Prof. Mthuli Ncube gives a keynote address on the 2nd of May 2011 in Copenhagen on the 'Danida Development Days - Myths and Realities in Africa’s new development'

1. Myths and Realities of Africa’s Development Mthuli Ncube Chief Economist and Vice President African Development Bank group 2 May 2011 DANIDA DEVLOPMENT DAYS, Copenhagen: 2-4 May 2011 1

2. Africa’s Economic Growth:2000-2010 African growth is strong. Africa the 3rd fastest growth region over 10 years Africa did well out of financial crisis due to good economic management, and diversification GDP level at US$1.6 billion at par with Brazil or Russia Growth is being held back by factors such as infrastructure (taking away 2% of GDP growth) Africa is natural resource rich Growth not Inclusive Source:AfDB 2

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4. Africa’s Socio-Economic Progress Poverty levels are falling Per capita income is rising Inequality is rising Intra-Africa trade has risen slightly and so has Africa’s share of world global trade ICT access and penetration has increased substantially Access to water and sanitation has not improved 4

5. Africa’s Socio-Economic Progress….continued Staple food yields have not improved Fertilizer consumption has fallen Under-5 child mortality has fallen Primary school completion rates are flat Number of fragile states has dropped Combustible renewables and waste to generate energy is not increasing Cost of doing business has fallen Time required for business start-up has fallen 5

6. Regulatory Policy Improvements in Africa Improvements in regulatory environment Reforming countries grow faster Investment climate is improving Rising Middleclass of 300 million people critical to private sector growth Source: McKinsey Global institute 6

7. Intra-Africa Trade Intra-Africa trade remains low compared to other regions Investment in regional transport infrastructure and ports, is necessary Source: AfDB 7

8. Sub-Saharan Africa lags behind other developing regions on all dimensions Regional connectivity is particularly lacking 8

9. Power : Missing links Source: AUC, AfDB, WB presentation at UN Millennium Summit, September 2010 9

10. Roads : Missing links Source: AUC, AfDB, WB presentation at UN Millennium Summit, September 2010 10

11. ICT: Missing links Source: AUC, AfDB, WB presentation at UN Millennium Summit, September 2010 11

12. Africa’s Agriculture Performance Agriculture sector is important as 60% of population in Africa depends on it Staple crop yields remain flat Fertilizer consumption low Source: FAO 12

13. Africa’s Governance Progress Improvements in 3 areas of governance No improvement in “voice and accountability” Static in “government effectiveness” Source: World Governance Indicators 2010 13

15. Macroeconomic stability

16. Diversified export base

18. Macroeconomic stability

19. Diversified export base

20. Financial markets(e.g. Ghana, Kenya) Pre-Transition Fragile States Oil Producers: additional criteria focusing more on capacity to manage oil revenues (e.g. Angola, Libya)

21. Africa’s Development Challenges Infrastructure Deficit (US$45 billion annually) Opportunity but Better management of relationships with “new partners”: China, India, Brazil, Russia, etc Regional integration Improving investment climate Promoting Domestic Direct Investment (DDI) Development Small to Medium Scale enterprises 15

22. Africa’s Development Challenges….continued Economic structural transformation Balancing “population dividend” with “poverty challenges” Inclusive growth and Youth Unemployment Higher education, vocation education and skills development Financial inclusion Development of agricultural sector 16

23. Africa’s Development Challenges…continued Domestic resource mobilization Effective and transparent management of natural resource revenues< e.g SWFs Dealing with illicit financial flows Piracy Leveraging ODA for private sector support Instituting flexible macroeconomic management Ensuring “Strong, Sustained and Shared Growth, which is preferably Clean” (SSSc) 17

24. Thank You 18