme (JMP) and date to 2006. 28. MDG 7: Ensure environmental sustainability - “Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation”.

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Central and West Africa Overall coverage as regards the distribution of safe drinking water in the region increased by 7% from 1990 to 2006, rising from 49% to 56%. 56% coverage in 2006 corresponds to a population of 395 million and, when broken down, accounts for 76% of the urban population and 41% of the rural one. A 9% increase in the spread of basic sanitation has also been observed, rising to 30% in 2006: 39% in the cities and 20% in rural areas. East Africa The overall coverage rates for the distribution of safe drinking water increased by 14% between 1990 and 2006, rising to 54% in 2006. The chief contribution to this growth derives from improvements in rural areas where coverage rose from 30% to 45%, while remaining stable in urban areas in which considerable increases in population were recorded. As regards the distribution of basic sanitation facilities, 2006 figures show a coverage of 37% in urban areas and of 27% in rural ones. South Africa In 2006, the highest level of coverage in the distribution of safe drinking water in Africa was recorded in this region, with the service provided to 92% of the population (100% in urban areas). This data attests to an increase of 8% compared to 1990. Meanwhile, basic sanitation coverage rose to 57%, the second best performance after north Africa. Fig. 9 Population (%) with access to safe drinking water and basic sanitation facilities (Source:TEH-Ambrosetti based on UN-Habitat 2008 data)

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40. The congested transport networks, the poor and badly maintained public vehicle fleet, the exponential growth of private cars are further challenges that the majority of African cities are having to deal with in order to smooth the way for harmonious development of the urbanized area and in order to facilitate connections with the neighboring countryside and with the other urban nodes of the country. From a more global standpoint, moreover, road transport is excessive compared to rail, air and water transport, thereby running the risk â&#x20AC;&#x201C; due to the progressive increase in the cost of fuel â&#x20AC;&#x201C; of reducing the competitiveness of the territory and the competitive advantage of the economic activities that are developed within it. Even although there are no studies offering comparisons relevant to the various facets characterizing the issue in question, it is nonetheless possible to identify, through precise data, the key critical issues that were the focus of recent public and private intervention. Central and West Africa Many governments of the region are showing a growing interest in the issue, given the amount of annual investments made towards the planning and development of the transport system (approx. 20% of the annual budget in West Africa). In Nigeria, for example, the state of the infrastructure of the urban and outer suburban public transport system remains one of the greatest obstacles to the economic development of the country. Less than a fifth of the 80,500 km of roads are asphalted and the rest are in poor condition. Fig. 10 Segmentation according to type of transport (Source TEH-Ambrosetti based on UN-Habitat 2003 data)

CHAPTER 2 - Urban development in Africa

East Africa The cities of East Africa and the respective adjoining areas are not sufficiently served by the public transport system and the majority of urban core cities suffer the lack or severe limitation of mobility, while sustaining high social and economic costs. Only recently has greater attention been dedicated to the problem in national strategic policies and guidelines, and economic liberalization has prompted foreign private players (especially the Chinese) to enter the market and improve the infrastructure in Kenya, Tanzania and Uganda. Notwithstanding this, the system continues to be characterized by a high demand for mobility and by the failure of public players to supply sufficient, accessible and timely public transport systems for the population29 . South Africa The cities of South Africa have been conceived as “Garden cities”30 in which each functional area is separated from the next by open spaces, with the low income brackets of the population relegated to the outskirts of the industrial areas. This spatial architecture has contributed over time to creating long distances, raising investments in the construction of ring roads, railways and in the improvement of transport infrastructure to priority level on the political agendas of many central and local governments. The essential nature of the region’s demand for transport is linked to employment31 . Deregulation and economic liberalization has led, in almost all the countries of the region, to the elimination of state monopolies controlling bus companies and to the consequent legalization of informal transport services, considered illegal up until now.

41. In the majority of African cities, the collection and disposal of waste is still considered to be the responsibility of the local authorities, but the sector has been subjected to numerous privatization experiences. There are critical situations everywhere and the investments required to meet the requirements of a rapidly growing urban population are substantial. Solid waste is still chiefly disposed of in dumps. Apart from cans, scrap metal and bottles which are generally purchased from urban waste sellers by recycling companies, practices such as recycling and composting are not very widespread. Dumps, as shown by numerous developed countries, do not provide long term solutions since sites suitable for this purpose close to the city boundaries are soon used up, given the speed at which the urban core cities expand. It is, therefore, of vital importance to identify alternative forms of disposal in order to sustain the growth of the cities.

29. This situation has enabled private players to penetrate the market more and more, filling some of the gaps left by the public sector and offering mobility services. One example is that of the matatus (collective 14-seater taxis) placed at the disposal of the public by private enterprises in Kenya, Uganda and Tanzania. Although they cannot consider themselves exempt from problems such as traffic congestion, pollution and accidents, their role is of essential importance not only within the cities but also because they provide connections with the surrounding rural areas and with other cities. 30. Source: UN-Habitat, 2008.

31. In Harare, the transport system mainly consists of taxis and of the informal sector’s minibuses. Travelling by bus, by bicycle or on foot are not priority choices, as far as transport habits are concerned. Prior to the economic crises in Zimbabwe, only 5% of workers cycled to work while 30% walked. With the rise in the price of fuel, the percentage of journeys made on foot has increased. Lilongwe, for example, has the highest percentage of low income workers travelling by foot each day, approx. 50-70, while 9% travels by bus, and 4% by bicycle - Source: UN-Habitat, 2008.

CHAPTER 2 - Urban development in Africa

42. The improvement of the African urban infrastructure system is both necessary and preliminary to the economic growth of the continent and recent UN-Habitat studies32 have demonstrated that the investments that have contributed to the growth of a territory most of all are the infrastructural ones. Given the strategic importance of the issue and the negligible amount of public funds still available, African governments are seeking alternative financing instruments to close the infrastructural deficit and boost economic and social development in their own cities. Among such instruments, the most important is that of partnerships with private entities. According to this mechanism, public authorities are responsible for drawing up the guidelines for the development of the infrastructure and, partly also for providing the capital for building it, leaving the private players the responsibility for constructing the works and also for managing them. The infrastructural challenge does not only involve the search for new sources of funding but also – and indeed first and foremost – the more efficient use of the resources available and the launching of structural reforms in order to create a greater degree of competition in the provision of general services. Box 5 - Public-private partnerships The most developed African markets as regards mechanisms such as Public-Private Partnerships (PPP) are those of South Africa and Nigeria. In South Africa, a special unit has been set up within the National Treasury for the purpose of regulating and providing advice to public institutions (such as local entities or authorities specialized on specific issues) interested in implementing PPP mechanisms. This unit is responsible for verifying that the project to which the mechanism is to be applied presents three key elements: economic accessibility, the correct transfer of risk from the government to the private sector and value for money. Since it was set up, ten years ago, the unit has concluded 22 PPP agreements for a value of 5.5 billion Dollars. In Johannesburg, the greatest PPP agreement of Africa for the construction of a rapid rail link (Gautrain) and of a series of bus networks connected with it in order to reduce internal travelling times to the Gauteng Urban Region (GUR) and to develop its potential. This is an investment of an estimated value of 3.3 billion Dollars, 85% of which is being financed by the government. The Provincial Government of Gauteng has granted 20-year concession period for the construction and management of the Gautrain

assigning it to Bombela, a consortium of private players that includes Bombardier Transportation (lead company) Bouygues Travaux Publics, Murray & Roberts, Strategic Partners Group, RATP, J&J Group and Absa Group. Construction commenced in 2006 and is scheduled to be completed within 2011. The roles and responsibilities of the project have been clearly divided between the public and private players. Bouygues and Murray & Roberts are responsible for the infrastructure works, Bombardier for design engineering, manufacturing, installation and maintenance of the railway components and RATP for the implementation of the system. The Provincial Government, on the other hand, will be responsible for assessing the service provided by the licensee and guarantee part of the returns on the basis of the estimate traffic levels. Nigeria is the second most developed market for PPPs and is currently finalizing its regulations for the instrument, in order to facilitate widespread use in the transport and energy sectors. It is estimated that the use of this instrument could lead to private investments to the value of around 10 billion Dollars in the railway sector, thereby partially filling the infrastructural gap suffered by the country.

32. Source: State of World’s Cities 2008/2009, UN Habitat.

CHAPTER 2 - Urban development in Africa

III. ENVIRONMENTAL CHALLENGES 43. Nowadays, the greater part of human activity is concentrated in the cities, generating 75% of the global GDP. As engines of economic development and areas with a high concentration of the population, cities contribute significantly and are, at the same time, extremely vulnerable to the impacts of climate change. In fact, built-up areas consume more energy and produce more emissions than the less urbanized areas: they consume approx. 67% of global energy and generate more than 70% of greenhouse gas emissions, the agents chiefly responsible for climate change. This mainly derives from the heating and lighting of the residential and commercial buildings which generate approx. 25% of global emissions (equal to that attributable to the agricultural and industrial sector). Transport, on the other hand, is responsible for 13.5% of the emissions, 10% of which is attributable to road traffic. The cities, therefore, play a key role in the analysis of the transformations to which the natural environment is subjected, as well as in the devising of efficacious solutions to resolve some of the most pressing challenges.

44. Urban development has always involved environmental liabilities, but the pace of recent trends and the scarcity of resources of the countries involved in such development entails unprecedented levels of consumption and losses of natural resources. It has been estimated 33â&#x20AC;&#x2030; that, following the exponential growth of the urban population, the entire urbanized surface of the developing countries will triple between 2000 and 2030 rising from 200,000km2 to 600,000km2. This transformation assumes even more significant proportions when we consider that the 400,000km2 area to be built upon over the next 30 years is equal to the entire urbanized area of the world, as of 2000.

45. Recent studies34â&#x20AC;&#x2030; have demonstrated that if the developing countries were to maintain the same consumption habits as the developed countries today, a resource base equal to four planet Earths would be required to sustain its growth. Given the limited availability of resources, it is obvious that cities in both developing and developed countries alike will have to seek more efficient methods for meeting the needs of the growing population, by changing their paradigm for development. The well-being of future generations depends on how cities today intend to approach the environmental liabilities inherent in the spread of the urban lifestyle. How can the cities reconcile the opportunities offered by urbanization for economic growth and for reducing poverty, while mitigating the negative effects? What initiatives should they launch, given the speed and the magnitude of the phenomenon and their limited management skills? How can they combine economic and ecological assessments so as to guarantee long term benefits for the cities and for the bulk of the population? If not properly planned, controlled and managed, urban devel-

33. Source: Eco2 Cities, Ecological Cities as Economic Cities, The World Bank, 2010.

34. Source: Eco2 Cities, Ecological Cities as Economic Cities, The World Bank, 2010.

CHAPTER 2 - Urban development in Africa

opment can significantly compromise the quality of the air, the availability of water, the capacity for the treatment of waste and recyling systems, together with many other aspects of the urban environment that affect the well-being of the population.

46. Depending on the degree of development and the reference context, the various cities have substantially different environmental challenges to face. Those of the developing countries tend to be delimited to clearly identifiable territorial areas, normally have an immediate impact and present a threat to the health of the population. While industrialized cities refer to the “Green Agenda” mainly alluding to the need to reduce emissions of green house gases in order to limit the global and intergenerational impact of the same, these cities refer to the “Brown Agenda”, alluding, with this term, to the critical environmental issues connected with noise and water pollution, the lack of safe drinking water, the inadequacy of sanitation facilities and waste collection. Africa, in fact, has the lowest emission rate of greenhouse gases in the world35 and, since this is not primarily correlated to the level of urbanization but more to consumption habits and wealth produced, it is not yet a priority on political agendas. Urban planning and the devising of actions in compliance with the principles of environmental sustainability are still in the initial stages in Africa36 . Public administration and the main business communities are not yet fully aware of the gravity of the potential and future dangers stemming from the climate changes currently underway, and environmental components are not yet a priority on political agendas if compared with all the other more urgent requirements and the scarcit y of the resources available to satisfy them. Initiatives geared towards meeting the environmental challenges are still few and far between and, when they do exist, they do not form part of a systemic and integrated scheme with the power to maximize the benefits to be gained.

35. The United States, China, the European Union, Russia and India account for roughly 61% of total greenhouse gas emissions. Among the developing countries, East Asia is (2004) the largest producer of CO2 emissions (5.6 billion metric tons), equivalent to almost 3 times those produced by South Asia (2 billion metric tons) and 4 times those produced by Latin America and the Caribbean (1.4 metric tons). North and Sub-Saharan Africa produce the lowest quantity of CO2 emissions (0.5 and 0.7 metric tons, respectively). Africa has a pro capite CO2 emission rate that is, on average, less than one tenth of the pro capite CO2 emission rate in the developed world. Source: UN-HABITAT State of World cities 2008/9. 36. Some initiatives for meeting environmental challenges in African cities have recently been launched through international, governmental and non governmental organizations, and variable geometry city networks: To mark its ten years of activity, the International Human Dimensions Programme has launched the UGEC (Urbanization and Global Environmental Change) initiative, the purpose of which is to conduct a series of research projects in Africa and to set up a regional network in West Africa gathering researchers, representatives of the local community and officials of the public administration departments and agencies. In 2007, UN-HABITAT set up a network designed to promote the principles of sustainable urban development, by disseminating

eco-friendly building standards at a global and local level. As part of this network the Cities and Climate Change Initiative (CCCI) was also launched in March 2009, on which occasion two African cities (Maputo and Kampala) were selected as pilot cities. The South African Cities Network is an exchange platform for officials and politicians of the cities of South Africa which serves for the exchange of information and best practices. Only recently it began to deal with issues connected with sustainable development, attesting to the attention paid by the cities in this region to issues such as post-apartheid restructuring and questions connected with justice and security. Addis Ababa, Cairo, Lagos and Johannesburg are members of the C40, the largest city network in the world. Originally known as the C18, it launched a biennial conference on climate in London in 2005, bringing together mayors, officials and exponents of the business community for an exchange of ideas and for the creation of synergies. The International Council for Local Environment Initiatives (ICLEI) is the organization entrusted to control and promote the formulation and implementation of Agenda 21 at a local level. Under the aegis of Cities for Climate Protection Campaign launched in 1993, ICLEI has launched numerous initiatives in the cities of South Africa (the only African country represented) for the reduction of greenhouse gas emissions and air pollution.

CHAPTER 2 - Urban development in Africa

47. Among the environmen-

Fig. 11 Energy consumption per passenger per kilometer (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

tal challenges of the African cities, air pollution is one of the most crucial problems. According to the United Nations Environment Programme (UNEP) external air pollution in African cities leads to approx. 49,000 premature deaths per year while the domestic use of solid fuels is the cause of eight times more deaths. In addition to rapid urbanization and to the relative increase in economic activities, urban air pollution in Africa is worsened by the rapid increase in the number of cars – old, poorly maintained and not subject to controls regarding emission levels –, by the lack of clean fuels, by weak regulatory frameworks specifically drawn up for controlling emissions and by failure to apply the rules in the rare cases in which they actually exist. Air pollution in Africa is on the increase as regards many of the main pollutants. The main cause, however, remains the use of fossil fuels (carbon, petroleum, natural gas) for transport, in the production of energy, in industry and in the domestic environment. The burning of wood, or of animal and vegetable remains also contributes to the high levels of air pollution.

48. The poor management of solid waste also represents yet another hazard for health in many African cities. Even although the quantity of waste produced in low income cities is generally less than that produced in high income cities, the management of waste is a growing worry considering that the consequences of inadequate collection and disposal could have a significant effect on the ecosystems of the cities, contribute to the deterioration of the urban environment and expose the health of the populations to serious risks. The cities in the developing countries are more widely exposed to these consequences than the cities in the developed world due to the fact that waste collection services, both public and private, are not yet widespread37 . In general, the waste produced consists mainly of organic materials such as waste products deriving from fuel, wood, carbon or foodstuffs 38 . The recycling and re-use of solid waste are common practices in the cities of the developing countries, but they are often left to the informal sector and managed in hazardous conditions; they are not yet object of a real national policy.

37. For example: in Cairo, Egypt, only a third of the waste is collected and treated by the Municipality or by the formal system; in Benin, less than 50% of the families that live in the city have their domestic waste collected through either a public or private system. 38. In cities such as Freetown, Kigali and Accra, more than 80%

of the waste is organic material, compared to 30% or less in cities such as Milan, New York and Gothenburg. 39. In developing countries, four out of ten non-permanent houses are located in areas threatened by flooding, landslides and natural disasters and are generally located in bidonvilles or in informal settlements.

CHAPTER 2 - Urban development in Africa

49. Climate change is yet

Fig. 12 African cities at risk for flooding (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data)

another of the major challenges for the cities. As demonstrated earlier, Africa is only marginally implicated in the climate change trends in progress given its low energy consumption and low greenhouse gas emissions. It is, however, one of the regions most exposed to the threats of climate change in the short term and to significant degrees due to the vulnerability of its ecosystems, to its widespread poverty and to its population’s lack of adaptability and limited capacity to respond. The increasing cost of land and housing has forced – and continues to force – the worse off populations to move to places that are highly subject to natural disasters39 thereby increasing the potential damage deriving from calamities of various kinds. These disasters are, therefore, only partly the result of natural, often unpredictable, forces, as exposure to such risks is intensified by irresponsible urban planning. In Africa, the main risk to which the cities are exposed as a consequence of global warming is the rise in sea level (estimated to range from 22 to 34 centimetres between now and 208040 ). Moreover, 11.5% of the African urban population live in costal areas at less than 10 metres above sea level (18% in North Africa and 9% in Sub Saharan Africa) and 15% of the cities in developing countries with the highest risk of flooding are located in Africa. The risk of sea level rise is created jointly by the high density of population and by the advanced degree of development that characterizes these areas in which the concentration of houses, commercial and industrial activities and facilities is high. Additionally, even although the proportion and number of inhabitants is less than that of Asia, the African cities41 will be among those most negatively affected by the rise in sea level, since they do not have the infrastructure and the effective prevention and safety systems that distinguish the coastal cities of Asia.

50. The number of cities in developing countries which are gradually coming to appreciate the importance of the issue and which have implemented policies and concrete initiatives oriented by a marked environmental awareness is on the increase. These

40. Source: State of World Cities 2008/9, UN HABITAT. 41. The largest African coastal cities likely to feel the negative impact of the sea level rise to the greatest extent are: Abidjan,

Accra, Alexandria, Algiers, Cape Town, Casablanca, Dakar, Dar el Salaam, Djibouti, Durban, Freetown, Lagos, Libreville, Lomé, Luanda, Maputo, Port Louis and Tunis.

CHAPTER 2 - Urban development in Africa

cities have demonstrated that, with the aid of a valid strategic approach, it is possible to use the resources more efficiently, achieving the same result from a smaller and renewable amount of resources while reducing pollution and wastage at the same time. Although the examples on African territory are still few and far between, other cities coping with similar problems can demonstrate that investments of this type can be feasible even when budgets are small, and that return on investment can be substantial, also in terms of direct and indirect benefits for the poorer segments of the population.

51. A growing commitment to support cities through the planning and implementation of long term urban investments can also be observed on an international scale. New financing opportunities have been made available for cities in developing countries wishing to implement actions geared towards embarking on a sustainable development path, with particular emphasis on energy efficiency measures for the reduction of greenhouse gas emissions. We are progressively witnessing the development of new accounting methods designed to estimate the costs and benefits deriving from public policies, together with new planning and investment evaluation approaches able to take the environmental variables into account.

IV. ECONOMIC CHALLENGES 52. In many regions, urban development has actually boosted the growth of national economies. On average, approx. 75% of global economic production is concentrated in the cities and in developing countries. This percentage is constantly on the increase and in many of these countries, the national GDP generated by the urban areas is already over 60%. As per the majority of the countries, Africa too shows a positive correlation between the degree of urbanization and the level of economic development. Only 9 out of the 24 countries considered 42â&#x20AC;&#x2030; present a misalignment between urbanization, which is on the increase, and economic growth, which remains either negligible or even negative 43â&#x20AC;&#x2030;. Notwithstanding the growth trend, economic development has not been sufficient to reduce the poverty levels, the jobs offered by the urban economy respond only partially to the demand for employment expressed by the population resident in the urban areas, so it did not take long to create the conditions for a parallel and informal market. The urban crisis, which was triggered by the widening of the gap between the increase in the population and the wealth produced, seems, today, to affect the majority of the African cities and shows in the slowing down of urban growth rates the first signals of confirmation.

42. Study taken from C. Kessides, La transition urbaine en Afrique Subsaharienne, 2006. 43. These are essentially countries in which civil uprisings (Rwanda)

or major transitions (South Africa) have taken place. The remaining countries present rather conflicting performances (Cameroon, Ivory Coast, Kenya, Madagascar, Nigeria, Togo, Zambia).

CHAPTER 2 - Urban development in Africa

53. African urbanization can, therefore, be viewed as a process with strong socialhumanitarian connotations, guided first and foremost by demographic forces and by the awareness of greater work opportunities, and not, on the other hand, by the socialeconomic transition brought about by industrialization and by the development of a sound urban economy in most of the regions of the world. African cities have, in fact, grown extremely rapidly thanks to the migration from the rural areas to the cities of people seeking greater opportunities for work and a better standard of living. Heedless of the increasing significance that these urban centres were acquiring, central governments never paid them much attention. Intimidated by local authorities wielding too much power or controlled by the opposition, they tended right from the outset to consider the cities as political hotbeds, and so they would obstruct their mayors through drastic reductions in the allocation of funds and heavy-handed interventionism, even in issues of local interest, rarely reinvesting funds in subsidized housing, infrastructure or job creation. From a historical standpoint, cities were not considered engines for the economic development of the territory in Africa, and the political decisions made following independence highlight their supporting role to central government. With the coming of independence, the renewed public sector, both central and local, provided work for a large slice of the population that was then to become the emerging middle class. With the structural adjustment programs of the ‘80s, however, a substantial number of jobs were suppressed, reducing the segment of the population that would have developed economic activities on a local scale by half.

54. Although insufficient to guarantee a high enough growth rate of the per capita income to reduce the incidence of pover ty, the economic growth shown by Africa over recent years derives essentially from the urban areas 44 . An estimate of the contribution of “urban economic activities” can be made by considering the contribution of the secondar y and ter tiar y sec tor s (generally located in urban areas) to the growth of the

Fig. 13 Contribution of the various economic sectors to the GDP (Source: TEH-Ambrosetti based on UN-Habitat data)

44. The contribution of the cities to the national GDP can only be assessed indirectly as there are no countries in Africa that publish financial statements broken down on the basis of geographical area. A “local GDP” was, for example, roughly calculated for some of the larger cities in South Africa. The economies of Johannesburg, Cape Town and Durban thus account for around 50% of the country’s GDP, while accommodating only 20% of the population. Addis Ababa, on the other hand, accommodates 4% of

the population but produces 20% of the country’s GDP. 45. Only in Cameroon, the Ivor y Coast, Malawi, Nigeria and Rwanda do industry and services contribute to the growth of the country’s GDP by less than 50%, due to the high agricultural performance of these countries. 46. Data for the ten-year period 1990-2003, Source: La transition urbaine en Afrique Subsaharienne, 2006. 47. Source: ILO, 2002.

CHAPTER 2 - Urban development in Africa

GDP. In the decade from 1993-2003, the urban economy accounted for 79% of the growth of the African GDP compared to the figure of approx. 100% in Europe and central Asia. This boost to growth is substantially attributable to services which, alone, contribute to more than half of the African GDP, a trend which renders Africa similar to the more developed economies45 .

55. Industry accounts for only 30% of the African GDP46 . Additionally, its growth was lower than that of the African GDP for a good part of the ‘90s. With the exception of a few mining cities, industry, especially the manufacturing sector, has never had a strong presence in African cities, whether large or small. Its importance has gradually decreased practically everywhere, including South Africa where were it tended to be stronger; this is the result of the gradual distancing of the public sector from private business capital due to the Structural Adjustment Programs. Numerous industries managed to survive thanks to public funding: the financial crisis of the countries and the warnings of the IMF accelerated the sector’s decline.

56. In Africa, alongside the traditional, controlled forms of economic activity, there is an informal sector which is growing in importance and which compensates for the lack of jobs in the traditional sector. This sector very often motivates the population to migrate from the rural areas to the city in search of better opportunities. According to estimates47 , the informal economy is responsible for 78% of non-agricultural jobs in Africa, 93% of the total new jobs available and 61% of jobs in the urban areas48 . The informal economy is, therefore, an essential source of employment for a large part of the urban population, and for women in particular. However, although the informal sector responds to requirements that would be very difficult to satisfy in another way, its importance in Africa today is yet another signal of the urban crisis that is affecting the majority of the cities. It can only be considered as a short-term solution and not as a sustainable development strategy for society49 . The contribution of the informal economy tends, in fact, to decrease as the level of development increases50 . It has been estimated that the informal economy accounts for 40% of Africa’s nonagricultural GDP, considerably higher than the 31% of Asia and the 29% of Latin America.

57. If, in the past, it was normal to consider the informal economy as marginal and unproductive, today figures demonstrate that its contribution to global productivity is fundamental for all developing countries and important for workers and consumers alike. This has led to the regulation of the informal sector being identified as one of the future challenges of the urban economy. Informal enterprises are, in fact, those most vulnerable to the lack of legal protection mechanisms and they often fall back on their own network of relations when they cannot rely on the honest and impartial application of the laws and regulations, or on one of the entities providing business development support.

48. This percentage reaches peaks of 90% in some countries, such as Benin. 49. A study of the informal manufacturing sector in Nigeria demonstrated that these enterprises are profitable for their owners but that the number of jobs that they create, during expansion and consolidation is, nonetheless, limited. They often

remain very small and undercapitalized and very rarely transact business with the more important enterprises of the formal sector (CBN/NISER/FOS, 2003). 50. Source: C. Kessides, La transition urbaine en Afrique Subsaharienne, 2006.

CHAPTER 2 - Urban development in Africa

Box 6 -Harare: regulating the informal economy in order to promote the economic development of the city The issue of how to structure and shape African cities is becoming increasingly more important. A growing number of cities are starting to recognize the importance of this issue and to formulate local policies giving these activities pride of place, as opposed to obstructing them, as was the norm up until a few years ago. Once success story is that of Harare (the capital of Zimbabwe) which, in the period running from 1994 to 2004, introduced policies that acknowledged the synergies existing between the formal and informal economy. Abandoning the customary obstructive approach in favor of deregulation policies of a number of urban spaces, Harare provided incentive to some small family enter-

prises to settle in the urban spaces traditionally reserved for the whites. The local authorities created spaces equipped for work, fitted out areas to serve as markets and flea markets, coordinated the construction of infrastructure for basic public services and contributed to developing the skills and management know-how of the small informal entrepreneurs. A success variable of these policies was the participation of local stakeholders in decision-making processes. Numerous jobs were created, particularly for young unemployed people and women, and the goods and services were also provided, at a cheaper and more accessible price, to the poorer segments of the population.

V. SOCIAL CHALLENGES 58. The urbanization trend is generally a positive factor for reducing the poverty of a country. The United Nations Population Fund examined the relationship between the major opportunities offered by the cities and the reduction of poverty in 25 countries and concluded that urbanization has contributed significantly to the reduction of poverty51 . Urban growth contributes to the reduction of poverty in various ways. In the first place, it allows the enlargement and diversification of the employment market and facilitates the efficient provision of services. Urban areas are, in fact, characterized by a high concentration of demand and a wide supply of work and services. From a less quantifiable but equally relevant standpoint, the heterogeneity of the urban population contributes to the widening of perspectives, helping to change consolidated attitudes and encouraging the emergence of ambitions in disadvantaged groups, which can call into question their status quo52 . Providing social services, building infrastructure to support basic services and pursuing the Millennium Development Goals can also be easier in an urban context 53 . From the supply side, decisions concerning production, the network’s managing body and the service providers will be easier to implement in the cities than in the areas with a lower population concentration. The per capita cost of the various infrastructural or social services will, in fact, tend to be lower as the population involved will be much larger. It is, moreover, easier to attract and maintain personnel, guarantee the quality of the service and offer a

51. For example, 28.3% of the reduction in poverty in Bolivia between 1999 and 2005 is attributable to urbanization (UNFPA, 2007).

52. Source: WDR, 2003. 53. Source: C. Kessides, La transition urbaine en Afrique Subsaharienne, 2006.

CHAPTER 2 - Urban development in Africa

range of competing options in the city as opposed to in more remote areas. In the urban areas, certain factors connected with the demand side can also facilitate the achievement of the Millennium Development Goals. It is, in fact, easier for citizens to obtain information and observe the consequences linked to certain modes of conduct or policies implemented by local public institutions. Preventive/awareness-raising actions can therefore be implemented more easily in the face of a more knowledgeable demand. In the final analysis, it should be underlined that access to income deriving from non agricultural activities and developed in an urban context also helps reduce rural poverty, representing a significant base of financial resources with which to integrate the incomes of the rural families through numerous transfers of money. Last but not least, the proximity of the urban markets multiplies opportunities for trade and exchange for the population residing in the surrounding rural areas.

59. Urban poverty remains, nonetheless, a significant factor in African cities, where 43% of the population lives below the poverty line and forecasts for the near future predict a rise in this percentage. The fundamental question posed is, therefore, that of understanding the extent to which poverty recorded in the city is part of a process of economic transition and normal change for a country and the extent to which this phenomenon is a distorted effect deriving from the failure of public policies and from inefficiencies in the local public institutions.

60. Traditionally, at the end of the ‘80s, the poverty in developing countries was mainly associated with the rural areas. With the urban transition underway in Africa, the burden of poverty is gradually shifting from the rural areas towards the cities, increasingly becoming an urban phenomenon in a process known as “urbanization of poverty”. If up until a few years ago the rural poverty rates were significantly higher than those encountered in urban areas, with even major differences in terms of income, consumption or spending, this gap has gradually narrowed with the passing of time. Notwithstanding the economic advantages and benefits deriving from life in an urban area, it has been demonstrated54 that the difference between the poverty rates are no longer so wide and that, in some cases, the incidence of poverty in the urban population is almost at the same levels as that of rural poverty55 .

61. On the basis of the predictions made on the evolution of urbanization and conjecturing constant rates of rural and urban poverty, the urban poverty level can be expected to keep growing for the next twenty years, until it reaches, or tops, 50% in Benin, Kenya, Mozambique, Nigeria, Senegal and Mauritania. The envisaged growth of urban poverty rates depends partly, but not exclusively, on the exponential growth of the urban population.56 . The analysis of African urban poverty brings other explanations to light, such as the failure of public institutions to design suitable and responsible policies, thereby perpetuating social

54. C. Kessides, La transition urbaine en Afrique Subsaharienne, 2006. 55. The difference between the urban and rural poverty rates is less than 20% in Ethiopia, Kenya, Malawi, Mozambique and Nigeria. Almost a third of the urban population lives below the poverty

100

line in Ethiopia, Gambia, Zambia, Madagascar, Kenya, Malawi, Mozambique, Nigeria and Senegal. 56. The correlation between these two dimensions is, in fact, weak and the correlation coefficient for Africa is 0.22.

CHAPTER 2 - Urban development in Africa

Fig. 14 Spatial fragmentation in Nairobi. exclusion and inequalit y (Source: TEH-Ambrosetti from Google Earth map, 2008) between the richer and poorer income brackets of the population. Low incomes are not the only factor responsible for the problem in question: difficulties in obtaining adequate services, the state of development of the health system, the level of education, individual and collective security are all, in fact, symptoms of underlying institutional obstacles and of a social exclusion that is difficult even for families with middle incomes to overcome. Urban poverty in Africa assumes many forms and manifests itself at a spatial level through the so-called “fragmented cities”. Since people with similar characteristics tend to settle in similar urban areas, the growing urbanization in course in the majority of African countries is accompanied by the setting up of highly specialized and diversified urban areas. Polarization of urban districts becomes more pronounced and progressively these districts detach themselves from the surrounding environment in a continual process of consolidation of differences and particularities. This phenomenon is not expressed merely as a social-economic difference but also generates and consolidates spatial, social, economic and political contradictions that are difficult to reconcile in a plan and in a unitary vision. In “fragmented cities” public spaces are always left to the poor and homeless while the better-off segments of the population tend to carry out their lives and their affairs in closed spaces, thereby rendering the city a place in which the districts and their respective residents seem to live and work autonomously. Even although social and physical fragmentation is more evident in the large cities, it is a pervasive urban phenomenon and is to be found in all of the African cities that have experienced a significant growth rate over the last twenty years. Urban fragmentation typically gives rise to two cities. The poorer segments of the population live in areas with high densities in unplanned spaces and the majority of them do not have proper housing, municipal services and other benefits normally guaranteed in urban areas. The better off segments, on the other hand, reside in planned and structured areas that benefit from all the facilities and public services. The districts without basic infrastructure and essential public services are the ones that accommodate the majority of the population in African cities and it is in these districts that the most evident manifestations of urban poverty are to be found.

101

CHAPTER 2 - Urban development in Africa

Fig. 15 Condition of African urban households (Source: TEH-Ambrosetti based on UN-HABITAT 2003 data)

Percentage of urban families without… Safe drinking water

Acceptable hygiene conditions

Sufficient living space

Structurally sound housing

Slum dwellers (%)

Benin

26,0

66,1

17,8

20,3

83,6

Burkina Faso

16,0

64,1

15,5

7,6

76,5

Cape Verde

36,0

52,5

n.d.

69,6

Ivory Coast

10,0

53,5

22,6

0,8

67,9

Gambia

20,0

58,8

n.d.

67,0

Ghana

13,0

55,2

21,2

0,9

69,6

Guinea

28,0

44,7

24,0

8,5

72,3

Guinea-Bissau

71,0

77,4

n.d.

93,4

2,0

54,8

n.d.

55,7

Mali

26,0

81,2

21,7

37,6

93,2

Niger

30,0

88,1

30,2

35,4

96,2

Nigeria

19,0

60,6

26,5

11,2

79,2

Senegal

8,0

62,3

27,3

6,4

76,4

Sierra Leone

77,0

81,7

n.d.

95,8

Togo

15,0

70,2

19,7

4,8

80,6

Liberia

62. If coping with urban poverty is the most important social challenge that African cities are likely to have to deal with in the years to come in order to guarantee sustainability to the development of their cities, numerous aspects – related to a greater or lesser extent – are involved in a challenge of such dimensions, such as, for example, the reduction of crime and urban violence. The period from 1999 to 2000 witnessed a global increase in the cases of violent crime, which rose from 6 to 8.8 per every 100,000 people57 and since 2002, 60% of the urban population of developing countries has been victim of a crime, 70% in Latin America and Africa. The highest homicide rate is found in Sub Saharan Africa and in Latin America. Today, urban violence and crime are considered among the most important threats to the safety of African cities 58 and the local authorities are making numerous efforts to improve security, also developing innovative approaches involving the citizens themselves.

63. Alongside urban poverty another connected, but distinct, phenomenon that deserves attention is the level of inequality in the distribution of income among the urban population. Urban inequality has been progressively on the increase since 1980 in all of the coun-

57. Source: UN-Habitat, 2008. 58. In 2000, 30% of the inhabitants of Johannesburg declared that

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they had been victims of a robbery (UN Habitat, 2008).

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Fig. 16 Mean Gini coefficient in the urban areas tries throughout the world, (Source: TEH-Ambrosetti based on UN-HABITAT 2008 data) particularly in the developing countries, in Africa and in Latin America, rising to exceptionally high levels 59. Several studies confirm that economic development is normally accompanied by an increase in the levels and forms of inequality (different human c apabilities and opportunities, different levels of participation in political life, different consumption and income levels, differences in standards of living and in access to resources and basic services etc.). In any case, excessively high levels of inequality can obstruct social-economical development, hamper the incisiveness of public policies aiming at reducing poverty, arrest the economic growth of a territory and create the prerequisites for social disorder and conflict. The average rate of economic growth of 5.4% 60 of Africa over the past ten years has contributed to exacerbating the disparity between the lower and higher income brackets of the urban population and these differences are likely to worsen unless relevant policies are adopted61 . In terms of inequality in the distribution of urban income, Sub Saharan Africa is second only to Latin America and the Caribbean and is characterized by a Gini coefficient62 of 0.46 compared to the 0.50 of the latter. With the exception of Algeria, Namibia and Sierra Leone, where the levels of inequality are much higher in the rural areas, for all the other countries for which data are available, the mean value of the coefficient of Gini is higher in the urban areas. In South Africa and Namibia, inequality is extremely pronounced despite the end of apartheid in the ’90s. The levels of urban

59. The countries of Latin America and Africa which manifest the highest levels of inequality are Brazil, Colombia, Kenya, Namibia, South Africa and Zimbabwe (Source: UN-Habitat, State of World’s cities 2008/2009). 60. The growth rate of the African GDP in 2009 was very low (2.3%) due to the crisis affecting all of the countries. In order not to distort the results too much, this data was not counted in the calculation of the mean value over the last ten years. Source: International Monetary Fund, 2009. 61. Countries such as Ghana, Mozambique and Tanzania have experienced a r apid r ate of economic grow th over recent years and, in a parallel manner, have also recorded growing levels of inequality. In any case, economic growth is not the only factor underlying the increase of inequality in a territor y; even countries experiencing moderate growth such as Cameroon and the Ivor y Coast also recorded growing levels of inequality. 62. The Gini coefficient is a measure of the inequality of a distribution. It is often used to measure the inequality of income or

wealth. It is a number of between 0 and 1. Low values of the coefficient indicate a more equal distribution and the value of 0 expresses total equality. High values of the coefficient indicate a more unequal distribution with the value of 1 expressing maximal inequality. The Gini coefficient may be used as an indicator of the level of inequality of income or wealth in the cities. Generally, cities that present a coefficient value of between 0.2 and 0.39 are characterized by a relatively equal distribution of resources; they tend to have a stable social situation and a high level of economic development. A value of 0.4 denotes a moderately unequal distribution of income or wealth and it is internationally considered as the threshold value above which the cities should apply urgent measures to limit the inequality gap. Cities with coefficient values equal or superior to 0.6 suffer excessively high levels of inequality as a result of an inefficacious employment market, a stagnant economy, structural problems in the distribution of wealth or failures on the part of the public institutions.

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i n e q u ali t y i n t h e s e t w o c o u nt r ie s eve n o u t s t r i p those of the cities of Latin America. The mean value of the Gini coefficient in the cities of South Africa is 0.73, that of the cities of Namibia is 0.62 while that of Latin America is 0.5. Freetown in Sierra Leone, Dire Dawa in Ethiopia and Dar es Salaam in Tanzania are among the cities with the lowest levels of inequality in Sub-Saharan Africa, the value of their Gini coefficient being 0.32, 0.39 and 0.36, respectively.

Fig. 17 Levels of inequality in the urban areas of Africa (Source:TEH-Ambrosetti based on UN-Habitat 2008 data)

64. The income inequalities of African cities date back to their colonial past, but were also reinforced subsequent to this period by the action of public administrations insensitive to the problem, and by the implementation of inadequate policies. The structural adjustment programs, which abolished the subsidies for basic services, for example, failed to alleviate urban poverty and in some countries actually contributed to incrementing not only the poverty but also the level of inequality63 .

63. As far as the urban areas of Kenya are concerned, the Gini coefficient worsened from 0.47 in 1980 to 0.57 in 1990 essentially as a result of the Structural Adjustment Program, in Nigeria,

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for the same reasons, an increase in the value of the coefficient – from 0.37 to 0.41 was recorded (Source: UN-Habitat, State of World’s Cities 2008/2009).

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VI. GOVERNMENTAL CHALLENGES 65. As per the majority of the world’s developing regions, many African countries have launched decentralization processes in the course of the past decade, with locally elected mayors and city councils. In parallel to this, these countries have gradually endeavored to decentralize budgetary autonomy to the advantage of local government, but this decentralization has not yet been completed in the majority of African cities.

66. The financial performance of the cities and hence the performance level in terms of provision of services depends mainly on the tax framework defined at a central level which establishes the respective autonomy in the realm of tax collection and access to central resources (either directly or by transfer). The income (including taxes and aid) and the expenditure of the local government bodies in terms of percentage of the GDP are very variable, depending on the region in question. In European Community countries, for example, local government expenditure is, on average, around 11% of the GDP, with major differences between one country and another64 . Taking the specific example of Africa, local resources can reach 5% of the GDP in Uganda or 3.5% in South Africa65 , but the level is generally 1% or less, as in Benin, Burkina Faso, Cameroon, Ghana, Senegal or the Ivory Coast. Local African governments rely less on taxation and more on money transfers from central government than most decentralized economies66 . Often the cities’ fiscal autonomy and debt capacity – especially in large cities and in those with a rapid rate of population growth – are not sufficient to cover the provision of services and investments required to guarantee the harmonious development of the urban areas, leaving very little margin for maneuver67 . The scarcity of local resources is not always compensated for by state investments to the benefit of urban areas68 which do not have sufficient infrastructure and services to be able to pursue integrated sustainable development.

67. In many countries municipal governments possess considerable structural weaknesses, not only from the financial but also from the technical perspective. The main reason for this resides in the fact that for a long time the predominant trend tended to be centralization of planning and financial responsibilities, leading to a reduction in the flow of resources towards local governments and very little maneuvering room for

64. It ranges, for example, from 31% of the GDP in Denmark to 2.8% in Greece. In Mexico, local expenditure and resources account for 1.4% each of the GDP and, on a sample of countries in transition (Bulgaria, Georgia, Kazakhstan, Moldavia, Mongolia, Romania) these values oscillate between 5% and 14% (Source: IMF 2004). 65. Source: IMF, 2004. 66. The limited contribution of local revenue should, however, be underlined which, in Benin, Burkina Faso, Cameroon, Ghana, Senegal and the Ivory Coast, does not amount to more than 5% of government revenue. 67. A property tax is not often applied, despite the fact that it is

one of the most significant and potentially important financial resources for the cities. South Africa is the only country in which this tax is strictly imposed, accounting for 72% of local government’s fiscal revenue. 68. In Cameroon, the capital expenditure for the 18 most important cities amounted to 1% of the State revenue. In Nigeria, only 8% of the national budget for investments is allocated to the urban areas (including all sectors of activity) while 80% goes to the rural areas. The local governments of this country spend the equivalent of 7% of the already limited state resources allocated to the urban areas.

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the latter in the management of local affairs. Notwithstanding the inadequate financial resources and administrative structures, the local African authorities are beginning to awaken to the potentially strategic role they could play in the development of the urban areas and of the country as a whole, and have set up partnerships to support one another, to fill skills gaps and promote the dissemination of good government practices 69 .

68. As a response to the growing decentralization of powers and responsibilities in progress in many countries of Sub-Saharan Africa, we are witnessing the establishment of new forms of local government which, recognizing the complexity of the urban context and the importance of involving the various stakeholders important to guarantee the efficacious and rapid implementation of public policies, open the most critical decision-making processes to the participation of citizens and representatives of the sector. Alongside the central and local public institutions, the importance of the private sector non governative organizations, of civil society associations and, last but not least, of the citizens themselves is gradually being acknowledged. In many cities of developing countries and still at a minor level in Africa70 , a change of paradigm is taking place towards a participatory urban government the goal of which is to create a consensus in the designing and implementation of public policies.

69. New forms of government also emerge from the complexity of management of the African metropolitan governments which, under the impact of the growing urbanization of the last few years, have undergone an unchecked expansion that has frequently caused the city to overstep its original boundaries and progressively incorporate the neighboring munic-

69. To this end, it is possible to cite some examples of aggregation strategies between municipalities and local entities among which: “Africités” a conference which, since 1998 has been organized every two years by the Association des cités unies et des collectivités locales; the South African Cities Network (Reseau des villes d’Afrique du Sud) which groups together the nine most important cities of the country; the Council of African Municipalities and Regions (Conseil des Communes et Régions d’Afrique) created in 2005 from the merging of African three sub-groups in order to have “a voice that speaks in favor of the sustainable development of local communities in Africa” and also the National Association of Municipalities of Benin (ANCB) founded in 2003 with the aim of creating a common ground in defense of the country’s interests and for the promotion of the development of the country’s municipalities. 70. By way of example, in Kenya the Ministry for Local Gover-

106

nment adopted measures for facilitating and improving relations between the City Councils and the residents through the Local Government Reform Plan (LGRP) and the connected Local Authority Service Development Action Plans (LASDAP). The Reform Plan in question made the involvement of the local community a prerequisite for the governments to be able to access the funds of central government (Local Authority Transfer Fund) for the financing of their development projects. The compulsory involvement of the stakeholders led the local authorities to extend some decision-making processes (e.g. the Budget) to citizens, consolidating their feeling of belonging to a community and although the process is still in its initial stages and the nature of the involvement still largely consists of informing as opposed to consulting the citizens, it seems nonetheless to have given some comforting preliminary results (Source: UN Habitat, 2008).

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ipalities and territories. The emergence of these new urban forms (e.g. Urban corridors, Urban Regions etc.) makes the creation of suitable forms of wide-area government an increasingly pressing need in order to coordinate and align the development guidelines of the local authorities than fall within in the larger urban region. Although the setting up of an efficient governance system poses, in the majority of cases, a complex challenge – especially from the political and administrative standpoint – it is a solution that is being adopted more and more by the largest African metropolises. In Kenya, for example, the Government recently (2008) set up the Ministry of Nairobi Metropolitan Development which, on an area of 3,000km2 and a population of 4.73 million inhabitants (21% of the country’s urban population), has been assigned to create an efficient transport system, replace the informal residential areas with housing units accessible to the lowest income groups, apply urban planning regulations, promote, develop and invest in public utilities.

Box 7 - Curitiba: a participatory urban development model for developing countries Curitiba, capital of the state of Paranà in the south of Brazil, presents all the critical problems of a metropolis that grew too fast, passing from 300,000 inhabitants in 1950 to approximately 2,500,000 today. Despite such growth, it has managed, over the years, to attain much higher levels of education, health, well-being, security, democratic participation, political stability, public spiritedness and environmental protection, not only than the rest of Brazil but also than numerous industrialized countries, becoming a city that is, today, a symbol of good urban governance, orderly growth and democratic participation in development choices. This result was not obtained through centralized planning but through the development of hundreds of wide-ranging and inexpensive initiatives that were simple, local and person-centered and which boosted market mechanisms and personal skills. Curitiba had the benefit of a forward-looking and pragmatic leadership, an integrated design process and strong public and private participation. There are many examples that testify to the respect and involvement of citizens as a strategic resource to be nurtured. Among these, the “Citizen Streets” are of particular interest. This is an urban area, a symbol of administrative decentralization, in which a sizable segment of public services are concentrated – thereby saving the population from travelling long distances into the centre of the city – and which constitutes an election ground

to facilitate the participation of citizens in public decision-making processes. The guiding principles underlying the urban and administrative aspects of the “Citizen streets” are: - fairness: in order to guarantee the same conditions of service to all the citizens from the various areas of the city; - accessibility: for this reason, the Citizen streets are located close to the public transport terminals and to other public municipal structures; - quality: guarantee the quality of the services through compliance with the criteria of efficacy and efficiency These structures provide services such as the booking of outpatient medical visits, registration with COHAB (Public Housing Company of Curitiba) and enrolment in the state schools, payment of taxes and access to favorable credit terms. In addition to the service centers of all city clerk’s offices, there are also both state and federal government agencies. Some of the Citizen Streets contain public outpatient clinics, bank facilities, offices of the state water and electricity boards, of local transport, of the Instituto de Identificação (ID Institute) and of the Justices of the Peace. They also accommodate state and federal finance facilities and the headquarters of SEMPRE / SINE (Public Employment Office / National Job Centre), the Municipal Social Security office, the Army, the Fire Brigade and the Post Office. These streets also contain the so-called “Family Stores”, a type

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of cheap supermarket where the members of families whose total earnings amount to less than three minimum salaries can purchase food products with a 30% discount on market prices, on presentation of their electronic identity card. It is, first and foremost, in Citizen Streets that the population take part in the public life of the city and that urban planning proposals are presented and discussed. Still within these community centers, there are also small busi-

nesses, libraries, auditoriums and covered sports areas dedicated to leisure time, managed directly by the inhabitants of the area under the supervision of the regional council. These business and leisure activities, originally launched with the aim of attracting the population and promoting the use of public services – the primary goal of the project – contribute today to making the Citizen Streets a real meeting point for the population of Curitiba.

70. A further challenge set for the African cities which, over the next few years, will absorb the greater part of the world’s population increase, concerns the development and consolidation of urban governance tools with the power to sustain the local authorities in resolving the critical issues revealed by demographic and economic trends. In particular, strategic and urban planning, a key instrument designed to support urban development processes, has not been forward-looking enough and – basing itself on data that is frequently inaccurate and on statistics that are difficult to obtain – it has not succeeded in efficiently organizing and regulating the extensive urbanization of recent years. This has led, in the majority of African cities, to a spontaneous form of urban development, dominated by illegal and often informal residential areas, and to an increase in the low income brackets of the urban population which have not been provided with suitable housing or with access to basic services such as water, sanitation facilities or electricity.

71. If for many years, the cities’ urban plans concentrated essentially on the spatial dimension and their main priority was to regulate land occupancy above and beyond any other economic-financial consideration, in recent years the largest African metropolises have begun to draw up multidimensional strategic plans that consider, in a systemic and integrated manner, a series of aspects (spatial, economic and social) that impact the development of an urban area. In the light of the new spatial developments of the urban areas, planning is gradually changing scale, passing from a focus limited to the city toward a regional perspective, so as to assess the contribution of all the urban core cities to the development of the entire country. Over the next few years, central governments and local authorities will be compelled to view the urbanization process more and more in a regional context as opposed to a strictly local one, so as to define a hierarchy of urban core cities, a concept that either does not exist or has been handed down from the colonial era and never challenged since. The creation of a hierarchy of cities with specific functions and roles would, in fact, safeguard against the excessive concentration of resources or the duplication of functions and promote a more rational and sustainable development of the country71 .

71. By way of example, Kampala was the object of numerous planning actions in 1912, 1930, 1948, 1968, 1972 and 1994 which essentially took local requirements into account without focusing on the wider national context. Even the 1994 Plan provided for the rehabilitation and relaunching only of the areas already developed and equipped. As soon as the city began to grow in

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importance and size, it became clear that planning centered on a single urban area of Kampala was not going to be sufficient, so the local authorities are currently working on the wide-area planning that will serve to enhance and better orient the city’s contribution to the development of Uganda.

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Box 8 - Nairobi Metro 2030 In Kenya, in 2008, a unique and innovative experiment for Africa was launched in the sphere of governance and wide-area planning which, even although still in its initial stages of development, heralds a radical change of paradigm, shifting towards the management of urban areas as catalysts for the countryâ&#x20AC;&#x2122;s development. In order to cope with the expected urban growth of the Nairobi Metropolitan Region and in an attempt to respond effectively to present and future challenges, the Kenyan Government has developed an ambitious strategic vision (Nairobi Metro 2030) in order to redefine the Metropolitan Region from the spatial standpoint and create a world-class urban area designed to generate sustainable well-being and quality of life for residents, investors and visitors alike. The development and implementation of the Plan, which is part of a wider vision for the development of the country, is the responsibility of the Nairobi Metropolitan Development Ministry, created especially for the purpose. The vision involves the creation of the â&#x20AC;&#x153;best managed African metropolisâ&#x20AC;?, based on an international, competitive and inclusive economy and sustained by high level infrastructure and a skilled workforce. On the basis of key values such as innovation, entrepreneurship, sustainability, co-responsibility, autonomy and excellence, the strategy aims to optimize the role in national development of the Nairobi Metropolitan Region, using to advantage the strong points that distinguish the territory such as: the role of Nairobi as a hub for air transport, the large number of local and international

institutions and of research institutes and educational establishments located in the territory. The Nairobi Metropolitan Region covers a surface area of 3,000km2 and incorporates the population groups that gravitate around Nairobi attracted by its employment opportunities and the leading public utilities. The initial planning will only concern the area included within a radius of 40 km from the centre, even although the metropolitan area extends for a radius of at least 100km and, in addition to the Municipality of Nairobi, the area considered also includes 12 neighboring and independent local authorities. It still remains to be seen how the institutional architecture planned for the widearea government is going to succeed in reconciling the various powers and respective autonomy of the other public institutions responsible for governing segments of the above-described territory. Nairobi Metro 2030 promotes integration between economic, infrastructural and social policies, system governance, environmental policies and labor policies with a view to consolidating skills at an institutional level. The essentially informal urban economy, combined with inadequate provision of basic services and with roughly half of the population of Nairobi living in slums, contribute to explaining the magnitude of the challenge that the Kenyan Government, aided by UN Habitat, has taken on with Nairobi Metro 2030. The whole of Africa will be following the development of the project attentively, in the hope of gleaning some good practices to be able to replicate.

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Box 9 - The World Bank’s approach to urban development With the Comprehensive Development Framework (CDF) launched in 1999 by the then President Wolfenshon, the World Bank has inaugurated a new approach to development, inspired by a systemic bottom-up logic. The urban development initiatives that have distinguished the activity of the Bank since the ‘70s have gradually taken on a new focus over the years. In order to understand the extent of this change, a summary of the main steps of the evolution of the Bank’s approach to urban development is provided below: - 1970s: the main goal is the reduction of poverty. The main projects provide for multi-sectoral investments in basic infrastructure and in the construction of housing for low income urban residents (slum upgrading). - 1980s: the questions of institutional reform and the creation of a legal framework for a sound political and financial management of the municipalities become items on the Bank’s urban development agenda as key issues. The projects aim at municipal development in order to promote financial reform and create new skills within the municipalities. Projects with a monosectoral slant start to gain ground: transport, water, sanitation facilities etc. - 1990s: a decline in the Bank’s interest in urban development issues, reduction of investments to this end and emphasis on structural adjustment projects. - 1997-98: renewed interest in issues related to urban development both due to the increased demands for aid from developing countries and

110

due to its acknowledged role as a catalyst for the urban economy. The experience gained in the field and an analysis of the results obtained from the projects brought to completion led the World Bank to gradually adopt a systemic approach to urban development. The approval of the CDF officially confirms the need to dedicate attention to factors which, up till now, were not known to have an effect on the performance of local development projects, such as political reform, institutional change, questions relative to funding and social activities. The urban transition phenomenon that is currently underway in the majority of countries is interpreted as a global phenomenon that strikes from all sides, from the economic and financial one to the political and institutional one and, as such, requires a wideranging urban development strategy conceived in such a way as to deal with the various aspects in a parallel and coordinated manner. Considering that the requirements of the beneficiaries of the World Bank initiatives vary on the basis of the type of urban transition involved and on the initial starting conditions of each of the said beneficiaries in terms of economic power, financial and institutional capacities, the Bank has developed a flexible strategy that enables it to provide responses appropriate to the requirements of its various interlocutors, playing a role that ranges from technical assistance, to financial aid through to support in the definition of the goals, priorities and development strategies of the municipalities.

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4. Summary remarks and opportunities for urban development in Africa

72. The 21st century is the century of cities and urbanization. In 2007, for the first time in history, at a global level, the urban population exceeded the rural one. Fig. 18 Distribution of the world population; % of total (Source: TEH-Ambrosetti based on United Nations data)

73. According to the Uni-

Fig. 19 Mega-cities in the world; number (Source: TEH-Ambrosetti based on United Nations data)

ted Nations almost 3 billion people live in urban agglomerates today; in 2015, this figure is expected to rise to over 4 billion. This means that in the next 5 years â&#x20AC;&#x201C; going by the forecasts â&#x20AC;&#x201C; the ur ban population will grow by over 500,000 people per day. This trend will also lead to an enlargement of the urban systems: in fact, by 2015, there are likely to be over 59 mega-cities (urban agglomerates with over 10 million inhabitants). 72

72. State of the World Population.

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74. Although these phenomena will occur on a global scale, they will have a more wide-reaching effect on the developing areas, the urban populations of which will show exponential growth, in contrast with the industrialized ones, where mass urban migration processes commenced in the 19th century and growth figures are now more limited.

Fig. 20 Urban population in the developing areas; millions of people (Source: TEH-Ambrosetti based on United Nations data)

75. In no other historical era has the urban population grown at such a pace. Causes contributing to this trend are unquestionably the progress made in agriculture, science and medicine, but also “push” factors such as the poverty of the rural areas and the lack of resources and - conversely – “pull” factors such as modern lifestyles, economic opportunities, access to the amenities etc. that cities have to offer.

76. All this has important implications at no less than three closely interrelated levels: - Strategic. In an era of mass urbanization in which almost 9 people out of ten will be living in urban agglomerates by 2050, the planning of the axes of growth and management of urban systems implies the need for exceptionally innovative and efficacious solutions, compared to what was done in the past. All this will be rendered even more critical by the fact that in a world that is increasingly more interconnected and globalized – and, above all, with dwindling resources – access to the key factors required for development will represent a challenge that transcends continental borders. - Economic. Cities are the key to global growth. This is true today and will become even more so in the near future. This statement unfolds a multitude of problems with a single common denominator: to create conditions that will make cities centers that produce opportunities and wealth. If this does not Fig. 21 Population growth in developing countries; total population in millions happen, the risk is that (Source: TEH-Ambrosetti based on United Nations data) of creating a vicious circle in which poverty and urban decay are multiplied. In this sense, the United Nations’ forecasts are important. With reference to developing countries, it estimates that, if decisive action i s n ot t a ke n, t h e highest growth rate

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will be among the medium and low income brackets of the urban population (see figure 21). - Social. Large flows of people of different cultures and social extraction (sometimes extremely so) in ever extending urban areas with undefined boundaries will bring increasingly greater social changes in terms of lifestyles, culture and common rules for civil coexistence. Already today, these changes – and the tensions they produce – are evident. In the near future, they are bound to become more pronounced. In order to avoid dangerous “breaking points”, they must be put on the political agenda, so that this aspect can be managed efficiently.

77. These problems/challenges concern everyone: the urban issue is, therefore, one of the great global issues of the immediate future.

78. In developing countries and in the third world, given the contextual conditions, these challenges will reach higher critical peaks. In particular, Africa is (and will continue to be) one of the areas in which the tensions generaFig. 22 Urban population in Africa (millions) ted by these processes will be (Source: TEH-Ambrosetti based on UN-HABITAT data) most extreme.

79. In Africa, urbanization is faster than in any other part of the world; according to forecasts, by 203073 the following situation will exist: - more than 750 million Africans will be living in cities (more than the urban population of the entire western hemisphere), an increase of 300 million people, i.e. 45% more than current figures74. - Mega-cities with more than 10 million inhabitants will increase from the present figure of 1 (Cairo) to 3 (Cairo, Kinshasa and Lagos); cities with more than 1 million inhabitants will also increase from 52 to 75.

Fig. 23 Urban population in Africa (% of total) (Source: TEH-Ambrosetti based on UN-HABITAT data)

73. Source: UN-Habitat estimates, World Bank. 74. If these growth rates are confirmed, by 2050 there will be

more people in African cities than in the cities and rural areas (summed together) of the western hemisphere.

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Fig. 24 Mega-cities in the world; in the year 2015 (Source: United Nations)

80. These migratory push

Fig. 25 Cities with more than 1 million inhabitants (Source: TEH-Ambrosetti based on United Nations data)

factors, grafted onto weak urban systems that have not yet become effective engines of sustainable development, run the risk of becoming – in the words of the World Bank – “a time bomb”, if not properly managed. This is borne out by the recent UN-Habitat report, according to which African cities are those which have: - the highest percentage in the world of people living in slums, 71.9%; - the highest levels of inequality of income (see figure below).

81. So the challenges to be met are clear. It should also be noted, however, that after decades of bad urban planning and macroeconomic development choices producing debatable results, the awareness of the International community and the realization of African governments of the need for a new approach to the issues of urban sustainability, open up new prospects.

82. With this in mind, it is essential to consider, first and foremost, that the growth of wealth in the Continent will take place, above all, in the urban centers. Today the urban economy in Africa generates approx. 55% of the total GDP; by 2030 this is expected to rise to 75%. This is also due to:

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Fig. 26 GINI coefficient in some African cities; minimum=0, maximum=1 (Source: United Nations)

- Greater increase in productivity in urban areas as opposed to rural ones; empirical research carried out on a number of African countries has revealed that the increase in productivity is attributable, to a large degree, (between 20% and 50%, depending on the specific context) to the shift in employment from rural to urban areas. - Greater job creation in the cities as opposed to the rural areas. By 2040, the African workforce is expected to rise to 1.1 million people, greater than the Chinese or Indian workforce75. If efficient development policies are adopted, 2/3 of the new jobs could be created in urban areas. Fig. 27 Workforce, millions of people (Source: MGI)

75. Over the last 20 years in Africa, 75% of GDP per capita growth has

been brought about by the increase in the workforce (Source: MGI)

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83. Moreover, the urban areas will be chiefly occupied by the middle class (in addition to the “rich”) – the so-called “consumer class” – with the capacity to purchase services, primary and capital goods. This will be the real key to development. It is currently estimated that roughly 40% of this bracket of the population lives in African cities76; in the near future (2030), even allowing for the margins required in this type of forecast, these values could rise to 60-65%. Still with reference to the year 2030, recent evaluations suggest that the 18 largest African cities will have a combined spending power of over 1,300 billion Euros.

84. Growing urbanization will also require houses and infrastructure. As far as the first are concerned, at the current growth rates, the increase in the African urban population is expected to be of 300 million people by 2030: so a sufficient number of houses will have to be built to meet this demand. Assuming the average family size to be 5 persons (a conservative estimate), 60 million new houses would have to be built in the next 20 years (3 million a year; 8,200 a day). Assuming an average value of 30,000 Dollars per housing unit77, the potential market accumulated over 20 years could total to 1.8 trillion Dollars, i.e. 90 billion Dollars per year (without considering the building required to replace old housing).

85. Investments in infrastructure will be of similar proportions. It is well-known that, apar t f rom s ome s p ecific exceptions, the infrastructure gap is one of the most crucial problems for African cities.

Fig. 28 Growth rate % on a yearly basis per source of access to drinking water in the African urban areas (Source: TEH-Ambrosetti based on World Bank data)

86. For example, the majority of the urban populations in SubSaharan Africa does not obtain water from the utilities (or public mains) but from makeshift wells or surface deposits which, for 24% of Africa’s urban population, are the main sources of supply. And that’s not all: the enormous demographic pressures and the inadequacy of the already-existing services mean that access to drinking water is growing at a faster rate through “informal” solutions (figure on the right).

Fig. 29 Growth rate % on a yearly basis per source of access to drinking water in the African urban areas (Source: TEH-Ambrosetti based on World Bank data)

76. In 1980, the percentage of the middle class living in cities was approx. 28%. 77. The average construction cost per unit for 28,500 housing

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units in Nigeria at the start of the 1990s was 27,000 $; Source: “ The need for urban housing in Sub-Saharan Africa”, African Affairs, 1994.

CHAPTER 2 - Urban development in Africa

87. As far as access to electricity is concerned, according to the International Energy Agency (IEA), the electrification rate in the urban areas of the African Continent (approx. 67%) is the lowest in the world (see table below). The same applies to the transport network and all the other infrastructural elements of the urban system (especially services). Fig. 30 Access to electricity in the world, 2009 (Source: TEH-Ambrosetti based on International Energy Agency data)

Eletrification rate (%)

Eletrification rate in urban areas (%)

98.9

99.6

Subsaharian Africa

587

28.5

57.5

Africa

589

40.0

66.8

China and Middle East

195

90.2

96.2

South Asia

614

60.2

88.4

Developing Asia

809

77.2

93.5

89.1

98.5

1,453

72.0

90.0

99.8

100.0

1,456

78.2

93.4

Population without electricity (milion) North Africa

Middle East Developing Countries Transition economies and OECD World

88. Given the above situation, African governments and private investors are investing hugely in infrastructure: total investments per year are estimated to be over 70 billion Dollars. Recent studies78 estimate that investments for over 93 billion Dollars a year are needed to respond fully to Africa’s needs of Africa.In this context, it is important to underline two aspects: - Private sector investments are increasing significantly: over recent years, volumes have tripled to reach average values of approx. 20 billion Dollars per year between 2006 and 2008. This is due to various factors: extensive national investment plans; the channeling of international funds; special rates of return on investment and future prospects; progressive receptiveness and structural reforms aimed at attracting the private sector (investments and management)79. - The infrastructure deficit to be bridged is still substantial. In the next 10 years, simply to maintain the per capita income and the current living conditions in African cities, it is estimated that infrastructure investments in the broad sense totaling to 20 and 30 billion Dollars per year will be required80 (reaching accumulated values in 2020 of 200-300 billion Dollars).

78. V. Foster, C. Briceno, “Africa’s infrastructures – a time for transformation”, IBRD, 2010. 79. For example, as regards water for city systems, approx. 80% of the African countries have implemented structural reforms in order to create fertile conditions for attracting private investment.

In the interests of completeness, it should be pointed out that the process is still in course and that the room for improvement is still considerable. 80. Source: estimates of the International Monetary Fund, United Nations, MCGI.

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89. The framework of the opportunities offered by Africa in urban development may be interpreted and strengthened in the more general market analysis of the constructions of the Continent as a whole81: - Over the last eight years, investments in Africa have grown at an average rate of 8.5% (approx. 4% higher than the global rate) totaling to over 200 billion Dollars; - In 2008, growth was 9.4%, a percentage comparable to that of countries such as China (12.6%) and India (14.9%); - The more recent 2009 data point to a growth in investments of 6% against a worldwide decrease of 2.6%, with peaks of 8% in Europe and 14% in the United States.

90. An additional aspect of interest, also connected to what we have said above, refers to the economic and financial sphere. Lack of sufficient funds for different types of investment, starting with those for housing and infrastructure, has been one of the major problems the strategies for urban development in Africa have had to face. A number of studies82 have estimated (with the precautions that are always necessary in this type of exercise) that in the Nineties, aside from a few specific cases, the African governments could count, on the average, on resources sufficient to finance less than a quarter of the new urban projects. In addition to this, we have to add that the African economy - which is worsening - and the general difficult conditions of the context, do not allow a middle class to emerge with the capability to undertake private construction economically. Still in the Nineties, the general agreement was that projects of social housing should contribute for 5-10% to the structured housing needs of Africa. The situation is also greatly changed in these areas. - The African economy is growing, as is the solidity and availability of public funds: public spending in sub-Saharan African countries has gone from 66 billion Dollars83 in the 1990s to the current 140 billion, with an increase not only in absolute amounts, but also in percentage of the national GDP (22% in the Nineties; 29% today); there have also been similar trends in North African countries (public spending of 79 billion Dollars in the Nineties; currently, 142 billion).84 - Also growing is the level Fig. 31 Public investment (% of GDP) (Source: International Monetary Fund) (% of total public budget) of investment in housing and infrastructure (roads, energy, ICT, etc.). For example, for transport and communications, in the Nineties, sub-Saharan African countries spent 4.5% of their national budgets; today that share has risen to over 6% on average. If the energy and

81. Source: CRESME. 82. See as example A.G. Tipple, Oxford Journals, September 2010

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83. Refers to international Dollars 2000. 84. Source: ReSAKSS, working paper N째 28, April 2009.

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water sectors are also included, this percentage rises to 12%. - The middle class is stronger, in number and purchasing power. Already today, African nuclear families with a purchasing power of over 10,000 Dollars per year85 number around 30 million86 (there were fewer than 20 million in the early 2000s). If these trends were to hold true until 2020, there could be over 45 million families which represent a major core of consumers – mainly located in cities – capable of paying rent, purchasing houses and services, etc. - Private investment is also growing. Linked to the emergence of the African middle class and the programs of structural reform, urban development and privatization of services enacted by many African countries, numerous private companies - foreign but also local (though still residual in part) - are operating profitably87 at various levels of the chain (see also the previous comments on the volumes of private investment).

91. Naturally, all the foregoing considerations must be adjusted to fit the specific features of each country, and may differ greatly from case to case. It thus becomes essential to be able to “read” the contextual data in order to assess concrete opportunities (see Chapter 3 for the assessments of the Ambrosetti Development of Africa Map - ADAM).

92. In brief, therefore, the African cities are a challenge to be tackled, but also a great opportunity which the European and Italian enterprises, thanks to their know how, skills and urban “culture”,88 can seize and use to their very best advantage. To this end – as far as Italy is concerned – even with statistics that are not relative to the specific urban context, it is important to point out that: - there are over 142 construction companies with Italian shareholdings operating in Africa89, almost 20% of the total; - as regards turnover, the large Italian general contractors are second only to the Chinese, outstripping both the Americans and the French. Given this, it is however important to point out that the network of medium (and small) national businesses which – thanks to their design engineering abilities, quality level and supply chain integration capacities – could profitably penetrate these markets, are still largely absent, also due to the absence of a comprehensive country strategy (like that of other players, first and foremost China) able to provide valid backup to the entrepreneurial operations in the territory. From this standpoint, the recent African Plan drawn up by the Italian Ministry of Foreign Affairs, the supply chain missions of Confindustria and the relevant African market prospects could represent an important turning point, for further reinforcing Italy’s presence in Africa, particularly in the Sub-Saharan area.

85. PPP, 2005. 86. Source: MGI. 87. For example, the rates for services in Africa are higher than average of developing areas. For example: energy prices ($ per kWh) Africa: from 0.02 to 0.46; developing countries: from 0.05 to 0.10; water rates ($ per m3) Africa: from 0.86 to 6.56; developing countries: 0 0.03-0, 6; mobile rates ($ per month for the same volume) Africa: 2.6 to 21; developing countries: 9.9; internet rates ($ / month) Africa: 6.7 to

148; --developing countries: 11. Source: IBRD. 88. Europe is one of the areas of the world that underwent urbanization first. Today cities play a role of fundamental importance in the economic and social life of Europe. Roughly 80% of the population of the European Union lives and works in cities or in their surrounding urban areas. 89. Of these, 73 are operating in the countries of northern Africa and 69 in the Sub-Saharan area. Source: CRESME.

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CHAPTER 3 Africa Observatory: current trends, future prospects and performance of the individual countries

CONTENTS 1. Introduction: Africa after the crisis

123

2. The economic situation in Africa

125

2.1 Africa and the global crisis

125

2.2 Prospects for 2010 and 2011

129

2.3 An emerging trend: the growth of the middle class

130

3. Africa as a political entity: representation and unification

133

3.1. Africa in international relations

133

3.2. Regional economy in Africa

137

4. Africa and the struggle to meet the “Millennium Development Goals” (MDG)

141

Goal 1: Eradicate extreme poverty and hunger

143

Goal 2: Achieve universal primary education

144

Goal 3: Promote gender equality and empower women

144

Goal 4: Reduce child mortality

145

Goal 5: Improve maternal health

146

Goal 6: Combat HIV/AIDS, malaria and other diseases

147

Goal 7: Ensure environmental sustainability

148

Goal 8: Develop a global partnership for development

148

5. “the Ambrosetti Development of Africa Map – ADAM” analytical tool of the growth of the African countries

151

5.1 Methodology behind the “ADAM – Ambrosetti Development of Africa Map

151

152

The summary indicator for economic performance

Summary indicator of assets

154

5.2 Plotting the Map: ADAM – Ambrosetti Development Africa Map

163

5.3 Some examples of countries in transition

167

Uganda: a country braced to leap

167

169

Rwanda: a country on the right track

Malawi: exiting the safe zone

173

175

Zambia: a landlocked country with tremendous potential

6. Africa’s development traps

178

6.1 Conflict trap

178

6.2 Natural resource trap

180

6.3 Landlocked country trap

182

6.4 Poor government trap

185

7. Summary Remarks

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1. Introduction: Africa after the crisis

1. The world economic crisis has had a negative impact on African growth, hitting the SubSaharan area more sorely than initially expected: real economic growth decreased from 5.4% in 2008 to 2.9% in 2009 in contrast with preliminary forecasts that had predicted a growth rate in 2009 of 3.3%1. The crisis was not, however, limited to the financial markets, a fact that raised hopes for Africa, which is only marginally involved in this sector, but it had repercussions on the entire economy.

2. As predicted, the crisis in Africa was initially felt by the countries whose financial markets are more integrated in the world economy, e.g. South Africa, after which it expanded, following the collapse of world trade, to the oil exporting countries (e.g. Angola) and to the commodity exporting countries (e.g. Botswana and Zambia). The sharp decline in the exports of raw materials was greater than the drop in imports, leading to a worsening of the trade balance and current account.

3. The crisis, therefore, had more serious effects on countries with medium income levels and on those exporting oil, that are more fully integrated in the world economy, allowing the low income countries to continue their usual course virtually intact.

4. Tourism also suffered as a result of the world crisis, momentarily slowing down the development achieved in 2007 (+9% of arrivals), dropping in 2008 to +3.8% to soon climb back up to 5% in 2009. Africa was, however, the only area of the world to enjoy growth in this sector in the 2008-2009 season, partly as a spinoff of the Soccer World Cup in South Africa: a growth rate of 7% is expected in 2010.

5. In 2008, Africa witnessed an increasing flow of foreign direct investments, reaching +27% compared to 2007, totaling 72 million Dollars; while in 2009, with the fall of the markets it experienced a 36% decrease in inflows of investments, which stopped at 59 billion Dollars.

1. Source: OECD, African Economic Outlook, 2009.

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6. The African economies proved themselves to be extremely resistant to the crisis, on the whole, and thanks to the coordinated action of the African central banks, an upturn of 4.5% is predicted for 2010 and of 5.2% for 2011. The recovery of the African economy should be aided by the revival in private demand (thanks to the presence of a growing middle class), by foreign investments which are predicted to rise once more and, above all, by exports (commodity prices are already on the increase). Africaâ&#x20AC;&#x2122;s recovery is, however, partly dependent on the recovery of its trading partners, i.e. the United States, Europe and the BRICs â&#x20AC;&#x201C; the latter being partners of ever increasing importance for Africa. The crisis is however a long way from being over, also because the interruption in the growth process halted the improvement of many fundamental aspects (per capita income, education, diet and health), monitored through the Millennium Development Goals, slowing or even inverting the trend with respect to the progress obtained in the previous years.

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2. The economic situation in Africa 2.1 Africa and the global crisis 7. The African economy has been more resistant to the global crisis than other economies, but its effect, although less devastating, was still considerable. After a number of years in which Africa was enjoying an average growth rate of around 6%, 2009 saw it drop as low as +2.9%.

Fig. 1 GDP growth trend in Sub-Saharan Africa compared to the advanced economies and emerging markets (Source: International Monetary Fund)

8. The effects of the world crisis struck Africa through different channels: - Finance (and thus directly through the banks). - Trade (and thus through a drop in the demand for, and the prices of, commodities) - F i n a n c i a l i n f l o w s ( w h i c h decreased at the time of the crisis).

Fig. 2 Price trends of the main metals– Price 2000=100 (Source: Bloomberg, International Monetary Fund)

9. The first channel, the most direct, was the least critical for the economy of Africa, the banks of which – being only marginally integrated with international financial circuits – only suffered the international bank crisis to a minor degree.

Fig. 3 Price trends of the main agricultural commodities – Price 2000=100 (Source: Bloomberg, International Monetary Fund)

10. The channel through which the crisis dealt the hardest blow to Africa was trade, namely that of raw materials and commodities.

11. In 2008, Africa had achieved a volume of (import and export) trade exceeding 1,000 billion Dollars. Exports, sustained by the favo-

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rable prices of the commodities, had reached 557.8 billion Dollars, enabling the continent to import goods for a value of 465.6 billion Dollars. Notwithstanding this positive trend, factors such as lack of export diversification2, the drop in demand and in the prices of commodities in the second half of 2008 right through to the start of 2009, combined to reduce the African volume of trade considerably. In 2009, in fact, the volume of African exports dropped by 2.5% and that of imports by approx. 8%. Another factor that exacerbated the African trade situation during the crisis was that of the destination of African exports: the main trade partners of Africa have, in fact, always been Europe and the United States. These two partners alone, in 2008, accounted for half of the African export volume, but they were also the areas most Fig. 4 Export and import flows from and to Africa in 2008 (Source: World Trade Organization)

hardly hit by the crisis. This situation is gradually changing and already during this period of crisis, Africa has managed to reduce the negative effects of the fall in trade with the advanced economies by trading with the emerging economies, especially China, a trading partner that is gradually gaining importance. In fact, in the period from 2000 to 2008, Africaâ&#x20AC;&#x2122;s trade with China increased by 703% at an average annual rate of 28% against a total growth in African trade of 363% (from 282 billion Dollars to 1,023 billion Dollars). Europe was unable to keep Fig. 5 Trend of trade balance of African countries divided by clusters (Source: International Monetary Fund)

2. Approximately 80% of African exports are made up of oil, minerals and agricultural commodities.

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Fig. 6 Trend of current account of African countries divided by clusters (Source: International Monetary Fund)

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pace; trade increased, but remained under the average, i.e. 317%, at an average annual growth rate of 16%.

12. Due to the fall in the prices of commodities the trade balance began to deteriorate: the value of exports fell by 30% while that of the imports only fell by 20%, leading also to a worsening of the current account in many African countries.

13. The African economies depending on commodity exports had, in fact, increased their public spending during the price boom3 (without putting aside reserves) while the countries that had managed to achieve a government surplus (e.g. Nigeria) drew on these reserves in an attempt to resolve the difficulties generated by the crisis.

14. Already by the second half of 2009, the prices of commodities began to recover; the trade balance of many countries has therefore started to improve and is expected to reach positive figures again by 20104.

15. Not actually being the direct arena of the crisis, Africa could have partially avoided this situation of a reduction of trade by falling back on the domestic market but, despite the efforts underway to create regional economies, this market is still very limited and only accounts for 10% of total trade.

16. Capital inflows were also affected by the crisis. The crisis did not have a significant effect on official aid5 (see chapters 4 and 5). It was, in fact, linked to commitments previous to the crisis and already earmarked in the budgets of the donor countries; on this subject, the greatest worry is that, during the negotiation phase in 2011, the developed countries most sorely hit by the crisis will cut the flows of Fig. 7 Trend of foreign direct investments in Africa aid in order to mend their domestic bal (Source: UNCTAD, 2010) ances. Additionally, the decrease in the GDP of the donor countries will inevitable reduce (and is already reducing) the flow of aid, even if past commitments were to be renewed.

17. The interruption on the flows of foreign direct investments (FDI) is even more serious: Africa had been experiencing a period of constant growth in FDI flows which reached their maximum peak of 72 billion Dollars in 2008 (+27% com-

3. The commodity price boom lasted 5 years, from 2003 to mid2008. After this period, the prices of oil and other commodities took a downturn that lasted until the beginning of 2009. Agricultural products followed the same trend. 4. Of course the net trade balance varies from country to country; countries that import oil and agricultural products (the poorest) suffered much less (indeed some actually benefitted) from the drop in the price of raw materials, while the countries exporting

minerals and oil were those that witnessed the greatest damage to their trade balance. Another interesting effect to highlight, as regards the price of agricultural commodities is that while producers were at a disadvantage when prices dropped, the same phenomenon produced positive effects with regard to the redistribution of wealth. 5. The depreciation of the Dollar led to a decline in the value.

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pared to 2007). The drop in the prices of commodities put the brake on foreign investments in the mining and manufacturing industries, the very sectors that were the focus of foreign investments. Preliminary estimates6 for 2009 show a drop in FDIs to Africa of 36%. In general, the same situation was observed in many other emerging economies with similar rates of reduction (34%); but Africa suffered this reduction to a greater extent because the general level of domestic investment is highly dependent on that from abroad (approx. one fifth of the total).

18. With regard to the various areas that attract the FDIs: - Northern Africa is the area that receives the most diversified investments. Figures for 2009 are expected to show further drops in FDI flows to this area. - In 2009, western Africa benefitted from the presence (and from new discoveries) of oilfields, especially in Ghana, Guinea and Nigeria. 80% of all investments in western Africa are connected with oil extraction. - Inflows to central Africa remained stable in 2009, at around 6 billion Dollars. The Democratic Republic of the Congo is the main recipient of the area, with 2.6 billion Dollars of incoming investments. - Eastern Africa continues to be the area receiving the lowest percentage of FDIs in the continent, with total inflows of around 4 billion Dollars in 2009. - Southern Africa was the area that grew most in 2008, registering an increase of around 50%. Then, in 2009, it suffered a severe drop in investments, which fell by around 25% compared to 2008.

19. In 2008, the greatest beneficiaries of the FDIs were Nigeria, Angola, Egypt and South Africa. Investments, therefore, continue to be directed towards resource-rich countries or towards the extractive industries. The challenge for Africa is, therefore, to attract investments to diversified sectors with higher value-added activities.

20. The future recovery of the FDI flows is linked to the response of the investors: Africa was not the direct site of the crisis, returns on investment continue to be relatively high and there are important opportunities for diversifying investments. Thus, the continentâ&#x20AC;&#x2122;s attractiveness for private investors may well be rapidly regained.

Fig. 8 Distribution of Foreign Investment Flows per area of Africa, 2008 (Source: UNCTAD, 2010)

21. Another financial inflow which is estimated to have suffered from the crisis is that of workersâ&#x20AC;&#x2122; remittances from abroad: the generalized crisis of the world labor market has led workers to reduce the percentage of money transfers to their country of origin, thereby decreasing the income of their families of origin, and hence the spending power and consumption of the latter.

6. African economic outlook 2010.

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BOX 1: Improvement according to Doing Business Foreign investments have become one of the major sources of capital for Africa, thanks also to the governments’ efforts to make Africa a more attractive outlet for investments and, in par ticular, to improve the business environment. In the World Bank’s “Doing business””

repor t for 2010, out of the 46 African countries monitored, 29 improved their ranking; most of the improvements concerned simplifying procedures for starting up a new business and for conducting foreign trade. Please refer to the databook for the complete list.

Fig. 9 African countries that have registered the greatest improvements in the Doing Business ranking (Source: World Bank)

22. It is very difficult, however, to calculate the effective amount of the remittances; the World Bank has estimated that, prior to the crisis, for countries such as Nigeria, Sierra Leone, Togo, Guinea Bissau and Senegal, remittances accounted for between 8% and 11% of the GDP.

23. Overall, in 2009 the remittances are estimated to have dropped by approx. 6.6% (from 41 billion Dollars in 2008 to approx. 38 billion in 2009). The decline has not, however, been felt to the same extent all over Africa: the countries of northern Africa have suffered more while, in Sub-Saharan Africa, (although hit by the crisis) there are countries, such as Uganda, which actually experienced an increase in remittances in 2009. Fig. 10 Trend of remittances to Africa (billions of Dollars) (Source: World Bank, 2010)

Country

2003

2004

2005

2006

2007

2008

2009

Sub-Saharan Africa

9,4

12,6

18,5

21,1

20,5

North Africa

9,6

11,5

13,1

13,9

18,3

19,7

17,6

Total Africa

15,6

19,5

22,5

26,5

36,9

40,8

38,1

2.2 Prospects for 2010 and 2011 24. In the second part of 2009, the world economy started to grow again, and Africa, as a whole, should continue to be one of the major areas of growth: the increase in the African GDP is expected to improve compared to 2009 settling at a growth rate of 4.5% in 2010 and of 5.2% in 2011 (remaining, however, at lower levels compared to the pre-crisis period).

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Fig. 11 Expected GDP growth in 2010-2011 per geographical area (Source: International Monetary Fund)

25. World trade is on the increase 7 and the prices of commodities have risen again. After the 2.5% drop in 2009, African exports are expected to grow by 3.2% in 2010 and by 5% in 2011. The recovery will also contribute to reducing the tax deficits created by the crisis; from 4.4% of the GDP in 2009, the average deficit of the African countries is expected to decrease to approx. 3.3% in 2010, and even to 1.9% in 20118. By the end of 2011, 2 African countries out of 5 should have deficits of less than 3% or even surpluses. The trade balance of the majority of African countries is also expected to improve and return to positive figures due to the upswing in demand and in the prices of commodities9.

2.3 An emerging trend: the growth of the middle class 26. One of the main effects of this decade of growth in Africa has been the emergence of a new social-economic bracket that can, to all effects and purposes, be defined as the “middle class”. Although there are not yet official statistics regarding the numerousness of this segment of the population, it is estimated that, in 2008, it amounted to around 100 million people,10 i.e. 12% of the entire African population. From 2000 till the present day, this new social group whose annual income in Dollars at purchasing power parity (PPP)11, may be estimated at between 10,000 and 20,000 Dollars per year, has been growing at an annual

7. Also private investments, remittances and private consumption are expected to recover, but with more difficulty than trade. 8. Some oil producing countries (Libya, Democratic Republic of the Congo, Equatorial Guinea) might even register a tax surplus. 9. Oil exporting countries will register the greatest trade sur-

130

pluses. Some states (Seychelles, Sa?o Tomé and Principe and Liberia) will continue to have very negative trade balances. 10. “The middle classes moving on up”, The Africa Report 2010. Those belonging to the “global” middle class are not included. 11. Reference 2005.

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rate of around 5.9%; if this trend continues, by 2020 the African middle class will total to around 195 million people (more than the Indian one).

Fig. 12 Evolution of the emerging African middle class in millions of people 2008 (Source:TEH-Ambrosetti)

27. In African countries, the relative price system is ver y dif ferent from that of advanced countries; individuals with nominal incomes considered well below the poverty line in advanced countries, fall well within the middle class in Africa. The table shows the minimum monthly incomes (at current values) in a number of African countries, above which citizens are considered middle class; this “threshold” is not only defined on the basis of income, but also in relation to expectations, accessibility to well-being and modes of consumption. It can be seen that, in certain countries (Rwanda, Ethiopia and Sierra Leone) an individual who lives on 5 Dollars a day could even be considered as belonging to the middle class.

28. The African “new middle class” is mainly comprised of professionals, doctors, teachers and public sector employees living in urban areas. From the income perspective, they are positioned below the “affluent” bracket and above the so-called “emerging potentials”. The “affluent” are those – both individuals and families – whose medium-to-high and high incomes are comparable to those of advanced countries (this class comprises the economic and political élite, although extremely limited numerically, and high public officials working for international organizations, often abroad) who mainly consume imported goods. The “emerging potentials” – 24% of the African population, are those who live on more than 2 Dollars a day and who are starting to have a portion of income to dedicate – sporadically – to discretionary consumption, although they cannot yet consider themselves “consumers”. It is important to note that below the “emerging potentials” there are two more brackets: the “poor and “extremely Fig. 13 Minimum monthly income in order to be considered middle class in poor”. Both of these brack certain African countries, 2009 (Source: Consumer Insight Africa) et s (which, combined, account for 60% of the population) live below the poverty line of 2 Dollars a day: the first manage to satisfy their primary needs while the second are destitute and starving.

29. The growth of the middle class and its consumption, both of goods and of services, represents the cornerstone of African

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development and will be even more so in the future. The new middle class bolsters domestic demand for consumer goods (electrical household appliances, telephonic equipment, cars, education and food). While the “affluent” prefer imported products and services provided by foreign institutions and organizations, the new middle class are mainly consumers of African products and services, thereby helping to boost the development of the African manufacturing industry and stimulating the growth of the services and construction sectors in Africa. The creation and strengthening of local activities also creates jobs; in this way, a virtuous mechanism is established so that the newly employed created thanks to the demand of the middle class become, in turn, part of the middle class. An example of this positive effect on the economy is that of tourism: while the rich often go abroad on holiday, the middle class tends to move within Africa, giving impetus to the tourism sector, which employs large numbers of local people.

30. The importance of the middle class is not, of course, only limited to the economic sphere. It is an educated middle class with an average degree of schooling, the families of which tend, on the whole, to be planned and less numerous and, as such, it will have a decisive effect on the political and social stabilization process and determine the composition of the continent’s future ruling class.

Fig. 14 Composition of the African population by income/consumption classes (Source: TEH-Ambrosetti)

31. In advanced countries the middle class accounts for around 50%-60% of the total population: there is, therefore, a gap between the estimates illustrated up till now and the “typical” structure of the income brackets of the more developed economies. It is in this gap that Africa’s great growth potential resides.

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3. Africa as a political entity: representation and unification

3.2 Africa in international relations 32. As it grows economically, Africa is beginning to impose itself as a unified body and autonomous political entity in international political and economic relations with other part ners. 33. In order to acquire more importance on an international scale, Africa is striving to invert what had been its political focus for many years, bringing politics and domestic growth back to the center of its own interests. Its objective is to concentrate first and foremost on domestic economic growth, and then open itself to the world, rather than adopt its traditional position â&#x20AC;&#x201C; that of considering relations and trade with the rest of the world as a means for facilitating domestic growth.

34. Africa wants, therefore, to be the engine of its own development and to become a political entity in the front line as regards the choices of the Continent. For this to be possible, Africa is well aware of the need for greater unity between the individual countries, in order to exploit internal synergies and extend its political weight on the international chess board.

35. This becomes even more urgent when the situation of African representation within international forums is examined: after a period in the spotlight, the interest shown by international institutions in the African continent seems to have waned. The G8 has given Africa a great deal of space in the last 8 summits, helping in this way to cancel part of the African debt and increase the budget allocated for aid. Conversely, the same amount of attention has not been reserved for the theme of Africa on the agenda of the G20. The G20 is, in fact, deciding upon initiatives for developing countries that are more geared to medium income countries than to poor ones.

36. The presence of South Africa in the G20 cannot be considered as representative of the African continent as a whole: in fact, due to its economic development and history, it is not yet considered by the rest of the continent as an authorized spokesman. If South Africa is not suited to this role, it is not easy to identify another country eligible to enter the international forums. Nigeria, the second economy of Sub-Saharan Africa, does not appear to be a possible candidate, given its domestic situation and its limited economic importance on an international scale. The relatively limited economic weight and small dimensions of all the African countries risk marginalizing the continent from international forums without there being a deliberate intention to exclude it.

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Box 2: Regional hegemony South Africa and Nigeria are the two main economies of Sub-Saharan Africa and both are endeavoring to establish regional influence. Both countries are employing a very similar “strategy” in the pursuit of their hegemonic goals which is based on intervention - both political and military – in the civil wars which have recently afflicted (or are still afflicting) some African countries. In such scenarios, they have not failed to exert their influence, presenting themselves as solvers of local conflicts, also through sending their own troops to carry out peace-keeping operations. Nigeria and South Africa have different economic and social characteristics that can be used as trump cards vis à vis other countries within the continent. Nigeria is the most populous African country (with approx. 149 million inhabitants), third in terms of GDP (165,437 million Dollars in 2009), but only 20th in terms of GDP per capita (approx. 2,100 Dollars in 2008). It plays a dominant role in western Africa, a role that has grown following France’s decision not to act as “protector” in western African countries.

The country has experienced high rates of economic growth, tied predominantly to oil exports and investment from China that allows it to play a dominant regional role with neighboring states. Today, South Africa is the African country with the highest GDP (287,219 million Dollars in 2009), 7th in terms of per capita GDP at PPP (approx. 10,100 Dollars in 2009) and 5th in population (approx. 49 million people). The embargo set by the international community during the apartheid period had the effect of boosting the development of a number of industrial sectors, fostering production diversification. For a number of years, South Africa has been making foreign direct investment in other countries of the continent (in the last ten years, this flow was, on average, 1 billion Dollars per year; in 2008 it was over 2 million). For these reasons (economic and socio-political development) South Africa is the only African country to be invited regularly to represent the continent in the international meetings of the G8 and G20.

37. Lack of African representation should not, however, be interpreted as a desire, on the part of the international community, to wash its hands of the problems of Africa. The situation does, nevertheless, pose the question of ownership of development: if Africa is not represented when common support policies are chosen and negotiated, the aid will be decided more and more by third parties, disregarding the desire of the continent to decide upon priorities and methods of intervention.

38. In this framework, in absence of a recognized leadership, the African organization with the most authority is the African Union: the recent election of the President of Malawi, Bingu wa Mutharika, as its leader has considerably increased its credibility and representativeness12.

39. The African Union13 is the supranational African institution entrusted to guide Africa towards the constitution of the unity of the continent. It qualifies as the no. 1 institution and primary organization for the promotion and acceleration of social-economic integration and for greater unity and solidarity among the nations and peoples of Africa.

12. The previous President of the African Union, Gheddafi, was not a credible partner and representative of the whole of Africa in the G20.

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13. The African Union was established in 2001 as a successor to the Organization of African Unity to promote the integration of the African countries.

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40. In its vision, the African Union declares as its first goal the constitution of a strong and unified Africa through the building of partnerships between governments and all segments of civil society (in particular women, young people and the private sector) to reinforce solidarity and internal cohesion. As a continent-wide organization, the Union focuses on the promotion of peace, safety and stability as prerequisites for African development and integration.

41. Within the African Union, a primary role is played by the New Partnership for Africa’s Development (NEPAD), adopted in 2001 on the mandate from five African heads of state (Algeria, Egypt, Nigeria, Senegal and South Africa) of the Organization of African Unity, to outline a framework for integrated social-economic development. As part of the plan to incorporate NEPAD in the structures and programs of the African Union, the secretariat of NEPAD was made into an Agency of the African Union in 2010. In this way, greater coordination and consistency are guaranteed between the policies decided at the headquar ters of the African Union and the actions promoted by NEPAD. The priority goals of NEPAD remain: - Sustainable growth and development of African countries (peace and security; democracy and good economic administration; politics and entrepreneurship; regional cooperation and integration). - Reduction of Africa’s marginal position in the globalization process. - Reform policies in the following sectors: Agriculture,14 human development, infrastructure, production and exports, and the environment. - Mobilization of the resources required for development (increase in domestic savings and investment; improvement in public accounts management; growth in Africa’s share of world trade; attract foreign direct investment and development aid).

42. In fact, if on one hand the process of integration in Africa was, in a certain way, the result of a push towards “pan-Africanism”, it cannot be ignored that there are many differences between African states that make it difficult to reach agreement and common policies on such major issues as development and economic growth, and the fight against poverty and disease.

43. To iron out these differences and promote the constitution of a united Africa, the African Union launched the peer review mechanism, which encourages African countries to follow guiding principles, political economic and corporate governance codes and standards that are standardized throughout the countries of the Union. The harmonization of the conditions of the African countries is the starting point required for a future constitution process involving a more concrete economic and political integration of the African countries, comparable in certain ways to the constitution of the European Union.

14. Using the CAADP program.

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Box 3: The African Peer Review Mechanism The African Peer Review Mechanism (APRM) is a mutually agreed instrument voluntarily adopted by the Member States of the African Union (AU) as a self-assessment/monitoring mechanism. Countries accede formally to the APRM by presenting the Memorandum of Understanding of March 2003 (year of foundation of the APRM) signed at the NEPAD Secretariat. The APRM currently has 29 Member States, namely: Algeria, Burkina Faso, Republic of the Congo, Ethiopia, Ghana, Kenya, Cameroon, Gabon and Mali (since 2003); Mauritius, Mozambique, Nigeria, Rwanda, Senegal, South Africa, Uganda, Egypt, Benin, Malawi, Lesotho, Tanzania, Angola and Sierra Leone (since 2004), Sudan and Zambia (since 2006); São Tomé and Príncipe and Djibouti (since 2007), Mauritania and Togo (since 2008). The African Peer Review Mechanism has 4 distinct entities: 1) The Committee of Participating Heads of State and Government (APR Forum); this is the highest decision making authority of the APRM. 2) The Panel of Eminent Persons (APR Panel) which is appointed to oversee the review process, to guarantee its integrity and to make recommendations to improve the situation of the countries reviewed. 3) The APRM Secretariat, which provides coordinating and administrative support. 4) The Country Review Mission Team (CRM Team) which is appointed to visit the country under review, provide preliminary input with a view to improving the Country’s Program of Action and produce the APRM Report on the country. The peer review process involves 4 phases: - Phase 1: self-assessment of the country and drawing up of the Program of Action. - Phase 2: visit to the country by the Country Review Mission Team directed by a member of the APR Panel and in-depth consultation of the team with government officials, members of parliament and representatives from political parties, the business community and society at large (including the mass media, universities, trade unions and non governmental organizations). The purpose of the visit is to raise the stakeholders’ awareness of the peer review process, of its guiding principles and the spirit in

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which it is carried out, with a view to discussing and improving the proposed Program of Action and create a consensus regarding the areas of intervention not yet covered. - Phase 3: preparation of the CRM Team’s report containing an analysis of the state of the country and recommendations for accelerating the achievement of the goals. - Phase 4: The CRM Team’s report is submitted to the APR Panel. The Panel, in turn, makes its recommendations and reports them to the Forum. The Forum examines the Country Report and the recommendations of the APR Panel and decides what actions to take. The fourth phase is completed with the Chairperson of the APR informs the Head of State of the country under review of the decisions reached by the Forum. - Phase 5: The Country Report and the recommendations made are made public for the benefit of the supranational (African Union, PanAfrican Parliament, the regional economic communities of reference etc...) and national African institutions. Once the process has been completed, the followup phase begins in which the country examined reviews its Program of Action, implements it and monitors the progress made. Also during this phase, the APRM Secretariat carries out a monitoring and guiding action, also using workshops, to disseminate information on other countries experiences and successes. Nine countries have completed the peer review process to date: Ghana, Rwanda, Kenya, South Africa, Algeria, Benin, Uganda, Nigeria and Burkina Faso. Three countries are ready to receive the visit of the CRM team (Mozambique, Mali and Lesotho), while a further three have completed the self-assessment phase (Ethiopia, Mauritius and Tanzania). The other countries, although part of the program, have not yet started the peer review process. From the countries already reviewed a series of common themes requiring immediate attention have emerged: management of diversity; unemployment; limitations in the capacity and provision of services; land reform and corruption. Other widespread problems are violence against women, poverty, inequality and foreign dependence.

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3.1 Regional economy in Africa Alongside this continental integration process, the African countries have devised sub-regional integration processes of a purely economic nature. The main organizations (known as RECs, Regional Economic Communities) are: - Common Market for East and Southern Africa, COMESA. - Union du Maghreb Arabe, AMU. - Economic Community of West African States, ECOWAS. - Southern African Development Community, SADC. - Inter-governmental Authority on Development, IGAD. - Communauté Economique et Monétaire d’Afrique Centrale, CEMAC.

44. The primary goal of these various African organizations is the development of free trade areas and to simplify trade flows. Of course, many of them have developed from the political standpoint, and this is borne out, for example, by the fact that they are working to resolve a number of regional conflicts.

45. Irrespective of any considerations regarding their efficacy, the existence of regional organizations alongside the African Union underscores the difficulty surrounding the integration process on a continent-wide scale.

4 6. Alongside

Fig. 15 Main African regional organizations (Source: World Bank)

efforts to integrate Africa politically and as regards customs regulations, starting out from the regional communities, economic develop ment has, in recent years, also taken on a regional dimension. Individual countries have increasingly become aware of the fact that greater integration of their economies and sharing of goals and resources for development improve the efficacy of investments, both private and within the context of international development cooperation programs. The protagonists and means for convincing them of this have been the African regional organizations who already had among their goals increased integration and sharing of development choices for their member states.

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47. And this was the context in which the logic of the transnational corridors was developed as an initiative for development: it involves the pooling of resources for the construction of major infrastructure projects that increase mobility, connections and trading between nations and communications and energy supFig. 16 Transport infrastructure included ply, thus contributing to increasing com in the North-South corridor petitiveness and development of the (Source: Regional Trade Facilitation Programme) region involved in the initiatives.15 Start-up of concrete infrastructure development programs connected with the creation of policies and measures aimed at fostering market integration and trade liberalization, should contribute to turning around the process of African integration.

48. The North-South corridor represents a pilot applications project of the Aid for Trade mechanism. For the first time, on a regional level, infrastructure investment is made at the same time as the adoption of measures to promote business and trade (multi-sector approach). The project is the result of efforts of three regional organizations in southeast Africa: COMESA, EAC and SADC.16

49. The goal is to reduce the difficulties and slowness in trade connections in order to improve competitiveness and, ultimately, to increase economic development and employment, and to reduce the poverty level in the 8 countries involved: South Africa, Zimbabwe, Zambia, Tanzania, Democratic Republic of the Congo, Malawi, Botswana and Mozambique. The project has a multi-sector approach: investment is called for in all infrastructure required for connections and trade, i.e., roads, ports and rail, including intervention in the electrical energy sector.

50. It has been calculated that the infrastructure improvements included in the North-South corridor could result in time savings for African-based companies equal to 150 million Dollars per year. According to the World Bank, an adequate energy supply, good roads and positive business relations could cause a rise in GDP of 2% and an increase of 40% in productivity.

15. The importance of the corridors was acknowledged also during the 12th summit of the heads of state of the African Union held in Addis Ababa in February 2009, during which the belief was reiterated that continent-wide integration is not just a question of political choices and openings, but that a continental communica-

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tions network must be created through direct action involving the mobility and transport and telecommunications networks. 16. The decision was made during the three-way summit in Kampala (Uganda) in October 2008.

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Among the main results expected from improvement in infrastructure of the areas involved are: - 25% reduction in transport and transit costs between Dar es Salaam (Tanzania) and Lusaka (Zambia). - 10% reduction in travel times between Lusaka and Durban (South Africa). - At least a 20% reduction in transit times at the Chirundu checkpoint on the border between Zimbabwe and Zambia. - Reduction in transit times and costs between eastern and southern Africa. - Increase in electrical energy transmission between countries, especially hydro-electric.

51. The area involved is 25% of the entire continent, brings together 198 million people (approx. 25% of the Sub-Saharan Africa population) and has a GDP of 351 billion Dollars (almost half of the Sub-Saharan Africa GDP).

52. Alongside initiatives involving physical infrastructure, the nations involved in the project are committed, on their part, to adopting the measures required to foster liberalization of trade and integration of regional markets (already one of the objectives of a number of regional African organizations and the African Union).

53. The North-South corridor is comprised of two corridors designated as priorities by NEPAD: the Durban corridor that connects the Copperbelt region in Zambia with ports in South Africa, and the Dar es Salaam corridor that connects this Tanzanian port with Zambia. This corridor will later be integrated into other transit and transport corridors that crisscross the entire African continent. Specifically, its integration into the Central corridor has been planned, which stretches from the port of Dar es Salaam in Tanzania to Rwanda and Burundi; the North corridor that crosses through Kenya, Uganda, Rwanda, Burundi and the Democratic Republic of the Congo, and the corridor between southern Sudan and Ethiopia.

54. The overall financial commitment is 1.2 billion Dollars17 to improve rail, road and port connections along Africaâ&#x20AC;&#x2122;s North-South corridor and broaden access to electrical energy.

55. Another area in which considerable development of corridors is taking place is western Africa. The ECOWAS area18 is developing mainly road connections along the east-west arterial roads and from north to south. The main arterial roads in the area are: - The Dakar-Lagos that crosses the 10 coastal states of the ECOWAS area. - The Dakar-Njamena which crosses Senegal, Mali, Burkina Faso, Niger, Nigeria arriving as far as Chad. - The Algeri-Lagos, a highway that crosses the Sahara desert.

56. The beating heart of the area is the urban corridor which passes through Ibadan and Lagos in Nigeria, Cotonou in Benin, LomĂŠ in Togo and Accra in Ghana. The main cities along the corridor are approximately 150-200 kilometers apart and numerous housing settlements

17. The European Union (see chapter 5) and individual countries are also contributing to the funding of this major infrastructure project. 18. Economic Community of West African States formed by Benin,

Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

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have formed between them, rendering it the most densely and uninterruptedly populated corridor of Sub-Saharan Africa. Accra accounts for 19.7% of the total population of Ghana, LomĂŠ for 58% of the population of Togo, Cotonou for 22.4% of the population of Benin and Lagos for approx. 6.6% of the population of Nigeria, with approx. 9.7 million inhabitants. Overall, the corridor has a population of 18.3 million inhabitants considering the cities alone and it is estimated to amount to 25 million inhabitants, considering those of the small towns and villages as well. Also from the economic standpoint, the importance of the cities of the corridor depends on the area: Lagos alone produces 26.2% of the GDP of Nigeria, and 70% of Ghanaâ&#x20AC;&#x2122;s manufacturing industries are concentrated in Accra.

57. It is clear that the presence of a cor-

Fig. 17 Western African highway network (Source: United Nations)

ridor of such dimensions can act as a driving force for the economic development of the entire area. ECOWAS, conscious of this opportunity, has adopted protocols to facilitate trade within the area, with the aim of: - Adopting common policies, laws and regulations on transport and communications issues. - Developing a widespread network of asphalted highways within the ComFig. 18 Accra-Lagos-Ibadan urban corridor munity, giving priority to the suprana (Source: United Nations) tional ones. - Promoting regional air transport services. - Harmonizing maritime transport regulations. These protocols are, however, a long way from being concretely adopted (due to bureaucratic and administrative delays) and the substantial fragmentation of the territory through which the urban corridor runs, broken up by national boundaries and customs, obstructs and slows down both trade and passengers, so that many opportunities for growth deriving from the concentration of people and resources along the corridor are lost. In 2010 the World Bank approved a 228 million Dollar program to demolish trade barriers and upgrade road and sea transport from Abidijian to Lagos. Improvements in the efficiency of the corridor will increase both domestic and foreign trade, facilitating imports and exports and enabling the urban corridor to really become a catalyst for the economy of the entire area.

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4. Africa and the struggle to meet the â&#x20AC;&#x153;Millennium Development Goalsâ&#x20AC;? (MDG)

58. Established during the United Nations Millennium Summit in September 2000 and signed by 189 nations as part of the Millennium Declaration, the 8 Millennium Development Goals are changing the course of development in many countries by providing orientation for the efforts by governments, development agencies, non-governmental organizations and society as a whole towards their achievement. The goals are: 1) Eradicate extreme poverty and hunger. 2) Achieve universal primary education. 3) Promote gender equality and empower women. 4) Reduce child mortality. 5) Improve maternal health. 6) Combat HIV/AIDS, malaria and other diseases. 7) Ensure environmental sustainability. 8) Develop a global partnership for development19.

59. The goals were drawn up with 2015 as the year by which they were to be achieved. They are measureable and concrete and represent a reference in evaluating the development policies established by individual governments and supernational organizations, which are responsible for having the goals met. Fig. 19 Summary of the targets for each goal (Source: World Bank)

19. Non measurable goal.

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Each of the goals is comprised of sub-goals (or targets) which are also quantifiable and for which a detailed system of reference indicators has been proposed that facilitate evaluation of the extent to which Fig. 20 Progress in meeting Millennium Development Goals as of 2007 they have been reached. (Source: OECD)

60. Sub-Saharan Africa is undoubtedly one of the areas encountering most difficulties in pursuing the goals, while some other countries have reached and even surpassed the reference targets. The world crisis, moreover, has slowed down progress regarding the achievement of these goals.

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Goal 1: Eradicate extreme poverty and hunger Target 1: Reduce by one-half, from 1990 to 2015, the proportion of people living on less than $1 per day

61. This is one of the most difficult goals to reach. Since 1990 the trend has, in any case, been positive if a far cry from the estimated required values for reaching the goal in 2015. The number of people living on less than one Dollar a day has dropped from 55.7% in 1990 to 51.4% in 2007. The world crisis has, however, slowed down progress in this field and, if the 1990-2007 trend would have made it possible to reach the target of 36% of the population surviving at under 1$ a day, with the effects of the crisis this figure will not drop below 38%. 50% of the countries for which data was available, (24 countries) shows an improvement that will not be sufficient to reach the Fig. 21 % of the labor force that lives on less than target within the reference time horizon one Dollar per day or, even worse, a deterioration of the (Source: TEH-Ambrosetti based on World Bank data) situation. This problem is more accentuated in the countries of western Africa (10 states) and southern Africa (9 states). On the other hand, those which have demonstrated positive or very positive per formance are Cameroon, Cape Verde, Senegal, Kenya, Mauritania and Ghana. Those countries whose rate of growth is on-course to reach the target include Benin, Republic of the Congo, Guinea, Swaziland and Uganda.

Target 2: Reduce

by half, from

1990

2015,

the proportion of people who suffer from

hunger

62. The results are conflicting: the percentage of the population that is undernourished has gone from 32% in 1990 (202 million people) to 28% in 2005. This result is not sufficient to meet the target of 16% by 2015. The people suffering from hunger in Sub-Saharan Africa in 2009 were estimated by the FAO to be 265 million, 32% of the population, up 11.8% from 2008. Northern Africa20 also registered its highest percentage in this area, around 13%. Once again here, there are countries with better and worse performance. Angola, Chad, Djibouti and Mozambique have shown good results, while the areas of central and eastern Africa continue to suffer from hunger. The most serious cases are found in the Republic of the Congo, Burundi, Liberia and Guinea-Bissau. Due to the increase in the price of agricultural products and oil, as well as constant population growth and continued low productivity of agriculture, food security is once again facing a critical period. The current world crisis is further worsening the situation.

20. FAO data does not breakdown its statistics between northern Africa and the Middle East. For this reason, separate data is not available.

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Goal 2: Achieve universal primary education Target: by the year 2015, provide all children, both boys and girls, the means to complete primary school

63. Enrolment in the first year has increased by 18 percentage points between 1999 and 2008 (from 56% to 74% of the population at school age). Some countries have already reached full enrolment: Madagascar, SĂŁo TomĂŠ and Principe, the Seychelles and Tanzania, while others are very close to the target (around 95%), i.e.: Algeria, Egypt, Tunisia, Mauritania, Rwanda, Uganda and Zambia. Other countries have shown significant improvement, going from enrolment levels of around 50% (1999) to 70% (2008), among which Benin, Ethiopia, Ghana, Guinea and Mozambique. Again here, despite the very positive results in some countries, half of Sub-Saharan African countries are not on-course to meet the objective, and some have actually registered a worsening in their situation (Cape Verde, Liberia, Gambia and South Africa, the latter particularly so).

64. The other condition for meeting full schooling is completion of primary school: in 2008 the primary school completion rate rose to 65% of the children at school age; in 1990, only 49% completed primary schooling and in 2000 this figure rose to 53%. Progress has, therefore, been remarkable. Literacy of children under the age of 15 has improved from 66.5% in 1990 to 73% in 2006. However, this increase is still insufficient to meet a level of 100% in 2015.

Goal 3: Promote gender equality and empower women 65. The progress in eliminating sexual inequality is very clear from the figures for primary school enrolment. 67.9% of Sub-Saharan African countries have attained or are oncourse to meet the 2015 goal, and of these more than 80% have a percentage that is higher than the average. Gambia, Mauritania, Mauritius, Namibia and Rwanda have

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Fig. 22 % of children who have completed primary education (Source: TEH-Ambrosetti based on World Bank data)

Fig. 23 Rate of enrolment of girls in primary school, compared with boys (Source: TEH-Ambrosetti based on World Bank data)

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attained equality, closing a gap of 30% between boys and girls in 15 years, and some states have actually registered an advantage for girls (Mauritania, Gambia, Rwanda and Mauritius).

66. There has also been improvement in female employment in 1990, of those employed in non-agricultural sectors 23% were women, while in 2007 this rose to 29%21; the World Bank estimates that by 2015 this will have risen to 33%. Even more significant is the improvement in the percentage of parliamentary seats held by women, which has risen from 7.2% in 1990 to the current figure of 18% (2009 data).

Goal 4: Reduce child mortality Target 4: reduce by 2/3 between 1990 and 2015 the mortality rate among children under five

67. Sub-Saharan Africa is unquestionably the area of the world farthest from meeting this goal. The children who die in this area are approximately half of those who die in developing countries. In 2007, the infant mortality rate was 145 children out of every 1,000 live births (157 in 2006), compared with 77 out of 1,000 in south Asia (area with the next worst performance level). There are, however, 19 â&#x20AC;&#x153;virtuousâ&#x20AC;? countries which have reached the goal. Other than the countries of northern Africa, the ones that have shown the best results are Eritrea, Malawi, Mozambique, Namibia, Niger and Tanzania which, although starting from very high mortality levels, have already reached the goal. As many as 8 countries (Benin, Burundi, Cameroon, Chad, Republic of the Congo, Guinea Bissau , Kenya and South Africa) have worsened, Fig. 24 Deaths of children under 5 per 1,000 even compared to the 1990 data. (Source: TEH-Ambrosetti based on World Bank data) The world crisis is, moreover, likely to dampen expectations further in this far from reassuring scenario. If, before the crisis, it was estimated that Africa would reach an infant (under 5s) mortality rate of 129.2 out of ever y 1,0 0 0 bir ths, the updated post-crisis estimate for 2015 is of 139.5 deaths out of every 1,000 live births.

68. The achievement of this goal is closely tied to reducing poverty, since poverty is responsible for malnutrition and for the worsening of hygiene conditions which, reducing the defenses of the immune system, cause diseases that would, otherwise, have been prevented through immunization.

21. Compared with a global average of 39%.

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In 2007, 28% of children under 5 were underweight (compared with 32% in 1990). The phenomenon is much more serious in the rural areas (30% of children underweight) than in the cities (19% of children underweight). As far as disease is concerned, measles is the primary cause of death in children in Africa,22 ahead of AIDS, tuberculosis and malaria. Much is being done on this front but, given the results, the effort required is still great: in 2007, the percentage of children between 12 and 23 months who had received a dose of vaccine against measles rose from 55% in 2000 to 73% in 2007, a percentage still below the average in developing countries (80%), but in line with that in south Asia (72%) and Oceania (62%).

Goal 5: Improve maternal health Target: reduce by 3/4 between 1990 and 2015 the maternal mortality ratio

69. Half of all maternal deaths (nearly 265,000) occurred in Sub-Saharan Africa. The risk for mothers to die from childbirth-related complications is the highest in the world: 1 out of 22 as opposed to 1 in 7,300 in developed countries. In 2005, the mortality rate was 900 mothers for every 100,000 live births, almost double that of the second-worst area, 490 out of 100,000 in south Asia. The target for 2015 should be to attain a level close to 230, but only 26.9% of Sub-Saharan African states are on-course and the progress made since 1990 has only been one percentage point.

70. The major causes of maternal mortality are, in order of importance: hemorrhages, septicemia and infections (including HIV), hypertension and abortion-related complications. In 2007, 44% of women were attended by a healthcare worker during birth (42% in 1990) and 75% were examined at least once during pregnancy (68% in 1990).

Fig. 25 Comparison of maternal mortality in developing countries: Number of childbirth-related deaths per 100,000 live births (2005) (Source: TEH-Ambrosetti based on UNDP data)

71. A further risk factor is adolescent pregnancy. Births by mothers between 15 and 19 had decreased from 131 per 1,000 women in 1990 to 118 in 2000, but the figures for 2006 (123 for every 1,000) show a worrying inversion in the trend. This problem can be eliminated gradually by increasing access and quality of sanitary services for women, access to birth planning means, prevention of unwanted pregnancies and increase in schooling for girls.

22. World Health Organization, 2008.

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Goal 6: Combat HIV/AIDS, malaria and other diseases Target 1: Halt and begin to diminish the spread of HIV/AIDS by 2015

72. This goal is very far from being met. In 2007, a third of all new cases of HIV worldwide and 38% of the deaths from AIDS occur in Sub-Saharan Africa. The level of HIVpositive individuals rose from 2.1% in 1990 to 4.9% in 2009. Approximately 67% of those infected by the HIV virus on a worldwide level live in Sub-Saharan Africa and this disease is the no. 1 cause of death. Around 60% of the people that are HIV-positive in Africa are women. Southern Africa has the highest rates of infection: the worst performer is Swaziland, with 26% of the population infected by HIV; also in dire straits are Botswana (23%); Lesotho (23%), South Africa (18%) and Namibia (15%). In more than 80% of Sub-Saharan AfriFig. 26 Percentage of women between ages 15 and 24 can countries, the levels of HIV infec affected by HIV (Source: TEH-Ambrosetti based on World Bank data) tion have not been reduced sufficiently or have actually increased. This makes it difficult to reach the goal set for 2015. In addition, in Africa HIV represents one of the main obstacles to sustainable development given the age bracket it affects is that between 14 and 49 years of age. Additionally, out of the 15 million children orphaned each year due to AIDS, as many as 12 million are estimated to be African.

Target 2:

achieve, by

2010,

universal access to treatment for

HIV/AIDS

for all those who

need it

73. The number of people who receive anti-virus treatment is in continuous growth. In 2006, it was at 21%, while in 2007 it had already risen to 30%. But, despite this, in 2007 because of the scarcity of drugs compared with what would be required, 5 million people were denied access to treatment. On the other hand, it is estimated that since 2002, use of these drugs has meant 2 million years of life have been gained in Sub-Saharan Africa alone.

74. After HIV, malaria and tuberculosis are the most serious diseases. Approximately 80% of deaths in the world due to malaria occur in Sub-Saharan Africa, and malaria is also responsible for more than 18% of deaths of children under 5. The fight against tuberculosis is especially critical. While in 1990 new cases were 157 for every 100,000 inhabitants (excluding those HIV positive), in 2006 the new cases had risen to 291 and in 2007, they decreased slightly to 234. Despite this slight improvement, these statistics seriously call into question the possibility of stopping the disease by 2015; the tuberculosis virus has mutated, becoming resistant to the most widely used drugs.

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Goal 7: Ensure environmental sustainability Target:

2015,

reduce by half the proportion of people without sustainable access to safe

drinking water and basic sanitation

75. The lack of basic infrastructure makes access to sources of safe drinking water and sanitation facilities a priority issue. In 2006, only 58% of the African population had access to drinking water, with a marked difference between the situation in the cities (80% with access) and the rural areas (46% with access); the target to be reached by 2015 is 75%. 60% of the countries have already achieved the goal (Morocco, Mali, Chad, Cameroon, Benin, Ghana, Ivory Coast, Burkina Faso, Sierra Leone, Senegal, Guinea, Guinea Bissau, Somalia, Zambia and Zimbabwe) or are on-course for achieving it (for example: Namibia, Liberia, Lesotho, South Africa, Botswana and Mauritania). On the other hand, there is a group of countries that has actually worsened its performance from 1990 to 2006: Algeria, the Comoros Islands, Republic of the Congo, Equatorial Guinea and Ethiopia.

76. Even more serious is accessibility to sanitary facilities: in 2006 in Sub-Saharan Africa, only 31% of the population had access (29% in 2000 and 26% in 1990); of these 42% were in the cities and 24% in rural areas. The target for 2015 is to broaden access to sanitation facilities to 63% of the population which would mean passing from the 242 million people who currently have access to roughly 612 million by 2015. This goal is even more difficult to reach considering the fact that the growth in population, acceleration of urbanization and hence the increase in poor urban outskirts will render it increasingly more difficult to extend access to sanitation facilities. Currently in Sub-Saharan Africa, the percentage of the urban population that lives in slums is around 62%. These families may be without access to safe drinking water, sanitary facilities, structurally sound housing or sufficient space to live in.

77. Other problems with less-direct impact on the populations monitored as part of this goal are CO2 emissionsâ&#x20AC;&#x201D;slight in Africa compared with developed countries (although on the increase) and deforestation, unquestionably a relevant problem if we consider that the continent is exploited both for wood and for new land to use as plantations. In this regard, a moderately positive trend is underway: the portion of land subject to environmental protection rose from 8.5% in 1990 to 9.5% in 2007 and to 10% in 2009; nonetheless, Sub-Saharan Africa continues to be one of the areas of the world with the greatest loss of forests: approx. 4.1 million of hectares less each year (2000-2005).

Goal 8: Develop a global partnership for development 78. In setting the Millennium goals, the United Nations acknowledged the central importance of cooperation between the most developed countries and the poorest countries. The eighth goal has been broken down into sub-goals, some of which are not measurable but serve rather as guidelines for the development of stronger and more responsible cooperation between the north and the south of the world. They are as follows:

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1) to gradually develop an open, transparent and non-discriminatory trading and financial system. 2) to address the special needs of the less developed countries (including exportations free from tariffs and quotas for the less developed countries; debt extinction programs, more generous aid from countries committed to reducing poverty). 3) to address the problems of landlocked developing countries and small islands. 4) to deal, comprehensively with developing countries’ debt burden, through national and international measures, to make it sustainable in the long term. 5) in cooperation with the pharmaceutical sector, find access to affordable essential drugs. 6) in cooperation with the private sector, make available benefits of new technologies, especially information and communications.

79. Progress in the first 4 sub-goals has been generally inadequate, except in the case of easing the debt burden. In terms of aid, this rose, in 2008, by 10.2% to 119.8 billion Dollars, the highest figure ever achieved. In terms of individual donor nations, however, extremely few have met the promised aid target of 0.7% of the GNI (Denmark, Luxembourg, The Netherlands, Norway and Sweden). The financial crisis of 2009 led to a reduction of aid to Africa: even the “virtuous” countries that meet the 0.7% target, have reduced the amount of aid provided in absolute terms, given the drop in the GNI itself. There have, moreover, been some failings on the part of certain countries (Austria, Greece and Italy) the contribution of which (debt extinction excluded) proved to be less than half of the set target. This situation is worrying, not only because failure to provide the promised aid makes the reaching of the Millennium Goals even more difficult, but also because it undermines the sustainability of the progress already made.

80. The International Monetary Fund launched an HIPC (Heavily Indebted Poor Countries) program in 1996 in order to help a group of countries severely penalized by a debt and an unsustainable debt service. In 2009 40 countries eligible to receive aid were selected; 29 of these are in Sub-Saharan Africa. At the time being, 21 African countries have reached the required conditions for obtaining cancellation of their debt 23; 7 have obtained a partial reduction (Chad, Democratic Republic of the Congo, Ivory Coast, Guinea, Guinea Bissau, Liberia and Togo) and 4 African countries have reported levels of indebtedness and poverty that make them eligible to enter the program (Comoros Islands, Eritrea, Somalia and Sudan).

81. Aid should be given by developed countries to developing countries also through certain ambits of the private sector, i.e. the pharmaceutical and telecommunications sectors. In the first case, this means adopting policies that allow for increased access (and, therefore, a lowering of prices) to drugs. Less than ¾ of developing countries have developed policies to substitute brand name pharmaceuticals with generic ones. For telecommunications, the goal is to broaden the population base with access to the telephone, cell

23. Benin, Burkina Faso, Cameroon, Central African Republic, Republic of the Congo, Ethiopia, Gambia, Ghana, Madagascar, Malawi,

Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tomé and Principe, Senegal, Sierra Leone, Tanzania, Uganda and Zambia.

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phones and the worldwide web. In Africa more than 50 million new telephone users were registered in 2007; cell phone market penetration has risen from 2% in 2000 to almost 25% today. The spread of cell phones has not only increased access to voice services but also instant messaging, m-banking, m-commerce and disaster management. Latest generation cell phones are designed for broadband Internet connections; this could facilitate access (at the moment internet users are limited to 5% of the population) and bridge the broadband infrastructure gap in Africa.

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5. “The Ambrosetti Development of Africa Map – ADAM”. analytical tool of the growth of the African countries

82. The “Ambrosetti Development African Map – ADAM” (strategic map of the African countries) is a tool that has been developed for the express purpose of interpreting African phenomena. The special feature of ADAM lies in the multi-aspect approach adopted for describing and understanding the key factors driving the development of different African countries, making it possible to monitor progress over time.

83. In order to arrive at a more complete interpretation, account has been taken not only of variables of an economic nature,24 but also other factors affecting growth sustainability and development: the supply of natural resources, minerals and infrastructures and the level of risk of a country in terms of the overall situation regarding governance, taken as referring to both political stability and the efficiency of the administrative and legislative machinery.

84. The map is not limited to displaying and monitoring the trend in the relative positions of countries in the long-term. It can be used as a tool with significant predictive value that makes it possible to project the evolutional course of the various countries in the medium-term, thus providing both the current players and most attractive potential players of tomorrow.

85. The strategic map is thus aimed at those in the public and private sector who require accessible analytical tools in order to guide and support their investment decisions, identify future economic and trade partners or define priorities in establishing closer bilateral relationships.

5.1 Methodology behind the “ADAM – Ambrosetti Development of Africa Map” 86. The different analytical parameters were channeled into two main indicators, one relating to economic performance (rates of growth of GDP and per capita GDP, as well as the level of per capita GDP achieved), the other the total assets (i.e., resources, “physical” and social-sanitary infrastructure) required for the realization and sustainability of economic performance25.

24. We are, in fact, convinced that the measurements linked to the GDP are not sufficient to describe the growth of an African country. 25. The economic per formance par ameter was used as a

dependent variable (Y) to be compared with the independent variable (X), the asset index, comprised of the parameters referring to resources and social-sanitary and physical infrastructure.

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87. The two parameters are, in turn, composed of indices and sub-indices. Each index selected has been weighted on the basis of the African average for reference year 2001 in order to make it possible to compare the results obtained between the various countries and highlight the evolution over time in African countries.

88. The political-administrative situation is the third aspect represented by the color of the point. The introduction of the governmental aspect derives from the conviction that the political-administrative variable impacts on the economic performance of a country26.

The summary indicator for economic performance27 89. The economic parameter (ordinate axis of the matrix) is used to assess the “state of health” of the African countries’ economic system 28; it comprises 3 indices, which are described below. Fig. 27 Summary indicator of economic performance

90. Per capita GDP with purchasing power parity (average of 3 previous years)29 (Source: World Bank). This indicator was chosen as a proxy for overall well-being of a country’s population. As is well-known, the per capita income does not take account of the distribution of income within the country; often, particularly in developing countries, there may be a small group of people with a very high income while the majority is still very poor. Despite this limitation,30 per capita GDP remains one of the most commonly used indicators to assess a country’s level of wealth, particularly in the case of developing countries, as opposed to

26. It should be stressed that the unique nature of the African situation means that each situation represented on the map must be read with caution. In fact, performance values which are, in themselves, positive, may hide situations of oligarchy and nonorganic development of the country. In addition, the synthesis represented here is, by nature, an approximation of the situation analyzed. 27. For the values of the indicators for each analysis parameter, please refer to the databook. 28. The general economic situation in Africa was examined in Chapter 5. 29. The length of time of 3 years is sufficiently long to photograph

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a country’s recent development trends and to “smooth out” any anomalies and avoid attributing excessive importance to past situations. 30. Several measurements of a state’s well-being have been devised, which are alternatives or complementary to the economic measure expressed by GDP. Among these, for example, is the Genuine Progress Indicator (GPI), which aims to measure the improvement in the quality of life distinguishing (with different weightings) positive expenditures (since they improve well-being, such as expenditure for goods and services) and negative expenditures; Gross National Happiness or the Human Development Index drawn up by the United Nations.

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the single measurement of GDP generated. In 2008 Africaâ&#x20AC;&#x2122;s average per capita GDP amounted to 4,298,9 Dollars showing a growth of 6.3% against 2007 when it was around 4,026 Dollars.

91. Average annual growth in GDP (average of 3 preceding years) (Source: World Bank, African Development Indicators). This index allows for an evaluation of the dynamism and growth trend of the economy of the countries considered. During the last year of observation (2008), Africa has grown on average by 5.4%, with twodigit figures above all for countries that are exporters of oil and natural gas. In general, most African countries appear to have embarked on a path of growth. Of the 52 countries examined, 5 (Angola, Equatorial Guinea, Ethiopia, Rwanda, Uganda and Nigeria) showed a level of GDP growth greater than or close to 10%. The current economic crises has considerably reduced these rates for 2009 but by early 2010 the rates were expected to be back in line with pre-crisis levels. Fig. 28 Africaâ&#x20AC;&#x2122;s GDP Growth (2002-2012) (Source: TEH-Ambrosetti based on World Bank data)

92. Average annual growth in per capita GDP (average of 3 preceding years) (Source: World Bank, African Development Indicators). This indicator was chosen as the best proxy available for growth in per capita wealth, despite the fact it is subject to a number of limitations of per capita GDP itself. This indicator is of particular importance as it encapsulates the greatest African paradox: if percentage population growth is close to or greater than GDP growth, the benefits of economic growth are cancelled out in terms of the spread of well-being and wealth for the population. Such extreme cases exist in Togo, the GDP growth of which was +1.1% in 2008 while the per capita GDP decreased by -1.37%; in Senegal with a GDP growth of +2.5% and per capita GDP -0.17% and the Ivory Coast with a GDP growth of +2.2% in 2008 and a per capita GDP which decreased by -0.1%.

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Summary indicator of assets 93. The indicator of a countryâ&#x20AC;&#x2122;s assets is the second variable used to construct the strategic map (x axis on the matrix). It represents the supply of resources and structures a country has for sustaining development. This indicator is composed of a series of indices referring to the following sub-parameters: - Natural resources available in the country. - Physical infrastructure. - Social-sanitary infrastructure. A corrective factor has been applied to the presence of natural resources sub-parameter in relation to export diversification, in line with the fact that a country whose natural wealth is based on a single commodity is more fragile and vulnerable than one with a diversified economy. Fig. 29 Composition of the summary indicator of assets and relative weightings

Natural and mineral resources

94. As already mentioned, the growth of many African states is closely tied to the extraction industry and to the exploitation of energy resources. The objective is to ascertain the extent to which a country is naturally rich in raw materials, energy resources, minerals and other resources which, if properly exploited, allow the country to generate development. In specific terms, the indices taken into consideration to evaluate the state of this parameter (reference should be made to the databook for the values for individual African countries) are listed below.

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Fig. 30 Major gold mining countries (tons per year) (Source: World Bank)

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Production of metals, oil and gas (Source: US Geological Survey, World Nuclear Association).

95. Africa is extremely rich in minerals: from bauxite in Guinea, to copper for which Zambia and the Democratic Republic of the Congo are leading world producers. There are also large reserves of chromium in Zimbabwe (as well as in South Africa), tungsten in Rwanda, Democratic Republic of the Congo, Uganda and Burundi, and titanium in Sierra Leone, Egypt and South Africa. South Africa is the no. 1 country with the greatest supply of metals. It alone produces onethird of all the gold in the world and is the largest global producer of uranium.31

96. With regards to energy resources, it is estimated that 10% of world reserves of oil and 8% of gas deposits are located in Africa.32 Oil is the main expor t commodity for many African countries. Of these, Nigeria, Libya, Angola and Algeria figure among the major world producers of oil, followed by Egypt, Sudan, Equatorial Guinea and Gabon. The presence of oil is a resource that generates foreign direct investments: Concessions issued for the exploitation of deposits are, in fact, often paid for not only in money but also through investments in physical infrastructure that then belongs to the countries and which is crucial for development. The observations made about oil are also relevant to gas. Nigeria, Algeria, Egypt and Libya are the main producers of natural gas in Africa.

97. To avoid penalizing a country in terms of its supply of one resource or another, a mineral and energy resources basket has been created by totaling the output of each mineral/fuel, assigning an average price33 between the years 2001 (year in which data began to be collected) and 2005 (last year before the speculative wave in raw materials).34 All metals and fuels with significant production levels in Africa were taken into consideration: bauxite, cobalt, chromium, gas, gold, oil, lead, platinum, copper, titanium, tungsten and uranium.

98. Diamond production (Source: US Geological Survey). Diamond production was looked at separately from other minerals since a reliable price reference to value this stone is not available. The lack of a reference price is due to the extreme variability in the quality of gemstones and lack of a real commodity market for them.35 With reference to diamonds, most resources are concentrated in few areas of the African continent, primarily in southern Africa.

31. Together with Niger and Namibia, it supplies over one-third of world production. New uranium deposits have recently been discovered also in Malawi. 32. Source: Energy Information and Administration, Official Energy Statistics U.S. Government, 2007. 33. Prices refer to list prices for quoted minerals and the overthe-counter (OTC) price for secondary minerals.

34. The need to refer to indirect prices arose because of the presence of speculative peaks in some years, irrespective of the general market trend (e.g., palladium in 2001). 35. Since diamonds are not considered a commodity given the variety and different characteristics of each stone, they are not sold on regular markets and, as a result, no given price exists for them.

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99. Lumber production (Source: FAOstat). Among non-mineral resources of which Africa has rich supplies, mention should be made of lumber36 which for many countries represents an important resource for export. Major producers of lumber are Nigeria, Gabon, South Africa, Democratic Republic of the Congo and Cameroon.

100. Percentage of cultivated and cultivatable land37 as a proportion of total land (Source: World Bank, World Development Indicators) Cultivatable land or land that Fig. 31 Breakdown of African lumber producers 2008 can be used for pasture is a (Source: World Bank) starting condition for a form of agriculture that is not strictly subsistence farming. Africa has not yet been able to properly exploit its agricultural resources. This ability in other developing countries, especially the Asian continent, has led the way to general economic development (the socalled â&#x20AC;&#x153;green revolutionâ&#x20AC;?38 ). Although from the end of the 1990s, changes took place and Fig. 32 First 10 African countries by percentage of arable land as a proportion of total land (Source: World Bank, 2008) agriculture once again took on a central role in the agendas of many governments; considerable unexploited potential still exists in African agriculture, most of which is still subsistence. In percentage terms, agriculture contributed 13% of total added value and 30% of production of goods for the continent. The figure below shows the countries with the highest percentage values of land cultivability.

36. In the evaluation of the index, only trunk production has been taken into consideration, eliminating the production of less valuable wood for paper and combustion. 37. This index includes permanent pastures, arable land and already cultivated land. 38. This term refers to the remarkable boom in agricultural productivity in the developing world between 1960 and 1990. In

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many regions during these decades, especially in Asia and Latin America, the yield of the most important cereals (rice, wheat and corn) more than doubled, while significant increases were also achieved in other crops. The process was triggered by the adoption of various initiatives on the part of many governments of industrialized and developing countries which invested heavily in agricultural research.

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101. Export diversification correction (Source: World Bank, African Development Indicators) To the natural resource index we applied a multiplier to correct the supply value on the basis of export diversification. This correction is of fundamental importance for balancing the potential risks of countries that have a very restricted basket of raw materials. For example, countries the economy of which is closely linked to a single resource (the worst performers in the figure alongside) run the risk of entering into crisis if the world trade market of the resource on which they depend were to wane. Many African countries that are victims of this imbalance have suffered very heavy repercussions due to the recent world crisis and the collapse of demand for many raw materials (see the first part of this chapter). Fig. 33 Export diversification in the 10 most diversified and 10 most dependent countries (Source: TEH-Ambrosetti based on World Bank data)

Diversification Index 10 Best Performer

10 Worst Performer

Morocco

67,3

Angola

1,1

South Africa

45,6

Chad

1,1

Tunisia

35,8

Guinea-Bissau

1,2

Tanzania

30,1

Sudan

1,2

Senegal

22,3

Equatorial Guinea

1,3

Kenya

21,9

Libya

1,3

Madagascar

21,2

Nigeria

1,3

Swaziland

20,0

Rep. of the Congo

1,4

Egypt

17,2

Niger

1,4

Mauritius

13,4

Gabon

1,9

102. Additionally, it has been shown that considerable wealth traceable to just one raw material generates other mechanisms that deter sustainable economic development and undermine proper institutional functioning. We shall examine this question in more detail in the section on the natural resource trap. The correction reduces the natural resource supply index by 20% for highly-dependent countries (diversification index39 < 2), while countries with highly-diversified exports are awarded a +20% correction on the natural resource supply index.

103. The countries with very low diversification indices (less than 2) are, first and foremost, those with economies based on oil and gas. two extreme situations are those of Angola and

39. The export diversification index is calculated by the World Bank on a scale of 1 to 100, in which 1 represents total depen-

dence on a single commodity and 100 a situation of complete diversification based on the world economy.

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Chad which have a minimum diversification index of 1.1. In Angola, oil accounts for approx. 85% of the total GDP and, in the period from 2004 to 2007, it contributed to raising the GDP by 15 percentage points40 per year, becoming the country’s strength (income) and the weakness (dependence) at one and the same time.

104. Countries with great export diversification include Egypt, Kenya, Madagascar, Morocco, Senegal, Swaziland, Tanzania, Tunisia and South Africa. It is interesting to note that almost all these countries (except South Africa) are not rich in raw materials, further proof that it is the lack of “income” that stimulates local economies to diversify and change. Lack of earnings from raw materials, and as a result, lack of liquidity to buy foreign goods, creates the need to generate local industry that first becomes competitive on its own home market and later in neighboring countries and abroad (for a more detailed discussion, refer to the section on the natural resource trap).

Physical infrastructure

105. The second sub-parameter considered as part of the summary indicator of assets is infrastructure availability within the territory. Physical infrastructure is extremely important for the overall social economic development of a country, for creating the conditions required to attract foreign direct investment and for promoting trade between the regions of Africa and abroad.

106. Mobility infrastructure index (Sources: CIA, World Factbook and World Bank). The first index considered relates to Fig. 34 Top 10 countries by mobility infrastructure index mobility and the transport system, which growth in the period 2001 – 2008 (Source TEH-Ambrosetti based on various data) is the primary factor for a territory’s competitiveness and is comprised of the availability of roads, rail and airports. The variance41 in size of African countries has made it necessary to relate availability in kilometers of roads and rail and number of airports, to the surface area of the country. Obviously, this favors some states of touristic interest (first among these, the Seychelles) which has significant infrastructure, in particular airports, to a degree disproportionate to its domestic requirements. In any case, although in terms of

40. The double figure percentage growth of oil exporting countries was possible also thanks to the steep rise in the price of crude oil over the recent years: The three largest producers (Algeria, Angola and Nigeria) earned a trillion Dollars in the period between 2000 and 2008, compared to 300 billion Dollars earned

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by the same countries in the nineties. 41. The largest country on the African continent is Sudan with a surface area of 2,505,810 km² (Italy has a surface area of approx. 301,000 km²). The smallest African state is the archipelago of the Seychelles with a total surface area of 455 km².

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the index the disproportion is enormous, there is no question but that this concentration of infrastructure is both an instrument and the result of development. The following figure shows the countries with the highest rates of growth in mobility infrastructure over the period 2001-2008. Benin proves to be the country with the highest growth rate thanks, first and foremost, to the development of the railway network which has almost doubled since 2001 (from 420 km to 758 km of rail track).

107. Rate of electrification42 (Source UNDP, United Nations Development Programme) The electrification rates of the continent are still very low, especially in Sub-Saharan Africa: the rate of electrification of the whole of Africa is 36%, a value that falls to 24% if we consider SubSaharan Africa alone. According to calculations made by the International Energy Agency (IEA), at least 350 billion Dollars need to be invested by 2030 in order for the rate of electrification to meet estimated future needs.43 The figure below reports the number of days per year in which black outs occurred in a sample of African countries and compares this with China and India. The worst case was that of Nigeria, where black outs were practically a daily occurrence.44 As was the case of mobility infrastructure, shortages of electric energy also compromise the competitiveness of products and trade, increasing production costs. Fig. 35 Number of days per year in which black outs occurred in a sample of African countries (2009) (Source: Center for Global Development)

42. Measured as the number of people having access to electricity as a percentage of the total population. The latest statistics available date to 2005, monitored by spot readings of the UNDP in different years in different countries. The reference year is the

one for which most up-to-date figures are available. The series was held to be constant in developing the map. 43. World Energy Outlook 2007. 44. Source: Center for Global Development, March 2009.

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Social-sanitary infrastructure

108. Social-sanitary infrastructure have a direct bearing on the development of human capital and well-being of the local population. Three structures have been taken into consideration: schools and hospitals, since they represent the minimum structures that a community must be provided with, and the diffusion of telecommunications equipment. The indices chosen are given below.

109. Primary school instruction (Source: World Bank, African Development Indicators) The indicator for primary school instruction was obtained from the average of indicators for: - primary school enrolment; - primary school completion. Primary schooling has been given two indicators in compliance with the Millennium Development Goal relative to education that targets increasing the rate of enrolment and completion of primary instruction as a fundamental basis for development.

110. Presence of doctors, nurses and volunteers throughout the country45 (Source: World Bank) The supply index of medical personnel indicates the extent to which health care is widespread among the populations. We selected a personnel-related indicator, as opposed to the number of hospitals: in this way it was possible to evaluate the presence of innumerable paramedical structures (clinics, field hospitals, NGOs) since these structures often play an important auxiliary role to hospitals, especially in outlying and rural areas.

111. Diffusion of telecommunications equipment (Source: The European House-Ambrosetti based on World Bank data) Means of communication and information have now acquired a fundamental role for economic and social development, allowing for significant progress in the growth process. The sub-indices of which this index is comprised are: The number of telephone lines per 1,000 inhabitants, the number of cell phone users per 1,000 inhabitants, the number of computers per 1,000 inhabitants and the number of internet users per 1,000 inhabitants. It was thought better not to include in the index broadband presence and availability given that it is still not that common. It is, nonetheless, interesting to highlight the countries in which it is more widespread. Once again, they are the countries most attractive from the point of view of tourism (Seychelles, Mauritius and SĂŁo TomĂŠ and Principe) and those of North Africa (Morocco, Tunisia, Egypt and Algeria). Among the countries of Sub-Saharan Africa, other than South Africa which is at a level similar to that of North Africa, the only countries46 in which broadband services reach at least one inhabitant per 1000 are Zimbabwe, Senegal, Gabon, Sudan and Botswana. Broadband is not yet available in the following countries47 (and as result they do not appear

45. Spot readings of the World Bank in 2004. The series was held to be constant in developing the map. 46. Among those for which data is available.

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47. At the time the data was gathered which, for some states, is prior to 2007. Please refer to the data book .

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in the table): Angola, Burundi, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Ethiopia, Guinea, Guinea Bissau, Liberia, Madagascar, Mozambique, Nigeria, Sierra Leone, Swaziland and Tanzania. Fig. 36 Broadband availability per 1000 inhabitants. For countries marked with 1 asterisk, the latest data is from 2007; for those with 2 asterisks it is from 2006; for those with 3 asterisks it is from 2005 (Source: TEH-Ambrosetti based on World Bank data)

Broadband per 1000 Country

2004

2007

2008

Algeria*

1,11

8,48

Angola*

0,00

0,67

Benin*

0,01

0,24

Botswana*

0,00

1,88

Burkina Faso**

0,01

0,12

Burundi

0,00

0,02

Cameroon**

0,00

0,02

Cape Verde

0,60

14,86

14,80

Congo, Dem. Rep.*

0,03

0,02

Ivory Coast**

0,04

0,51

Egypt, Arab Rep.

0,39

5,96

9,43

Gabon*

0,48

1,39

Gambia, The*

0,02

0,17

Ghana

0,04

0,71

0,74

Kenya*

0,00

0,47

Lesotho***

0,01

0,02

Madagascar

0,00

0,14

0,33

Malawi*

0,01

0,11

Mali

0,00

0,26

0,41

Mauritania

0,00

1,28

1,84

Mauritius

2,08

48,78

57,55

Morocco

2,17

15,47

15,49

Namibia*

0,00

0,12

Niger***

0,01

0,02

Nigeria

0,00

0,17

Rwanda

0,13

0,27

0,44

Senegal

0,70

3,21

3,88

Seychelles

4,23

41,08

39,58

Sudafrica*

1,29

7,90

Sudan*

0,02

1,05

Togo

0,00

0,19

0,30

Tunisia

0,29

9,38

22,01

Uganda

0,00

0,06

0,15

Zambia

0,02

0,19

0,45

Zimbabwe*

0,72

1,22

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112. In the map, to highlight the relationship between governance and performance we have colored the dot for each country green, yellow or red depending on whether the political-administrative situation was positive, problematic or critical.

113. To render the relationship between governance and performance (both economic and accumulation of assets) even more evident and consistent, the color green was only assigned in cases of 3 consecutive years of a positive situation, and the same is true for yellow. A brief variation in the indicator was not held sufficient to register an improvement in this indicator.

114. In the map system we would expect it to be mainly the countries with positive governance (green) and those that improve their situation (from yellow to green) that would have a healthier economic growth. Good governance helps a country take advantage of opportunities made available, but cannot create them if they do not exist. The political-administrative stability index comprises 6 sub-indices:

115. Political stability and absence of violence (Source: World Bank, African Development Indicators) This index allows for an assessment of the extent to which African political institutions are stable, with an untroubled internal situation.

116. Efficacy of government (Source: World Bank, African Development Indicators) The index measures the quality of public services, the credibility of the government with regard to the implementation of policies, quality of the bureaucratic machinery and independence of public officers from political pressures.

117. Quality of the laws (Source: World Bank, African Development Indicators): This index measures to what extent implemented policies are market-based in terms of price controls, the regulation of financial markets and the power of bodies set up to monitor the banking system.

118. Rule of law (Source: World Bank, African Development Indicators) This index measures operators’ trust in the capacity of public administrations to apply the laws of the state, the perception of crime levels, the certainty of legal penalties, the protection of private property and the state’s capacity to ensure the observance of contracts.

119. Corruption (Source: World Bank, African Development Indicators) This index measures the extent to which public power is exerted for private purposes, including minimum and macroscopic corruption, as well as the state being “hostage” to an elite or lobbies which exercise private interests.

120. Voice and accountability (Source: World Bank, African Development Indicators) This index measures the extent to which citizens of a country are free to participate in political life and the election of their representatives, as well as enjoy freedom of expression, association and how free the media is.

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5.2 Plotting the Map: ADAM â&#x20AC;&#x201C; Ambrosetti Development Africa Map 121. ADAM - The Ambrosetti Development of Africa Map is the tool that represents the above-described elements on the Cartesian plane. We have identified 6 attention zones: - The 4 quadrants separated by the medians of the x- and y-axes, each of which identify a different group of countries with regard to economic performance and assets. - The vulnerability zone delimited by the y-axis and perpendicular line for the limit value of the first quartile48 of the asset axis. - The safe zone delimited by the y-axis and perpendicular line for the limit value of the third quartile49 of the asset axis.

122. The vulnerabilit y

Fig. 37 Structure of the ADAM â&#x20AC;&#x201C; Ambrosetti Development of Africa Map matrix

zone is that in which the countries are either endemically poor (third quadrant) and therefore start from a situation of lack of assets, low growth and impossibility to intervene, or countries w hic h have u n d e r g o n e growth in the absence of solid assets (fourth quadrant). This second case is typical of countries in which, even in the absence of any other type of infrastructure (schools, sanitary facilities, telecommunications equipment and often, also, even good governance), a natural resource is discovered that allows GDP to rise rapidly, but in the absence of means to take advantage of this new-found wealth, the growth registered is not transformed into assets and often comes to a halt. For example, this was the case with Chad which, following the discovery of oil, enjoyed a rapid phase of economic development (see its position in the 2004 map), only to return to its starting point in 2008.

123. The safe zone is ideally that in which a country not only has an economic development index that is above the average, but has also reached a level of infrastructural solidity such that, despite cyclical oscillation, it can expect that its economic situation will only

48. Within a distribution, first quartile refers to that part of the distribution in which 25% of the lowest values are contained. The greater the number of values concentrated at the beginning of the

distribution, the smaller the quartile interval will be. 49. Within a distribution, first quartile refers to that part of the distribution in which 25% of the lowest values are contained.

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improve. This quadrant includes countries which, often rich in natural assets,50 have also been able to transform growth and wealth into “man-made” assets (physical and social-sanitary infrastructure). Clearly, the precondition for remaining in the safe zone on a permanent basis is the presence of good governance.

Fig. 38 ADAM – Ambrosetti Development of Africa Map; situation in 2001 (Source: TEH-Ambrosetti elaboration)

124. What emerges from the map is that the real issue for economic growth to be sustainable over the long-term is that it be transformed into asset accum u l a tio n. Gener ally, those countries with a positive evaluation of the governance index are those most oriented to exploiting growth through on-going investment in economic and social infrastructure. Countries lacking in conditions for good government are also less able to t a ke f ull a d v ant ag e of t he nation’s assets. (For a more detailed discussion, refer to the sec tions on the traps of the growth of conflict and poor government.)

Fig. 39 ADAM – Ambrosetti Development Africa Map; situation in 2004 (Source: TEH-Ambrosetti elaboration)

Fig. 40 ADAM - Ambrosetti Development of Africa Map; situation in 2007 (Source: TEH-Ambrosetti elaboration)

125. To show the evolution over time of the position of countries on the map, we have provided 4 years of results below: 2001, the reference year against which all other data were compared; 2004, 2007 and 2008 which is the year for which the most recent data is available.

50. Tourist assets have not been taken into consideration in the map. Naturally, for some islands (Mauritius and Seychelles), this is their most precious asset. However, a good proxy for the impor-

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tance of tourism emerges from the concentration of mobility and transport infrastructure in these countries.

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126. Looking at the map tables

Fig. 41 ADAM - Ambrosetti Development of Africa Map; situation in 2008 (Source: TEH-Ambrosetti elaboration)

for the 4 reference years, the course of development of African countries can be seen: a. In 2001, there was a net concentration around the median of all countries, except those of the Maghreb, islands, South Africa and Botswana. b. 2004 showed an initial change in relative positions. Some countries began to emerge from the group around the median to go towards the 3rd quartile. c. This trend was consolidated in 2007, especially for those countries which showed themselves to be good performers from a political-administrative standpoint. d. In 2008 the countries that entered the third quartile are further confirmed, raising the value of the two medians even higher, a sign of constant growth for the entire continent. Fig. 42 ADAM - Ambrosetti Development of Africa Map; situation in 2008, showing the quadrants (Source: TEH-Ambrosetti)

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127. Moreover, each of the 4 quadrants include a group of Countries51 with similar characteristics as regards economic performance and assets. - The “virtuous developing” countries (in quadrant I), with economic performance and supplies of assets superior to the median. There are 16 countries included in this group: The Seychelles, South Africa, Mauritius, Botswana, Tunisia, Cape Verde, Egypt, Morocco, Gabon, Namibia, Algeria, Lesotho, Ghana, Tanzania, Gambia and Kenya. The countries in this group have a substantially positive political situation in common. - The “problematic” countries (quadrant II), with supplies of assets superior to the median but economic performance inferior to it. These are the countries which, despite being rich in resources, are unable to transform them into growth, often due to a situation of weak governance (Swaziland, the Comoros Islands, Cameroon and Republic of the Congo). Others are countries with extremely poor raw material resources which are concentrating their efforts on creating “man-made assets” (mobility and social-sanitary infrastructure) but which have not yet managed to draw on them to stimulate economic development (Benin, Gambia and Senegal). - The “trapped” countries (quadrant III), with supplies of assets and economic performance inferior to the median. This group includes the countries that are either endemically poor (Central African Republic, Niger, Burundi, Mali, Republic of the Congo, Eritrea, Guinea, Togo, Djibouti, Guinea Bissau and Liberia) or which have resources – oil, gold or diamonds – the revenue from which is not invested in the country. This is the case of the Ivory Coast, Chad, Democratic Republic of Congo, Madagascar and Zimbabwe. None of the countries in this quadrant has a positive political-administrative situation and frequently they are victims of authoritarian governments. - The countries classed as “runners with feet of clay”, (in quadrant IV) with assets inferior to the median but economic performance superior to it. Most of the countries included in this quadrant experienced a period of major growth thanks to the discovery of a natural resource (oil or gas) but have not yet transformed this wealth into infrastructural and social investments that will permit the harmonious growth of the country. These countries are Equatorial Guinea, Ethiopia, Sierra Leone and Sudan (and also Angola, although it is in another quadrant). In the same quadrant there are countries which, despite being poor in resources, have nonetheless managed to increase their performance thanks to improvements in governance and attraction of capital investment: e.g. Mozambique.

128. From the 4 quadrants, it is possible to identify a group of countries in transition, located around the intersection of the medians (Zambia, Uganda, Tanzania, Gambia, Rwanda, Mozambique). These countries have been advancing along a path of progressive improvement towards the first quadrant since 2001. All of these countries have in common a positive, or at least improving, political-administrative situation.

129. To this end, we selected a number of case studies and followed their growth path within the Ambrosetti Development of Africa Map.

51. In the interpretation of the map, homogeneous clusters were highlighted; there are “outsider” countries in each quadrant.

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5.3 Some examples of countries in transition 130. We chose 4 countries â&#x20AC;&#x201C; Rwanda, Uganda, Malawi and Zambia and examined the distance covered, in terms of development, from 2001 al 2008. These particular countries were chosen because, although in different ways, they have all improved greatly in the time interval in question, moving increasingly closer to the first quadrant. The base of the matrices illustrating the growth path of the countries described corresponds to the matrix of 2008 (hence the value of the medians and, as a result, of the four quadrants).

Uganda: a country braced to leap

Surface area: 241,038 km2 Population: 33,398,682 (2010) Form of government: Republic GDP (millions of USD, current prices): 40.55 Per capita GDP (USD, current prices): 1,300 Inflation (%): 12.1 Principal products: Sugar, beer production, tobacco, cotton, cement, steel manufacturing Principal trading partners: Kenya, Switzerland, United Arab Emirates, China, Japan Exports: coffee, peaches, tea, cotton and gold Imports: vehicles, medical supplies, cereals

131. A minor improvement accompanied by very positive signs. Uganda started off in the third quadrant in 2001 with a political-administrative situation that was not completely positive. During the period under consideration, 2001-2008, it registered constant growth that first took it into the second quadrant, until, by 2008, it was on the edge of the first quadrant; the shift was not among the greatest registered on the map, but it was accompanied by the achievement of many important goals: the Ugandan GDP grew, in fact, by 9.53% in 2008, markedly higher than the average of the African countries ( 5.34%). Considerable efforts were also made to reduce dependence on donors, which dropped from 5.1% of the GDP in 2007 to 2.6% in 2008. The export diversification index improved significantly (from 5.6 in 2001 to 10.4 in 2008). The main products exported are, however, still commodities: coffee (23% of the total); tobacco (4%); gold (3%); tea (3%). Agriculture remains, therefore, the economic sector that contributes most to the composition of the countryâ&#x20AC;&#x2122;s GDP (approx. 24%). Agriculture is immediately followed by the construction sector (13%) and by the public services-public administration, defense, education and health sectors - (11.9%). Also as regards the attracting of foreign investments, Uganda has been very active: the incoming FDI flow has been constantly on the increase: in 2001, incoming flows amounted to 151 million Dollars while, in 2008, they rose to 799 million Dollars.

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132. Political-administrative stability. Much of the progress achieved depends on the political-administrative stability which Uganda is known to enjoy under the presidency52 of Museveni, which began in 1986. The government has made great progress towards economic reconstruction: acknowledging the need for greater foreign aid, in 1987 it negotiated, and obtained, the support of the International Monetary Fund and the World Bank. Its attention then shifted to the implementation of economic policies in an attempt to restore price stability and guarantee the sustainability of the balance of payments. The situation cannot, however, be considered totally positive due to the presence of tension at the border with Rwanda: this conflictual situation prevents the country from being awarded a green dot.

Fig. 43 Growth path of Uganda within the ADAM – Ambrosetti Development of Africa Map (Source: TEH-Ambrosetti elaboration)

Fig. 44 Uganda’s GDP in billions of Dollars (*) expected result (Source: TEH-Ambrosetti based on World Bank data)

133. Mobility, electricity and communications. From 2001 to 2008, Uganda saw its assets increase in an uneven manner. As far as physical infrastructure is concerned, the road and airport index has remained unvaried while an increase in railways has been observed (from approx. 259 km in 2001 to 644 km in 2007). Currently, however, the physical infrastructure, particularly the roads and electricity network, are considered to be inadequate: this lack is undoubtedly a limitation for future development; the government, well aware of this fact, has recognized the priority status of the country’s infrastructure, investing in roads and hydro-electric power plants. 30% of these works are financed through the funding of donors (European Union, African Development Bank and World Bank). The passing of the North-South corridor through Uganda itself should provide a further impetus to the development of major roads and of the electricity network. Extremely important improvements have, on the other hand, been achieved as regards infrastructure for communications: this has increased almost 20-fold (twice the African average), strengthening Uganda’s chances of becoming interconnected with the rest of the world.

52. Uganda is a democratic republic with a non-party system, in which the President, Yoweri Museveni, is both head of State and head of the government. Executive power is held by the gover-

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nment while legislative power is held both by the government and by the national Assembly.

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134. Natural resources. a situation under transformation. From the map data as of 2008, Uganda proves to have a good amount of agricultural land (65% of its territory), a lumber production higher than the African average (and on the increase) and, compared to 2001, a new – if small – extractive industry based on gold and small tungsten deposits. These resources, which are undoubtedly important, have not been sufficient to give a decisive boost to Uganda’s development: the real turning point as regards the growth of assets will brought about by the recent discovery of oil53 in Uganda (not yet registered in the map data). The Ugandan economy will be profoundly affected by this discovery both due to the obvious cash flows that it will bring but also due to the political/economic relations that will be created with the neighboring countries (especially with Kenya over the passage of the pipelines) and with all the oil importing countries. This discovery will undoubtedly accelerate Uganda’s course within ADAM towards the first quadrant.

135. Improvements in living conditions. Even although the map does not precisely monitor the achievement of the Millennium Development Goals, it is unquestionably important to highlight the good results obtained by Uganda on many fronts. It is, in fact, one of the few Sub-Saharan African countries that has shown great enough improvements to suggest that it might, in fact, succeed in achieving many of the targets set for 201554. The latest statistics available show that the population that lives on less than 1 euro a day dropped from 56% (1993) to 31% in 2006; the percentage of the population infected with HIV dropped from 18% in 1992 to 6.2% in 2005 and the primary school enrolment rate has risen to 86%, on-course for reaching the goal of 100% by 2015.

Rwanda: a country on the right track

Surface area: 26,338 km2 Population: 11,055,976 (2010) Form of government: Republic GDP (millions of USD, current prices): 10,130 Per capita GDP (USD, current prices): 900 Inflation (%): 14.2 Principal activities: Agriculture Principal trading partners: China, Thailand, Germany, USA and Belgium

136. During the period from 2001-2008, Rwanda experienced constant growth and, at the same time, was able to accumulate assets. One of the conditions which indubitably enabled

53. A huge oilfield has been discovered in Uganda close to Lake Albert. This oilfield is considered the greatest onshore discovery of oil in Sub-Saharan Africa in the last 20 years.

54. See the paragraph on the Millennium Development Goals for details.

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the country to embark on this growth path was the improvement in the political-administrative situation.

137. Political stabilization. After the dramatic events of the 1990s, as of 2000, with the election of the Tutsi, Paul Kagame, as President of the Republic (subsequently re-elected in 2003 with 95% of votes and recently55 reconfirmed by the vast majority - 93%), Rwanda has been enjoying a phase of stability and peace. In fact, Kagame, the main political exponent of the Rwandan Patriotic Front (FPR), succeeded in channeling the interest of the population towards a decisive process of democratization after the years of conflict. Applying an open foreign policy, with initiatives geared towards cooperation with other countries.

138. Agriculture here and

Fig. 45 Rwanda’s GDP in billions of Dollars (*: expected result)

(Source: World Bank) now, services in the future The growth of Rwanda in the period under examination is largely attributable to the contribution of agriculture, the country’s top production sector that employs 85% of the working-age population. Among the commercial crops, coffee, the main export product, is of particular importance, followed by tea and tobacco. With regard to coffee production, its total volume was estimated to reach 23,000 tons in 2009, against the 28,000 tons of 2008. Notwithstanding this downturn, the Office des Cultures Industrielles du Rwanda-Cafè has announced its intention to make sizeable investments in the sector which will lead to a production capacity of up to 40,000 ton by 2011. With the new privatization policies, the land used for tea cultivation has greatly increased and, according to the forecasts of the Rwandan government, its production will rise from 20,000 tons in 2008 to 35,000 tons in 2012. Still, despite the good exportation results, 28% of Rwanda’s inhabitants still live in a situation of food insecurity; the cultivations for domestic production are still at a subsistence level.56 The Rwandan government is working to modernize the domestic agricultural sector, by imposing the planting of single crops for small plots of land, in an attempt to encourage specialization. This being the current situation, Rwanda - aware of not being able to rely on agriculture alone for future growth - has created Vision 2020. Being a landlocked, resource-poor country, Rwanda has set itself the goal of becoming a service hub for all the neighboring countries. This process is promoted by the adoption of reforms designed to improve the business environment.

55. During the elections of 9 August, 2010 56. The main products destined for local consumption are the

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yam, manioc, potato, sorghum, corn, and a variety of vegetable produce.

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Fig. 46 ”Doing Business 2010” Ranking (Source: World Bank)

Doing Business Ranking 2010

Doing Business Ranking 2009

Change of Ranking

Doing Business Ranking

143

Starting a business

Dealing with construction permits

-2

Employing workers

113

Registering property

Getting credit

147

Protecting investors

171

144

Paying taxes

-1

Trading across borders

170

171

Enforcing contracts

Closing a business

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Doing Business: Key factors

139. Administrative and economic reforms. Consistent with Vision 2020, Rwanda has implemented a series of reforms that have made it, in 2010, the most reformist African country with respect to the economic climate.57 The factors that most largely contributed to the remarkable progress of Fig. 47 Growth path of Rwanda within the ADAM – Ambrosetti the country were: the speed Development of Africa Map (Source: TEH-Ambrosetti elaboration) with which it is possible today to start up a new business in the country, availabili t y of wor ker s, eas e in obtaining credit but, particularly, protection for investors. The current government has, moreover, equipped the country with a streamlined and efficiency administrative structure and has striven for macroeconomic stability. These reforms have provided incentive for both African and non-African pri-

57. World Bank, Doing Business: measures through 10 indicators how easy it is for an entrepreneur to run a business in a country.

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vate investment in Rwanda. All the reforms are not yet structural and Rwanda still suffers from widespread poverty and over-dependence on agriculture. It can be seen from the map, in fact, that growth has taken place practically without the growth of the country’s assets.

140. Resource exploitation and growth. The extractive sector is enjoying a fair degree of development; the mining activities, which began under Belgian rule, exploit the mines of cassiterite, columbite, tantalite, gold and, particularly, tungsten, a mineral for which Rwanda is the leading producer of the African continent.

Fig. 48 Production of tungsten in Rwanda in tons (Source: U.S. Geological Survey)

141. Energy: new opportunities. Energy is one of the sectors to be strengthened, not only for the purpose of differentiating the economy but also in the light of “Vision 2020”. Energy production is, in fact, one of the main restrictions to Rwandan growth: the current requirement (2009) is 55 MW, but this is bound to increase apace with the economy. A project to produce energy from the natural gas generated by Lake Kivu is currently in its experimental phase. Contour Global, a company with headquarters in America, is installing 4 gas platforms with the capacity to produce up to 100 MW of energy.

142. Technology: forging ahead. The index considered in the map to monitor the progress of telecommunications comprises telephony (telephone lines and contracts) and the spread of the Internet (PC users and owners): between 2007 and 2008, this increased by approx. 388%. In virtue of its landlocked position, Rwanda is placing great emphasis on computer connections. In October 2006, NEPAD and the African Commission launched a project for the further development of ICT in Rwandan schools. The aim of the project is to link up primary and secondary schools: its ultimate aim is to interconnect all the secondary schools of Rwanda. Two institutions are heavily involved in teaching ICT: KIST (Kigali Institute of Science and Technology) and KIE (Kigali Institute of Education).

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Malawi: exiting the safe zone

Surface area: 118,484 km2 Population: 15,447,500 (2010) Form of government: Presidential Republic GDP (millions of USD, current prices): 12,810 Per capita GDP (USD, current prices): 800 Inflation (%): 8.7% Principal products: tobacco, tea, sugar, cement Principal trading partners: Imports: South Africa, India, China, Tanzania, USA Exports: South Africa, Egypt, Zimbabwe, Holland, Germany and Russia

143. In the period 2001-2008, Malawi embarked on a – chiefly economic – growth path that was really remarkable, given the scarce resources in its possession: this growth was achieved at the limits of the vulnerability zone from which - it would appear - Malawi is about to exit. The cornerstones on which its strategy was based are, basically: political stability and good governance, careful management of the exploitation of natural resources, a close eye on domestic policies and economic development.

144. The political situation. Malawi gained independence from Britain in 1964 and is currently led by President Bingu wa Mutharika58. He has been greatly praised for being the advocate of important policies geared at the economic growth of Malawi.

Fig. 49 Growth path of Malawi within the ADAM – Ambrosetti Development of Africa Map (Source: TEH-Ambrosetti elaboration)

145. Economy: s teady progress. Over recent years, the economy of Malawi has grown dynamically, sustained by good macroeconomic

58. Mutharika was elected in March 2004 as a candidate of the United Democratic Front from which he parted ways less than a year later. In February 2005, he founded a new party, the Democratic Progressive Party. The new party immediately attracted

important reformist figures from other parties with whom he has been winning the elections throughout the country since 2006. Re-elected president in the elections of 2009, since January 2010, Mutharika has also been President of the African Union.

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management. Starting off with its economic performance index in the negative, Malawi has succeeded in arriving at the level of the horizontal median: growth in the latest threeyear period monitored (2006-2008) was as much as 8.3% (against +5.8% of the 2005-2007 thee-year period). The growth of the GDP reached its peak in 2008, at 9.7%, sustained by record tobacco exports of 472 million Dollars in the 2007-2008 season59 and by an exceptional corn harvest. Agriculture is, in fact, the main source of growth: it only contributes to the composition of the GDP by 35% (compared with 46% for services and 19% for industry), but it employs 85% of the population60 and accounts for over 80% of export earnings. The diversification index of the latter is, in fact, extremely low (although slightly on the increase), at 3.861 out of 100. The growth of the Malawi economy is also boosted by an improvement in the tax situation and by a constant inflow of aid: through a policy of transparency and good governance, the country has succeeded in increasing the number of donors and hence the inflows of aid, flows which, in turn, have enabled it to reduce its borrowing requirement. In 2006, Malawi was included in the Heavily Indebted Poor Count r ie s (HIPC ) p ro gr am and, in Fig. 50 Contribution of the 3 sectors to Malawi’s GDP December 2007, it was granted (Source: TEH-Ambrosetti based on World Bank data) admissibility status by the United States and financial aid from the “Millennium Challenge Corporation” (MCC).

146. Physical infrastructure. Over recent years, Malawi has made huge efforts to improve its mobility infrastructure. Between 2004 and 2006, the railway system increased by 10.9%. Malawi is also investing heavily in river transport: an important project is underway for the purpose of reviving the river transport system; considerable savings will be made for the movement of goods within the country and to neighboring countries, especially Mozambique thanks to a total network of 238 km.

Fig. 51 Malawi’s GDP in billions of Dollars (*: expected result) (Source: TEH-Ambrosetti based on World Bank data)

147. The fight against poverty. Poverty remains one of the main problems of Malawi, which is, however, working extremely hard to

59. Between 2009 and 2010, a downturn is expected, due to drought, which will reduce agricultural production by around 10% 60. Small landowners account for around three-quarters of the

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agricultural sector. 61. In particular, 60% of Malawi’s income, apart from the donations, comes from tobacco exports.

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achieve the Millennium Development Goals also thanks to the Malawi Growth and Development Strategy implemented by the government. Economic growth and the improvement of food security from 2005 onwards have helped reduce poverty. According to Malawi government estimates, the percentage of poor people dropped from 52.4% in 2005 to 40% in 2009. The spread of HIV is still high â&#x20AC;&#x201C; at 12.1% â&#x20AC;&#x201C; but in decline compared to 2005, when it was at 15.3%. Other progress in the provision of sanitary services is evident in view of the decrease of maternal mortality, which dropped from 984 deaths per 100,000 women in 2005 to 807 deaths per 100,000 women in 2008. Life expectancy at birth has also improved from 48 years in 2005 to 53.1 in 2009.

148. New opportunities for the future. The role of the mining industry, which up until 2008 was relatively insignificant, is destined to grow with the commencement of extractive activities in the Kayelekera uranium mine. It has been estimated that from 2010 onwards, when the mine will be operating at full capacity, it will boost the income of the mining industry by 53.5%. If up till now Malawi has not experienced growth in its assets, this discovery could lend new impetus to the economy (mining activities are estimated to generate around 150 million Dollars per year) and give the country the opportunity to further stabilize its position in the first quadrant. In 2009, the World Bank itself took part in the review of the government plan for the mining industry, in order to raise the chances of this new resource becoming a source of economic growth and a means to the improvement of well-being for Malawi.

Zambia: a landlocked country with tremendous potential

Surface area: 752,614 km2 Population: 12,056,923 (2010) Form of government: Republic of Zambia GDP (millions of USD, current prices): 14.320 Per capita GDP (USD, current prices): 1,178 Inflation (%): 12.9 Principal activities: mining (copper), retail and wholesale trade, agriculture, manufacturing, service and tourist industries Principal trading partners: South Africa, EU, Japan, China

149. The case of Zambia was dealt with also in the third year of this research project but the constant growth of this landlocked country has been so significant as to deserve further attention this year. Zambia started in 2001 in the vulnerability zone with a political-administrative situation that was not completely positive. During the period under consideration, 2001-2008, it registered constant growth that first took it outside the vulnerability zone and

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then, in 2008, to the edge of the fir s t quadrant. This growth was based above all on copper, a resource that Zambia has in abundance, and improvement in its political-administrative situation. The corruption level has diminished on a constant basis from 2001 onwards (from 3.4 in 2001 to 2.8 in 200863) and there has also been continuous improvement in government efficiency (from 14.20 in 2000 to 29.40 in 200864).

150. Dependence on cop-

Fig. 52 Growth path of Zambia within the ADAM â&#x20AC;&#x201C; Ambrosetti Development of Africa Map (Source: TEH-Ambrosetti elaboration)

Fig. 53 Zambiaâ&#x20AC;&#x2122;s GDP in billions of Dollars (*: expected result)

(Source TEH-Ambrosetti based on World Bank data) per. At 2.5, Zambiaâ&#x20AC;&#x2122;s export d i ve r s i f ic at io n i n d ex is r ather low but s hows a slight improvement compared to the past (in 2007 it was 2.2). Copper exports, in fact, account for 63% of the total, followed by those of other ores (18%). But Zambia, in contrast with other resource-rich countries, is not highly depende n t o n e x p o r t s: i t w a s 36.79% dependent in 2008 (42.08% in 2007). Also the growth in recent years is due to the price boom in this raw material which has attracted many investors, both European and Chinese. Aware of this intrinsic weakness generated by dependence on a single resource, the Zambian government is pursuing a program of economic diversification based on tourism, agriculture, mining of precious stones and hydroelectric energy. This weakness became manifest during the recent world crisis: the initial drop in the prices of the commodity almost undermined the growth of the country, considerably damaging its trade balance. Although the emergency passed and the price of copper returned to pre-crisis levels, 3 mines considered to be unprofitable were closed in 2009, with important repercussions on employment.

62. Source: World Bank, corruption perceptions index.

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63. Source: World Bank, government efficiency index.

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151. Improvement in physical and social infrastructure. Zambia has been able to take advantage of the wealth derived from copper, transforming it into a range of infrastructure investments. Tremendous focus has been given the increase in mobility-related infrastructure, so important for a landlocked country. Even before the start of the construction of the north-south corridor that passes through Zambia, from 2001 to 2007, the network of roads on Zambian territory increased by 68% (from 66,781 km to 112,675 km). During the same period, rail lines were also extended, although to a lesser degree, by 14%. In terms of education, enrolment rates in primary school rose from 70% in 2001 to 92% in 2007, while the rate of completion grew from 60% in 2001 to 84% in 2007. The sanitary sector has also shown some improvement: between 2001 and 2007, the infant mortality rate decreased by 30%. As in many other countries, the number of cell phone users increased greatly during the period in question: from 11 per 1,000 inhabitants in 2001 to 280 in 2008. The use of computers is still limited (7 computers per 1000 inhabitants in 2001 and 11 in 2005, the most recent figures available). Internet access has increased somewhat more, starting at close to 2.3 users per 1,000 inhabitants in 2001 and rising to over 55 in 2008.

152. There are two factors which point to Zambiaâ&#x20AC;&#x2122;s tremendous future potential. The first involves possible oil reserves on the Angola border; the second is its geographic position which puts it at the center of the new transport system planned as part of the north-south corridor and which makes the country a candidate for becoming the hub for handling goods and services for an area involving 6 countries (Botswana, Angola, South Africa, Mozambique, Zimbabwe and Malawi) and a user basin of 152 million consumers.

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6. Africa’s development traps

153. It has been estimated that out of a world population of 6 billion people, one billion lives below the poverty line of one Dollar per day. Of this billion, 70% live in Africa. Paul Collier, in his book The Bottom Billion,65 stresses that the only way to be freed of poverty and therefore develop, is economic growth. This apparently simplistic statement has been belied in practice by almost thirty years of policies primarily oriented towards reducing poverty through massive aid, instead of creating the conditions for activating endogenous and structural processes of development.66

154. However, the specific situation of extremely poor countries is strongly conditioned by a number of circumstances that could be defined development traps:67 (and hence economic growth traps): - Conflict trap. - Natural resource trap. - Landlocked country trap. - Poor government trap.

155. In creating the strategic map of Africa—and, therefore, in selecting the variables that comprise it—how these traps affect development was taken into account. In particular, Collier’s work was extremely useful in the choice of indicators at the base of the model; for example, the export diversification correction was introduced to take into consideration the “raw materials trap” while the governance correction considers both the conflict levels and good government of a country. The condition of being landlocked was not explicitly introduced as a numeric variable, but it was always taken into consideration in evaluating the shifting of countries within the matrix. For this reason, we believe it important to examine the context and consequences of when a country finds itself “trapped” by one of these four conditions and how they influence and restrict its growth.

6.1 Conflict trap 156. All types of societies can have conflict, but the special aspect of countries in the “bottom billion” is the type of conflict they face internally. This conflict often results in civil war or can be resolved by a coup.68 In any case, conflict is very costly, may repeat itself and can

64. Paul Collier, The Bottom Billion, Oxford University, 2008. 65. Since 1975, following the serious oil crisis that hit the world economy and brought poorer countries to their knees, the World Bank, led by McNamara, took upon itself policies of aid and development support, giving priority to the war on hunger

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and reducing infrastructure-related initiatives made available by the international community in the immediate post-colonial decade. 66. See: Paul Collier, The Bottom Billion , Oxford University, 2008.

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cause a country to fall into the poverty trap. A full 73% of people who live in bottom billion countries have been involved in civil war in the past or are still involved. It is not civil war itself that entraps a country;69 it is the contextual conditions that determine whether the presence of civil war forces it into the trap. In low-income countries, the possibility that wars become a trap is very high and, as a result, they represent an obstacle to growth. In fact, civil war acts as â&#x20AC;&#x153;contrary growthâ&#x20AC;? because it damages both the country in which it takes place, as well as its neighbors. It tends to reduce growth by about 2.3% each year, making it worse than a prolonged economic depression: it kills people, creates refugees and mass movement of people which, in an economy in which public health systems are crumbling, produces epidemics.

157. Identifying the causes

Fig. 54 Countries with highest conflict indices (Source: TEH-Ambrosetti based on World Bank data)

of civil war is difficult because it involves social, political, Political geographic and economic Country Stability factors. Index 2007 An initial relationship can be Sudan -2,30 established between the risk Dem. Rep. of Congo -2,26 of war and starting income level. It is very likely, in fact, Ivory Coast -2,12 that civil war would break out Nigeria -2,07 in low-income countries and this relationship becomes a Guinea -2,02 vicious circle since war impovChad -1,96 erishes a country and poverty Central Africa Rep. -1,78 makes a country vulnerable to war. Other fac tors that Ethiopia -1,72 increase the risk of civil war in Burundi -1,43 a country are slow growth or, Zimbabwe -1,30 even worse, stagnation and decline. Algeria -1,18 In addition, it has been shown Liberia -1,15 that the lower the income of a Uganda -1,15 country at the start of a conflict, the longer the conflict Kenya -1,10 will be. Plus, often the concluEritrea -1,04 sion of a war is not the end of the conflict because, once over, it is probable that it will recommence. Having experienced a civil war generally doubles the risk of another conflict. The awareness of governments in post-conflict countries that

67. The causes and consequences of civil war will be explained in detail below. For coups, the causes are very similar, while the consequences (although negative) are less severe.

68. In some cases, such as the United States, Russia and England, these wars were fairly quick and did not recur.

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they face potential danger leads them to react by maintaining military spending at an abnormally high level. Statistically, during the decade following conflict, military spending is only one-tenth lower than during the war itself. In the ADAM strategic map, as many as 10 of the Countries in the so-called “vulnerability” zone suffered the highest number of conflicts in the years in question. Dependence on commodities—oil, diamonds, etc.—substantially increases the risk of civil war because natural resources contribute to financing conflict and sometimes even provide incentive for them. From a social standpoint, conflict is more likely where there are masses of people prepared to be involved in political violence, normally young people without an education or ties, conditions unquestionably easier to create in poor countries with a stagnating economy. Geography also sometimes contributes to making a country more susceptible to civil war. A vast country with its population dispersed in outlying areas, such as the Democratic Republic of the Congo, is at greater risk because rebel troops can more easily find places to train and hide.

158. When the growth process is interrupted in a low-income society, it is exposed to a series of difficult risks to contain and, at the same time, without growth peace is considerably more difficult. So much so that in bottom billion societies trapped by conflict, the economy remains blocked.

159. On the map, there are some countries which suffer from conflict. One fairly evident example (also because it is not influenced by other “traps”) are the Comoros islands which, despite the tourist potential they share with other islands (Mauritius, Seychelles and Cape Verde), started to regress when they became an arena of political conflict. Since 2004 this inversion has reduced their economic performance and also decreased their assets70. Madagascar is also a case in which political conflict is among the factors leading to lack of growth and asset erosion. The country started off in 2001 in the fourth quadrant, that of the “runners with feet of clay” From this position, a growing country can either travel along the transit route to the first quadrant, consolidating its growth by accumulating wealth or, in the case of negative governance situations or worse, the progress achieved can be lost. At the time of the 2008 survey, Madagascar was in the third quadrant, moving towards the vulnerability zone.

6.2 Natural resource trap 160. The supply of natural resources has often been shown to be a positive variable connected with the start of conflict. Ironically, their presence can even be disadvantageous for the sustainable growth of a country during times of peace.

69. Before the coup, the Comoros Islands were enjoying a period of asset accumulation.

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161. The most common result of massive exports of raw materials is the risk of a rise in currency values with the resulting loss of market competitiveness of other goods produced by that country.71 However, the main negative effect of a particular concentration of raw materials is seen in the lack of interest in developing industry. But this paradox can also be generated by the presence of massive aid.

162. In other words, a country lacking in natural resources that does not receive aid must acquire foreign currency through exports in order to buy imports. Exports are, in fact, paid in foreign currency and importers, in turn, repurchase foreign currency to buy foreign goods. In the case in which a country has natural resources that are exported (or receives aid from abroad), it does not have the need to develop its own manufacturing industry to produce export goods to acquire foreign currency. The opportunity cost for developing industry internally is higher than that of just purchasing imported goods with the wealth produced by natural resources. Exports of manufactured goods, on the other hand, are those that provide greater stimulus for a country to develop technologically and expand its productive base. The presence of oil is one of the factors that most readily creates this type of trap.

163. In addition, income deriving from natural resources is volatile. Dependence on export of raw materials exposes countries to the volatility of international trends in commodity prices. Government policies are therefore affected by periods of boom prices that lead to increases in the growth of public spending which, however, can be abruptly interrupted when prices begin to fall. The problem deriving from this is not limited to management of public spending, but also becomes a problem of consent management. During boom periods, governments that are not prepared and completely inefficient can be perceived as highly positive, while more competent governments working during periods of collapse are perceived negatively. Public opinion which is naive and relatively unaware of the macroeconomic context, bases its consent on the living conditions it experiences and not on the worth of the reforms and measures taken. Consent management is a very current issue if viewed in the context of the recent economic performances connected with the crisis in course in many African countries: the slowdown in growth and the worsening of living conditions can easily be exploited by the opposition to overthrow the government in office – severely taxing the African democratization process – and to weaken the often already fragile African governments.

164. After a period of relative stability in the year 2008-2009, Africa witnessed 4 coups (Mauritania, Guinea, Guinea-Bissau and Madagascar). None of the 4 coups was the direct consequence of an economic crisis but undoubtedly the pressure on the governments due to the worsening of economic conditions affected the domestic situation.

70. Traditionally, this phenomenon is called the “Dutch disease” because it was first hypothesized regarding the effect the pre-

sence of gas in the North Sea had on the Netherlands.

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6.3 Landlocked country trap 165. Geography is important. All other conditions being equal, countries that are landlocked suffer a loss in GDP growth of 0.5%.72 As can be seen from countries such as Switzerland or Luxembourg, this situation does not necessarily result in poverty, but it does pose additional conditions on development and growth. It is no accident that 38% of the billion people worldwide in poverty live in landlocked countries.

166. In the developing world, excluding Africa, only 1% of the population lives in countries which are both landlocked and with scarce resources. Aside from Africa, areas distant from the coast and which do not have resources simply do not become nations. These areas depend strongly on those around them and find it convenient to be part of a system on which they would be dependent anyway (the neighboring country with access to the sea), rather than be independent. In Africa, the opposite occurs. Approximately 30% of the population lives in resource-poor landlocked countries, Nevertheless, over recent years some of these countries have embarked on very positive growth paths thanks to the maintenance of political stability and to wise infrastructure policies transforming their weakness into a stimulus for research and the pursuit of innovative and concrete policies and strategies for growth. Examples of this are Zambia, Malawi and Rwanda.

167. The first consequence

Fig. 55 Positioning in the ADAM â&#x20AC;&#x201C; Ambrosetti Development of Africa

Map of landlocked countries (Source: TEH-Ambrosetti elaboration) of being a landlocked country is the increase in logistics costs that creates a disadvantage for any type of industry from the very start, compared with countries with port facilities. Mobility infrastructure is fundamental for these countries, but is largely outside their control because they depend on neighboring countries that face the sea. Specifically, it has been found that logistics costs are tied not so much to the distance from the sea, but rather the investment in port infrastructure of the neighboring country. Access costs depend, therefore on the transport infrastructure and political decisions of those countries on the coast. This condition of disadvantage does not apply to raw materials because the latter are so precious that transport costs do not affect their competitiveness. This is one of the reasons why a country such as Botswana has not been affected by its isolation.

71. From Paul Collier, The Bottom Billion, Oxford University, 2008.

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168. For a landlocked country,

Fig. 56 Landlocked countries

it becomes ver y difficult to access global markets, especially for industrial goods that require speed. For this reason, even before expanding into global markets, it is important to find market outlet s in neighboring countries. Naturally, in this case the growth of a landlocked country depends on the growth of the neighboring countries. It is calculated that for every increase in percentage point of the neighbor country, the landlocked nation benefits by 0.7. However, in Africa this relationship does not apply because African countries are either oriented towards the domestic market or the global market. For the moment, there are no real integrated transnational systems of infrastructure that facilitate trade. For this reason, in Africa the external positive effect of the growth of neighboring states is confined to 0.2% for each point of growth. To create incentive for landlocked countries to orient themselves more to neighboring markets, regional integration is more important than ever before, with the consequent elimination—or at least reduction—of trade barriers that produce an invisible transfer of wealth from poor landlocked countries to their richer and more industrialized neighbors. Highly important in the development of transnational markets is the recent commitment to the building of corridors to connect the various regions of Africa. (See the first part of this chapter which refers to the North-South corridor).

169. What else can be done so that landlocked states free themselves from this trap, in addition to removing customs barriers, creating free trade areas and providing incentives to improve the economic policies of neighboring states? The building of transnational corridors along the communications routes between countries and access to the sea are unquestionably the first step from the standpoint of infrastructure. The country involved could also adopt the strategy of being “a haven” for its neighbors by offering top quality services the other states can take advantage of—borrowing somewhat on the Swiss model (which is the strategy declared by Rwanda). Landlocked countries must also exploit all means they have to create connections independent of their neighbors’ policies, and key in these are air and telecommunications connections. Malawi, Rwanda, Lesotho, Swaziland and Zimbabwe already have an air mobility index higher than the African average73. As regards

72. Average adjusted by eliminating the extreme data of the islands (Seychelles, Mauritius, Comoros islands, Sao Tomé and

Principe and Cape Verde).

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the supply index for telecommunications infrastructure, only Zimbabwe, Uganda and Botswana have an index superior to the African average; added to these are also Zambia, Swaziland and Lesotho, if we consider Sub-Saharan Africa alone. Fig. 57 Per capita GDP, growth of the GDP and natural re source supply of landlocked countries (Source: TEH-Ambrosetti based on various data)

GDP per capita PPP USD (Average 2006-2008)

GDP growth per capita (Average 2006 - 2008)

Natural resources index

Botswana

13.183,5

0,83 %

679,49

Burkina Faso

1.123,3

1,64%

20,23

352,2

0,73%

53,04

1.467,7

-2,83%

30,17

Ethiopia

782,6

8,29%

19,08

Lesotho

1.523,1

4,71%

40,1

Malawi

765,1

5,60%

33,92

1.089,8

1,27%

22,76

Niger

641,3

2,46%

16,01

Central Africa Rep.

709,6

1,88%

36,9

Dem. Rep. of Congo

300,3

2,83%

564,4

Rwanda

902,7

4,70%

52,67

2.042,7

1,67%

63,88

Uganda

997,3

3,60%

83,29

Zambia

1.329,1

3,89%

34,11

Africa Average

3.781,3

3,05%

114,73

Landlocked Countries

Burundi Chad

Mali

Swaziland

170. One strategy for avoiding the trap of being a landlocked country is to create a transparent and favorable climate for investors, while at the same time creating interesting investment opportunities. In Africa, there are 16 countries that have developed a transparent and efficient financial market and stock exchange. Of these, 7 are landlocked countries (Botswana, Malawi, Swaziland, Rwanda, Uganda, Zambia and Zimbabwe).74

171. To conclude, good government can make the difference in a landlocked country with scarce resources, including with “bad” neighbors. For example, the governments of Uganda, Burkina Faso and Zambia75 have enjoyed decent levels of growth for approximately the last decade.

73. Dambisa Moyo, Dead Aid, 2009. 74. The same is obviously true of Botswana, but its massive natu-

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ral resources do not make it a “typical” landlocked country.

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6.4 Poor government trap 172. On one hand, we have already stressed how good governance and adequate economic policies are key for the growth of a country. However, it has been shown that positive effects cannot exceed 10% of the growth rate of a country. a country lacking opportunity cannot grow indefinitely thanks to good governance alone, but good governance unquestionably helps a country make the very best of the few opportunities it may have: none of the countries with good, stable governance has lingered in the third quadrant, that of the “trapped” countries. On the contrary, bad governance can destroy an economy and the advantages from raw materials, for example. The economic collapse of Zimbabwe, which has significant natural resources, can be traced to the political situation in the country.

173. The impact of good government on the development of a country is always tied to opportunities. The more opportunities a country has, the more good governance is important. For a country with scarce resources and few opportunities, even a light-weight government is adequate. The policies to be adopted require a lower level of technical skill, also because of the limited amount of resources available to be distributed. What is important is that the government does not do damage, but it cannot do much more than this. On the other hand, a richer country has the opportunity to increment the well-being of its citizens by transforming wealth into public services. However, often this does not happen. Examples clearly seen on the map are those of Chad and Equatorial Guinea which, together with failure to provide development for their citizens, saw a decrease in growth. Poor government is not necessarily a trap. Many countries have learned from past error and have improved their governance. Unfortunately, not everyone loses in situations of poor governance. The leaders of many poor countries are, in fact, very rich (examples are Equatorial Guinea and Nigeria) and often it is corruption that hampers the transformation of wealth into services, as well as the knowledge that education of their citizenry, in particular, could endanger their privileged position.

174. Not all cases of poor government lead to the presence of autocrats. Other examples of poor government are due to the lack of technical competence of those governing. Few citizens actually have the background necessary to guide a country and of those few that do, many often emigrate , becoming part of the well-known problem of the brain drain. Low education levels of its citizens also creates the effect of lack of support within the country for reforms. Often they are not understood and, just as often, no one awaits or knows how to evaluate their results. Added to this is the effect of distortion due to fluctuations in natural resource prices (please also refer to this specific trap).

175. To exit the trap of poor governance, major change is required in a country. It has been shown that the presence of a democratic state in itself is not sufficient to generate change. What is needed is the presence of a large population, an ample share of which has secondary school education. This condition is fundamental to formulating and pursuing reform because it is the only way in which the push for change and reform can be endogenous and shared by the population. This, in turn, is an indispensable condition to ensure that the reforms will be a success.

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176. As was seen in the discussion of landlocked countries, a situation of poor governance and economic stagnation is not just a problem for the country itself, but also for its neighbors. In his book, Paul Collier estimates that the bankruptcy of a country, in peacetime, can be valued at around 100 billion US Dollars.

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7. Summary Remarks

177. The strategic map presented here is a tool that is unique operationally (for purposes of method-building) and coherent (for its unitary interpretive approach) which makes it possible to display for each African state, over time, its economic growth performance and resources and infrastructure. At the same time, thanks to each country’s standing in terms of median values 76 and in terms of other countries on the continent, it also highlights the problematic elements that are often at the root of a non-harmonious interrelationship of the two preceding factors or instability in its political-administrative situation.

178. In addition to the four quadrants, we have highlighted some attention zones. The first, which we have called the “safe zone”, in the upper right-hand part of the map, is the area containing those countries which have become a consolidated part of what P. Khannna calls the countries of the “second world” (GDP between 3,000 and 6,000 Dollars per capita).77 These are countries which, having emerged from underdevelopment, can be considered “emerging” according to international definitions. They include the countries of northern Africa (Tunisia, Egypt, Algeria) that are ready to take advantage of imminent Mediterranean integration; the major islands (Seychelles, Mauritius, Cape Verde) which have succeeded in capitalizing on their natural resources and tourism to use them as a driving force for the rest of the economy;78 and naturally South Africa and its neighboring economic partners, Namibia and Botswana. In 2008, 3 new countries entered the safe zone: Ghana, Lesotho and Morocco, the positive progress of which was already underlined in the previous edition of this report. This group of relatively “happy few” still includes a small number of countries compared with African countries as a whole (just over 20% of the total). The second area highlighted, in contrast, is the one that we have called the “vulnerability zone”, which includes the countries of the fourth quartile. For the countries in this area, the critical points are lack of resources or also the inability to accumulate wealth, despite the presence of good economic performance. This quartile contains the poorest countries, those most politically “fragile” and often victims of conflict. Today this quartile still contains 11 countries (4 less than last year). Exiting from this zone—unfortunately an arduous task—is a major objective for countries which find themselves in a situation of chronic underdevelopment. At least for those countries with natural resources (a prime example being Equatorial Guinea), the commitment of government in working towards broad-ranging social-economic improvement of the country is critical, instead of concentrating wealth in the hands of a small elite. Realistically speaking, even if they are not within the “vulnerability zone”, the fact that almost all the other countries are still poised between continuing their course of growth and the risk of a dangerous reversal of direction should not be underestimated. Unfortunately, over

75. Median values are given in terms of the mean value, and not the mathematical average. 76. Parag Khanna, I tre imperi, Fazi editori 2009.

77. It is estimated that every tourist euro spent generates 2.1 of induced activity.

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the years, many African countries have demonstrated endemic fragility in consolidating the progress they make, often because of what Collier79 calls the â&#x20AC;&#x153;development trapsâ&#x20AC;? (conflict, excessive concentration of wealth, being landlocked and, above all, poor government).

179. Nonetheless, the entire interpretive system of the map is based on the thesis that the four traps, considered to-date serious impediments to African development, can, today, be removed thanks to a new approach to governance, greater awareness in applying economic policy tools by government, new technologies and also a different approach from international organizations to the continent of Africa. Briefly stated, the real challenge for African countries lies in the quality of their economic programs, the setting of a long-term approach and strategic objectives aimed at removing structural problems, and the meeting of tangible objectives along a path of broader human and social development of the community as a whole.

180. The varying degree in interest in Africa from many countries and foreign interests, represents an unprecedented opportunity for African governments. The competition between countries to attract and orient foreign capital will become the major driver for change for many countries. African countries are striving to offer concrete investment opportunities and provide a favorable, transparent, economic environment for foreign investors.

78. Paul Collier, The Bottom Billion, Oxford University, 2008.

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Chapter 4 Africaâ&#x20AC;&#x2122;s relations with South of the world

CONTENTS 1. an overview on the african awakening

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2. The South-South Axis

197

The weight of South of the World on aid flows to Africa

199

China blazes the way

200

Indiaâ&#x20AC;&#x2122;s race to keep up

206

Brazil-Africa: biofuel diplomacy

209

Arab nations: in search of land in Africa

211

3. SUMMARY REMARKS

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1. An overview on the african awakening

1. The global economy is rapidly becoming increasingly multipolar, with some developing countries establishing themselves as new powers and others transforming themselves into epicenters of growth. This was underscored by the president of the World Bank, Robert B. Zoellick, in a presentation entitled, significantly, “The End of the Third World?”.

2. One of these poles is Africa, which can aspire to a major role, and not just from an economic point-of-view.

3. From 2000 to 2008, African GDP increased an average of 5% per year.1 On the eve of the collapse of world markets in 2008, this continent registered a record flow of Foreign Direct Investment (FDI) totaling 88 billion Dollars, up 27% from 2007.2 Fig. 1 Foreign Direct Investment (FDI) attracted by Africa (billions of Dollars) (Source: TEH-Ambrosetti based on UNCATD data)

1. Source: World Bank data.

2. Source: African Economic Outlook, (2010).

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4. The global crises put a sharp brake on the continent’s development, but according to International Monetary Fund (IMF) data, Africa is recovering faster and better than other regions of the world, and with fewer consequences compared with previous crises. This means, on one hand, that many of the continent’s weaker economies are still not very integrated into the world trade and finance system, and therefore essentially protected from its shocks, and on the other, that the recovery, especially that of India and China, has positive spin-offs, especially for raw material exporting countries.3

5. Prospects for the future appear, overall, to be encouraging. The continent’s GDP is expected to grow by 5% in 2010 and 5.9% in 2011, a rate that could be maintained to 2015. Over the next 5-year period, sub-Saharan Africa will grow faster than Brazil.4

6. Other times in the past, Africa seemed at the point of embarking on the right road to development, but these successes often proved ephemeral. What is very changed today is the context in which the continent finds itself playing its role. Emerging economic powers, such as Brazil, China and India, but also other G20 countries, are intensifying their trade and diplomatic relations with Africa, given its strategic importance.

7. Africa possesses at least 10% of world oil; South Africa alone has 40% of the world’s gold supplies and Zambia, and the Democratic Republic of the Congo a third of cobalt deposits. Niger is rich in uranium and Guinea in bauxite. The continent has 10% of the world’s drinking water and 27.4% of its arable land.5

8. If they want to continue to grow, emerging economies cannot ignore Africa which is not only rich in necessary resources, but with its one billion inhabitants, of which half still live on less than US$1.25 per day, it is the last great frontier for development.

9. The advent of a multipolar world in which, increasingly, the choices and opportunities are not the exclusive right of the West, gives Africa new political weight. African countries are beginning to become aware of the importance their continent can have on the international scene and they bring their own outlook to the Doha Round negotiations, to discussions on climate change and into the UN Security Council, often in these cases with the support of emerging economies. The strength of the African GDP before the crisis and the recovery (although not homogeneous) both reflect and explain Africa’s new role.

10. Its underground wealth was been and will continue to be a driving force for the African economy. The sharp rise in crude oil prices—from US$99 per barrel in 1999 to US$145 in 2008—as well as in metals which quadrupled between 2002 and 2008, nonetheless provide only a partial explanation of the dynamism of the African economy. The boom in raw materials has had a 24% impact on the trend in the economy, but tourism, the banking sector and telecommunications have grown more rapidly. Including in countries that have not benefited from income derived from raw materials. Despite the fact that even profound differences

3. In many African countries, economic stimulus packages have also been launched. 4. Source: World Economic Outlook, IMF 2010.

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5. Source: Chatham House, Our Common Strategic Interest Africa’s Role in the Post-G8 World, 2010.

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persist between the various regions of Africa, the positive economic results are a sign of a reawakening of the continent that depends on a number of structural changes.

11. The last decade has seen an end to many conflicts and the establishment of a certain degree of political stability on the continent. The number of wars involving states has decreased, from 16 in 1999 to 7 in 2007, although in 2009 it went back up to 11. Victims decreased from close to 64,000 in 1999 to 1,400 in 2005 (once again, this figure worsened in 2009).6 The situation is still precarious in many areas and runs the potential risk of deteriorating; nonetheless, for the 11 sub-Saharan countries the Global Peace Index showed improvement over the last four years. The Global Peace Index, comprised of indicators including ease of access to weapons, military spending, number of homicides and refugees, has made progress, above all in Angola, the Ivory Coast and Uganda. Northern Africa has also made significant progress along the road to stability.

12. The reduction in violence has made it possible to create the conditions for economic development that have also been aided by a series of structural reforms made by African states. The average rate of inflation which, in the ’90s was around 22%, after 2000 dropped to 8%. Foreign debt was cancelled or reduced by one-fourth and the budget deficit significantly cut. Many countries lowered taxes or implemented policies to liberalize markets and promote growth of companies. Nigeria privatized over 116 companies between 1999 and 2006.7

13. In 2010, for the first time, an African country—Rwanda—was at the top of the list of those countries adopting measures to render their economies more efficient. As noted by the World Bank in its report, Doing Business, in Rwanda today it is possible to start up a company in 2-3 days, access to credit has improved and the process for registering property has been simplified. Two other African countries are also in the top ten: Egypt and Liberia, proof that despite the fact that the investment climate in Africa is still not among the easiest, there has been tangible improvement.

14. These structural changes have contributed to increasing the productivity of African companies which between 2000 and 2008 began to rise again for the first time in decades. In Africa today there are close to 1,400 companies quoted on the stock market and more than 100 have profits above one billion Dollars.

15. The most active sector is unquestionably that of telecommunications. In the last ten years, the number of mobile phones on the continent has grown to 316 million. But even in the financial sector, it is the retail sector that has felt the positive effects of urbanization of the continent and growth of the middle class.8

16. Close to 370 million Africans live in cities, 38% of the population and more than in India. But living in a large urban agglomerate does not always mean having access to better living

6. Source: Nogozi Okonjio-Iweala, managing director of the World Bank, What’s the Big Idea? To reposition Africa as the Fifth BRIC-A destination for Investment, not just Aid, (2010).

7. Source: World Bank. 8. Comprised of nuclear families with an income of at least 20,000 Dollars per year.

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conditions;9 in many African countries available income is not comparable to that in Asia and is far-removed from that in the West. Nonetheless, this new social bracket, comprised of teachers, shop keepers and white collar employees, is providing a decent impulse towards consumption, which is increasing 2-3 times that of OECD countries. In 2007, African nuclear families spent 860 million Dollars overall, more than Indian and Russian families did.10

17. One element that has always contributed to the distribution of wealth is trade. Starting in the 1950s, and for many decades following that, trade took place for the most part between high-income countries, and in particular along the Europe/United States/Japan triangle. However, over the last twenty years, this situation has changed profoundly. In 1990, North-North trade was 58% of the total, while in 2008 this had fallen to 41%.

18. The advance of developing countries onto the world economic scene is simultaneously the cause and consequence of a greater opening of Africa to international markets. Thanks to an exceptional increase in exports and imports of goodsâ&#x20AC;&#x201D;almost quintupled in 13 yearsâ&#x20AC;&#x201D; Africaâ&#x20AC;&#x2122;s contribution to world trade is 3.3%, while its share of GDP is only 2.5%. And it has 14.6% of the population.

19. Therefore, Africa is becoming an important link in the global economy, but its potential for growth is still tremendously latent. Those banking more on African development continue to be the emerging powers of the South of the world (see the next section).

9. See Chapter 2 of this report.

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10. Source: World Bank.

Chapter 4 - Africa and relations with South of the world

2. The South-South Axis

20. Behind the incredible growth Africa has enjoyed to 2008, but also behind its rapid recovery from the crisis, is one of the most dynamic forces on the international economic and political scene: trade between countries in the south of the world, which only twenty years ago totaled just 7.8% of global trade, but in 2008 was a full 19%.11

21. Africa is at the center of this flow of goods and capital traveling along the route connecting China and Brazil, while also passing through India.12 (See figure b e l o w ). A t t r a c t i n g t h e e c o n o mi e s i n f u ll - s c al e expansion is above all the wealt h of r aw mater ials found on the continent, but Africa is also seen as an investment opportunity and market for manufac tured goods.

Fig. 2 Composition in percentage of African trade exchange with the World, 1990-2008 (Source: World Bank)

Fig. 3 Commercial trade with Africa (billions of Dollars) (Source: TEH-Ambrosetti re-elaboration of data from Chatham House, Our Common Strategic Interest Africaâ&#x20AC;&#x2122;s Role in the Post-G8 World, 2010)

11. Source: Perspectives on Global Development, OECD 2010. 12. Source: UNCTAD, 2010.

13. Source: UNCTAD, 2010.

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Chapter 4 - Africa and relations with South of the world

22. The intensification of South-South relations has challenged the supremacy of developed countries not only in their economic, but also their political relations with Africa. In the mid-1980s, trade with the European Union was 55% of African trade, while in 2008 it was less than 40%.

23. FDI in African developing countries between 1995 and 1999 were 17.7% of the total, with the share rising to 20.8% between 2000 and 2008.13 Despite the dominating role of search for raw materials, investment has become increasingly directed towards creating markets for Indian, Chinese and Brazilian companies, including through greenfield projects, mergers and acquisitions. What began during the 1950s as a cooperation relationship between developing countries wishing to work together to reduce their dependence on industrial powers, has become transformed into an economic axis capable of changing Africaâ&#x20AC;&#x2122;s future. Fig. 4 Main FDI 2006-2008 in billions of Dollars (other donors 47 billion Dollars) (Source: TEH-Ambrosetti re-elaboration based on Milken 2010 data)

24. Starting in 2000, African countries began to negotiate a series of alliances with other countries in the South of the world on the basis of predominantly economic interests; however political collaboration, especially at international meetings, has an importance in this new diplomatic arrangement. Forums and partnerships have different structures and characteristics, but they share a series of guiding principles. All stress the importance of promoting cooperation between countries and pursuit of mutual benefits, without interfering in the internal affairs of partner states. This last is a condition that has given rise to numerous criticisms, especially with the most important ally in terms of economics and politics: China.

25. Alliances are consolidated through frequent, high-level state visits and they are based on the conceptâ&#x20AC;&#x201D;often expressed in official statementsâ&#x20AC;&#x201D;that all the parties involved benefit from them. Emerging economies, such as China, India and Brazil, consider Africa a strategic supplier of raw materials, indispensable for feeding their growth, but also a promising market for their product exports and a player to be involved in obtaining support on global development-

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related issues. These last two points are crucial and represent what is basically new in SouthSouth cooperation.

26. The network of relationships of which Africa is a part is comprised of bilateral, trilateral and regionally-based alliances.

27. The Forum on China-Africa Cooperation (FOCAC) is bilateral, as are the partnerships between Africa and India, Africa and Brazil, Africa and Turkey and Africa and the Republic of Korea.

28. The trilateral India-Brazil-South Africa pact (IBSA), launched in Brazil in 2003, is a dialogue between these countries that aims to extend their influence on the world scene and increase cooperation in areas such as agriculture, energy, the environment, education, defense, health, trade and tourism. IBSA has created a fund to which each member contributes one million Dollars to finance development projects that can be replicated in a range of situations.

29. Among the inter-regional initiatives, the New Asian-African Strategic Partnership (NAASP) was created in 2005 in Indonesia, in memory of the Bandung conference which in 1955 planted the seed of cooperation between developing countries. Its goal is to stress the need for a multilateral approach to international relations.

30. A year later, in 2006, ASAâ&#x20AC;&#x201D;the Africa-South America partnershipâ&#x20AC;&#x201D;took shape. Recently, South American companies have become more active in Africa, especially in the agriculture and energy sector.

31. There is also a long tradition of relations between Africa and the Arab world where the first form of cooperation was launched in 1977 at the first Afro-Arab summit. Again here, the areas of collaboration are varied and range from education (there are numerous Islamic schools, madrasas, financed by Saudi Arabia in various African countries) to culture, finance, trade and agriculture.

1.1 The weight of South of the World on aid flows to Africa 32. It is difficult to establish how much aid is given by countries who are not members of the Development Assistance Committee (DAC) of the OECD, but the countries of the South of the world are becoming increasingly important donors for Africa. As of 2006, the Official Development Assistance (ODA) of China, India, Korea, Brazil, Turkey and Arab countries towards Africa was 2.8 billion Dollars, 6% of the total flow of aid to the region.14

33. There are a number of characteristics that distinguish these types of aid and which they share: 14. ODA only includes official aid under the form of facilitated loans or contributions whose primary purpose is to promote the economic and social development of the receiving country. OFs

(Official Flows) represent the total official disbursements of a country and also include those forms of cooperation that do not fall directly under the category of development aid.

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- The flow of aid is often connected with promoting trade and investment. China and India use their own export-import banks as a channel for supplying financial support, compared with traditional donors who prefer to work through development agencies and not mix aid and investment. - Countries in the South of the world tend to focus their initiatives on infrastructure, as opposed to DAC donors who concentrate primarily on the social sector. Following adoption of the Millennium Development Goals, which focus on social development, the percentage of aid traditional donors earmarked for manufacturing and infrastructure in Africa dropped from 30% to 22%. The lack of infrastructure costs the continent at least a percentage point in annual per capita income growth. And meeting this deficit would require 93 billion Dollars per year. China is the most active in this sector. About 54% of all Chinese support to Africa between 2002 and 2007 was concentrated in public works. Between 2003 and 2007, India financed around 500 million Dollars per year in infrastructure, about the same amount guaranteed by Arab countries. Brazil concentrated on agriculture. As OECD members, only Turkey and Korea preferred to concentrate on other sectors.15 - Developing countries also give aid to countries that are weak or in conflictâ&#x20AC;&#x201D;countries ignored by traditional donors. The reason for this attention (as in the case of Sudan for China) is that they are often countries rich in resources. - They play an active role canceling debt to countries that are poor and highly indebted (HIPC), in open contradiction with the fact that India and China, above all, prefer to grant loans, even at preferential rates, rather than subsidies. - Unlike traditional donors, developing countries do not set conditions, such as implementation of economic or political reform. However, they often tie aid to access to raw materials or purchase of goods and services from companies of those countries providing economic support. - Technical cooperation is an important aspect of aid. In 2008, 33% of Korean allocations and 29% of those from Turkey involved training programs and other forms of technical assistance. Brazil has projects in this area with 22 African countries. For its part, India has launched the Pan African e-Network Project, with financing of 117 million Dollars, and which 44 countries have joined. Its objective is to provide digital services in the field of education and medicine.16

1.2 China blazes the way 34. Chinese aid to Africa, and its political, military and cultural exchanges, have a long history. Since the 1950s, the Peoples Republic of China has promoted cooperation with developing countries, largely for ideological reasons. But it was with the extraordinary start of Chinese growth,

15. Source: UNCTAD, 2010. 16. The Pan-African e-Network Project is a joint initiative of India and the African Union, founded on an idea of former Indian president A. P. J. Abdul Kalam. Its goal is to equip a hospital and training center in each of 53 African countries, 5 regional hospitals and 5 universities in a system of wide-band internet

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connections with universities and Indian medical centers. India will provide the hardware, software and satellite connection so that doctors in 12 hospitals on the sub-continent can provide remote consulting to 1,500 African doctors and nurses for 8 hours per day. Similarly, seven Indian universities will hold remote classes for 10,000 African students.

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following economic reforms initiated by Deng Xiaoping in 1978, that Africa has become increasingly more important in Beijing’s choices. The African continent is rich in raw materials and offers new markets and opportunities for expansion to Chinese companies in the process of going beyond national boundaries as part of the dictates of the so-called “going out policy”.17 But Africa counted in the past and still counts today for political reasons: to reaffirm the “One China” policy by taking allies away from Taiwan, obtain the support of African countries in international agreements and consolidate its role as a political power to which China has aspired for some time. From 2000 to 2008, the value of trade between Africa and China grew ten-fold, reaching 106.6 billion Dollars and 11% of total African foreign trade. China is currently the no. 2 trade partner with the continent, after the United States.18

Fig. 5 Traiding size of China-Africa on total african trading, 2008 (Source: TEH-Ambrosetti based on CIA data)

35. The composition of African exports clearly shows that China is especially interested in oil and mineral resources. There are five countries that are producers of crude oil or minerals: Angola, Sudan, South Africa, Republic of the Congo and Equatorial Guinea generate 85% of the entire continent’s exports to China. And this trend is growing. In 2001, China imported basically the same amount of raw materials and manufactured goods from Africa, while by 2008 this division had become unbalanced, settling around 85% vs. 16%. At the same time, Africa increased its imports of finished products from China from 76% in 2000 to 86% in 2008. Of these, about 25% are texFig. 6 Imports from China by sector, 2008 tiles, 11% high-tech informa (Source: CIA Factbook) tion products, 8% iron and steel and 46% electro-mechanical.19

36. This last category includes small appliances sold in many stores and markets across the continent, as well as farming and mining equipment, purchased from African companies or Chinese firms operating in Africa.

17. The “going out” or “go global” policy, developed in the 1990s, consists basically of an internationalization push by Chinese companies who are also attracted by a series of special incentives and protectionist policies to expand abroad. This decision has also resulted in a noteworthy growth in Chinese Foreign Direct

Investment. 18. Source: UNCTAD, 2010. 19. Source: UNCTAD, 2010 and “Looking East: Africa’s Newest Investment Partners”, presentation by Deborah Brautigam to the Africa Emerging Market Forum of Cape Town, September 2009.

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Fig. 7 Volume of imports (left) and exports (right) between Africa and China (Source: Standard Bank)

37. The flow of cheap merchandise from China is one of the controversial aspects of trade relations between Beijing and Africa. On the one hand, a greater number of Africans can now afford to buy products which, before being made in China, were too expensive, while on the other, Chinese competition has severely hit the textile industries of countries such as Lesotho, Swaziland, Madagascar, Kenya and even South Africa. And this does not even consider artisans who have been smothered by copies made in China that have invaded African markets.

38. In reality, the collapse of African textiles has coincided with the end of the Multifibre agreement in 2005,20 and as analysts have noted, it is largely due to the lack of competitiveness of African companies. The costs tied to the inefficiency of the system, lack of infrastructure and low investment into technology, mean that African products are always at a disadvantage to those from China. This has not prevented African workers from protesting against Chinese merchandise, and politiciansâ&#x20AC;&#x201D;as in the case of South Africaâ&#x20AC;&#x201D;from imposing quotas on the import of textile products.

39. China, which intends maintaining this, its most important market, has voluntarily agreed to reduce exports and has given the South African government 31 million Dollars to create training programs in local industries.

20. The Multifibre Agreement, which entered into effect in 1973 and concluded in 2005, introduced a postponement of the liberalization of international trade sanctioned by the 1947 General Agreement on Tariffs and Trade (GATT). The agreement involved textiles and, through bilateral negotiations, allowed for

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countries to set restrictions on the amount of imports. The 1994 Uruguay Round, which extended GATT, called for a gradual elimination of these quotas, up to the complete removal of the Multifibre Agreement, which occurred on Januar y 1, 2005.

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40. Given the shortfalls in African manufacturing, this contribution is virtually symbolic. Nonetheless, according to the principle of mutual benefit which officially guides Chinese cooperation, and as part of a precise economic policy, China is in the process of starting up a series of industrial initiatives in Africa. The Beijing government wants to export Chinese equipment and one of the ways for doing this is to start up companies close to the sources of raw materials. This has resulted in companies and joint ventures that produce automobile spare parts, refrigerators, mobile phone parts, leather goods and fish.21

41. To promote African industrial development, China has decided to contribute to the creation in Af r ic a of EPZ s (E x p or t Processing Zones):22 a type of special economic zone modeled, in part, on the experience of those which, in the 1980s, attracted foreign investment to the Peoples Republic, aiding in its extraordinary growth.

Fig. 8 Chinese imports from Africa and exports to Africa (billions of Dollars) (Source: TEH-Ambrosetti re-elaboration of data from Chatham House, Our Common Strategic Interest Africaâ&#x20AC;&#x2122;s Role in the Post-G8 World, 2010)

42. Announced at the FOCAC summit in 2006, the EPZs are negotiated bilaterally between the government in Beijing and its African counterpart. Their goal is create, through fiscal and legislated incentives, a favorable environment for development of Chinese companies, especially small- and medium-sized, but also local firms and those from other countries, giving rise to actual industrial zones. Half of the costs borne by companies that decide to relocate in the EPZs are reimbursed by the Chinese government and these companies can also obtain special currency access conditions and lower export taxes for products manufactured in the EPZs, as well as the support of the Chinese government in creating infrastructure, negotiating land purchase, work permits and authorizations from the host country.

43. The first EPZ began with the iron mining area in Chambishi, Zambia, where a 300 million Dollar foundry was built; a dozen Chinese companies are already active in the area, employing 3,500 Zambians. With a minimum investment of 500,000 Dollars, the Zambian government offers companies locating in this district full exemption from taxes on profits for the first year and 50% for five years, exemption from dividends for 5 years from the first return, total removal of import taxes on equipment and instruments for five years and tax breaks on infrastructure investment.23

21. For example, in 2006, Holley Pharmaceuticals invested 6 million Dollars to produce an anti-malaria drug in Tanzania; in 2007 China International Fisheries Corporation invested 5 million Dollars in a fish processing plant in Ghana; the Chinese appliance company Haier has announced that it will begin to produce CFCfree refrigerators in Nigeria; and a joint venture between two

Kenyan and Chinese companies will launch a 130 million Dollar factory to build solar panels in Kenya. 22. They are also known as Special Economic Zones (SEZ) and, in the case of Zambia, Multi-facility economic zones (MFEZ). 23. Source: Zambian Development agency.

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44. Three other districts like this are in the process of being created in Egypt, Nigeria and Mauritius, while others are currently under study in Angola, Ethiopia, Mozambique, Tanzania and Uganda. China plans to invest 2.5 billion Dollars in EPZs by the year 2018.

45. The Chinese are convinced that this time, the experiment will produce better results than the special zones created by African governments in the past.24 This will allow Africans to benefit from the technological partnership with Chinese companies. Part of these EPZs are financed by CADF, the China-Africa Development Fund, an investment fund created in 2006 at the China Development Bank, with a fund of 5 billion Dollars. The goal of the fund is to provide financial support to Chinese companies ready to come to Africa.

46. Africa still remains a minor destination for Chinese capital; nonetheless, Chinese interest in investment in the continent has grown. Chinese FDI was 551 million in 2000, and reached a level of 7.8 billion Dollars by the end of 2008, 4% of total Chinese FDI.25 The primary recipients are countries rich in resources: South Africa (3 billion Dollars), Nigeria (796 million), Zambia (651 million) and Algeria (509 million), but also in the top ten are Tanzania, Madagascar and Ethiopia—confirmation Fig. 9 Primary African recipient countries of Chinese FDI 2008 t hat C hi na’s s t r ate g y of (Source: Standard Bank) expanding into Africa also includes investment in other sectors, such as agriculture and manufacturing.

47. The area in which China has shown itself to be most active is unquestionably that of infrastructure building: roads, rail, government buildings and hydro-electric power plants. Between 2001 and 2007, the Peoples Republic committed itself to projects totaling close to 16 billion Dollars, including the renovation of 1,350 kilometers of rail line and construction of a further 1,600 kilometers, repair and construction of 1,400 kilometers of road and financing of 10 dams.26

48. As of 2010, China had completed works totaling 20 billion Dollars and signed contracts for a further 40 billion. Once again in this case, despite the special attention given to oil producing countries and those rich in mineral resources such as Angola, Nigeria and the Democratic Republic of the Congo, China has signed or is in the process of discussing projects with 35 countries.27

24. In the past, they were affected by lack of infrastructure, political and institutional problems and poor entrepreneurial skills. There was also significant criticism of the conditions under which employees were forced to work. 25. Source: UNCTAD (2010). Precisely calculating total Chinese FDI is very complicated and often the figures provided by the Chinese statistical office differ from those counted by international

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bodies. 26. Source: Vivien Foster et al. Building Bridges, “China’s Growing Role as Infrastructure Financier for Africa”, The World Bank PPIAF, 2008. 27. Source: Martyn Davies, Will China Influence Africa’s Development , OECD Global Development Outlook 2010 – Shifting Wealth.

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49. Creating infrastructure is a tile in the mosaic of a strategy launched in the mid-1990s that combines aid, trade and cooperation. Aid became a tool for promoting the activity of Chinese companies venturing abroad, with mutual benefit translating into development for the receiving country and business for China.

50. The key to this system is the Eximbank which grants credit to Chinese companies operating abroad and low-interest loans to African countries. Money is normally given directly to the Chinese company contracting the work. African governments agree to repay the loan through the profits generated by the project,28 or place as collateral their natural resources, as occurred with Angola and the Democratic Republic of the Congo. Often these major works are realized using Chinese manpower and management. Between 2005 and 2007, the Eximbank signed facilitated loans with African countries worth close to 16 billion Dollars, almost as much as the World Bank (17.4 billion).29

51. Chinese secrecy surrounding the extent and differences in classifying aid makes it difficult to establish how much China counts as a donor for Africa. In 2007, according to some estimates, China was involved in ODA aid and debt cancellation in the amount of 1.4 billion Dollars, a figure that might have reached 2.5 billion by the end of 2009, but in any case far from the commitments taken on by the United States or European Union.30 This lack of transparency, together with the fact that China grants aid and loans without asking that the political and economic conditions set by traditional donors be met (for example, combating corruption and improving governance), has raised significant criticism.

52. China has succeeded in creating a place for itself in Africa through the use of “soft power” tools, i.e., using persuasion, rather than the political or economic pressure that characterizes “hard power”. China has preferred to “woo” African countries (first of all, those rich in raw materials, but not only) with frequent high-level state visits and forums, but also assistance in a number of fields, including health, training and agriculture. For example, China sent the first medical team to Africa in 1964 on the invitation of the Algerian government and since then, at least 15,000 doctors have visited 47 African countries and treated 180 million patients. Through the Fund for the Development of African Human Resources, close to 3,800 candidates are trained each year, especially in the field of management, cooperation agreements have be signed with 27 African universities and 18 Confucius Institutes have been opened to teach Chinese. 31 In Africa, fourteen Agricultural Technology Demonstration Stations are active, centers in which the Chinese teach their cultivation techniques and introduce the use of hybrid seeds. But, above all, China has become the promoter of an alternative development model that has been dubbed the Beijing Consensus, as

28. This is the case with the hydro-electric plant in Dodo, Sierra Leone. 29. Source: Data taken from Deborah Braütigam, The Dragon’s Gift. The Real Story of China in Africa, Oxford University Press, 2009. 30. Source: Braütigam, 2009. 31. Source: THOMPSON, Drew, 2005: “China’s soft power in Africa:

From the ‘Beijing consensus’ to health diplomacy”, China Brief, V (21), KURLANTZICK, Joshua, 2006: Beijing’s safari: China’s move into Africa and its implications for aid, development, and governance. Washington: Carnegie Endowment for International Peace, p. 3; PANOZZO, Irene, 2008: “Beijing consensus’, l’offensiva dello charme nel continente nero”, Limes.

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opposed to the Washington Consensus:32 a development formula that has brought about improvement in the living conditions of millions of Chinese, as opposed to the rigorous rules imposed by the major financial institutions.

1.3 India’s race to keep up 53. The first trade contacts between India and Africa date back to the 14th century, but it was only towards the end of the 1800s that 2.5 million Indians crossed the ocean to settle in South Africa, Kenya, Uganda, Tanzania and Mauritius, finding work first in the mines, on the railway and on plantations. Today, it is calculated that there are around 2 million Indians in Africa. Despite the ties India has maintained with Africa in the name of anti-colonialism following the former’s independence, it was the economic and political ascent of the subcontinent that led the government in New Delhi to reconsider its relations with Africa as a land of conquest for dynamic Indian companies. Fig. 10 Volume of imports (left) and exports (right) between Africa and India (Source: Standard Bank)

32. The Washington Consensus is a list of ten political and economic reforms with a neo-liberal stamp and aimed at financial rigor, prepared in 1989 by John Williamson, economist at the Institute for International Economics, in response to the Latin American debt crisis. They involve priorities for public spending, reform of the tax system, trade liberalization, currency exchange and interest management and privatization. This manifesto was called the Washington Consensus because the US administration and international financial institutes have their headquarters in the US capital and it soon became the plan of action recommended, imposed or adopted in many developing countries. It ended up being hotly contested by those, such as Nobel prize winner Joseph Stigliz, who criticized limits and abnormalities of globalization. In contrast with the Washington Consensus, Joshua Cooper Ramo,

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a former journalist and China scholar coined the term Beijing Consensus to describe the Chinese development formula: innovation, control over imbalances caused by growth, strong control over power and defense of its own identity. This became a model that was appreciated because it was not imposed by any outside body. “China is blazing the way for other countries attempting to discover not only how to develop their own country, but also how to find a place within the international order that will allow them to maintain true independence, protect their own style of life and political choices.” Source: Cfr. John Williamson: What Washington means by policy reform, Washington: Peterson Institute for International Economics, 1990; Joshua Cooper Ramo: The Beijing consensus. The Foreign Policy Centre 2004.

Chapter 4 - Africa and relations with South of the world

54. The level of trade between India and Africa is still a long way from that between China and Africa, but it is accelerating. In 2000 it was just 7.3 billion Dollars, by 2008 it had reached 18.6 billion Dollars, but the Indian government expects it will exceed 70 billion by 2020. Today, trade between India and Africa is 6.9% of total Indian trade and India is in the top five suppliers of foreign merchandise for one-third of African states.33

55. The list of India’s main African trade partners reveals the fact that New Delhi is also attracted by the continent’s raw materials: oil, as well as minerals and coal. From Nigeria comes 47% of all Afric an Fig. 11 Indian imports from Africa and exports to Africa (billions of expor ts to Italy, 14% from Dollars) ((Source: TEH-Ambrosetti re-elaboration of data from Chatham House, Our Common Strategic Interest Africa’s Role South Africa, 10% from Egypt in the Post-G8 World, 2010) and 8% from Angola. 34 The state-owned oil company, ONGC Videsh Ltd (OVL), has invested more than 2 billion Dollars in 8 countries: Sudan, Congo, Nigeria, Libya, Ghana, Angola, Egypt and Uganda.35

56. To-date, India’s penetration into the African market has occurred differently than China’s. While Beijing has initiated a more coherent and aggressive strategy based on the workings of large state-owned companies, India’s progress has been made primarily by individual private companies.36

57. Historically, Indian FDI on the African continent has been concentrated in Mauritius where one of the largest communities of the diaspora lives. Between 1996 and 2005, this country has received 1.4 billion Dollars, 9% of total Indian FDI. 37 Between 2003 and 2009, Indian multinationals invested in 130 projects in Africa, compared with 86 Chinese companies. 38 Today, many large Indian groups are active throughout Africa with investments reaching 5 billion Dollars. They include a range of sectors, including oil, mining, infrastructure, telecommunications, pharmaceutical distribution and agriculture. Indian agrobusiness companies are very active in purchasing land and starting up production, ranging from cut flowers to tea, vegetables and dairy products. 39

33. Source: UNCTAD, 2010; India-Africa Conclave to help prepare roadmap for next Forum Summit, Confederation of Indian Industry, 2010; Simon Freemantle, Jeremy Stevens, Africa: BRIC and Africa, Standard Bank, 2009. 34. Source: UNCTAD, 2010. 35. Chietigj Bajpaee, The Indian Elephant returns to Africa Asia Times Online e OVL explores projects in Africa” The Hindu Business. 36. Source: The future of Africa-India engagement, Conference Report, Chatham House (2010). 37. Source: UNCTAD, 2010. 38. Source: OECD 2010.

39. Tata group has invested around 1.6 billion Dollars in 12 African countries, in telecommunications, chemical products, the food industry, automobile industry and mining. Archelor Mittal has massively entered into South African mining; Bharti Airtel acquired the African portfolio of the Zain Group for 10.7 billion Dollars, the largest telecommunications deal signed by an Indian company. Other agreements and acquisitions have occurred in the pharmaceutical and energy sectors. Cfr Francesca Marino, In Sudafrica l’India gioca per vincere, Limes; Indrajit Basu India Inc woos Africa, Asia Times online; Sanusha Naidu India stepping up the ante in Africa Relations, Panbazuka news; Shani Duttagupta and Sutanuka Ghosal, The Economic Times, 2010.

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58. Although India’s push towards Africa does not yet enjoy the coordination and force of China’s,40 the government in New Delhi has taken steps to remedy this by launching a series of political and economic initiatives.

59. In 2002, Focus Africa was launched, a program to create incentive for business relations through missions and reducing export tariffs to African countries. For the last six years, the Indian Eximbank, together with the Confederation of Indian Industry (CII), has organized a meeting—the Conclave on India Africa Project Partnership—in which ministers and Indian and African companies take part. At the one held in June 2010, 145 economic projects were discussed and agreements negotiated for 9 billion Dollars. Similar initiatives take place on a regional basis in Africa.41

60. The new framework in which these activities take place is the India-Africa Forum which met for the first time in New Delhi in 2008 and for which another summit is planned in 2011. It is modeled on the Forum on China-Africa Cooperation (FOCAC)42 and represents a clear attempt to catch up with China’s strong advance in Africa. At the first summit, the Indian premier announced that 500 million Dollars would be given to Africa for development over a 6-year period and that the Eximbank credit line granted to a number of African governments would be doubled from 2.3 to 5.4 billion Dollars. India will also give preferential export access to 50 of the world’s least-developed countries, 34 of which are African.43

61. The forum also discussed India’s commitment in the field of training and agricultural, technological and scientific cooperation, as well as the promotion of the small- and medium-sized Indian companies considered to be the driving force of development on the subcontinent, as a model for their African counterparts.

62. Placing the accent on the importance of small- and medium-sized companies, including in promoting job creation for young people, is one way in which the Indians are aiming to differentiate their modus operandi in Africa from that of the Chinese who center around major attention to projects connected with mining activity or in resource-rich countries and intensive use of Chinese labor in realizing these projects. In reality, at least from the standpoint of aid, the Indians have also shown themselves to be sensitive to the needs of energy supply: a large part of the credit lines opened by the Eximbank are earmarked for the Sudan government for infrastructure work, and to Angola and Nigeria, while the Techno Economic Approach for Africa India Movement (TEAM-9), provides 500 million Dollars in lines of credit to 8 countries in western African that coincide partially with those countries wooed by Indian oil companies. And, in part, aid from New Delhi is tied—as is that of the Chinese—to the purchase of goods and services from Indian companies.44

40. For example, unlike China, India has yet to codify its distinctive features in a programatic document, as Beijing did with its China’s African Policy published in 2006. 41. Source: CII. 42. FOCAC is a forum organized by China and African countries, formed to create and improve cooperation between developing

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countries, especially those part of the “South-South” axis. 43. Source: Plan of Action of the Framework for cooperation of the India-Africa Forum Summit; Chietigj Bajpaee. 44. Source: Eximbank India; Peter Kragelund, “The potential role of non traditional aid in Africa”, International Centre for Trade and Sustainable Development, 2010.

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63. As for China, Africa does not represent for India only a frontier for expansion of its own companies, but also an important ally on the international scene. The Delhi Declaration which closed the 2008 Africa-India Forum summit underscored the importance of multilateralism and the viewpoint of developing countries at international meetings, such as summits on climate change and WTO negotiations. India, like Brazil, also aspires to playing a greater role within the United Nations and this is one of the political motivations that led to the creation of IBSA and, in general, to its relaunching of relations with Africa.

1.4 Brazil-Africa: biofuel diplomacy 64. With the presidency of Inacio Lula da Silva in 2003, Brazil has taken on a more much dynamic international profile. And although its relations with Africa cannot be compared to those the continent has developed with India and China, this South American country is rapidly growing in importance as one of Africaâ&#x20AC;&#x2122;s partners.

65. During his term in office, President Lula has visited Africa nine times (more than any other non-African head of state), visiting over twenty countries. The reasons for this major attention are political, as well as economic.

66. From 1990 to 2008, trade between Brazil and Africa jumped from 700 million to 31.1 billion Dollars. A leap tied, above all, to the export of oil and mineral resources from a handful of countries that comprise Brazilâ&#x20AC;&#x2122;s leading trade partners: Nigeria (32%), Angola (16%), Algeria (12%) and South Africa (10%).

67. The Brazilian state oil company, Petrobras, is present in Libya, Nigeria and, above all, Angola, where it has announced its intention to invest 3 billion Dollars in oil production by 2012, while the government in Brasilia has granted this African country a line of credit of one billion Dollars.45

Fig. 12 Brazilâ&#x20AC;&#x2122;s leading African partners (2008) (Source: TEH-Ambrosetti based on Standard Bank data)

68. Africa, for its part, imports from this South American country sugar (28% of the total consumed), meat and milk products, grains, animal and vegetal fats, vehicles and machinery. Brazil remains the only developing country with which Africa maintains a positive trade balance.

45. Source: UNCTAD, 2010.

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69. Nonetheless, in 2009, Africa increased by 3.1% its imports of agricultural products from Brazil, arriving at a level of 7.7% of Brazil’s total production. Fig. 12 Volume of imports (left) and exports (right) between Africa and Brazil (Source: Standard Bank)

70. Emerging markets are becoming an increasingly important destination for Brazilian agricultural exports. But the most urgent question for the biggest state-owned companies, leaders in the production of ethanol, growers of sugar cane and manufacturers of agricultural machinery and equipment, is to boost the global demand for biofuels. Brazil would like to take advantage of the economic growth and industrialization of Africa to stimulate ethanol production and consumption. In 2008, Nigeria imported from Brazil 97.8 million liters of ethanol, with an increase of 127% over 2006 which made it the tenth largest purchaser of Brazilian biofuels; Ghana imported 19.7 million Fig. 13 Brazilian imports from Africa and exports to Africa (billions of liters, a leap of 222% com Dollars) (Source: TEH-Ambrosetti re-elaboration of data from Chatham House, Our Common Strategic Interest Africa’s Role pared with 2006.46 in the Post-G8 World, 2010)

71. Considering future prospects, the heart of the Brazilian strategy is to offer assistance to African governments so that they will be able to initiate production of biofuels. EMBR APA, the publicly-owned company in the field of agricultural research, in 2008 opened an

46. Source: Simon Freemantel, Jeremy Stevens, “Brazil weds itself to Africa’s latent agricultural potential”, Standard Bank, 2010.

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office in Accra, Ghana, to facilitate the transfer of technology and know-how to African growers, as well as promote contacts with Brazilian companies. Through EMBRAPA, Brazil has extended its cooperation to many other countries, including Mozambique, Kenya, Angola, Morocco, Libya and Mali, for projects relating to biofuels, but also irrigation systems and cotton cultivation.

72. In May 2010 The Africa-Brazil Agricultural Innovation Marketplace was launched, an initiative supported by many international bodies whose purpose is to promote cooperation between NGOs, experts and African and Brazilian sector associations in order to strengthen the productive yields of small farmers.

73. In recent years, many Brazilian companies have negotiated agreements in Mozambique, Sudan, Republic of the Congo, Uganda, Senegal, Angola and Nigeria, to start-up biomass cultivation for fuels and the production of ethanol and biodiesel.

74. From a political standpoint, the most important forum is IBSA, the trilateral body which includes India, Brazil and South Africa. In the joint declaration concluding the fourth summit held in Brasilia in April 2010, it emerged clearly that the intent is to construct an alliance concerning the reform of the UN Security Council and, above all, to increase the influence of developing economies within an international context.

1.5. Arab nations: in search of land in Africa 75. The jump in the prices of agricultural products between 2007 and 2008 provoked an increase in investment in this sector and a race for acquisition of large areas of arable land. Investment funds, hedge funds, pension funds and private companies are convinced that over the long-term, prices of grains, soy and dairy products are destined to remain high due to pressure from demand, while land suitable for agricultural production is a limited resource and therefore will inevitably increase in value, becoming an excellent asset for diversifying investment portfolios.

76. For countries such as Saudi Arabia, the United Arab Emirates, Kuwait or Qatar, the sharp rise in the price of food has become a question of national security. Saudi Arabia and the other countries in the region have scarce water reserves and land unsuitable for cultivation. For this reason, they import 60% of their food needs. Although they possess significant financial resources, the prospect of having to face such high costs, but, above all, the protectionism of countries47 producing agricultural raw materials, has pushed governments to purchase land abroad on which to produce food to export back into the homeland. This just accelerated and broadened a process which in some African countries had already begun with cultivation of horticultural products for export and biomass for biofuels. Between 2004 and 2009, in five countries aloneâ&#x20AC;&#x201D;Mali, Ethiopia, Sudan, Ghana and Madagascarâ&#x20AC;&#x201D;at least 2,492,684 hectares of land ended up in the portfolios of companies and sovereign wealth funds.

47. At the height of the food crisis, thirty-odd countries producers of wheat, rice and other agricultural raw materials imposed

export quotas or tariffs to avoid an excessive rise in prices having destabilizing effects internally.

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77. According to estimates of the United National Economic Commission for Africa (UNECA), the continent has a patrimony of 733 million hectares of arable land of which only 3.8% is utilized and 7% irrigated—“clearly there is ample margin of development for agriculture.”48

78. Many African countries have greeted this renewed interest in agriculture with enthusiasm. Tanzania has created a sort of land bank with 2.5 million hectares suitable for investment, while Ethiopia, through the investment commission, has made available 2.7 million.

79. In 2009, Saudi Arabia created the King Abdullah Initiative for Saudi Agricultural Investment Abroad (KAISAIA), an agency to support initiatives created by the state and businesses together. It also created a public company, the Saudi Company for Agricultural Investment and Animal Production (SCAIAP) with a capital of 800 million Dollars, whose task is to support companies who want to do agricultural business abroad. Among the twenty countries identified as potential investment goals are Sudan and Ethiopia.

80. The Islamic Development Bank, together with a group of investors based in Saudi Arabia, has launched a project called 7x7 because, in seven years, it intends developing 700,000 hectares of land to produce 7 million tons of rice. This plan, created under the aegis of the Organization of the Islamic Conference, involves Mali and Senegal (which are members of it) and probably also involves Sudan and Uganda.

81. Other developing countries, such as Korea, India and China itself, are interested in investing in agricultural land and have initiated negotiations with numerous African states.

82. These signed agreements generally provide for long-term leasing (50 to 99 years) of vast plots of land either free-of-charge or with ridiculously low rents, in exchange for developing the area and developing infrastructure on it. They are often negotiated and signed in secret and have given rise to much criticism because of the potential negative impact on local communities and small farmers, as well as food security in countries such as Ethiopia which still receives food aid from the WFP. For this reason, the FAO and IFAD are working to draw up a code of conduct for agricultural investment.

48. Source: United Nations Economic Commission on Africa (UNECA) (2009), “ Economic Report on Africa: Developing Afri-

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can Agriculture Through Regional Value Chains”, Addis Abeba, UNECA, p. 123.

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3. Summary remarks

83. Africa has an active population of 500 million people. In 2040, there will be 1.1 billion Africans of working age, more than there will be Indians and Chinese, with potential positive effects for the continent’s wealth.

84. If economic growth remains around 5%, by 2020 the GDP will be 2,600 billion Dollars. The number of African families with the ability to spend their income in non-food goods will be 128 million: African consumers who in 2008 spent 860 billion Dollars, will be spending 1,400 billion. 85. Africa is faced with the opportunity of transforming its destiny, thanks above all to the impulse from emerging economic powers—China and India in the forefront, but also Brazil, Turkey and Korea. The expanded commercial relations between countries in the south of the world stimulated economic growth in Africa before the advent of the financial crisis, and they are also one of the primary reasons why the continent is emerging from the recession more quickly than other regions.

86. Developing countries feed the demand for raw materials, the flow of FDIs and aid, and actively contribute to bridging the shortfall in Africa’s infrastructure. But, above all, they no longer see Africa as just a desperate continent in need of international support, but as an economic partner, a potential market and a political ally. The strengthening of this SouthSouth axis has partially eroded the influence of traditional Western partners.

87. For the first time in its history, Africa has before it an alternative to the model proposed by Western powers, both in terms of investment, as well as cooperation. Desiring to open the way to the continent’s resources and markets, India and China offer facilitated lines of credit and loans through their export-import banks. Money used to finance great projects, often realized by Chinese or Indian companies. The fact that African countries have the possibility of obtaining in the short-term those works they require is, in itself, a positive thing. China and India are involved in projects traditional donors have not taken into consideration, or which were discarded because they were too expensive or complicated. Often the projects financed by large financial institutions or traditional donors have very long realization times because they are slowed by costly bureaucratic red tape. However, the risk is that these aid agreements in exchange for business fall outside the structure of rules promoted by financial institutions to enhance transparency in the management of funds, good practices and respect for the environment,49 thus contributing to the fragility inherent in many African countries. In addition, access to funds granted with significantly facilitated rates

49. For example, through adoption of the Equator Principles, a voluntary framework of rules to promote respect for environmen-

tal and social standards in the financing of great works.

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and without any special conditions—for example, rigorous management of public finances—over the long-term could cause another unsustainable debt increase for many poor countries.

88. Africa is still dependent on the extraction of oil and mineral resources, which constitutes the dominant model, including in trade relations with emerging economies. The majority of Foreign Direct Investment is earmarked for mining projects. However, there is also an increase in that aimed at manufacturing and agriculture. According to some estimates, by 2030 China will be the no. 2 economic power in the world, India no. 4 and Brazil no. 7, and a good part of this growth will necessarily be thanks to Africa, the continent with the lowest starting economic base and, therefore, with the highest margins for an increase in consumption. For this reason, Africa cannot help but become an increasingly central market for emerging economies. According to OECD calculations, if the countries in the South of the world were to liberalize trade by reducing tariffs to the levels in the North of the world, they would see earnings of 60 billion Dollars, especially in manufacturing.50

89. The FDI flow in developing countries is an important contribution to reducing investment volatility. Even at the height of the crisis, China continued to announce new projects in Africa. The multinationals in the countries of the South of the world are more likely to invest in an environment that is very similar to that in which they began operation, and they have greater knowledge of the markets in developing countries.51 Companies in the South of the world are not always distinguished by their adoption of high standards in working conditions or in their social and environment responsibility and, unlike Western multinationals (by no means blameless) they are not even subject to public opinion in their home countries.

90. Importing low-cost merchandise has sometimes had dramatic effect on the economies of some African countries which have not been able to withstand competition from Chinese products. Nonetheless, China is climbing back up the value chain and is expanding production and export of capital goods, with a potential two-fold effect on the economies of medium- and low-income countries. The first is to lower prices of goods used in production and the second is to open the door to the consumer goods industry, including in Africa. Unlike in rich countries, demand in developing nations is concentrated above all on low-cost generic products. For African countries, this represents a unique opportunity to enter into the production chain. To boost the entrepreneurial ability of African companies, cooperation with China and, above all, with India in the area of training and transfer of technological skills becomes tremendously important. India has distinguished itself for the innovative capacity of its companies that have created products which are functional at affordable prices,52 a lesson that could prove fundamental for African companies.

91. Another sector long neglected in the relations between economic powers and Africa is agriculture. Brazil has focused much of its African adventure on cooperation in this sector. With a history of success behind it, Brazil probably has valid lessons to teach its African

50. Source: OECD, 2010. 51. For example, the largest investors in telecommunications in Africa are from emerging or developing countries. 52. This phenomenon has been dubbed “Frugal Innovation” and

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ranges from the invention of the Tata Nano, to generic drugs and drinking water and computer systems. Cfr., The Economist, 1. Introduzione: il risveglio dell’Africa

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partners, both in biomass and green fuel production, as well as the adoption of more efficient agricultural techniques for food production. Indian and Chinese companies have also put much emphasis on the development of agricultural business. Driven by the prospect of a sector that will become strategic because increasingly more areas of the world will become unusable due to depletion (including in China and India) and because the world is changing and increasing its consumption of food. Investments to improve African agriculture are indispensable, but if they take the form of purchase of large tracts of land on which to cultivate food crops in order to re-export them to the home countries, this risks fomenting controversy and creating a new form of African dependence much like that in the past.

92. Political alliances between developing countries are shaping a new framework of international relations in which Africa can play an increasingly major role. China, India and Brazil have understood better than the European Union, United States and G8 how much Africans aspire to be seen in terms of their potential, and not only for their (still) enormous problems. And they have decided to capitalize on these aspirations in the various international meetings and summits.

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Chapter 5 Relations between Europe and Africa

CONTENTS 1. Europe rethinks its strategy

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1.1. Results of the first Action Plan

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1.2. The Infrastructure Trust Fund: an innovative model

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1.3. Aid: focus on effectiveness

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2. Trade, the difficult road to partnership

2.1. Aid for Trade

3. Focus on individual countries

230 232 234

3.1. Germany

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3.2. France

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3.3. Great Britain

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3.4. Spain

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3.5. Italy

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4. Africa-Usa

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5. Summary Remarks

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1. Europe rethinks its strategy

1. The European Union (EU) is Africaâ&#x20AC;&#x2122;s leading trade partner and largest aid-giver, but its importance is waning in favor of emerging powers, while the complexity of other key factors in European/African relations, such as immigration and security, remain. This is the basis for the necessity to rethink the entire nexus of relations with the African continent.

2. An initial step was taken in 2005 following the G8 summit in Gleneagles,1â&#x20AC;&#x2030; with the launching of the EU strategy for Africa. But it was at the summit between the EU and African countries held in Lisbon December 8-9, 2007 that Europe made a decided turn. In reality, this was the second EU/Africa gathering, seven years following the first one, 2â&#x20AC;&#x2030; and it marked a significant relaunching (at least on paper) of cooperation and relations between Fig. 1 Aid to Africa from the United States and Europe 1960-2009 (billions of Dollars) (Source: TEH-Ambrosetti re-elaboration based on Milken 2010 data)

1. At the G8 summit in Gleneagles, the heads of state committed themselves to increasing aid to Africa by 25 billion Dollars per

year by 2010, a doubling of 2004 levels. 2. The first was held in Cairo on April 3-4, 2000.

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the two continents. The initial results of this new partnership will be discussed at the third summit set for November 29-30, 2010 in Sirt, Libya.

3. The cornerstone of this new structure is the Africa-EU Strategic Partnership,3 based on a number of principles that support: African unity, mutual dependence between Africa and Europe, shared responsibility, respect for human rights, democratic principles, rule of law and right to development. The goals of this new strategy can be summarized in four macro areas: a. Peace and security. b. Democratic governance and human rights. c. Trade and regional integration. d. Key development issues. They include strengthening of institutional ties and solutions to commonly-faced challenges, such as peace and security, migration, environmental protection, promotion of democratic governance, basic human rights, sustainable development, meeting of the Millennium Development Goals (MDG), promotion of an effective multilateral approach and reform of the United Nations and other international institutions.

4. The emphasis on human rights and governance underscores the difference in approach (compared with China) the EU intends stressing in its relations with Africa. At the same time, the declarations regarding multilateralism and the importance of strengthening dialogue between the two continents demonstrate Europe’s intention of recognizing Africa’s growing political importance.

5. Europe’s African policy is concretized in Action Plans. The first, covering the three-year period 2008-2010 was launched in Lisbon and the second will be defined in Sirt. The Action Plan identifies eight priority areas: - Peace and security. - Democracy and human rights. - Trade, regional integration and infrastructure. - Millennium Development Goals. - Energy. - Climatic change. - Migration, mobility and employment. - Science, information and space.

6. The Joint Africa-EU Partnership was created to provide enhanced coherency and coordination in EU policies involving Africa. However, many of the economic and political cooperation instruments used previously continue to exist, thus raising questions about the actual extent of the “revolution” announced in Lisbon. Added to this is the recent launching of European diplomacy with the granting of new responsibilities for foreign policy to the High Representative for the Union of Foreign

3. The Africa-EU Strategic Partnership is the follow-up to the EU Strategy for Africa prepared in 2005 in order to lend greater cohe-

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rence to European aid to Africa and create a framework in which long-term relations between Europe and Africa could develop.

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Affairs, the impact of which on formulating and managing African policies is as-yet unclear.

7. The projects tied to the Joint Africa-EU Partnership are (or could be) financed through a series of instruments that already existed at the time of the Lisbon summit and which often cover other geographical areas, and not only for Africa: - The European Development Fund (EFD), the EU’s primary development cooperation instrument, which for the five-year period 2008-2013 has available funds totaling 22.7 billion Euros.4 - The Africa Infrastructure Trust Fund (ITF), a fund which collects contributions from the European Commission, member states, European Investment Bank and other financial institutions for development, in order to co-finance major infrastructure-related projects. - The European Neighbourhood Policy (ENB) designed to support neighboring countries attaining European living standards, has a budget of 12 billion Euros (for the period 2007-2013) which also finances projects in Mediterranean countries. - The Development Cooperation Instrument (DCI) involves the implementation of MDG-related programs, rural development, post-crisis aid in 47 developing countries in Latin America, Asia, the Gulf and southern Africa. It also concerns itself with measures to reduce the impact on producer-countries of the changes in European sugar policy. It has a budget of 16.9 billion Euros (2007-2013). - The Instrument of Financial Stability (IFS) is two-part: one short-term, the goal of which is to provide an answer to emergencies following a natural disaster or conflict; and a long-term one whose purpose is to combat proliferation of arms of mass destruction and terrorism, and improve conflict prevention. Its budget is 2.1 billion Euros (20072013). - European Instrument for Democracy and Human Rights (EIDHR). It was created to enhance respect for human rights and basic freedoms in those regions most at-risk, reinforce the role of civilian society in promoting democratic reforms and support action in areas such as violence against women, torture, the death penalty and child soldiers. For the period 2007-2013, its budget is 1.106 billion Euros.5 - Common Foreign and Security Policy (CFSP) which, through a common security and defense policy, provides support to civilian and military missions that contribute to international crisis management. Currently, the EU has 14 active missions, including two in the Democratic Republic of the Congo, one in Guinea Bissau, one in Somalia and one off the Somali coast against piratry. The CFSP’s 2010 budget is 282 million Euros. To-date, the African Peace Facility, founded in 2004, has provided close to 740 million Euros. Starting in 2007, the EU and African Union decided to broaden the range of action of this instrument, to now include: - Capacity building. Nearly 100 million Euros have been spent to organize the African Peace and Security Architecture (APSA) and Africa-Eu dialogue; - Peace Support Operations, such as the AU mission in Somalia (AMISOM), or the Central African Republic (MICOPAX) for which approximately 600 million Euros

4. Source: 10th EDF, European Commission.

5. External EU cooperation programs.

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were budgeted; - Early Response Mechanism (ERM) with financing of 15 million Euros, whose purpose is to provide the African Union or regional communities with funds to support initiative phases of mediation and planning for peace missions. - Development banks, such as the European Investment Bank, which manages the Investment Facility (IF), a fund to support private investment in ACP countries, that provided 2.2 billion euro in financing between 2003 and 2008 and has available an additional 1.5 billion Euros for the period 2008-2013.

8. In addition to the fragmentation of sources of project financing that fall within the goals of Africa-EU partnership, another aspect which raises questions is the geographical organization of many European programs and the structure of trade itself. In classifying developme nt aid an d im p or t- ex p or t agre e me nt s, Br us s els s till t hink s in ter ms of African-Caribbean-Pacific (ACP) countries: a group of 79 countries comprised of 48 subSaharan African states, 16 Caribbean countries and 15 Pacific nations. All signers of the Cotonou6â&#x20AC;&#x2030; agreement which calls for cooperation in economic and political development. Relations with countries in northern Africa are governed by the European-Mediterranean Partnership, Euromed. A distinction which would appear in contradiction to the importance given relations between the two continents in the Joint Africa-EU Partnership, as well as the view of Africa as a unified entity and efforts to implement increasingly close collaboration with the AU, an approach that was reaffirmed in the second revised Cotonou agreement reached in March 2010. Fig. 2 Total investment in FDI projects in Africa 2003-2009, billion of Dollars (Source: TEH-Ambrosetti re-elaboration based on FDI information)

6. The ACP group of nations was formed in 1975; until 2000, relations between Europe and these countries was governed by the

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LomĂŠ conventions and, successively, by the 20-year Cotonou agreement.

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1.1. Results of the first Action Plan 9. In the first three years of application of the common strategy, the dialogue around African security on a continent- and region-wide level has been strengthened. The EU has allocated 1 billion Euros to support projects involving African peace and security, including the Early Warning System that facilitates preventive action in the event of at-risk situations, definition and implementation of disarmament and anti-terrorism policies and training and operational support for the Africa Standby Force—the continent-wide crisis intervention force.

10. In the area of human rights and democracy, the Platform for Dialogue with experts from 30 capitals on the issues of governance, and the Civil Society Human Rights Dialogue were initiated. The AU election support fund received one million Euros from Europe. But the most important aspect of the cooperation in this sector is, without doubt, the contribution the EU gives to the African Peer Review Mechanism (APRM).7 Europe has contributed 2 million Euros to the UNDP trust fund that supports the APRM secretariat, but above all it provides financing through the Governance Incentive Tranche, a fund of 2.8 billion Euros with which Europe rewards the programs of African, Caribbean and Pacific countries which have embarked on the road to reform.

11. The EU has provided 1.5 billion Euros of financing for commercial integration in four African regions: eastern and southern Africa (645 million); western Africa (598 million); South African Development Community–SADC (116 million) and central Africa (165 million); and with 10 million Euros, a vast program to harmonize public health and plant health, improvement of veterinary and legal controls over food production (please also see paragraph 3.1).

12. The Millennium Development Goals (MDG) are an important aspect of European cooperation. In terms of food safety the EU has intervened directly, allocating 560 million Euros through the European Commission Food Facility and a further 200 million Euros from the European Development Fund, benefiting 30 African countries. Around 80 million Euros per year are spent for programs tied to research in the field of agriculture and for the Comprehensive Africa Agricultural Development Program (CAADP), as well as projects involving sustainable land management. In 2008 and 2009, the EU granted 100 million Euros to The Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), of which 60% are spent in Africa. Other monies were allocated to research into forgotten diseases. Commitment to education is conducted through contributions made by the European

7. The African Peer Review Mechanism is the first voluntary selfevaluation system African states have developed to measure progress—utilizing international standards—in the field of political, economic and corporate governance, as well as in social and

economic development. It was created with the signing of a memo of intent to the secretariat of the New Partnership for Africa’s Development (NEPAD) in 2003 and it has 29 member states.

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Commission to the Education for All Fast Track Initiative (EFA-FTI) which, in the three-year period 2007-2009 totaled over 32 million Euros: 21 of the 30 EFA-FTI beneficiary countries are African.

13. In the energy sector, the European Union contributes to both infrastructure creation and market standardization and integration, as well as the launching of specific projects such as the solar plan for the Mediterranean.

14. On the climate change front, at the December 2009 Copenhagen summit, the EU committed itself to spending 2.4 billion Euros per year from 2010 to 2012 to allow Africa to adapt to the effects of the rise in temperature and to begin the process of cutting greenhouse gas emissions. Mali, Mauritius, Mozambique, Rwanda, Senegal, The Seychelles and Tanzania were identified as partners in a reinforced cooperation effort under the aegis of the Global Climate Change Alliance (GCCA). A further five countries will be selected in 2010. Other efforts are planned to combat desertification.

15. In terms of immigration, mobility and employment, one of the key initiatives was the creation and start-up of the African Transfer Institute (financing of 1.7 million Euros), the purpose of which is to render less-expensive and secure money flows between African immigrants in Europe and their home countries. Planned for academic year 2010/2011 is the start-up of the Nyerere Program, a university student exchange program, with financing of 30 million Euros. And, by the end of 2010, a network of observatories on migration throughout the entire continent should be operational.

16. Regarding science, the EU contributes to research through a framework program which, since 2007, has granted 65 million Euros for 500 projects.

17. There are also numerous institutional cooperation projects with exchange of personnel and training seminars for representatives of the AU commission.8â&#x20AC;&#x2030;

1.2 The Infrastructure Trust Fund: an innovative model 18. One of the economic resources of European policy in Africa is the Infrastructure Trust Fund (ITF) created in 2007 to lend financial support for the partnership of the same name between the EU and AU in the wake of the Gleneagles G8 summit.

19. The fund is administered by the European Investment Bank (EIB) and is a mechanism which brings together funds from European donors and long-term loans from the EIB and other development financial institutions. This mix makes it possible to generate a substantial initial contribution allowing other financers to consider investments that would otherwise be rejected because of their high cost due to limits on the ability to obtain other

8. Source: Key deliverables of the Joint Africa-EU Strategy.

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loans, for example from highly-indebted poor countries (HIPC), or because the return is too low.

20. The project financed must be â&#x20AC;&#x153;transnational or national, but with regional impactâ&#x20AC;?. They involve transport, energy, water management and telecommunications. Financing may be of four types: - interest subsidies; - technical assistance which includes financing of preparatory work for projects candidates for receiving ITF funds, such as environmental impact analysis, project supervision and training and preparation of local administrative and technical personnel; - direct contribution for those parts of the project with substantial and demonstrable social and environmental benefits, or capable of mitigating negative social and environmental impact; - insurance premiums.

21. Since its creation, the level of financial commitment from fund supporters has grown from 87 million to 373 million Euros by the end of 2009, of which 165 million from the European Development Fund and members states (Austria, Belgium, Finland, France, Germany, Great Britain, Greece, Italy, Luxembourg, The Netherlands, Portugal and Spain). An additional 200 million are to be made available from ACP system funds. Twenty-one projects have received an initial go-ahead or have already received final approval, for a total of over 122 million Euros that will form the basis for overall investment totaling 1.4 billion Euros. Fig. 3 Locations of projects already approved (Source: Standard Bank)

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22. Among the approved projects is the rehabilitation of the Beira9 corridor in Mozambique with the restructuring of the Sena railway and port, the Félou electrical energy plant in Senegal which will also provide energy to Mali and Mauritania, and an underwater cable system along the east African coast that calls for the laying of 10,000 kilometers of fiber optics10.

1.3 Aid: focus on effectiveness 23. As European Commission President Josè Manuel Barroso has noted, the EU is the world’s largest donor, with a contribution of 55% of all development aid.

24. In 2008, Europe contributed 50.1 billion Euros to Official Development Assistance (ODA).11 In 2005, Europe decided to set a new objective: reach a contribution level of 0.7% of Gross National Income (GNI) in 2015, with an intermediate goal of 0.56% by 2010. These two objectives were confirmed at the Gleneagles G8 summit. Each of 15 then-member nations committed itself to contributing 0.51% by 2010. Half of the new funds are earmarked for Africa. Fig. 4 Gleneagles: Pledges and actual allocations 2005-2010 (billions of Dollars) (Source: TEH-Ambrosetti re-elaboration based on ONE data)

25. Between 2004 and 2009, European aid to Africa increased by 37%, from 16 billion Euros to 22.5 billion Euros.12 Between 2008 and 2009, the increase was 4%. If the estimates of increase for the current year are confirmed—1.8 billion more—by the end of 2010 the EU

9. The port of Beira is extremely important for the interior of Mozambique, but even more for Malawi, Zambia and Zimbabwe, which do not have access to the sea. A railway, a road and an oil pipeline connect Zimbabwe with the port of Beira through the so-called Beira Corridor

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10. Source: EU-Africa Infrastructure Trust Fund Annual Report, 2009. 11. European institutions plus member states. 12. Respectively, 11.5 billion and 16.148 billion net of debt cancellation.

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will have met 38% of the financial pledges made in Gleneagles, and the amount of aid will total 0.4% of GNI.13

26. European aid policy is strongly tied to the principles of effectiveness sanctioned by a series of international agreements, in particular the 2005 Paris Declaration, the 2006 European Consensus on Development and the Accra Agenda of 2008.14 One of the changes brought about by agreement to these principles was the growing amount of contributions no longer earmarked for specific projects, but for the general support of the budgets of developing countries. According to this approach, it is the receiving countries who set their own strategies for reducing poverty and do so by means of state coffers into which donor funds flow. The intent behind this is to increase the involvement of developing countries and have them take on enhanced responsibility, but also to reduce the costs and time required to manage aid, one of the critical aspects of cooperation projects.

27. In 2009, monies allocated to Africa from the European Development Fund totaled 3.1 billion Euros, while the actual amount disbursed was 2.5 billion. Of these allocations, 22% are for budget support, 19% for transport and 14% for government and civilian society. In addition, over 2009, the Commission approved new programs for budget support for 26 sub-Saharan countries totaling 1.1 billion Euros, equal Fig. 5 Breakdown of 2009 allocations (Source: CIA Factbook) to 37% of funds provided annually through the EDF. One of the countries where Europe uses the instrument of budget support the most is Zambia where, thanks to the positive results of its efforts to meet millennium development goals, it was selected in 2008 as the beneficiary of a 255 million euro contribution over six years through the Millennium Development Goal15 contract (see Chapter 3).

13. Source: ONE, The Data Report, 2010. 14. The Paris Declaration on Aid Effectiveness is an international agreement which ministers and heads of a number of development agencies have adhered to, committing themselves and their organizations to increasing efforts to harmonize, coordinate and manage aid while aiming for results that may be monitored on the basis of series of indicators: ownership—developing countries shall set their strategies for reducing poverty, institutional improvement and fight against corruption; alignment—donor countries shall conform to these goals and use local resources; harmonization—donor countries shall coordinate and simplify procedures and share information to avoid duplication; results— developing countries and donors shall focus on results and their quantification; mutual responsibility—donors and partners are

both responsible for results. In Accra in 2008, the Accra Agenda for Action (AAA) was drawn up which, basing itself on the Paris Declaration, added additional commitments: predictability—donors shall provide partner countries with information on 3-5 years of planned aid; local systems—in distributing aid, the systems of the recipient country shall be used primarily; conditional nature—in terms of the means and timeframes for disbursing aid, donors shall conform to conditions based on the development goals of each individual country rather than prescribed conditions; fewer restrictions— donors shall commit themselves to reviewing the restrictions preventing developing countries from buying the goods and services they require wherever and from whomever they can obtain the best quality at the lowest price.

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28. Another mechanism connected to budget support is Vulnerability-Flex (V-Flex), developed by the EU to allow developing country governments to take on emergency situations, such as an increase in the price of food and fuel, without having to channel funds from other goals. It involves rapid granting of aid in the form of budget support or gifts which compensate for potential budget losses in developing countries caused by crisis situations. This provides governments with additional “buffer” funds and they are not forced to cut spending for social welfare. The system launched in late 2009 with available funds of 500 million Euros has already allowed the European Commission to assist 11 countries with 160 million Euros. Payment of V-Flex aid to Madagascar and Niger was suspended following coups in those countries.16

29. The European Union guarantees 20 million Euros for food security programs in Ethiopia, thus aiding over 8 million people in 286 areas affected by drought.

30. EU humanitarian aid is managed through the Commission’s Directorate-General for Humanitarian Aid and Civil Protection (ECHO)17 which intervenes under emergency situations. In 2009, ECHO supplied assistance to victims of disasters, both natural and those caused by man, in over 70 countries. Aid reached close to 115 million people, in an overall amount of 930 million Euros, 53% of which went to Africa.

31. In April 2010, the European Commission presented a 12-point Action Plan to accelerate progress towards reaching Millennium Development Goals (MDGs) in 2015. The document calls for making available further aid to be distributed through more effective planning. Specifically: - member states will be asked to prepare annual action plans and organize each year a joint evaluation; - EU members and the Commission will intensify collaboration in developing countries; - coherence of all EU policies (regarding trade, finance, climate change, food security, migration, fight against poverty) with development goals will be assured; - more targeted aid will be concentrated on those countries in which progress towards MDGs is slower.18

32. Over the course of 43 missions, the EU monitored approximately 408 projects involving infrastructure and services (210), economic infrastructure (35), manufacturing (55) and commodity aid (32). Of the projects analyzed, 66% registered very good or good overall performance, but some problems were still seen regarding sustainability (where only 59% had higher evaluation scores); efficiency (56%) and effectiveness (50%). The most critical sector was that of manufacturing, with 45% of the projects showing poor results. The European

15. The MDG contract is a new type of longer-term budget support over six years. It involves a baseline contribution of 70% of the agreed-upon sum (which is reduced only in the case of loss of eligibility for financing or other basic aspects of cooperation), with 30% variable and tied to results. 16. Article 96 of the Cotonou Agreement provides that, in case of violation of human rights, democratic principles and the legally

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constituted state, consultations shall be undertaken between the parties that, if fruitless, may be followed by “appropriate measures”, in this case suspension of loans. 17. European Commission, Humanitarian Aid & Civil Protection 18. “A twelve-point EU action plan in support of the Millennium Development Goals”, European Commission, April 2010.

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Commission also recognized that potential profits connected with more efficient management of the aid would amount around 3 billion Euros per year: a goal which could be met through improved coordination between EU institutions and member states at the onset of the planning and allocation process.19 Fig. 6 Breakdown of projects monitored by the European Union by sector

Fig. 7 Reporting of problem areas in projects monitored by the European Union

19. A twelve-point EU action plan in support of the Millennium Development Goals.

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2. Trade, the difficult road to partnership

33. The EU is Africa’s primary trade partner, but its advantage over other partners is in decline. If in the mid-1980s 55% of Africa’s total export-import activity was with Europe, by 2008 that level had dropped to 40%.

34. In 2009, 4% of European imports came from African countries and 4.8% of EU exports were directed to Africa. As in the case of emerging economies, African exports to Europe are also characterized by a prevalence of raw materials: 42% is comprised of hydrocarbons and their by-products and 18.6% by food and livestock. Africa, on the other hand, primarily imports transport-related machinery and equipment (43.2%) and finished products (12.6%).

35. For over 30 years, trade between Europe and ACP countries were governed by the Lomé conventions which provided developing country partners with wide-ranging tariff exemptions for EU exports, without these having to be reciprocal. But this preferential access did not succeed in reinforcing the economy or strengthening growth in ACP countries.20 This approach was contested by the World Trade Organization (WTO) which, nevertheless, agreed to an extension to 2007. Fig. 8 Comparison of the growth in trade (billions of Dollars) (Source: TEH-Ambrosetti re-elaboration based on Chatham House data)

20. Source: Louis Michel, former European Commissioner for aid and development: Economic Par tnership Agreements:

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drivers of development.

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36. The 2000 Cotonou agreement had created the foundations for a new tariff structure based on reciprocity to be implemented through Economic Partnership Agreements (EPA). These involve economic agreements that replace the preferential tariff system the EU granted ACP group countries which could impose duties on imports from the European Union, but enjoyed exemptions for their exports to the EU. This system, which contravenes WTO regulations, was in place until 2007 when the EU initiated EPA negotiations with seven regions or groups of countries: five in Africa and two in the Caribbean and Pacific.

37. Essentially, EPAs introduce the concept of reciprocity and, as a result, the opening of African markets to European imports and vice versa. The immediate and complete opening of goods, capital and service markets occurred unilaterally for the EU starting on January 1, 2008, while for developing countries, a period of 15 (and up to 25) years is foreseen. They may continue to exclude from liberalization 20% of the imports of “sensitive” products. EPAs include a series of aid measures to developing countries so that they may undertake the required structural reforms.

38. Negotiations are currently underway with all African organizations: Southern African Development Community (SADC); Eastern and Southern Africa (ESA); East African Community (EAC); Economic Community of West African States (ECOWAS) and Economic Community of Central African States (CEMAC).

39. The decision to conduct negotiations with regional blocks, despite the fact that the possibility of bilateral agreements between the EU and individual countries is not ruled out, was preferred by Europe in order to promote integration of intra-African markets. Nonetheless, to-date, only interim agreements, often between individual countries and the EU, have been concluded.

40. Among the most problematic aspects slowing the accord process is the lack of coherence between EPA goals and regional integration processes in Africa. Many of the groupings identified as the other parties in the negotiations do not strictly coincide with already-extant groups or the boundaries of constituent customs unions. In addition, each group also includes countries still considered within the ranks of least developed countries (LDC). States that may continue to enjoy a system of tariff exemptions accepted by the WTO,21 but which are also more exposed to potential harm from the complete liberalization of imports from Europe foreseen in EPAs. For this reason, in a document, the AU put forward the request to open not 80% of trade over 15 years, but rather 60-70% in over 20 years.

41. Another point dividing Africa and the European Commission is the European proposal to include a “Most Favored Nation” clause in EPAs. By adopting this procedure, contracting countries commit themselves to granting products from a foreign country customs and duty conditions that are not less favorable than those already established in trade agreements with a third-party country. The result of this is that African countries should extend to Europe the most favorable treatment they might decide

21. This is the Everything But Arms (EBA) agreement which allows for access to the EU without import duties or quotas.

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Chapter 5 - Relations between Europe and Africa

to guarantee other partners. According to Africans, this would be a way to limit their chances of signing ambitious trade agreements with emerging economies, such as India and China.

42. African countries would also like a system that protects their agricultural products, the sector most likely to be at-risk from European competition. They hope for the introduction of commitments that legally bind the EU to disburse greater resources to support the implementation of EPAs.22

43. With South Africa, the European Union signed a bilateral agreement in 2004, the Trade, Development and Cooperation Agreement (TDCA), which covers trade relations, economic cooperation and development, as well as numerous other areas, from culture to political dialogue.

3.1 Aid for Trade 44. On October 15, 2007, the EU adopted the Aid for Trade Strategy, the purpose being to aid developing countries, especially LDCs, to better integrate themselves into world markets. This new strategy concentrates on providing partners the support required for them to increase their ability to operate in free markets and benefit from this in order to strengthen their economies, reduce poverty and promote development.

45. There are two types of aid in this field: - the first more directly tied to trade, Trade Related Assistance (TRA), which provides support in trade planning, regulation and development, for example, through market analysis and promotion of investments and services; - the second encompasses a broader concept of Aid for Trade and includes support in the areas of infrastructure and production capacity. These could include road and telephone line construction, realization of ports and customs services, budget support for reforms, or financing to help factories meet international health and safety standards.

46. The EU committed itself to increasing by 2 million Euros per year those funds earmarked for Aid for Trade by the year 2010. In 2008 contributions in this sector amounted to 10.4 billion Euros, of which 3.2 billion allocated by the Commission and 7.2 by member states. With regard to TRA, as of 2008 Europe was committed to 2.6 billion Euros, of which approx. 1 billion provided by the EU and 1.2 billion by member countries.

47. Africa is the major recipient of European Aid for Trade funds: 2.7 billion Euros in 2007. Over the course of the tenth EDF (2008-2013), the European Commission almost doubled its financial commitment for regional integration in ACP countries. 39. It earmarked 645 mil-

22. Melissa Julian, EPA update Trade negotiations insights, International Centre for Trade and Sustainable Development, July

232

2010.

Chapter 5 - Relations between Europe and Africa

lion Euros to support the path of integration of the Eastern and Southern Africa and Indian Ocean region and 116 million for development of the SADC.23

48. During negotiations to conclude an EPA with West African countries, a development program was developed, entitled PAPED (Accord de développemnt pour l’Accord de partenariat économique), in which the commissions of ECOWAS and the West Africa Monetary and Economic Union (UEMOA), governments and representatives of the private sector also took part.

49. The PAPED is comprised of 5 axes requiring support as part of EPA development: - Diversification and increase in production capacity; - Development of intra-regional commerce and facilitated access to international markets; - Improvement and reinforcement of trade-related infrastructure; - Necessary adjustments tied to trade requirements; - Support for implementation, control and evaluation of EPA in western Africa. The estimated cost of PAPED for the period 2010-2014 is approximately 9.5 billion Euros. In addition to the EU, contributions will also arrive via bilateral programs between EU and member states, UN agencies, the World Bank and African Development Bank. Europe estimates that it can make available funds totaling 6.5 billion Euros.24

23. Source: Aid for Trade fact sheet, 2009. 24. “The EU Commitment to Deliver Aid for Trade in West Africa

and Support the EPA Development Programme (PAPED)”, ECDPM Discussion Paper, 2010.

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Chapter 5 - Relations between Europe and Africa

3. Focus on individual countries

Germany 50. For a long time, Germany did not have the political and cultural influence in Africa that Great Britain, France or Italy had. Starting from the assumption that the continent was growing and changing, in 2007 Germany opened a new and more dynamic phase in its policy towards Africa, and in 2008 and 2009 there followed a 110 million Euros increase in funds allocated to the continent.

51. In 2008, Germany was the fifth largest donor to the Development Assistance Committee (DAC) for Africa. It paid out 2.7 billion Dollars, 6% of DAC funds received by the continent. The largest share (37%) went for debt cancellation, 34.9% to social welfare programs (education, health, etc.), while 10% went to projects in the economic sector, 6% of which were in energy where Germany is one of the major contributors.

52. In 2008, Germany decided to reinforce cultural relations with the African continent by launching the “Aktion Afrika” project, financed starting in 2008 by approx. 40 million Euros.

53. Germany contributes both through bilateral and multilateral aid to the creation of an African safety structure: the goal is to establish an “Africa stand-by force”: a grouping of mixed brigades comprised of military and civilian personnel able to participate in peace missions in the continent. Germany is training the police forces which will be part of this contingent.

54. The funds appropriated by the German federal government for bilateral development cooperation projects are primarily utilized by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), a state-run organization working in 128 countries, 41 of which in sub-Saharan Africa, and employing 14,685 people.25

55. In 2009, the amount of funds handled by the GTZ increased by 18% to a record level of close to 1.5 billion Euros (in 2008 they had been 1.2 billion Euros). 80.5% of this sum derives from contracts with the Development Ministry (BMZ), but partnership with the private sector is growing.

56. The projects the GTZ is pursuing in Africa are both nationally- and regionally-based, and range from promoting governance to reinforcing peace and security, water and land

25. Figures from 2009, 1,700 people more than in 2008.

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Chapter 5 - Relations between Europe and Africa

management, reform of financial systems and support for the New Partnership for Africa Development (NEPAD).26

57. In 2008, Germany exported to Africa goods worth 28.6 billion Dollars, increasing by almost 20% the 2007 level. 23.4% of German exports to Africa are cars, 18.3% machinery, 10.7% chemical products and 6.3% information technology (see Figure 9).

58. Germany is playing an increasingly fundamental role on the African economic scene. South Africa is its no. 1 trade partner, and in 2008, it alone accounted for 37% of total exports and 22% of total imports in German-African trade. Fig. 9 Breakdown of German exports to Africa, 2008 (Source: TEH-Ambrosetti re-elaboration based on Standard Bank data)

59. In 2009, trade between Germany and Africa diminished for the first time in six years, by 22% compared with the previous year due to the major financial crisis hitting the entire world economy.

60. Between 2000 and 2008, German IDEs in Africa27 increased 38% to 6.3 billion Euros. There are 686 German companies active on the continent, with close to 164,000 employees. Their primary destination is South Africa (with over 4 billion Euros of investment), where the major German automakers have announced their intention to invest between 200 and 500 million Euros. On the other hand, northern Africa, where the bulk of African crude oil imported into Germany comes from, is the destination of companies active in the oil sector.

61. Afrika Verein, the association offering information and assistance to German companies intending to invest on the continent, has been active for nearly 100 years.28

26. NEPAD is a program formed in 2001 by the merging of previous initiatives of five African heads of state. Its goal is to eradicate poverty, promote sustainable development and integrate the African economy into the global one. In 2010 it became an agency

of the African Union. 27. Entire continent. 28. Data provided by Afrika Verein.

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Chapter 5 - Relations between Europe and Africa

Fig. 10 Germany-Africa imports and exports (Source: TEH-Ambrosetti re-elaboration based on Chatham House data)

Exports to Africa (millions/$)

Germany

Imports from Africa (millions/$)

2006

2007

2008

2006

2007

2008

Total

20.191

23.941

28.615

19.077

20.497

27.635

Africa excl. South Africa

11.377

14.225

18.095

14.738

15.508

21.438

Sub-Saharan Africa

13.014

15.055

16.750

8.896

10.418

12.896

Sub-Saharan Africa excl. South Africa

4.200

5.339

6.230

4.557

5.429

6.699

South Africa

8.814

9.716

10.520

4.339

4.989

6.197

62. The year 2009 was also an important year for investment from the Deutsche Investitions- und Entwicklungsgesellschaft (DEG), the institute (member of the KfW public banking group) which finances private companies wanting to invest in developing countries. Of the 90 projects totaling over one billion Euros financed in 2009, 26% (266 million Euros) were in Africa.

France 63. The tremendous cultural influence and close economic relations between France and Africa have been the cornerstone of a not-always-easy relationship between this former colonial power and its old empire, relations also characterized by scandals and court cases that have involved French businessmen and politicians. Living in France today are 6 million people (French or immigrants) of African origin. To this day, France still maintains a standing military presence in Africa.29

64. Today, France is the third largest trade partner on the continent, the no. 2 exporter (behind China) and the no. 4 importer (behind the US, China and Italy). Nonetheless, if in the 1960s trade with Africa was 40% of French foreign trade, today that percentage has dropped to around 5%.

29. France has three permanent bases in Africa: 1,200 men in Senegal, 820 in Gabon and 2,900 in Djibouti, with, additionally, its presence in Chad (1000 men) and the Licorne operation in the

236

Ivory Coast consisting of 950 men, plus its involvement in UN missions in the Central African Republic.

Chapter 5 - Relations between Europe and Africa

65. In 2008, a total of 3.69 billion Dollars worth of goods were exported to Africa, an increase on the previous year of almost 18%. But the largest increase between 2007 and 2008 was registered by imports which grew by 36% for a total value in 2008 of 38.4 billion Dollars. Fig. 11 France-Africa imports and exports (Source: TEH-Ambrosetti re-elaboration based on Chatham House data)

Exports to Africa (millions/$)

France

Imports from Africa (millions/$)

2006

2007

2008

2006

2007

2008

Total

26.344

30.393

36.878

24.763

28. 198

38.354

Africa excl. South Africa

24.204

28.177

34.482

23.767

26.957

36.945

Sub-Saharan Africa

11.341

13.184

15.278

9.195

11.443

15.640

Sub-Saharan Africa excl. South Africa

9.237

10.968

12.882

8.199

10.202

14.231

South Africa

2.104

2.216

2.396

996

1.241

1.409

66. In 2009, Africa was the recipient of 7% of French exports, totaling 23.3 billion Euros (down 7.7% from 2008, but up 27.2% compared with 2000). From Africa arrived 5.1% of French imports, totaling 20 billion Euros (down 26.9% from 2008, but up 46.3% compared with 2000). France’s balance-of-trade is thus positive with the African continent, at 3.3 billion of which 1.1 is with sub-Saharan Africa.30

67. The erosion of French hegemony and the simultaneous inroads made by the Chinese, was clearly noted at the 25th “Françafrique” French-Africa summit held in Nice from May 31-June 1, 2010, at which, for the first time, in addition to over 51 representatives of 51 African countries and the French president and ministers, 80 French and 130 African companies also took part. On that occasion, the French president recognized and supported the need for Africa to have a permanent member on the United Nations Security Council.

68. The emphasis on the economic aspect of French-African relations had been underscored earlier in 2008 when in a discussion to the South African parliament French President Nicolas Sarkozy announced three new components of the French commitment towards the continent: creation of a 250 million euro investment fund to acquire shares in other mixed or thematic funds in order to develop African companies; establishment of a 250 million euro

30. L’Expansion: “Le sommet France-Afrique sous le signe de business”, 1 June 2010 (Source: French Foreign Ministry).

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Chapter 5 - Relations between Europe and Africa

guarantee fund to facilitate credit access of small- and medium-sized African companies; and doubling of the activity of the French development agency for the private sector to the extent of 2 billion Euros over 5 years.

69. The French Development Agency (AFD) is the body which, since 1941, manages French development cooperation efforts. Net bilateral French aid to Africa disbursed in 2009 was 3 billion Euros, approx. 60% of bilateral funds overall. Of these, 2.5 billion (50% of bilateral aid), went to sub-Saharan Africa, with the remaining 500 million to northern Africa.31 The country which receives the most aid on the continent is Cameroon, second in the top-ten receivers of French funds, of which six are African.32

70. 35% of funds destined to sub-Saharan Africa are in the infrastructure and urban development sector. 21.8% of French aid goes to projects in the field of transport and telecommunications, the same amount (21.3%) going to education.33

Fig. 12 Breakdown of French funds to sub-Saharan Africa (Source: TEH-Ambrosetti re-elaboration based on Standard Bank data)

71. Also utilizing 44% of its resources in Africa is PROPARCO, the investment and economic cooperation promotion firm created in 1977. This financial institution is partly owned by AFD, and partly by private interests in both the North and South of the world. PROPARCO’s mission is to catalyze private investment in developing countries in order to promote sustainable growth and the attainment of MDGs.

72. In 2009, PROPARCO’s budget was 1.9 billion Euros, with a net profit of 23.6 million Euros. Its shares were 269.4 million Euros and approved transactions an additional 111.4 million Euros. It disbursed a total of 1.4 billion Euros in loans and underwrote others worth 947.5 million Euros. In Africa, the company has four regional offices and activity totaling 920 million Euros, ranging from initiatives to lower the cost of immigrants sending money home, to the first private project to produce geothermal energy and support of agribusiness.

73. At the most recent Françafrique summit, France also announced it would be creating an African agriculture fund, the purpose of which would be to support development of agricultural projects and commodity distribution. The fund will have start-up monies of 120 million Dollars, rising to 300 million Dollars when in full operation.

31. Source: French Foreign Ministry. 32. Source: OECD.

238

33. AFD 2008; OECD 2010.

Chapter 5 - Relations between Europe and Africa

Great Britain 74. In recent years, Great Britain’s policy towards Africa has been characterized by major attention to the continent’s problems and aid to promote its development. The policy undertaken by Labour governments has been a sort of “moral crusade for Africa”. 34 This is seen in initiatives such as the Commission for Africa launched by former premier Tony Blair, the “Make Poverty History” campaign, and the commitments made at the Gleaneagles G8 summit held in 2005 during the British presidency. This position was seen concretely in a considerable increase in aid that today totals 0.43% of GDP, compared with a DAC country average of 0.3%. British ODA to subSaharan Africa, net of debt cancellation, rose from 1.5 billion Pounds in 2004 to 2.5 billion Pounds in 2009. 35

75. British development cooperation is generally managed by the Department for International Development (DFID), whose commitment to sub-Saharan African for 2010-2011 should reach 3.4 billion Pounds, nearly three times that of 2004-2005.36

76. In 2008-2009, bilateral DFID aid to Africa was more than 1.5 billion Pounds, 47% of the budget set aside for bilateral programs.37

77. Ethiopia is the African country which, between 2008 and 2009, received the greatest amount of DFID bilateral funds (166 million Pounds), while the country receiving the most British ODA funds is Tanzania at 141 million Pounds, followed by Ethiopia with 140 million.38

78. ONE, the organization that fights extreme poverty and also controls the efficacy of aid and whether the African commitments made by G8 countries are met, calculates that if in 2010 Great Britain grants —as promised—an additional 1.2 billion Pounds for sub-Saharan Africa, the region will receive 3.8 billion Pounds in ODA funds. If this occurs, 93% of the goal to increase aid to Africa will have been met.

79. Great Britain’s priorities for international development appear in a White Paper presented in 2009, entitled Building our Common Future. Underscored in the document are Britain’s efforts in the fight against poverty, climate change and, more specifically, the commitment to reserve 0.7% of GDP for aid by the year 2013, while also increasing transparency. Among other things, London intends focusing its efforts on weak countries, earmarking at least 50 percent of aid for them, plus triple investment into security and justice, supporting 8 million schools in Africa by the year 2010 and saving 6 million mothers of newborn children by the year 2015 through progress in mother-child health.

34. Julia Gallagher, “Britain’s idealisation of Africa: is ‘doing good’, good enough?”, Centre for Development Policy and Research, SOAS, 2009. 35. Source: ONE, 2010.

36. Source: DFID, 2009. 37. Source: DFID, 2009. 38. DFID, 2009.

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Chapter 5 - Relations between Europe and Africa

80. The current government has decided to embark upon a sweeping reform of bilateral and multilateral cooperation by reviewing about 2.9 billion Pounds given in aid to 90 countries, and 3 billion Pounds London contributes to the coffers of international institutions.

81. The government has explained that it intends to hold to the goal of allocating 0.7% of GDP to aid by the year 2013, but it will better channel the money by redistributing it to a number of priority countries and focusing efforts on reducing poverty, improvement in maternal health, womenâ&#x20AC;&#x2122;s rights to family planning and protection against fatal diseases, such as malaria.

82. In terms of multilateral organizations, Great Britain has stated its intention to continue to finance (including through additional funds) those which show themselves to be effective in terms of actions to fight poverty and in their ability to obtain concrete results. For the others, contributions could be cut or even stopped altogether.

83. A Guarantor for aid transparency will also be created, which will ascertain that the DFID will publish all information relating to how public money destined for cooperation is spent.39

84. Great Britain is among Africaâ&#x20AC;&#x2122;s top donors,40 but it is seventh in the rank of trade partners with Africa. Only 3.8% of African foreign trade takes place with the United Kingdom. Nonetheless, the new minister for Africa made his debut in July with involvement at the AU Fig. 13 United Kingdom-Africa imports and exports (Source: TEH-Ambrosetti re-elaboration based on Chatham House data)

Exports to Africa (millions/$)

United Kingdom

Imports from Africa (millions/$)

2006

2007

2008

2006

2007

2008

Total

11.337

12.830

15.609

18.068

18.868

21.054

Africa excl. South Africa

7.392

8.538

10.889

10.755

10.312

11.746

Sub-Saharan Africa

8.800

9.789

11.609

12.961

13.717

15.070

Sub-Saharan Africa excl. South Africa

4.855

5.497

6.889

5.648

5.161

5.762

South Africa

3.945

4.292

4.720

7.313

8.556

9.308

39. Source: DFID, June 2010. 40. The most recent OECD statistics for DAC donors put Great

240

Britain in 3rd place on the basis of the average of the three-year period 2006-2008, but in 2008, Germany donated more.

Chapter 5 - Relations between Europe and Africa

summit in Kampala and tour of the Region with clear focus on the economy and business opportunities.

85. Great Britain increased trade with Africa by 16% between 2007 and 2008, arriving at a level of 36.6 billion Dollars. 38% of trade was with South Africa, with which Great Britain has 9.3 billion Dollars in imports and exports 4.7 billion Dollars (see Figure 13).

Spain 86. The profile of relations between Spain and Africa has grown significantly over the last decade. This is seen above all in the increase in ODA funds to sub-Saharan Africa: in 2004 these were 492 million Euros, while in 2008 they were over one billion Euros.41 Spain is also the sixth largest trading partner with Africa (ahead of Great Britain). In 2009, Spanish exports to Africa were 9.3 billion Euros (5.9% of the total) and imports from Africa reached 16.7 billion (8% of the total).42 The primary recipients of Spanish exports are South Africa, Nigeria and Angola, a country with which, in 2009, trade reached 936 million Euros.43

87. The instrument through which Spain develops policy towards the continent is its Africa Plan which sets goals and priorities for initiatives. The first one covered the period 20062008 and the second the four-year period 2009-2012. It was created out of the necessary for a regional and more-coordinated approach to Africa. It is structured around six main working principles: - support and consolidate democracy; - peace and security; - fight poverty; - promote trade relations and investment between Spain and Africa, and African economic development; - strengthen the partnership around migration; - reinforce Africa-Spain relations, multilateral relations and those with the EU, consolidate Spainâ&#x20AC;&#x2122;s political and institutional profile in Africa through Africa House44 and other forms of diplomacy.

88. According to the Plan, Spain intends forging a new meaning of its proximity to Africa.

89. In line with European choices, Spain is focusing on cooperation with the African Union and regional communities, with special attention towards ECOWAS. Individual countries receiving Spanish aid are chosen on the basis of a long and special relationship with Spain, their status as geographical neighbors, level of commitment to MDGs, capac-

41. Source: Plan Africa, 2009-2012. 42. Source: Foreign Trade Bulletin, Ministry of Industry, Tourism and Trade. 43. Source: Africa Plan, agencies. 44. Source: Africa House is a public entity inaugurated in 2007,

headquartered in the Canary Islands. It is a sort of diplomatic terminal founded with the goal of promoting knowledge about the African continent through research and studies, creating networks of experts and reinforcing relations between Africa and Spain in various fieldsâ&#x20AC;&#x201D;cultural, academic and economic.

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Chapter 5 - Relations between Europe and Africa

ity to be driving forces in regional integration and the need to monitor specific situations of conflict and instability.45

90. An important part of Spanish efforts is directed at regulating the flow of immigrants and fighting illegal immigration. Madrid has signed agreements on immigration with Cape Verde, Gambia, Guinea-Conakry, Mali and Niger, as well as a Memorandum with Senegal and an agreement on immigration flows with Mauritania. It has initiated projects to create 12 professional training schools in Africa and has created a joint Spain-ECOWAS fund for migration and development. In collaboration with the African Development Bank and Danish cooperation, Spain has also financed the African Guarantee Fund (with capital of close to 500 million Dollars for a period of five years) to increase credit access to small- and medium-sized companies on the continent.

Italy 91. In the last two years, Italy has launched a number of initiatives aimed at revitalizing relations with Africa, characterized in the past by a prevalently humanitarian approach, but, above all, by a low level of coordination between initiatives and a lack of precise goals.

92. Italy is the fourth largest trading partner with the continent. In 2009, exports were over 16 billion, and imports 24.4 billion (down from 2008). The first three months of 2010 registered a rise in both exports and imports, compared with the same period in 2009: exports reached a level of 3.9 billion Euros (+2.5%) and imports were over 7.4 billion Euros (+6%). Trade is strongly tilted in favor of northern Africa (see Figure 14) because of imports of oil and natural gas, and for this reason Libya is the most important trade partner,46 followed by Algeria. South of the Sahara, the main trading partner is South Africa, but other countries are growing, such as Cameroon which, in the first four months of 2010, registered a jump of 34% in trade with Italy.47

93. In 2009, the Minister for Economic Development announced the first Africa Plan, aimed at relaunching economic activity in the sub-Saharan area. The underlying concept is that “the presence in Africa of ‘emerging financers’ and other western countries, constitutes a challenge Italy must face if it does not want to lose the opportunity for a gradual and diversified penetration of its companies in the African market in sectors strategically important for the development of the continent, as well as significant profit for Italian business.” The Plan refers to the rich supply of raw materials on the continent, as well as the economic dynamism of African countries. The Plan also hopes for recognition of existing

45. In western Africa, in addition to Mauritania, ECOWAS countries, in particular Senegal, Mali, Gambia, Ivory Coast, Niger, Nigeria, Guinea Bissau, Guinea, Ghana and Cape Verde. On the Horn, the countries of the Intergovernmental Authority on Development (IGAD), in particular Ethiopia, Kenya and Sudan; in central Africa the countries of the Communauté èconomique des Etats de l’Afrique centrale (CEEAC), in particular Equatorial Gui-

242

nea, Cameroon, Gabon and Sao Tome and Principe; in southern Africa, SADC countries, in particular South Africa, Namibia, Mozambique, Angola, Zimbabwe, Tanzania and Democratic Republic of the Congo. 46. Almost 50% of Italian imports from Africa come from Libya. 47. ICE data; Vice-minister Urso led a trade mission with 50 companies to Cameroon in July 2010.

Chapter 5 - Relations between Europe and Africa

Fig. 14 Italy-Africa imports and exports (Source: TEH-Ambrosetti re-elaboration based on Chatham House data)

Exports to Africa (millions/$)

Italy

Imports from Africa (millions/$)

2006

2007

2008

2006

2007

2008

Total

15.872

20.046

26.445

39.399

43.350

56.471

Africa excl. South Africa

13.875

17.929

24.325

36.512

39.609

52.569

Sub-Saharan Africa

5.511

6.352

7.019

7.414

9.067

10.494

Sub-Saharan Africa excl. South Africa

3.514

4.235

4.899

4.527

5.326

6.592

South Africa

1.997

2.117

2.120

2.887

3.741

3.902

Italian initiatives in the area of cooperation, in order to better set long-term goals and create specific partnerships between African countries and Italian regions in order to guarantee a continuity of action, including over the medium-to-long term and, above all, to create â&#x20AC;&#x153;outposts of business opportunitiesâ&#x20AC;?.

94. In order to finance the start-up of the Plan, the Ministry for Economic Development, together with the JEV, allocated 3.5 million Euros; the Association of Italian Companies Abroad (SIMEST) decided to make available 90 million Euros to support investment projects in the sub-Saharan area; and the SACE Group provided 720 million Euros for export and investment insurance in the area. Fig. 15 Number of Italian companies present in sub-Saharan countries, 2008 (Source: TEH-Ambrosetti elaboration based on CIA Factbook data)

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Chapter 5 - Relations between Europe and Africa

95. In July 2010, at the second “Italy & Africa Partners in Business” forum organized by the Ministry for Economic Development and SIMEST, Vice-Minister Urso stressed that the goal is to “double in three years the value of exports and investment in sub-Saharan Africa, arriving at, respectively, 9 billion Euros and 150 million Euros”. Taking part in the forum were 500 Italian companies and 19 African government ministers.

96. Nonetheless, Italian presence in sub-Saharan Africa is still quite low. Direct Italian investments are just 0.2% of the total, with 250 Italian companies (of which 101 in South Africa), with 22,000 employees and billings of 5.4 billion Euros.48

97. Also in the field of development cooperation, for the first time, a document laying out the guidelines for the three-year period 2009-2011 was prepared. Given Italian commitment to reaching Millennium Development Goals, the priority sectors for bilateral action are identified as agriculture and food security; environment, land and management of natural resources, with special emphasis on water; health; education; governance and civil society, including in terms of support of e-government and information and communication technologies (ICT) as a tool for combating poverty; support for micro-, small- and medium-sized companies. Italy will continue to work towards empowerment of women, support of vulnerable sectors of the population (children and the handicapped) and safeguarding and promotion of cultural heritage. The commitment made in this document was to allocate 50% of available funds into bilateral activity with sub-Saharan Africa for each year between 2009 and 2011.

98. The guidelines establish a list of 11 priority countries on which to concentrate resources.49

99. In 2008, Italian cooperation disbursed 115 million Euros in aid, divided between 34 beneficiary countries, and 34.7 million Euros in credit to Ethiopia, which is the number one beneficiary of Italian aid with 43.2 million Euros total (of which 8.4 in aid). Mozambique is the number one aid recipient (20.2 million Euros), followed by Sudan (20 million Euros) and Somalia with 16 million Euros.

100. 47% of aid, 41 million Euros, were disbursed through NGOs which are an important part of the “Italian system” of development cooperation, of which local bodies are also a part.

101. In terms of aid, a negative aspect is the Italy’s delay in maintaining the promises made at Gleneagles in 2005. The latest ONE report provides quite a scathing picture. Between 2004 and 2009, Italy cut 169 million Euros of ODA aid to sub-Saharan Africa, and strayed from the goal set for 2010 (3.8 billion Euros). In 2009, the ODA percentage of GDP was 0.15%, quite removed from the 0.51% to be met by 2010 that the EU set as the minimum target for each member country.

48. Source: SIMEST 49. Niger, Senegal, Burkina Faso, Ghana, Sierra Leone, Guinea

244

Bissau, Sudan, Kenya, Ethiopia, Somalia and Mozambique. Initiatives already undertaken in other countries will be completed.

Chapter 5 - Relations between Europe and Africa

102. To improve aid management and transparency, in 2009 the Ministry of Foreign Affairs drew up a national plan for aid effectiveness and created a group of experts in 12 thematic working groups.

103. In July 2010, to facilitate growth of the African continent, the Ministry for Economic Development promoted two instruments, countertrade and microcredit. Use of the countertrade (CT) mechanism to activate investment flow is often the only possible means for developing relations with highly-indebted countries who find it impossible to support further international debt or obtain international financing.

104. The use of micro credit derives from the evidence of a number of economic theories that have shown how real and sustainable development is that which involves the development of human capital, i.e., the individual capacity of people to exploit the resources found in nature through their own activity and invest through facilities for the exercise of fundamental rights, such as food, health and education.

105. The system for granting micro credit calls for the creation (on a voluntary basis) of small, homogeneous groups whose beneficiaries are interconnected by their desire to obtain the loan. The cornerstone supporting the entire microcredit system is constant assistance from the loaning body which provides a true role of support in utilization of credit.

245

Chapter 5 - Relations between Europe and Africa

4. Africa-Usa

106. The election of the first Afro-American president in the history of the United States ignited African hopes about the start of a new chapter in relations with Washington. Historically, the African continent has never been at the top of US strategic priorities, although it does remain Africa’s no. 1 trade partner.

107. The humanitarian commitment has always been the US’s main approach to Africa, although some events over the last decade has seen emerge other priorities that contributed to changing—at least in part—the continent’s perception even during the Bush presidency.

108. Africa has become more important for the energy security of the US which today imports 22% of its oil from Africa (15% from sub-Saharan Africa), against 17% from the Middle East.

109. The presence of radical Islamic groups in many areas of Africa has fed fears that the terrorist menace will expand and this is one of the considerations at the basis of the creation of Africom, the regional command for Africa, one of the main—albeit controversial—innovations of the Bush era.

110. The Obama administration has decided to focus its policy on five key points: - reinforce African governments and democracy; - support economic progress; - increase prevention of disease and availability of treatment; - work with Africans and the international community to prevent and resolve conflicts; - cooperate with Africans to take on transnational challenges, such as climate change, illegal exploitation of natural resources and traffic of human beings and drugs.

111. In 2009, the United States was confirmed as the single country that donated the most in the world50 with 28.7 billion Dollars in aid, 5.4% more than in 2008. The quota destined for sub-Saharan Africa was 7.5 billion Dollars, an increase of 10.5% over 2008. The quota earmarked for Least Developed Countries (LDCs) also rose by 13.6%, surpassing 8 billion Dollars.51 The US government assists 47 countries in sub-Saharan Africa through 23 missions of the US Agency for International Development (USAID). US aid programs are centered primarily on strengthening the governance of recipient countries and there are many conditions tied to meeting certain standards in managing the nation and public money. Rules which in certain cases proved to be excessively strict and, consequently, slowing results.

50. As a single country, Europe (the EU) with its member countries remains the no. 1 donor.

246

51. Source: OECD, 2010.

Chapter 5 - Relations between Europe and Africa

112. Since his election, Barack Obama has made it clear that he wants to rationalize the aid system which is too “fragmented into different agencies and theories”.52 Above all, he wants to reinvigorate the activity of the State Department which, during the Bush era, lost its central role in African policy increasingly “governed” by the Department of Defense which took on more civilian tasks as part of military cooperation and training projects. An initial step in this direction was the creation in 2009 of the Global Health Initiative (GHI), an ambitious project intended to coordinate efforts in the fight against the spread of AIDs, malaria, tuberculosis and forgotten tropical diseases, as well as improve child health, diet and family planning. GHI is based on a number of previous successful programs (although also somewhat contested), such as the President’s Emergency Plan for Aids Relief (PEPFAR) and the President’s Malaria Initiative, and will have available funding totaling 63 billion Dollars over six years.

113. Support continues for the Millennium Challenge Corporation which provides aid to developing countries who meet specific eligibility criteria ranging from a commitment to fight corruption to respect for civil liberties, participatory democracy and fiscal policies. For 2011, Obama asked Congress to provide 1.28 billion Dollars in funding for it.53

114. At the G8 in Aquila in 2009, the US president announced his wish to allocate at least 3.5 million Dollars over three years (part of a collective G8 commitment of 18.5 billion) for agricultural development and food security. The result was Feed the Future (FTF), an initiative aimed at fighting hunger and malnutrition by supporting adoption of food security plans by a number of countries at risk, and promoting strategic investment and sustainability in agriculture.

115. Between 2005 and 2008, trade between the US and Africa increased by nearly 42%, but over the last 30 years, the US share in African foreign trade has continued to oscillate between 10 and 15%. An indication that the growth in the African economy has not been transformed automatically into an increase in the importance of the United States feeling the effects of the advance of emerging countries. In 2009 the economic crisis caused a 45.5% collapse of US imports from Africa, primarily the result of a drop in purchase of crude oil which constitutes 95.8% of imports, and a drop in exports of 18.1%.54 The top five recipient countries of US exports are South Africa, Nigeria, Angola, Benin and Ghana. The primary countries from which the United States imports are Nigeria, Angola, Republic of the Congo, Equatorial Guinea, Chad and Gabon, all oil producers.

116. American companies have been fairly hesitant to venture into new markets in Africa and in the last decade, investment outside of the energy sector has been fairly static. Sub-Saharan Africa accounts for about 1% of total American FDI, although there was a 5% increase between 2006 and 2007, to 13.3 billion, with a further 20% between 2008 and 2009.55

52. Alex Vines, Tom Cargill “Sub-Saharan Africa: Providing Strategic Vision of Fire Fighting? In America and a Changed World: A question of Leadership, Chatham House, 2010. 53. In the past, on more than one occasion, the MCC has had problems receiving support from Congress, above all because of the

lack of clarity in agency goals and red tape in assigning funds to eligible countries. 54. US Department of Commerce data. 55. Source: VINES, CARGHILL, and U.S. Bureau of Economic Analysis, 2010.

247

Chapter 5 - Relations between Europe and Africa

117. One of the instruments the United States adopted for promoting trade and African development at the same time is the African Growth and Opportunity Act (AGOA). Adopted during the Clinton presidency in 2000, this program provides for customs-free import in the US of approximately 6000 African products from 38 countries responding to a series of requisites.56 In 2008, trade with AGOA countries reached 104.5 billion Dollars, an increment of 28% over the previous year. The balance of the first 10 years of this program is mixed, there have been success stories, such as the growth in clothing and textile exports, in particular from Lesotho and Kenya, going from 350 million Dollars prior to AGOA to 1.3 billion; cut flowers from Kenya (from 700 thousand Dollars to 1.7 million Dollars); or coffee and tea from Tanzania (from 2.5 million Dollars to 16 million).57 But there has also been criticism, above all tied to the fact that the majority of imports from AGOA countries involve oil, gas and related products.

118. There are proposals to make the program permanent58, broaden the range of products eligible for tariff cuts, but also invest more in training and support for African companies.59

119. In addition to the AGOA, in 2006 the United States also launched the African Global Competitiveness Initiative (AGCI) with the goal of promoting competitiveness of African companies in exports through training, greater access to credit and improvement in regulations. Its funding is 200 million Dollars over 5 years. Information and technical assistance are supplied through four regional hubs in Ghana, Senegal, Kenya and Botswana, run by USAID missions.

56. Among these is respect for the rule of law, human and worker rights, safeguarding of intellectual property, commitment to build a market-based economy and elimination of barriers to US investment. Countries that do not respect one or more of these criteria may be suspended from the AGOA, as happened in 2009 with Niger, Madagascar and Guinea following government coups.

248

They may also be reinstated, as happened with Mauritania. 57. http://www.america.gov/st/africa-english/2010/June/201006 18095108SztiwomoD4.854983e-02.html. 58. Source: AGOA expires in 2015. 59. The Whitaker Group, “AGOA’s architects unveil New Economic Policy for Obama Administration”, 2010.

Chapter 5 - Relations between Europe and Africa

5. Summary Remarks

120. The increasingly urgent presence of new players on the African scene has pushed Europe to re-think its relations with the continent. The 2007 Lisbon summit saw the launching of the new Africa-EU strategic partnership under the banner of a more coordinated and coherent effort by the European Union and greater joint responsibility in making choices. In November 2010, in Libya, there will be another summit between the two continents and this will offer an opportunity to make an initial stock-taking.

121. The strategy includes some new aspects, such as the emphasis on multilateralism, strengthening of relations between the European Union and the African Union, support for regional integration within the continent and the need to set relations between Europe and the African Union within a long-term framework. Nonetheless, the impact of these changes will become diluted due to the persistence of previously-established approaches within the European apparatus. Many of the development cooperation programs and trade strategies classify sub-Saharan Africa as part of the ACP countries, and include northern Africa within the Mediterranean region, thus de facto denying the united nature of the African continent which is the fulcrum of the Lisbon strategy.

122. From the standpoint of trade, Europe puts much emphasis on the EPAs, the mutual market liberalization agreements which must replace the preferential tariff systems as established by the WTO. It considers them an opportunity to make trade a driving force in the African economy, a goal the protective measures offered by the Lomé conventions have not achieved. And it is ready to accompany the path towards signing of the EPAs with aid for trade packages. This road is proving to be quite rocky, but, most of all, it once again indicates the problem of thinking of Africa as a unified whole, on a regional as well as a continent-wide scale. Given the lengthy negotiations required to reach signing of regional agreements, the EU has chosen to sign many interim agreements with individual countries, thus risking to damage the intra-African trade framework which Europe, itself, contributed in building.

123. Europe remains a fundamental donor for Africa and despite the fact that it is not yet in line with the goals set in the European consensus for development at Gleneagles, efforts to make aid more efficient and transparent are basic to allowing Africa to consolidate the first positive results from the economic reawakening of the continent. In addition, the EU has an extremely important role to play in building African security through military training and financing.

124. To a certain extent, this new perception of Africa has also “infected” some member states of the European Union.

125. In its guidelines, Germany clearly affirms that Africa’s new direction requires new policies. And it actively commits itself in terms of cooperation, but above all with evergreater presence of German companies on the continent.

249

Chapter 5 - Relations between Europe and Africa

126. France, traditionally the European country with the most cultural and economic influence on the continent, affirmed its desire at the most recent Françafrique summit to change direction from a political standpoint and pay more attention to especially the economic requests of its African partners.

127. Great Britain is far and away the country that has committed itself most in terms of development cooperation, making Africa a moral question. The change in government marked the start of a profound change in the aid system which, in the Conservative view, will be aimed at definite goals and priorities and, above all, towards enhanced efficiency and transparency. It still remains to be seen if and how trade relations will be revised and reinforced.

128. Spain is creating for itself an increasingly more important role in relations with the African continent, aiming above all at improving relations with its “geographical neighbors” and defusing potential crisis situations, but also promoting Spain as a political and trade partner.

129. Italy has finally adopted a number of instruments, such as the Africa Plan, which indicate an awareness of the importance the continent can play in the Italian economy. However, concrete indications of this new course of action remain limited. Even the intent to better plan development cooperation initiatives by setting priorities and specific goals is a step in the right direction, but unfortunately failure to meet commitments made during international gatherings ends up impacting on the country’s image and weakening its position.

130. The election of Barack Obama fed tremendous hope on the African continent, even if the expectations of governments are almost certainly more realistic. Africa has not suddenly jumped to the fore of US administration priorities, and budget constraints imposed by the economic crisis and the many fronts still open internationally will probably not allow for the launching of new programs. Nonetheless, the United States has taken a number of interesting steps towards reorganizing and rationalizing its aid system, as well as reorganizing the section dedicated to Africa within the State Department, providing new impetus to political action on the continent.

131. The United States are a very important donor for the continent, but many aid programs lack flexibility and are perhaps not suitable for meeting the needs of a continent undergoing profound change. Change that not even American companies seem to have grasped.

250

Databook

Fig. 1 GDP growth (% annual), Source: World Bank 2010 Country

GDP growth (% annual) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

2,6

4,7

6,9

5,2

5,1

Angola

3,14

14,49

3,31

11,18

20,61

18,56

20,28

14,8

4,5

3,9

3,1

2,9

3,8

4,6

5,1

Botswana

5,21

3,33

6,28

6,54

4,68

2,96

4,25

-1

Burkina Faso

6,65

4,7

8,04

4,63

6,35

5,5

3,6

4,47

Burundi

2,06

4,45

-1,22

4,83

0,9

5,12

3,6

4,5

Cameroon

4,51

4,01

4,03

3,7

2,3

3,22

3,5

3,9

Cape Verde

3,8

4,6

6,2

-0,71

6,53

10,8

6,94

5,95

0,26

-0,58

-7,6

2,4

4,2

2,8

11,66

8,49

14,72

33,63

7,93

0,15

0,2

-0,4

Benin

Central African Republic Chad Comoros

3,33

4,15

2,47

-0,24

4,23

1,24

0,49

0,97

Congo, Dem. Rep.

-2,1

3,47

5,79

6,64

7,88

5,59

6,26

6,2

Congo, Rep. Cote d'Ivoire

3,8

4,8

1,72

3,6

7,7

6,24

-1,59

5,57

-0,02

-1,43

-1,56

1,79

1,26

0,68

1,71

2,21

Djibouti

2,05

2,62

3,2

3,83

3,17

4,11

4,26

3,86

Egypt, Arab Rep.

3,54

2,37

3,21

4,08

4,48

6,85

7,07

7,06

Equatorial Guinea

61,9

19,46

13,96

9,75

1,26

21,44

11,29

Eritrea

8,88

3,01

-2,66

1,45

2,57

-0,97

1,33

Ethiopia Gabon Gambia, The Ghana Guinea Guinea-Bissau

8,3

1,51

-2,16

13,57

11,82

10,86

11,1

11,32

2,13

-0,27

2,48

1,35

3,02

1,18

5,55

2,06

5,8

-3,25

6,87

7,05

5,11

6,55

6,3

5,89

4,5

5,2

5,6

5,9

6,4

6,1

6,2

3,98

4,19

2,04

2,71

3,33

2,17

1,51

8,4

0,2

-7,1

-7,15

-0,63

2,22

3,46

0,6

2,7

Kenya

3,78

0,55

2,93

5,09

5,8

6,4

6,96

3,6

Lesotho

3,04

1,63

3,94

4,55

0,68

8,1

5,06

3,95

2,9

3,7

-31,3

2,6

5,3

7,8

9,4

7,1

Liberia Libya

4,52

3,26

-2,75

6,3

5,2

6,8

Madagascar

6,02

-12,67

9,78

5,26

4,6

5,02

6,24

6,88

Malawi

-4,97

-4,42

6,28

5,68

2,55

8,2

8,6

9,7

Mali

12,1

4,15

7,44

2,19

6,08

5,3

2,8

Mauritania

2,89

1,1

5,59

5,18

5,45

11,7

1,9

Mauritius

5,56

2,71

3,19

4,7

4,57

3,6

4,68

5,34

Morocco

7,55

3,32

6,32

4,8

2,98

7,76

2,72

5,8

Mozambique

11,9

8,82

6,02

7,88

8,39

8,68

7,02

6,46

Namibia

1,18

4,79

4,24

12,27

2,53

7,15

4,06

2,67

7,1

4,4

-0,83

7,41

5,8

3,3

9,5

Nigeria

3,1

1,55

10,3

10,6

5,4

6,2

6,45

5,29

Rwanda

8,5

0,3

5,3

7,1

7,29

7,94

11,23

Niger

Senegal

4,58

0,65

6,66

5,9

5,63

2,39

4,66

2,5

Seychelles

-2,27

1,21

-5,89

-2,85

7,47

8,3

7,26

2,81

Sierra Leone

18,17

27,46

9,29

7,51

7,25

7,34

6,85

5,06

South Africa

2,74

3,67

3,12

4,86

4,97

5,32

5,1

3,06

Sudan

6,17

5,36

7,14

5,11

6,33

11,29

10,16

8,34

1,83

3,89

2,51

2,21

2,87

3,51

2,5

6,24

7,24

5,67

6,73

7,37

6,74

7,15

7,46

Swaziland Tanzania Togo Tunisy

-0,18

4,14

2,7

1,2

3,9

1,9

1,1

4,92

1,65

5,56

6,04

3,98

5,66

6,33

5,1

Uganda

4,94

6,4

6,47

6,81

6,33

10,78

8,59

9,53

Zambia

4,89

2,72

5,67

5,44

5,2

6,2

Zimbabwe

-2,7

-4,4

-10,4

-3,8

-5,3

255

Databook

Fig. 2 GDP growth per capita (% annual), Source: World Bank 2010 Country Algeria

GDP growth per capita (% annual) 2001

2002

2003

2004

2007

2008

3,17

Angola

0,16

11,02

0,12

Benin

1,65

1,07

0,44

Botswana

3,74

2,06

5,1

5,37

3,5

Burkina Faso

3,34

1,38

4,59

1,34

3,1

Burundi

0,03

1,93

-3,91

1,81

-2,05

2,01

Cameroon

2,07

1,59

1,64

1,38

0,08

1,07

1,5

1,89

Cape Verde

1,96

2,8

4,42

-2,32

4,88

9,15

5,41

4,47

-1,51

-2,18

-9,01

-0,56

0,74

2,21

2,31

0,94

7,62

4,49

10,52

28,93

4,37

-2,93

-2,55

-3,13

1,17

1,97

0,33

-2,32

2,05

-0,92

-1,88

-1,4

-4,63

0,57

2,65

3,37

4,54

2,27

3,27

3,21

Chad Comoros Congo, Dem. Rep.

3,64

2006

1,11

Central African Republic

5,32

2005 3,54

0,48

1,47

7,82

17,11

15,29

17,09

11,83

-0,32

-0,46

0,47

1,3

1,84

1,73

2,96

-2,22

2,38

0,66

1,5

0,5

1,44

Congo, Rep.

1,53

2,28

-0,81

1,11

5,32

4,12

-3,39

3,7

Cote d'Ivoire

-2,32

-3,54

-3,57

-0,29

-0,88

-1,51

-0,56

-0,11

Djibouti

-0,35

0,54

1,34

2,05

1,39

2,29

2,45

2,05

1,59

0,44

1,26

2,12

2,53

4,88

5,12

5,14

57,23

16,09

10,8

34,24

6,8

-1,43

18,26

8,43

4,64

-1,27

-6,76

-2,69

-1,35

-4,46

-1,81

-1,15

Egypt, Arab Rep. Equatorial Guinea Eritrea Ethiopia

5,47

-1,11

-4,68

10,66

8,95

8,01

8,25

8,47

-0,14

-2,39

0,37

-0,67

1,03

-0,73

3,6

0,21

Gambia, The

2,29

-6,37

3,53

3,8

2,02

3,52

3,37

3,04

Ghana

1,56

2,07

2,79

3,23

3,58

4,13

3,88

4,02

Guinea

2,01

2,26

0,15

0,77

1,31

0,09

-0,64

-2,16

-9,36

-9,43

-3,04

-0,19

1,11

-1,63

0,46

1,13

-2,02

0,29

2,38

3,05

3,62

4,18

0,9

Gabon

Guinea-Bissau Kenya Lesotho

1,68

0,52

2,98

3,7

-0,08

7,34

4,49

3,38

Liberia

-1,73

0,33

-33,07

-0,16

1,84

3,55

4,69

2,41

Libya

2,41

1,18

-4,71

2,88

4,17

3,1

4,76

4,95

Madagascar

2,96

-15,16

6,71

2,34

1,73

2,17

3,39

4,05

-7,53

-6,88

3,63

3,05

-0,02

5,45

5,87

6,95

8,9

1,12

4,27

-0,86

2,92

2,16

-0,25

1,89

Mauritania

-0,07

-1,82

2,57

2,22

2,57

8,74

-0,63

Mauritius

4,41

1,83

2,13

3,81

3,74

2,8

4,04

4,66

Morocco

6,18

2,07

5,11

3,68

1,94

6,51

1,5

4,55

9,1

6,12

3,45

5,37

5,99

6,41

5,02

4,47

Malawi Mali

Mozambique Namibia

-0,59

3,21

2,85

10,85

1,22

5,74

2,38

1,02

Niger

3,36

-0,57

0,8

-4,24

3,72

2,16

-0,04

5,96

Nigeria

0,47

-1

7,58

7,92

2,9

3,73

4,1

2,96

Rwanda

3,9

8,03

-1,39

3,7

5,05

4,75

5,15

8,18 -0,17

Senegal

1,88

-1,93

3,93

3,18

2,89

-0,27

1,93

Seychelles

-2,36

-1,81

-4,86

-2,5

6,95

6,12

6,72

1,26

Sierra Leone

14,39

22,62

4,85

3,29

3,44

4,01

3,9

2,43

South Africa

0,87

2,68

1,87

3,63

3,75

4,21

4,09

1,29

Sudan

3,89

3,22

5,02

3,01

4,13

8,91

7,75

5,94

Swaziland Tanzania Togo Tunisy

-0,17

1,02

3,26

1,86

1,35

1,76

2,19

1,06

3,53

4,46

2,89

3,87

4,45

3,78

4,14

4,4

-3,07

1,34

0,09

0,44

-1,31

1,32

-0,62

-1,37

3,73

0,53

4,94

5,05

2,98

4,63

5,32

4,07

Uganda

1,69

3,06

3,09

3,39

2,92

7,23

5,09

6,01

Zambia

2,38

0,39

3,34

3,11

2,81

3,72

3,66

3,43

-3,07

-4,52

-10,35

-3,66

-5,17

Zimbabwe

256

Databook

Fig. 3 GDP per capita, PPP (current international $), Source World Bank 2010 Country

GDP per capita, PPP (current international USD) 2001

2002

2003

2004

Algeria

5577,05

5854,41

6297,27

6713,83

Angola

2331,64

2633,9

2693,27

Benin

1177,73

1211,11

1242,33

Botswana

2005

2006

2007

7176,05

7437,74

2987,18

3611,49

1273,9

1309,03

2008

7747,86

8032,66

4294,98

5162,6

5898,54

1356,67

1410,79

1467,87

9363,44

9723,82

10437,13

11313,68

12087,6

12683,77

13405,56

13391,77

Burkina Faso

839,32

865,76

924,82

964,14

1026,16

1083,7

1119,83

1161,34

Burundi

315,59

327,32

321,22

336,44

340,18

357,95

369,3

382,76

Cameroon

1694,37

1751,38

1817,99

1895,94

1958,78

2042,07

2127,76

2215,06

Cape Verde

2220,29

2322,35

2476,77

2488,93

2694,68

3034,02

3283,03

3504,27

654,75

651,66

605,55

619,45

644,18

679,17

713,35

735,67

856

910,11

1027,32

1362,58

1468,05

1469,88

1470,45

1455,27

1001,54

1039,18

1064,87

1070

1127,26

1152,06

1160,47

1169,01

221,39

226,55

237,51

252,57

272,56

287,54

304,83

321,44

Congo, Rep.

2932,57

3052,04

3091,88

3216,02

3496,5

3755,31

3724,29

3945,88

Cote d'Ivoire

1537,77

1509,29

1486,35

1524,58

1560,06

1584,94

1617,97

1651,23

Djibouti

1590,06

1626,57

1683,47

1767,25

1849,76

1951,67

2052,63

2140,23

Egypt, Arab Rep.

3674,78

3755,48

3883,77

4080,24

4318,85

4672,39

5042,29

5416,41

12169,69

14375,43

16267,94

22465,91

24769,88

25186,19

30577,06

33872,93

646,1

649,06

618,06

618,69

630,06

620,93

625,91

632,12

Central African Republic Chad Comoros Congo, Dem. Rep.

Equatorial Guinea Eritrea Ethiopia Gabon

504,44

507,56

494,14

562,52

632,69

704,91

783,35

868,11

12008,52

11926,14

12225,49

12492,43

13028,52

13340,8

14188,66

14526,53

Gambia, The

1008,5

960,79

1015,86

1084,78

1142,45

1219,88

1294,47

1362,77

Ghana

963,41

1000,58

1050,44

1115,54

1192,84

1281,22

1366,34

1452,07

Guinea

914,86

951,93

973,71

1009,38

1055,62

1089,91

1111,75

1203,97

Guinea-Bissau

567,43

523,32

484,07

482,84

497,49

518,87

523,98

537,8

Kenya

1179,32

1175,67

1204,21

1268,24

1349,22

1442,13

1542,26

1589,95

Lesotho

1069,33

1093,68

1150,3

1227,09

1265,74

1401,45

1503,29

1587,84

Liberia

428,49

437,43

298,99

307,09

322,84

344,85

370,6

387,76

11014,67

11339,23

11035,07

11679,53

12559,54

13357,24

14364,16

15402,42

847,94

732,01

797,75

839,88

882,07

929,65

986,71

1048,92

Malawi

590,34

559,35

592,01

627,62

647,76

704,61

765,82

836,79

Mali

845,48

869,92

926,38

944,84

1003,82

1057,79

1083,18

1127,56

Mauritania

1445,66

1444,13

1512,78

1590,83

1684,38

1889,4

1927,46

Mauritius

8070,68

8362,6

8722,49

9314,56

9975,21

10577,2

11296,38

12079,33

Morocco

2867,66

2978,25

3197,11

3410,12

3588,64

3942,7

4108,28

4388,5

500,54

540,48

571,05

618,99

677,26

743,38

801,4

855,35

4078,75

4283,37

4499,25

5130,5

5360,76

5847,18

6145,45

6342,7

531,8

538,01

553,88

545,64

584,23

615,66

631,79

684

Nigeria

1325,97

1335,68

1467,52

1629,26

1730,68

1851,84

1979,02

2081,89

Rwanda

619,03

680,43

685,24

730,99

792,69

856,51

924,57

1021,93

Libya Madagascar

Mozambique Namibia Niger

Senegal

1351,61

1348,72

1431,58

1519,51

1614,03

1660,33

1737,3

1771,96

Seychelles

16140,6

16126,17

15668,7

15716,28

17352,22

18995,28

20810,23

21529,57

Sierra Leone

422,1

526,62

563,93

599,23

639,91

686,52

732,22

766,27

South Africa

6852,38

7158,83

7448,03

7940

8503,65

9141,22

9767,68

10108,56

Sudan

1247,51

1310,21

1405,36

1489,28

1600,98

1798,52

1989,3

2153,28

Swaziland

3647,53

3749,11

3953,77

4142,86

4334,68

4549,91

4773,07

4928,21

803,91

854,49

897,89

959,47

1034,53

1107,52

1184

1262,94

Tanzania Togo

695,84

717,48

733,41

757,8

772,03

806,84

823,17

829,48

5117,35

5234,41

5610,01

6062,61

6444,81

6955,51

7520,19

7996,08

Uganda

722,33

757,43

797,45

848,18

901,19

996,76

1075,36

1164,7

Zambia

928,48

948,4

1001,01

1061,78

1126,95

1205,67

1283,01

1355,77

Tunisy

Zimbabwe

257

Databook

Fig. 4 Export of goods and services (% of GDP), Source: World Bank Country

Export of goods and services (% of GDP) 2001

2002

2003

2004

Algeria

36,25

35,08

Angola

76,63

73,53

69,62

Benin

15,18

13,54

13,68

Botswana

38,27

2005

40,07

2006

2007

2008

47,65

48,9

47,13

59,11

69,68

79,28

73,77

73,92

89,49

13,32

13,46

48,61

47,38

44,66

44,34

48,7

50,7

47,04

45,71

Burkina Faso

9,24

8,82

8,79

10,74

9,99

11,53

Burundi

6,86

6,16

8,42

9,58

11,4

10,73

Cameroon

21,92

19,93

20,24

19,4

20,45

22,05

29,22

Cape Verde

30,32

31,46

31,74

14,87

17,02

19,1

19,7

19,94

Central African Republic

16,52

15,51

13,5

13,23

12,62

14,04

14,85

14,42

Chad

14,67

12,69

24,63

51,01

55,06

61,15

49,61

43,98

Comoros

15,52

15,73

15,75

12,65

12,48

11,72

12,17

12,76

Congo, Dem. Rep.

18,65

21,16

26,13

30,24

30,98

28,64

27,19

23,24

Congo, Rep.

77,42

81,51

79,27

84,32

84,78

86,88

73,01

Cote d'Ivoire

41,84

50,03

45,84

48,56

51,05

52,65

46,58

51,05

Djibouti Egypt, Arab Rep. Equatorial Guinea Eritrea Ethiopia Gabon

37,3

38,57

39,91

36,97

40,61

40,32

59,2

17,48

18,32

21,8

28,23

30,34

29,95

30,25

37,68

101,35

99,62

96,85

90,13

87,42

86,76

81,89

78,26

11,83

12,72

7,27

6,82

5,78

6,52

6,26

12,6

13,32

14,9

15,1

13,88

12,83

11,6

59,03

53,56

55,34

62,2

64,74

64,98

64,72

77,25

Gambia, The

35,89

42,47

43,09

39,9

33,3

30,1

Ghana

45,23

42,62

40,68

39,3

32,41

36,03

33,74

36,84

Guinea

26,61

24,46

22,28

21,05

28,37

33,5

37,24

27,83

Guinea-Bissau

28,61

29,82

29,96

32,13

31,28

18,7

27,95

29,82

Kenya

22,93

24,9

24,09

26,62

28,46

26,59

26,13

24,92

Lesotho

44,87

58,25

52,29

55,91

51,08

52,72

47,31

Liberia

23,18

19,86

32,35

37,28

37,89

28,63

33,27

Libya

30,19

47,74

Madagascar

29,08

16,01

23,09

32,64

26,91

29,9

30,4

26,34

Malawi

27,99

34,05

29,83

24,96

19,58

18,82

23,55

23,37

33,3

31,88

26,42

25,38

25,62

32,11

27,32

Mauritania

33,82

33,26

27,7

30,58

35,9

54,58

57,66

Mauritius

65,61

60,6

59,05

55,24

56,54

60,13

61,81

61,62

Mali

Morocco

29,41

30,15

28,66

29,37

32,31

34,2

35,8

40,65

Mozambique

24,64

28,28

28,99

32,08

32,89

39,9

37,58

31,99

Namibia

41,17

43,39

39,81

40,45

45,47

47,87

38,95

Niger

16,92

15,2

16,17

16,94

15,38

Nigeria

42,99

31,87

42,7

43,95

46,54

43,17

40,15

43,47

Rwanda

9,38

8,09

7,85

10,13

10,29

9,7

9,74

8,07

Senegal

28,73

28,55

26,63

26,44

26,93

25,63

25,45

24,94

Seychelles

81,57

83,97

95,14

97,81

81,14

88,85

108,8

130,92

Sierra Leone

16,03

17,57

23,22

23,02

24,05

24,95

20,95

24,91

South Africa

30,13

32,99

28,06

26,71

27,4

29,55

31,57

36,33

Sudan

12,82

13,33

14,7

17,63

18,23

16,52

20,09

22,74

Swaziland

89,33

99,79

104,21

90,1

89,14

84,6

79,86

80,23

Tanzania

15,94

16,72

19,66

22,36

20,96

21,68

Togo

31,67

33,77

33,81

33,52

40,32

42,29

41,94

40,44

Tunisy

47,68

45,23

43,81

46,92

49,72

50,38

54,13

65,17

Uganda

11,52

11,21

11,38

12,72

14,2

15,3

16,74

15,64

Zambia

28,06

27,72

28,71

38,33

34,68

38,59

42,08

36,79

23,1

9,22

25,06

42,48

56,8

Zimbabwe

258

Databook

Fig. 5 Index of export diversification, Source: World Bank 2010 Country

Index of export diversification 2001

2002

2003

2004

2005

2006

2007

Algeria

5,3

3,7

3,1

2,3

2,4

2,3

2,4

Angola

1,3

1,2

1,1

Benin

1,8

3,7

4,2

3,9

4,8

6,3

6,4

Botswana

7,5

1,3

1,4

1,8

2,8

Burkina Faso

4,4

2,8

2,3

2,5

1,6

1,7

1,9

Burundi

1,9

3,3

2,8

3,4

5,4

2,6

Cameroon

4,5

4,8

4,7

4,1

3,3

Cape Verde

8,6

6,2

14,5

13,6

7,9

Central African Republic

2,4

2,2

5,4

5,5

4,7

4,6

5,5

Chad

1,5

1,7

2,2

1,4

1,7

1,2

1,1

Comoros

1,3

3,2

1,7

2,4

4,6

5,6

4,9

Congo, Dem. Rep.

2,4

2,2

3,4

4,7

6,2

7,6

Congo, Rep.

1,5

1,6

1,5

1,4

1,3

1,4

Cote d'Ivoire

6,8

6,3

4,8

7,2

7,1

7,7

Djibouti

4,9

18,6

13,1

44,6

23,9

5,9

26,3

18,9

22,1

22,6

17,2

1,3

1,2

1,1

1,2

1,3

Eritrea

14,4

12,5

31,2

27,8

9,5

22,4

2,1

Ethiopia

5,3

4,2

4,6

4,1

4,2

4,5

4,7

Gabon

1,7

1,8

1,7

1,8

1,7

1,9

Gambia, The

5,8

6,9

8,2

10,7

6,1

5,2

6,6

Egypt, Arab Rep. Equatorial Guinea

Ghana

8,2

6,5

5,3

5,2

4,7

4,5

Guinea

3,4

3,8

3,5

3,3

3,1

3,4

3,2

Guinea-Bissau

1,6

2,8

2,2

2,3

1,2

1,4

1,2

11,3

20,1

18,8

18,4

17,9

19,9

21,9

5,2

7,3

7,1

7,2

7,9

6,6

Liberia

2,1

2,4

3,1

3,4

3,3

3,5

Libya

1,4

1,5

1,4

1,3

Madagascar

9,2

10,5

15,7

19,6

19,5

21,2

Malawi

2,9

2,5

3,2

3,8

2,9

3,8

Mali

3,2

1,6

1,5

1,3

1,5

2,9

Mauritania

3,8

4,2

4,5

4,2

4,1

4,4

3,9

Kenya Lesotho

Mauritius

12,6

13,6

13,9

11,8

12,3

12,7

13,4

Morocco

35,3

64,5

72,1

71,6

69,6

67,3

Mozambique

2,9

3,5

2,8

2,6

3,1

2,7

3,5

Namibia

7,1

8,3

10,2

7,9

5,9

5,2

9,1

Niger

4,6

2,2

2,1

3,7

2,5

1,4

Nigeria

1,3

1,2

1,3

1,2

1,3

Rwanda

2,6

2,7

1,7

2,7

2,5

4,1

Senegal

12,8

14,5

19,6

19,7

10,4

25,4

22,3 3,9

Seychelles

2,6

3,7

3,2

3,8

4,7

3,2

Sierra Leone

6,8

8,5

4,5

3,4

2,8

5,3

7,3

South Africa

33,2

45,1

54,1

51,5

46,7

45,6

Sudan

1,7

1,6

1,5

1,4

1,3

1,2

Swaziland

8,8

14,5

17,2

18,8

Tanzania

20,8

27,6

25,5

20,4

31,2

30,1

Togo

9,3

9,8

13,3

11,8

9,3

Tunisy

28,5

43,4

47,1

44,8

43,2

44,3

35,8

Uganda

6,2

6,3

7,3

6,7

7,8

10,4

Zambia

4,2

5,2

5,8

4,1

3,5

2,3

2,5

Zimbabwe

9,8

11,2

13,6

15,7

15,6

10,8

259

Databook

Fig. 6 Foreing Direct Investments, FDI (USD Milions), Source: UNCTAD Country

2001

2002

2003

2004

2005

2006

2007

2008

2009

Algeria

1.196

1.065

634

882

1.081

1.795

1.662

2.646

2.847

Angola

2.145

3.133

5.685

5.606

6.794

9.064

9.796

16.581

13.101

Benin

261

174

Botswana

403

418

391

279

486

495

521

234

344

137

171

Burkina Faso Burundi

Cameroon

602

383

319

225

309

284

270

337

Cape Verde

131

190

212

120

117

460

924

713

467

-99

-279

-69

234

462

Central African Republic Chad Comoros Congo C么te d'Ivoire Congo, Repubblica DemocraDjibouti

131

321

513

1.475

1.925

2.275

2.483

2.083

273

213

165

283

312

319

427

482

409

141

391

409

256

1.808

1.727

951

164

195

234

100

Egypt

510

647

237

2.157

5.376

10.043

11.578

9.495

6.712

Equatorial Guinea

941

323

690

341

769

470

1.243

-794

1.636

Eritrea

-8

-1

Ethiopia

349

255

465

545

265

545

222

109

Gabon

-89

206

320

242

268

269

209

Gambia

Ghana

137

139

145

636

855

1.220

1.685

Guinea

105

125

386

382

141

Guinea-Bissau

729

141

372

108

132

200

378

-113

145

143

357

1.038

2.013

4.689

4.111

2.674

Kenya Lesotho Liberia Libyan Arab Jamahiriya Madagascar

294

777

1.180

543

Malawi

108

170

122

244

132

100

225

180

109

102

392

814

106

138

338

-38

Mali Mauritania Mauritius

-26

105

339

383

257

2.808

481

2.314

895

1.653

2.450

2.803

2.487

1.331

Mozambique

255

347

337

245

108

154

427

592

881

Namibia

365

181

149

226

348

387

733

720

516

Morocco

Niger

129

566

739

Nigeria

1.277

2.040

2.171

2.127

4.978

13.956

6.087

6.814

5.851

Rwanda

103

119

Senegal

210

273

272

208

Seychelles

146

239

252

243

Sierra Leone

Sao Tome and Principe

Somalia South Africa

-1

-5

141

108

6.784

1.569

734

798

6.647

-527

5.695

9.006

5.696

Sudan

574

713

1.349

1.511

2.305

3.541

2.436

2.601

3.034

Tanzania

467

388

308

331

494

597

647

679

645

Swaziland

-61

-46

121

106

Togo

Tunisy

487

821

584

639

783

3.308

1.616

2.758

1.688

Uganda

151

185

202

295

380

644

733

787

799

Zambia

303

347

364

357

616

1.324

939

959

103

Zimbabwe

260

Foreing Direct Investments, FDI (USD Milions)

Databook

Fig. 7 Top 15 African partnersin trade and services with EU-27, 2007, Source: Eurostat Top 15 African partnersin trade and services with EU-27, 2007 Country

Trade volume 2007(in milion EUR)

South Africa

10.084

Egypt

8.310

Morocco

6.511

Nigeria

5.582

Tunisy

4.476

Algeria

3.376

Angola

3.330

Lybia

1.941

Kenia

1.569

Mauritius

1.349

Liberia

1.158

Ghana

860

C么te d'Ivoire

856

Senegal

831

Gabon

725

261

Databook

Fig. 8 Value of basket of minerals and oil (USD), Source: Geographical Yearbook, NY Metal Exchange, Metal Price Country

Value of basket of minerals and oil (USD) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

29.354.751.589

30.997.930.534

33.443.572.674

34.454.566.517

36.192.621.090

35.524.240.973

39.472.639.865

8032,66

Angola

9.206.419.351

11.234.098.578

10.695.110.945

12.139.487.667

15.420.067.035

17.545.317.098

21.714.530.502

5898,54

Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Central African Rep. Chad Comoros Congo, Dem. Rep. Congo, Rep. Cote d'Ivoire Djibouti Egypt, Arab Rep. Equatorial Guinea

5.783.120

231.325

1467,87

216.430.772

57.298.667

105.183.810

97.453.407

128.782.373

124.912.016

129.931.726

13391,77

11.566.240

2.417.344

8.906.005

13.012.020

16.158.037

18.170.563

19.892.002

1161,34

4.799.990

5.586.494

33.145.109

37.423.385

46.059.120

47.369.217

32.025.706

382,76

1.044.297.275

926.203.726

862.446.270

1.155.341.334

1.062.971.629

1.126.729.084

1.088.429.316

2215,06

3504,27

231.325

185.060

80.964

126.620

735,67

1.734.936

313.420.737

2.227.026.586

2.295.309.090

2.027.114.331

1.944.260.338

1455,27

1169,01

3.456.049.461

3.579.092.801

3.398.779.974

3.630.915.610

4.158.825.563

4.563.638.646

1.327.889.500

321,44

115.662

867.468

693.974

231.325

115.662

2.950.396.872

3945,88

35.855.344

41.291.477

15.186.473

14.099.247

18.945.501

18.505.984

16.460.600

1651,23 2140,23

13.822.283.034

13.919.702.262

14.243.581.299

14.220.067.615

15.105.601.615

16.681.363.496

20.074.884.572

5416,41

2.213.798.096

2.545.987.444

3.020.024.557

4.317.284.058

4.655.361.757

4.464.087.713

4.700.739.676

33872,93

Eritrea

3.122.885

104.096

381.686

346.987

379.860

632,12

Ethiopia

60.144.448

42.448.101

44.819.180

39.822.564

50.613.866

46.626.441

41.784.600

868,11

809.637

3.469.872

2.962.402.321

14526,53

1362,77

Ghana

794.615.638

801.220.093

818.310.822

730.291.810

773.239.661

765.761.485

979.393.038

1452,07

Guinea

150.361.120

194.486.326

192.254.041

128.385.264

176.963.472

176.153.835

227.916.000

1203,97

Guinea-Bissau

537,8

Kenya

1589,95

Gabon Gambia, The

Lesotho Liberia Libya Madagascar Malawi

1587,84

11.566.240

485.782

231.325

1.272.286

185.060

231.325

139.282

387,76

17.811.870.358

17.193.732.051

18.538.716.005

20.304.067.701

22.533.584.932

23.975.394.307

25.260.018.602

15402,42

38.177.640

8.091.600

33.247.086

56.982.973

103.664.884

97.403.457

123.251.000

1048,92

836,79

489.113.157

648.206.788

584.499.938

496.318.925

569.405.995

641.741.260

618.538.700

1127,56

Mauritania

Mauritius

12079,33

115.360.059

134.746.651

98.272.652

90.572.349

100.231.234

102.167.560

107.783.500

4388,5

Mali

Morocco Mozambique Namibia Niger Nigeria

289.354

196.825

728.933

647.858

728.883

786.748

1.139.822

855,35

86.178.427

99.757.771

93.256.213

82.542.068

88.446.780

80.774.386

223.962.772

6342,7

32.590.240

22.463.855

22.976.587

31.541.708

57.026.151

41.842.835

212.856.604

684

30.343.788.444

28.086.106.910

30.926.207.164

34.438.928.421

35.248.734.697

34.868.241.054

36.513.180.151

2081,89

Rwanda

400.647

678.598

854.955

3.020.841

7.789.590

14.335.230

1021,93

Senegal

6.361.432

6.939.744

7.597.200

1771,96

Seychelles

21529,57

Sierra Leone

633.547.125

818.080.444

766,27

South Africa

20.395.322.525

20.734.254.070

21.506.988.334

21.439.570.762

21.193.157.034

22.513.781.144

31.951.678.552

10108,56

2.770.122.840

3.061.058.360

3.374.214.561

3.821.792.297

3.842.089.293

4.159.532.730

5.989.943.991

2153,28

Sudan Swaziland Tanzania Togo Tunisy

4928,21

354.068.110

510.727.523

563.903.533

566.957.578

612.110.022

540.070.138

516.430.176

1262,94

829,48

850.380.331

889.197.803

809.112.743

854.009.579

872.035.302

830.466.884

1.187.123.620

7996,08

Uganda

161.492

889.654

472.149

17.230.323

20.004.590

19.218.447

20.960.075

1164,7

Zambia

943.976.160

1.042.433.400

1.123.164.250

1.264.555.332

1.235.596.770

1.319.910.080

1.420.948.500

1355,77

Zimbabwe

801.770.155

772.561.831

730.055.192

856.033.672

748.237.832

710.901.594

1.085.778.763

262

Databook

Fig. 9 Diamond production (thousands of carats), Source: Geographical Yearbook, 2010 Country

Diamond production (thousands of carats) 2001

2002

2003

2004

2005

2006

2007

Algeria

Angola

5.170

5.022

5.700

6.100

7.000

7.800

9.670

Benin

26.400

28.400

30.400

31.100

31.900

32.000

33.000

Burkina Faso

Burundi

Cameroon

Cape Verde

Botswana

Central African Republic

480

416

333

350

380

420

417

Chad

Comoros

Congo, Dem. Rep.

18.200

21.679

26.981

30.880

30.300

28.000

27.200

110

101

Djibouti

Egypt, Arab Rep.

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia, The

1.170

963

904

905

1.063

970

900

361

491

623

716

570

450

1.015

Guinea-Bissau

Kenya

Congo, Rep. Cote d'Ivoire

Ghana Guinea

Lesotho

170

Libya

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

1.487

1.562

1.481

2.004

1.902

2.200

Niger

Nigeria

Rwanda

Senegal

Liberia

Namibia

Seychelles

Sierra Leone

600

352

507

692

669

612

600

South Africa

11.170

10.876

12.684

14.300

15.800

15.370

15.200

Sudan Swaziland

254

240

237

304

220

230

270

Togo

Tunisy

Tanzania

Uganda

Zambia

Zimbabwe

263

Databook

Fig. 10 Production of wood (tonnes), Source: FAOSTAT 2010 Country Algeria

Production of wood (tonnes) 2001

2002 0

2003 0

2004 0

2005 0

2006 0

2007 0

2008 0

Angola

45.900

Benin

35.000

215.000

130.000

Botswana Burkina Faso Burundi Cameroon Cape Verde Central African Republic Chad Comoros Congo, Dem. Rep. Congo, Rep. Cote d'Ivoire Djibouti

85.000

87.000

73.000

120.000

266.000

1.190.000

1.250.000

1.400.000

1.450.000

2.266.000

690.000

611.000

475.000

524.000

533.000

14.000

8.650

170.000

895.000

1.179.000

1.350.000

1.277.000

1.450.000

1.600.000

1.700.000

2.615.000

2.084.000

1.556.000

1.678.000

1.347.000

1.408.000

1.469.000

Egypt, Arab Rep.

134.000

Equatorial Guinea

635.000

574.000

419.000

1.924

Eritrea Ethiopia Gabon Gambia, The

5.600

7.500

6.200

4.000

2.584.000

1.688.000

3.563.000

3.500.000

3.200.000

3.500.000

3.400.000

106.000

1.212.000

1.104.000

1.400.000

1.350.000

1.200.000

1.304.000

1.392.000

138.000

40.000

251.000

241.000

251.000

241.000

588.000

607.000

982.000

1.364.000

800.000

100.000

180.000

240.000

63.000

Madagascar

103.000

102.700

184.800

160.100

192.900

222.450

266.930

Malawi

130.000

3.900

Ghana Guinea Guinea-Bissau Kenya Lesotho Liberia Libya

Mali Mauritania

1.000

Mauritius

5.000

4.000

5.000

5.500

7.000

5.800

5.800.000

Morocco

201.000

253.000

160.000

185.000

259.000

215.000

238.000

Mozambique

128.000

123.000

113.000

Namibia

Niger

Nigeria

7.100.000

Rwanda

245.000

Senegal

40.000

Seychelles Sierra Leone

3.600

South Africa

6.002.000

5.235.900

5.237.100

2.282.800

2.131.100

1.937.300

Sudan

123.000

Swaziland

260.000

Tanzania

317.000

Togo

55.000

43.000

44.000

86.000

Tunisy

20.800

20.000

25.000

Uganda

1.055.000

1.369.000

Zambia

25.700

38.400

50.800

63.500

75.000

245.000

786.000

631.600

577.600

Zimbabwe

264

Databook

Fig. 11 Arable lands (% of land area), Source World Bank 2010 Country Algeria

Arable lands (% of land area) 2001

2002

3,18

2003

3,17

2004

3,15

2005

3,15

2006

3,15

2007

3,14

2008

3,14

Angola

2,41

2,49

2,65

Benin

22,15

23,05

23,96

24,86

24,41

Botswana Burkina Faso

0,35

0,43

0,34

0,4

0,42

0,44

16,59

16,96

17,69

17,73

18,27

19,01

Burundi

37,97

38,4

38,55

38,36

38,4

38,55

38,75

Cameroon

12,81

Cape Verde

12,41

3,1

3,07

3,1

3,07

3,09

Central African Republic Chad Comoros

2,86

3,02

3,34

3,41

42,99

Congo, Dem. Rep.

2,96

Congo, Rep.

1,43

1,45

Cote d'Ivoire

8,81

8,49

8,81

Djibouti

0,04

0,06

Egypt, Arab Rep.

2,87

2,95

2,92

2,98

3,02

3,03

Equatorial Guinea

4,63

Eritrea

5,56

5,91

5,92

6,14

6,44

6,34

Ethiopia

10,71

9,94

10,93

12,36

12,92

13,4

14,04

1,26

Gabon Gambia, The Ghana Guinea Guinea-Bissau Kenya Lesotho

33,5

34,5

34,8

17,84

18,37

18,39

17,58

18,02

5,9

6,1

6,51

6,92

7,73

8,55

8,95

10,67

9,01

8,95

9,04

9,24

9,25

9,33

9,14

10,87

9,88

10,21

10,87

9,88

Liberia

3,95

Libya

1,03

0,99

Madagascar

5,07

30,29

31,89

Mali

3,78

3,85

4,06

3,52

3,81

3,85

3,97

Mauritania

0,44

0,39

0,47

0,44

Mauritius

49,26

46,8

45,81

45,32

44,33

Morocco

19,02

18,83

20,29

18,4

18,2

18,07

5,09

5,66

5,72

5,85

5,72

5,85

5,66

Malawi

Mozambique Namibia Niger

0,99

0,97

11,04

11,12

10,88

11,3

11,62

Nigeria

32,94

35,14

36,23

38,43

39,53

40,08

Rwanda

40,54

45,24

46,62

48,64

Senegal

16,15

16,1

15,49

15,77

16,5

15,51

15,5

2,17

Seychelles Sierra Leone

6,98

7,47

7,96

8,38

11,17

12,57

South Africa

12,15

12,1

11,94

Sudan

6,89

6,95

7,6

7,58

8,18

8,1

8,13

Swaziland

10,35

Tanzania

10,05

10,27

10,69

10,72

10,16

Togo

46,15

45,96

45,78

45,23

Tunisy

17,86

17,84

17,96

17,57

17,92

17,75

Uganda

25,88

26,38

26,89

27,4

27,9

Zambia

7,08

Zimbabwe

8,35

265

Databook

Fig. 12 Diversification index, Source: World Bank Country

Diversification index

Marocco

67,3

Sudafrica Tunisy

Performance

Diversification index

Country

Good

Africa

45,6

Good

Rwanda

4,1

35,8

Good

Mauritania

3,9

Tanzania

30,1

Good

Sao Tome and Principe

3,9

Senegal

22,3

Good

Seychelles

3,9

4,1

Kenya

21,9

Good

Malawi

3,8

Madagascar

21,2

Good

Liberia

3,5

Swaziland

Good

Mozambique

3,5

Egypt

17,2

Good

Cameroon

3,3

Mauritius

13,4

Guinea

3,2

Zimbabwe

10,8

Botswana

2,8

Uganda

10,4

Burundi

2,6

Togo

9,3

Zambia

2,5

Namibia

9,1

Algeria

2,4

Eritrea

2,1

Capo Verde

Performance

Corte d'Avorio

7,7

Mali

Congo, Rep. Dem.

7,6

Burkina Faso

1,9

Bad

Sierra Leone

7,3

Gabon

1,9

Bad

Gambia

6,6

Congo, Rep.

1,4

Bad

Lesotho

6,6

Niger

1,4

Bad

Somalia

6,6

Equatorial Guinea

1,3

Bad

Benin

6,4

Libya

1,3

Bad

Gibuti

5,9

Nigeria

1,3

Bad

Central African Republic

5,5

Guinea-Bissau

1,2

Bad

Comoros

4,5

Sudan

1,2

Bad

Ethiopia

4,7

Angola

1,1

Bad

Ghana

4,5

Chad

1,1

Bad

Diversification index 10 Best Performer Morocco

67,3

Angola

South Africa

45,6

Chad

1,1

Tunisy

35,8

Guinea-Bissau

1,2

Tanzania

30,1

Sudan

1,2

Senegal

22,3

Equatorial Guinea

1,3

1,1

Kenya

21,9

Libya

1,3

Madagascar

21,2

Nigeria

1,3

Swaziland

266

10 Worst Performer

Congo, Rep.

1,4

Egypt, Arab Rep.

17,2

Niger

1,4

Mauritius

13,4

Gabon

1,9

Databook

Fig. 13 Rail lines (total route km), Fonte World Bank 2010 Country

Rail lines (total route km) 2001

2002

2003

2004

2005

2006

2007

Algeria

3.793

3.572

3.073

3.572

Angola

2.761

Benin

420

438

578

758

Botswana

888

Burkina Faso

622

Burundi

1.016

974

Cape Verde

Central African Republic

Chad

Comoros

Cameroon

Congo, Dem. Rep.

3.641

4.499

3.641

4.538

3.641

Congo, Rep.

900

1.026

795

894

795

Cote d'Ivoire

639

660

639

Djibouti

100

5.125

5.150

5.063

5.195

Eritrea

306

Ethiopia

681

699

Gabon

731

810

814

810

Egypt, Arab Rep. Equatorial Guinea

Gambia, The

Ghana

953

977

953

Guinea

837

2.634

â&#x20AC;Ś

2.778

490

Madagascar

883

732

854

Malawi

710

797

Mali

734

733

729

Mauritania

717

Guinea-Bissau Kenya Lesotho Liberia Libya

Mauritius

1.907

Mozambique

2.035

2.072

3.070

3.123

Namibia

2.382

3.528

Nigeria

3.557

3.505

3.528

3.505

Rwanda

Senegal

906

Morocco

Niger

Seychelles Sierra Leone

South Africa

22.657

20.041

20.247

24.487

5.901

4.578

5.478

5.978

5.478

301

4.582

568

2.163

1.909

2.153

2.218

259

644

Zambia

1.273

1.673

Zimbabwe

2.700

2.910

3.077

Sudan Swaziland Tanzania Togo Tunisy Uganda

267

Databook

Fig. 14 Airports data, Source: Teh-Ambrosetti based on CIA 2010 data Country

Airports concentation (100 km)

Total Airports 2009

Paved airports (% on total airports)

Paved airports 2009

Algeria

143

0,011

Angola

192

0,006

0,015

Botswana

0,004

Burkina Faso

0,013

0,009

Benin

Burundi

Cameroon

0,029

Cape Verde

0,008

Central African Republic

0,248

Chad

0,006

0,004

100

0,215

Comoros Congo, Dem. Rep. Congo, Rep.

194

0,001

Cote d'Ivoire

0,057

Djibouti

0,009

Egypt, Arab Rep.

0,056

0,009

0,025

Equatorial Guinea Eritrea Ethiopia

0,012

Gabon

0,006

Gambia, The

0,016

100

Ghana

0,009

Guinea

0,005

0,007

181

0,025

Guinea-Bissau Kenya Lesotho

0,031

Liberia

0,086

137

0,033

0,008

Libya Madagascar Malawi

0,015

Mali

0,027

Mauritania

0,002

Mauritius

0,003

Morocco

0,245

Mozambique

155

0,008

Namibia

129

0,019

Niger

0,016

Nigeria

0,002

Rwanda

0,006

Senegal

0,200

Seychelles

0,010

Sierra Leone

3,070

South Africa

607

0,009

148

Sudan

121

0,050

0,005

125

0,081

Swaziland Tanzania Togo

0,013

Tunisy

0,014

Uganda

0,019

Zambia

0,015

0,013

Zimbabwe

268

Databook

Fig. 15 Roads total network (Km), Source: World Bank 2010 Country

Roads total network (Km) 2001

2002

2003

2004

Algeria

104.000

Angola

51.429

Benin

19.000

Botswana

24.102

Burkina Faso

92.495

Burundi Cameroon Cape Verde

2005

2006

108.302

109.563

51.492

19.000

16.000

24.102

25.233

24.455

25.798

92.495

14.480

12.322

50.000

1.350

Central African Republic

24.307

Chad

33.400

880

Comoros Congo, Dem. Rep.

156.741

153.497

151.564

Congo, Rep.

13.400

17.289

18.241

Cote d'Ivoire

58.500

80.000

3.065

Djibouti Egypt, Arab Rep.

69.800

92.370

98.734

Equatorial Guinea

2.880

Eritrea

4.010

32.871

33.297

33.856

36.469

37.018

39.477

8.547

9.170

10.235

Ethiopia Gabon Gambia, The

2.867

3.742

3.845

Ghana

46.179

47.787

54.311

57.613

62.221

Guinea

32.432

44.348

45.478

3.455

63.942

63.265

6.134

7.091

8.673

Liberia

10.600

Libya

95.789

100.024

124.568

Madagascar

56.763

65.663

70.987

Malawi

15.451

Mali

15.700

18.709

20.765

8.589

11.066

Guinea-Bissau Kenya Lesotho

Mauritania Mauritius

2.000

2.015

2.028

Morocco

57.679

57.694

57.734

57.493

57.626

Mozambique

30.400

Namibia

54.352

42.237

54.352

Niger

14.658

14.657

15.074

18.387

18.423

18.550

Nigeria

193.200

Rwanda

12.600

14.008

16.348

Senegal

13.576

458

Sierra Leone

11.330

11.300

South Africa

364.131

367.153

Seychelles

Sudan Swaziland Tanzania Togo

11.900

3.584

3.594

3.678

78.891

81.245

7.520

Tunisy

18.997

19.232

20.245

Uganda

70.746

Zambia

91.440

112.675

Zimbabwe

97.267

269

Databook

Fig. 16 Eletrification data, Source: UNDP HDI 2008 and World Bank 2010 Country Algeria

Eletrification rate (2005)

Eletricy production Kwh (2006)

Total eletricity consupmtion in Kwh (2006)

Consumption per capita in Kwh (2006)

35.226.000.000

29.013.000.000

869,93

Angola

2.959.000.000

2.530.000.000

148,05

Benin

127.000.000

602.000.000

74,06

Botswana

1.042.000.000

2.637.000.000

1.419,14

Burkina Faso Burundi

Cameroon

3.954.000.000

3.374.000.000

185,64

Cape Verde

Central African Republic

.. ..

Chad

Comoros

Congo, Dem. Rep.

7.886.000.000

5.801.000.000

95,66

Congo, Rep.

453.000.000

573.000.000

164,37

Cote d'Ivoire

5.530.000.000

3.433.000.000

174,5

Djibouti

Egypt, Arab Rep.

115.407.000.000

102.475.000.000

1.303,72

Equatorial Guinea

Eritrea

269.000.000

Ethiopia

3.269.000.000

2.942.000.000

38,39

Gabon

1.726.000.000

1.420.000.000

1.017,47

Gambia, The

Ghana

8.429.000.000

6.985.000.000

311,92

Guinea

Guinea-Bissau

Kenya

6.477.000.000

5.313.000.000

145,35

Lesotho

Liberia

Libya

23.992.000.000

22.273.000.000

3.688,41

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

23.192.000.000

20.893.000.000

685,09

14.737.000.000

9.676.000.000

461,39

Mozambique Namibia

1.606.000.000

3.163.000.000

1.545,52

Niger

Nigeria

23.110.000.000

16.848.000.000

116,42

Rwanda

Senegal

2.439.000.000

1.816.000.000

156,78

Seychelles

Sierra Leone

South Africa

251.910.000.000

227.945.000.000

4.809,88

Sudan

4.209.000.000

3.570.000.000

90,28

Swaziland

Tanzania

2.776.000.000

2.319.000.000

57,81

Togo

221.000.000

625.000.000

101,71

Tunisy

14.122.000.000

12.363.000.000

1.220,66

Uganda

Zambia

9.385.000.000

8.534.000.000

710,01

Zimbabwe

9.776.000.000

11.903.000.000

955,35

270

Databook

Fig. 17 Boardband subscribers (1.000 people), Source: World Bank Country

Boardband subscribers (1.000 people) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

0,00

0,56

1,11

4,11

5,10

Angola

0,00

0,44

0,67

Benin

0,00

0,01

0,02

0,18

0,24

Botswana

0,00

0,87

0,97

1,88

Burkina Faso

0,00

0,01

0,03

0,12

8,48

Burundi

0,00

0,02

Cameroon

0,00

0,01

0,02

Cape Verde

0,00

0,60

1,96

15,42

14,86

14,80

Central African Republic

0,00

Chad

0,00

Comoros

0,00

0,01

Congo, Dem. Rep.

0,00

0,02

0,03

0,02

Congo, Rep.

0,00

Cote d'Ivoire

0,00

0,02

0,04

0,06

0,51

Djibouti

0,00

0,05

Egypt, Arab Rep.

0,00

0,01

0,07

0,39

1,83

3,25

5,96

9,43

Equatorial Guinea

0,00

0,30

Eritrea

0,00

Ethiopia

0,00

Gabon

0,00

0,13

0,48

1,12

1,26

1,39

Gambia, The

0,00

0,02

0,05

0,17

Ghana

0,00

0,04

0,09

0,57

0,71

0,74

Guinea

0,00

Guinea-Bissau

0,00

Kenya

0,00

0,15

0,48

0,47

Lesotho

0,00

0,01

0,02

Liberia

0,00

Libya

1,60

Madagascar

0,00

0,07

0,14

0,33

Malawi

0,00

0,01

0,03

0,11

Mali

0,00

0,26

0,41

Mauritania

0,00

0,06

0,32

1,28

1,84

Mauritius

0,00

0,24

0,97

2,08

4,34

22,26

48,78

57,55

Morocco

0,00

0,07

0,09

2,17

8,27

12,85

15,47

15,49

Mozambique

0,00

.. ..

Namibia

0,00

0,07

0,10

0,12

Niger

0,00

0,01

0,02

Nigeria

0,00

0,17

Rwanda

0,00

0,13

0,19

0,27

0,44

Senegal

0,00

0,12

0,22

0,70

1,60

2,50

3,21

3,88

Seychelles

0,00

4,23

11,44

29,26

41,08

39,58

Sierra Leone

0,00

South Africa

0,06

0,44

1,29

3,52

7,07

7,90

Sudan

0,00

0,02

0,03

0,05

1,05

Swaziland

0,00

Tanzania

0,00

Togo

0,00

0,19

0,30

Tunisy

0,00

0,03

0,29

1,75

4,33

9,38

22,01

Uganda

0,00

0,03

0,04

0,06

0,15

Zambia

0,00

0,01

0,02

0,19

0,45

Zimbabwe

0,06

0,23

0,51

0,72

0,82

1,22

271

Databook

Fig. 18 Internet users (1.000 people), Source: World Bank Country Algeria

Internet users (1.000 people) 2001

2002

6,46

2003

2004

15,92

21,95

2005

2006

46,35

58,44

2007

2008

73,76

103,39

Angola

1,36

2,7

3,71

4,65

11,43

19,08

28,37

30,52

Benin

3,63

7,03

9,51

11,83

12,71

15,38

17,87

18,47

34,22

33,8

33,42

33,06

32,68

43,05

53,15

41,99

1,55

1,97

3,67

3,94

4,64

6,27

7,44

9,21

Botswana Burkina Faso Burundi

1,06

1,18

2,01

3,49

5,42

6,58

7,02

8,05

Cameroon

2,77

3,61

5,88

9,76

14,05

20,36

29,55

Cape Verde

26,85

35,19

43,25

53,19

60,74

68,09

82,83

206,15

0,76

1,25

1,48

2,18

2,62

3,05

3,68

4,3 11,75

Central African Republic Chad

0,46

1,64

3,17

3,57

3,94

5,73

8,36

Comoros

4,53

5,68

8,69

13,61

33,31

34,22

35,17

Congo, Dem. Rep.

0,12

0,93

1,36

1,98

2,39

2,97

3,69

4,52

Congo, Rep.

0,32

1,57

4,6

10,78

14,63

20,08

27,6

42,88

Cote d'Ivoire

3,96

4,98

7,59

8,49

10,39

15,25

22,36

32,05

Djibouti

4,42

5,9

8,37

11,39

12,43

13,44

Egypt, Arab Rep.

8,39

26,07

40,38

51,51

117

125,16

131,56

154,17

Equatorial Guinea

1,65

3,21

5,21

8,44

11,5

12,79

15,57

18,2

Eritrea

1,57

2,25

7,18

11,48

17,67

21,31

24,78

30,02

Ethiopia

0,37

0,72

1,06

1,55

2,2

3,11

3,7

4,46

Gabon

13,48

19,4

26,6

29,79

48,93

54,89

57,67

62,15

Gambia, The

13,37

17,97

24,37

33,08

37,99

52,38

62,05

68,79

8,3

11,93

17,17

18,31

27,23

38,48

42,7

Ghana Guinea Guinea-Bissau

1,76

4,02

4,51

5,09

5,42

6,37

7,8

9,15

10,23

13,54

18,08

19,01

20,57

22,06

23,55

Kenya

6,24

12,15

29,6

30,42

31,21

75,79

79,93

87,18

Lesotho

2,62

10,87

15,39

21,87

25,99

30,08

34,9

36,34

Liberia

0,34

0,33

0,32

0,31

5,51

Libya

3,67

22,45

28,16

35,35

39,21

43,06

47,32

Madagascar

2,23

3,4

4,23

5,25

5,68

6,08

6,5

16,54

Malawi

1,67

2,2

2,86

3,58

3,97

4,4

10,02

22,14

Mali

1,94

2,36

3,2

4,44

5,17

7,39

8,11

9,83

Mauritania

2,65

3,68

4,28

4,86

6,75

9,86

14,42

Mauritius

88,34

103,29

122,67

194,59

241,3

255,39

269,69

299,49

Morocco

13,87

23,99

33,87

117,3

152,61

200,02

213,86

329,82

1,61

2,61

4,23

6,87

8,67

8,58

9,36

16,07

23,52

25,74

33,02

37,62

39,89

44,03

48,56

53,69

1,04

1,26

1,54

1,87

2,19

2,91

3,89

5,45

Mozambique Namibia Niger Nigeria

0,9

3,2

5,57

12,82

35,37

55,28

67,58

72,69

Rwanda

2,41

2,93

3,57

4,31

5,56

10,86

21,15

30,86

Senegal Seychelles

9,84

10,06

21,01

43,86

47,87

56,12

68,95

83,53

110,83

140,22

144,93

242,42

253,32

342,79

376,33

370,65

Sierra Leone

1,6

1,76

1,9

2,03

2,15

2,28

2,4

2,5

South Africa

64,49

68,51

71,68

86,3

76,77

78,07

82,88

Sudan Swaziland Tanzania

1,4

4,39

5,38

7,92

12,92

80,92

86,56

91,9

12,82

18,16

24,37

32,29

36,97

40,99

41,27 12,24

1,71

2,22

6,77

8,78

9,85

9,72

9,69

Togo

27,76

36,02

36,85

37,82

50,07

52,08

54,17

54,19

Tunisy

42,38

51,68

64,03

84,07

95,1

127,85

168,42

271,14

Uganda

2,38

3,84

4,65

7,2

17,42

25,29

36,72

78,97

Zambia

2,33

4,78

9,8

20,14

28,52

41,6

48,73

55,47

39,94

63,95

65,64

80,16

97,92

108,52

114,02

Zimbabwe

272

Databook

Fig. 19 Mobile subscribers (1.000 people), Source: World Bank Country Algeria Angola Benin Botswana Burkina Faso Burundi

Mobile subscribers (1.000 people) 2001

2002 3,23

2003

2004

14,33

45,38

2005

2006

150,85

415,82

2007

629,60

814,20

5,24

9,50

23,06

47,33

100,10

136,75

194,31

16,76

28,39

29,66

55,85

70,23

120,52

209,94

189,50

250,67

291,24

288,05

307,08

442,95

758,47

6,21

8,77

18,20

29,31

45,47

70,80

109,02

4,89

7,38

8,77

13,29

19,47

24,47

29,43

Cameroon

25,70

42,19

63,28

87,93

126,58

172,54

244,76

Cape Verde

68,30

90,92

110,28

132,84

161,25

209,92

279,10

Central African Republic

2,80

3,15

9,85

14,55

23,86

25,79

29,93

Chad

2,50

3,75

6,87

12,54

20,70

44,52

85,32

3,47

14,25

25,85

60,10

63,91

Comoros Congo, Dem. Rep.

2,88

10,46

22,59

34,98

46,75

72,81

105,64

Congo, Rep.

45,66

65,87

95,69

108,70

135,74

216,84

354,15

Cote d'Ivoire

41,91

58,05

71,22

91,62

126,42

214,94

365,89

4,01

19,67

29,61

43,63

54,78

53,88

54,02

Djibouti Egypt, Arab Rep.

41,23

65,14

82,51

106,82

187,09

242,71

398,15

Equatorial Guinea

34,03

70,91

89,84

130,90

200,17

282,46

433,46

4,59

8,93

13,21

14,46

Eritrea Ethiopia Gabon

0,41

0,72

2,12

5,46

11,23

15,28

124,45

227,52

240,17

385,29

570,77

685,06

878,83

Gambia, The

38,50

67,69

97,96

111,42

153,04

243,14

466,31

Ghana

11,83

18,34

36,87

76,85

127,56

226,32

324,11

Guinea

6,66

10,66

12,86

17,54

20,99

0,85

25,47

61,88

95,61

174,80

Guinea-Bissau Kenya

18,71

36,07

47,09

73,43

129,55

200,81

304,82

Lesotho

29,83

71,41

64,60

99,81

126,10

179,42

227,34

Liberia

0,63

6,50

14,36

28,18

46,49

78,24

150,01

Libya

9,16

12,57

22,35

86,21

337,94

650,40

730,94

Madagascar

8,85

9,51

16,08

18,41

27,37

54,59

112,74

Malawi

4,67

7,02

10,75

17,23

32,46

51,58

75,49

Mali Mauritania

2,33

4,33

22,62

36,12

65,63

126,41

201,30

41,81

90,87

125,29

181,25

251,63

348,31

416,54

Mauritius

227,04

287,67

378,15

444,10

528,31

616,22

741,26

Morocco

165,50

212,39

249,31

312,91

411,14

524,80

649,03

Mozambique

8,18

13,31

22,22

35,26

73,25

111,55

154,41

55,72

77,23

113,62

143,49

222,24

297,50

385,93

Niger

0,18

4,82

6,66

13,46

24,42

35,16

63,40

Nigeria

2,08

11,95

23,39

66,28

131,49

223,34

272,97

Rwanda

7,62

9,40

14,67

15,16

24,15

33,20

65,24

Namibia

Senegal Seychelles

28,45

50,82

69,99

97,74

146,99

247,06

332,20

451,75

534,42

594,55

659,02

709,36

831,44

908,81

Sierra Leone

5,72

13,61

21,93

132,69

South Africa

240,71

302,84

368,11

449,62

724,21

836,91

888,89

3,05

5,49

14,88

29,01

49,54

113,72

193,59

51,50

62,49

76,89

129,48

176,83

219,70

331,91

Sudan Swaziland Tanzania

7,94

17,04

53,13

51,78

88,10

146,14

204,10

Togo

17,04

29,60

41,24

54,78

69,51

110,45

180,89

Tunisy

40,23

58,71

194,87

376,11

566,43

724,62

765,25

Uganda

11,13

14,96

28,60

41,57

45,44

67,19

135,64

Zambia

11,36

12,80

21,77

41,20

82,73

142,21

221,40

Zimbabwe

24,59

26,35

28,10

32,69

49,32

64,19

91,45

273

Databook

Fig. 20 Population, Fonte: World Bank Country

Population (Milions) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

30,95

31,41

31,89

32,37

32,85

33,35

33,85

34,36

Angola

14,70

15,16

15,65

16,14

16,62

17,09

17,55

18,02

Benin

6,88

7,11

7,36

7,61

7,87

8,13

8,39

8,66

Botswana Burkina Faso Burundi

1,75

1,78

1,80

1,82

1,84

1,86

1,88

1,90

12,26

12,66

13,08

13,51

13,93

14,36

14,78

15,21

6,60

6,77

6,96

7,16

7,38

7,60

7,84

8,07

Cameroon

16,24

16,63

17,02

17,41

17,80

18,17

18,53

18,90

Cape Verde

0,45

0,46

0,47

0,48

0,49

0,50

Central African Republic

3,93

4,00

4,06

4,12

4,19

4,26

4,34

4,42 11,07

Chad

8,78

9,12

9,47

9,81

10,15

10,47

10,76

Comoros

0,55

0,56

0,58

0,59

0,60

0,61

0,63

0,64

52,04

53,54

55,17

56,92

58,74

60,64

62,40

64,21

Congo, Dem. Rep. Congo, Rep.

3,10

3,18

3,26

3,34

3,42

3,49

3,55

3,62

Cote d'Ivoire

17,69

18,07

18,45

18,84

19,24

19,67

20,12

20,59

Djibouti Egypt, Arab Rep.

0,75

0,76

0,78

0,79

0,80

0,82

0,83

0,85

71,52

72,89

74,30

75,72

77,15

78,60

80,06

81,53

Equatorial Guinea

0,54

0,56

0,58

0,59

0,61

0,63

0,64

0,66

Eritrea

3,83

4,00

4,18

4,35

4,53

4,69

4,84

5,00

Ethiopia

67,27

69,06

70,88

72,75

74,66

76,63

78,65

80,71

1,26

1,29

1,32

1,34

1,37

1,40

1,42

1,45

Gabon Gambia, The

1,35

1,39

1,44

1,48

1,53

1,57

1,62

1,66

Ghana

20,00

20,47

20,95

21,44

21,92

22,39

22,87

23,35

Guinea

8,54

8,71

8,87

9,04

9,22

9,41

9,62

9,83

Guinea-Bissau

1,34

1,37

1,40

1,44

1,47

1,51

1,54

1,58

32,07

32,91

33,78

34,67

35,60

36,55

37,53

38,53

1,91

1,93

1,95

1,97

1,98

1,99

2,01

2,02

Liberia

2,96

3,06

3,14

3,22

3,33

3,47

3,63

3,79

Libya

5,46

5,57

5,68

5,80

5,92

6,04

6,16

6,28

15,73

16,19

16,66

17,13

17,61

18,11

18,60

19,11

Malawi

11,94

12,26

12,57

12,89

13,23

13,57

13,92

14,28

Mali

10,30

10,61

10,93

11,26

11,61

11,97

12,33

12,71

Mauritania

2,64

2,72

2,80

2,88

2,96

3,04

3,12

3,20

Mauritius

1,20

1,21

1,22

1,23

1,24

1,25

1,26

1,27

Morocco

28,83

29,18

29,52

29,84

30,14

30,50

30,86

31,23

Mozambique

18,66

19,13

19,61

20,08

20,53

20,97

21,37

21,78

Kenya Lesotho

Madagascar

Namibia Niger

1,91

1,94

1,97

1,99

2,02

2,05

2,08

2,11

11,53

11,94

12,37

12,81

13,26

13,74

14,20

14,67

Nigeria

128,04

131,34

134,66

138,00

141,36

144,72

147,98

151,32

Rwanda

8,31

8,54

8,69

8,82

8,99

9,21

9,45

9,72

Senegal

10,16

10,43

10,71

10,99

11,28

11,58

11,89

12,21

0,08

0,09

Seychelles Sierra Leone

4,37

4,54

4,73

4,93

5,11

5,27

5,42

5,56

South Africa

44,81

45,25

45,80

46,35

46,89

47,39

47,85

48,69

Sudan

35,67

36,41

37,14

37,90

38,70

39,55

40,43

41,35

1,09

1,10

1,11

1,12

1,14

1,15

1,17 42,48

Swaziland Tanzania

35,03

35,96

36,93

37,95

39,01

40,12

41,28

Togo

5,40

5,55

5,70

5,84

5,99

6,14

6,30

6,46

Tunisy

9,67

9,78

9,84

9,93

10,03

10,13

10,23

10,33

Uganda

25,22

26,04

26,89

27,78

28,70

29,65

30,64

31,66

Zambia

10,72

10,97

11,22

11,47

11,74

12,02

12,31

12,62

Zimbabwe

12,50

12,52

12,51

12,49

12,48

12,46

12,45

12,46

274

Databook

Fig. 21 Rural population (% of total population), Source: World Bank Country

â&#x20AC;&#x153;Rural population (% of total population) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

39,5

38,8

38,1

37,4

36,7

36,06

35,42

34,78

Angola

45,1

44,2

43,3

Benin

61,36

61,02

60,68

60,34

59,6

59,2

58,8

Botswana

45,98

45,16

44,34

43,52

42,7

41,94

41,18

40,42

Burkina Faso

83,06

82,72

82,38

82,04

81,7

81,28

80,86

80,44

Burundi

91,46

91,22

90,98

90,74

90,5

90,2

89,9

89,6

Cameroon

49,22

48,34

47,46

46,58

45,7

44,88

44,06

43,24

Cape Verde

45,8

44,2

43,4

42,6

41,86

41,12

40,38

Central African Republic

62,3

62,2

62,1

61,9

61,74

61,58

61,42

Chad

76,22

75,84

75,46

75,08

74,7

74,24

73,78

73,32

Comoros

71,94

71,98

72,02

72,06

72,1

72,04

71,98

71,92

Congo, Dem. Rep.

69,74

69,28

68,82

68,36

67,9

67,28

66,66

66,04

Congo, Rep.

41,32

40,94

40,56

40,18

39,8

39,42

39,04

38,66

Cote d'Ivoire

55,84

55,18

54,52

53,86

53,2

52,54

51,88

51,22

Djibouti

16,14

15,58

15,02

14,46

13,9

13,5

13,1

12,7

Egypt, Arab Rep. Equatorial Guinea

57,4

57,36

57,32

57,28

61,18

61,16

61,14

61,12

61,1

60,94

60,78

60,62

Eritrea

81,88

81,56

81,24

80,92

80,6

80,16

79,72

79,28

Ethiopia

84,86

84,62

84,38

84,14

83,9

83,6

83,3

Gabon

19,2

18,5

17,8

17,1

16,4

15,92

15,44

14,96

Gambia, The

49,94

48,98

48,02

47,06

46,1

45,26

44,42

43,58

Ghana

55,24

54,48

53,72

52,96

52,2

51,46

50,72

49,98

Guinea

68,6

68,2

67,8

67,4

66,52

66,04

65,56

70,32

70,34

70,36

70,38

70,4

70,32

70,24

70,16

Guinea-Bissau Kenya Lesotho

80,1

79,9

79,7

79,5

79,3

78,7

78,4

79,34

78,68

78,02

77,36

76,7

75,98

75,26

74,54

Liberia

44,94

44,18

43,42

42,66

41,9

41,22

40,54

39,86

Libya

23,48

23,36

23,24

23,12

22,82

22,64

22,46

Madagascar

72,62

72,34

72,06

71,78

71,5

71,16

70,82

70,48

Malawi

84,38

83,96

83,54

83,12

82,7

82,2

81,7

81,2

Mali

71,58

71,06

70,54

70,02

69,5

68,94

68,38

67,82

Mauritania

59,92

59,84

59,76

59,68

59,6

59,4

59,2

Mauritius

57,38

57,46

57,54

57,62

57,7

57,64

57,58

57,52

Morocco

46,36

46,02

45,68

45,34

44,66

44,32

43,98

Mozambique

68,54

67,78

67,02

66,26

65,5

64,72

63,94

63,16

Namibia

67,06

66,52

65,98

65,44

64,9

64,32

63,74

63,16

Niger

83,78

83,76

83,74

83,72

83,7

83,62

83,54

83,46

Nigeria

56,76

56,02

55,28

54,54

53,8

53,08

52,36

51,64

Rwanda

85,46

84,72

83,98

83,24

82,5

82,22

81,94

81,66

Senegal

59,2

58,8

58,6

58,4

58,14

57,88

57,62

Seychelles

48,62

48,24

47,86

47,48

47,1

46,62

46,14

45,66

Sierra Leone

64,24

63,98

63,72

63,46

63,2

62,88

62,56

62,24

South Africa

42,62

42,14

41,66

41,18

40,7

40,22

39,74

39,26

Sudan

62,96

62,02

61,08

60,14

59,2

58,32

57,44

56,56

Swaziland

76,54

76,38

76,22

76,06

75,9

75,62

75,34

75,06

Tanzania

77,32

76,94

76,56

76,18

75,8

75,36

74,92

74,48

Togo

62,82

62,14

61,46

60,78

60,1

59,4

58,7

Tunisy

36,22

35,84

35,46

35,08

34,7

34,3

33,9

33,5

Uganda

87,82

87,74

87,66

87,58

87,5

87,34

87,18

87,02

Zambia

65,16

65,12

65,08

65,04

64,86

64,72

64,58

Zimbabwe

65,78

65,36

64,94

64,52

64,1

63,62

63,14

62,66

275

Databook

Fig. 22 Primary school enrollment (%), Source: World Bank Country

Primary school enrollment (%) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

93,8

95,48

96,33

96,72

96,62

95,18

95,35

Angola

Benin

78,93

82,22

77,72

80,17

Botswana

83,47

83,93

84,26

85,33

83,99

Burkina Faso

36,06

35,4

37,21

39,62

44,07

46,94

52,15

58,15

Burundi

51,24

50,24

53,61

55,18

58,28

74,6

81,24

Cameroon Cape Verde Central African Republic Chad

91,3

95,07

94,18

91,79

90,08

87,8

84,51

45,1

45,61

53,83

56,21

54,46

58,31

60,22

Comoros

Congo, Dem. Rep.

56,41

57,36

54,93

54,71

53,82

Congo, Rep. Cote d'Ivoire Djibouti

28,81

29,54

31,39

32,82

34,42

37,75

40,06

45,3

Egypt, Arab Rep.

93,56

93,94

94,83

95,96

93,74

93,88

95,75

Equatorial Guinea

93,11

91,75

87,07

67,08

Eritrea

39,1

43,23

46,87

48,33

48,58

46,54

41,19

Ethiopia

41,87

43,91

44,91

48,17

59,58

65,22

71,38

Gabon

87,99

Gambia, The

68,69

66,58

69,55

63,41

61,11

72,28

70,97

66,53

Ghana

55,39

58,19

60,93

56,94

63,86

63,61

71,56

72,9

Guinea

51,58

59,62

63,58

67,17

69,41

71,57

73,64

Guinea-Bissau

45,15

62,36

74,86

74,17

75,82

75,48

86,29

77,75

77,99

78,22

75,94

75,2

72,36

39,47

30,86

Kenya Lesotho Liberia Libya Madagascar

65,86

66,85

76,83

88,96

92,93

95,91

98,46

Malawi

93,83

92,77

91,12

87,01

Mali

53,94

53,84

53,85

59,13

60,51

63,02

.. ..

Mauritania

68,1

69,31

70,62

78,28

76,72

79,5

80,44

Mauritius

92,37

93,94

95,57

94,83

94,96

95,03

95,38

Morocco

80,52

85,3

86,96

86,81

87,45

88,11

88,85

Mozambique

60,84

56,87

71,11

76,6

76,05

Namibia

82,25

84,1

84,58

83,02

84,09

83,84

86,52

Niger

30,7

34,13

38,02

41,83

42,47

43,42

44,89

Nigeria

61,13

62,19

62,98

63,81

Rwanda

68,36

70,47

75,36

71,55

78,72

91,47

93,6

Senegal

57,92

53,49

63,04

67,57

69,64

70,72

71,92

Seychelles

93,88

93,99

94,82

99,4

Sierra Leone

South Africa

91,3

90,37

90,12

88,31

86,32

85,32

85,76

Sudan Swaziland

75,34

74,77

74,63

77,11

78,15

84,17

87,01

Tanzania

58,45

74,05

83,15

87,96

92,54

97,85

Togo Tunisy

77,3

79,88

76,61

78,29

77,51

80,13

77,23

94,69

96,33

97,01

97,38

97,03

96,1

95,05

Uganda

94,61

Zambia

66,95

69,15

83,19

92,03

91,99

94,05

Zimbabwe

85,67

82,64

81,74

87,8

276

Databook

Fig. 23 Primary school completion (%), Source: World Bank Country

Primary school completion (%) 2001

2002

2003

2004

2005

2006

2007

2008

Algeria

89,44

91,48

92,91

94,34

95,83

85,23

95,14

Angola

38,8

40,91

45,06

48,65

64,66

64,4

Benin Botswana

92,53

94,08

94,31

94,29

94,61

Burkina Faso

26,14

26,66

29,09

30,28

31,29

33,3

37,07

Burundi

25,26

25,56

29,91

32,21

34,62

36,27

39,23

51,28

57,07

59,16

52,1

51,79

55,47

96,09

97,09

97,58

95,42

81,36

92,25

86,24

24,9

22,19

24,29

24,38

30,24

30,45

24,69

27,58

32,67

34,49

31,19

30,8

30,43

47,83

46,95

50,37

50,49

Cameroon Cape Verde Central African Republic Chad Comoros Congo, Dem. Rep.

38,53

50,68

Congo, Rep.

54,53

56,94

53,52

76,86

67,1

73,21

72,27

Cote d'Ivoire

42,24

42,84

44,69

Djibouti

27,68

32,92

32,7

31,22

35,48

Egypt, Arab Rep.

95,08

93,23

93,39

94,94

97,99

93,8

98,45

Equatorial Guinea

55,88

54,29

47,79

58,25

66,72

Eritrea

36,68

35,22

38,62

43,61

51,59

48,91

46,38

Ethiopia

26,62

29,96

32,96

35,63

41,33

45,42

46,28

75,97

74,7

Gambia, The

74,87

72,43

75,2

66,01

63,82

70,41

71,58

69,02

Ghana

62,45

65,21

64,48

70,68

77,7

Guinea

35,06

39,53

40,11

51,02

58,3

63,73

64,2

Guinea-Bissau

26,94

Gabon

Kenya Lesotho

90,04

92,62

62,09

63,33

65,34

67,45

62,3

78,32

Liberia

63,43

54,74

Libya

35,29

39,17

45,14

57,62

56,87

61,52

65,88

67,86

57,26

56,17

55,07

55,36

Madagascar Malawi Mali

36,99

37,67

40,69

42,55

44,11

49,42

52,18

Mauritania

48,57

45,98

47,21

44,28

46,01

47,14

59,44

Mauritius

105,63

103,2

100,37

99,39

97,22

92,3

93,53

Morocco

58,78

61,72

66,63

74,94

80,3

84,02

83,38

Mozambique

18,83

22,22

29,51

41,67

41,81

46,32

Namibia

86,41

84,49

84,53

77,87

78,79

76,85

77,08

Niger

19,52

21,06

20,34

26,57

29,61

32,72

39,6

Nigeria

71,92

72,37

Rwanda

21,93

26,66

35,19

35,5

Senegal Seychelles

41,97

44,3

44,36

46,48

51,48

48,66

50,13

117,61

118,33

115,75

104,69

114,87

113,86

Sierra Leone

80,75

South Africa

94,69

97,09

100,21

92,15

82,32

84,45

Sudan

39,39

41,34

44,37

46,2

46,87

49,97

Swaziland

60,99

63,17

60,67

63,29

66,68

67,41

74,62

Tanzania

54,79

59,27

59,06

56,46

74,35

85,41

111,67

66,4

69,49

65,06

66,1

65,03

64,46

57,38

Tunisy

87,05

90,95

93,82

96,65

99,17

119,57

99,86

Uganda

57,22

59,2

59,5

55,5

54,43

Togo

Zambia Zimbabwe

59,71

71,13

82,72

84,04

88,09

89,2

82,85

81,03

277

Databook

Fig. 24 Ranking Doing Business (Subshara), Source: World Bank

Closing a Business

Enforcing Contracts

Trading Across Borders

Paying Taxes

Protecting Investors

Getting Credit

Registering Property

Employing Workers

Dealing with Construction Permits

Ease of Doing Business Rank

Country

Starting a Business

Ranking Doing Business (Subsahara)

Mauritius

South Africa

Botswana

Namibia

3 34

Rwanda

Zambia

Ghana

Kenya

Ethiopia

Seychelles

Uganda

Swaziland

Nigeria

Lesotho

Tanzania

Malawi

Madagascar

Mozambique

Gambia, the

Cape Verde

Burkina Faso

Sierra Leone

Liberia

Sudan

Mali

Senegal

Gabon

Zimbabwe

Comoros

Togo

Mauritania

Côte d'Ivoire

Angola

Equatorial Guinea

Cameroon

Benin

Guinea

Niger

Eritrea

Burundi

34 34

Chad

Congo, Rep.

São Tomé and Principe

Guinea-Bissau

Congo, Dem. Rep.

Central African Rep.

278

Databook

Fig. 25 ADAM â&#x20AC;&#x201C; Ambrosetti Development Africa Map; situazione al 2001 - (Fonte: elaborazione TEH-Ambrosetti)

279

Databook

Fig. 26 ADAM â&#x20AC;&#x201C; Ambrosetti Development Africa Map; situazione al 2004 - (Fonte: elaborazione TEH-Ambrosetti)

280

Databook

Fig. 27 ADAM â&#x20AC;&#x201C; Ambrosetti Development Africa Map; situazione al 2007 - (Fonte: elaborazione TEH-Ambrosetti)

281

Databook

Fig. 28 ADAM â&#x20AC;&#x201C; Ambrosetti Development Africa Map; situazione al 2008 - (Fonte: elaborazione TEH-Ambrosetti)

282

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