African Economic
Outlook 2016
SPECIAL THEME:

Sustainable Cities and Structural Transformation
Algeria
AngolaBenin
Botswana
Burkina Faso
BurundiCabo Verde
Cameroon
Central African Republic
Chad
Comoros
Congo
Congo, Dem. Rep.
Côte d’Ivoire
Djibouti
Egypt
Equatorial Guinea
Eritrea
Ethiopia
Gabon
GambiaGhana
GuineaGuinea-Bissau
Kenya
LesothoLiberia
Libya
Madagascar
MalawiMali
Mauritania
Mauritius
MoroccoMozambique
Namibia
Niger
Nigeria
Rwanda
Sao Tome and Principe
Senegal
Seychelles
Sierra Leone
SomaliaSouth Africa
South Sudan
Sudan
Swaziland
Tanzania
Togo
Tunisia
UgandaZambiaZimbabwe

ÉCOLE

EDITION
AFRICANECONOMICOUTLOOK

AFRICAN DEVELOPMENTBANK GROUP﻿

Foreword
The African Economic Outlook (AEO) celebrates its 15th edition this year. The African
Development Bank, the OECD Development Centre and the United Nations Development
Programme partner to produce this annual report. A team of over 100 researchers,
economists, statisticians and other experts from Africa and other regions of the world
collaborate on the AEO.
The AEO analyses the present state of affairs in Africa, provides two-year forecasts
and addresses a special theme, supporting all with extensive data. The five chapters inPart I cover economic and social aspects of the continent and allude to this year’s theme:
sustainable cities and structural transformation. Part II’s three chapters concentratesolely on the theme, building on analysis from the African Economic Outlook 2015: Regional
Development and Spatial Inclusion. Country notes on each of Africa’s 54 countries constitutePart III; their short version is produced here. For the first time, the statistical annex
includes a table on gender, comparing indicators from the three partner organisations.
The African Economic Outlook is available in various editions and formats.
For the AEO’s 15th anniversary, the partners have redesigned the website:www.africaneconomicoutlook.org. The site is now easier to navigate and houses past
editions, in addition to the following:• this report in English and French and an abridged version in Portuguese• thefull-length country notes in their original language and accompanying
individual tables and figures• an overview of the report’s chapters with key figures by subregion, in English andFrench.

© AfDB, OECD, UNDP 2016

African Economic Outlook

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﻿

﻿

Editorial
Africa’s economic performance held firm in 2015, amid global headwinds andregional shocks. Growth in real GDP is estimated at 3.6%, higher than the 3.1% for the
global economy and 1.5% for the euro area. Africa remained the world’s second fastest
growing economy after East Asia. In 2015, sub-Saharan Africa (excluding South Africa)grew faster than the continental average, at 4.2%, with East Africa leading the way at
6.3%. Growth in Central, North and West Africa was above 3%, while Southern Africa
grew by an average of 2.2%. Looking ahead, average growth in Africa is expected toremain moderate at 3.7% in 2016 but could accelerate to 4.5% in 2017. This forecast hinges
on the strength of the world economy and a gradual recovery in commodity prices.
In 2015, total external flows to Africa were estimated at USD 208 billion, withremittances remaining the main contributor. Confirming the world’s positive outlook
on the continent, African governments have been able to tap into international capital
markets through sovereign bond issuances. However, due to global headwinds and somecountry-specific risks, interest rates inched higher. The global economic environmentis affecting African countries differently. Revenues are dropping in resource-richcountries, while oil importers are benefiting from lower inflation as well as less pressure
on current accounts. Amid tighter global financial conditions, some countries face large
fiscal deficits.
The resilience in Africa’s growth is partly owed to domestic factors, including
private consumption, public infrastructure development and private investment. In themedium term, continued improvement in the business environment and fast expanding
regional markets may increasingly become new sources of growth for the continent. The
rise of intra-regional trade, in particular, illustrates growing opportunities for African
producers to diversify their trade. Africa also possesses significant potential for ademographic dividend, spurred by the continent’s young population. However, to benefit
from this potential, governments must focus on putting in place and implementing theright policies.
Turning Africa’s steady resilience into better lives for Africans requires strong policy
action to promote faster and more inclusive growth. Three out of every four Africans
still live under poor human conditions, compared to one in five globally. To achieve thedevelopment objectives set by African institutions and the international community,
African countries must deepen structural and regulatory reforms, foster macroeconomic
stability, and tackle power supply bottlenecks in order to address the obstacles to thetransformation of their economies. Coupled with investment in social sectors, this will
open up more opportunities for youth and for women.
Africa’s ongoing, multi-faceted urban transition and the densification it produces
offer new opportunities for improving economic and social development while protecting
the environment. These can be better harnessed to achieve the Sustainable Development
Goals (SDGs) – especially SDG 11 on sustainable cities and communities – and theobjectives of the African Union’s Agenda 2063. The benefits could accrue to both urban
and rural dwellers, provided governments adopt an integrated approach. For instance,
connecting urban markets to rural economies could increase productivity of agriculture
and raise non-farm incomes. Accelerating investment in urban infrastructure is criticalto turn African cities and towns into engines of structural transformation at the local,
national and regional levels. In order to seize this “urbanisation dividend”, a numberof bold policy reforms are necessary. For example, national urban strategies must be
tailored to specific contexts, harness innovative financing instruments, and strengthen
ongoing efforts to promote efficient multi-level governance systems.

© AfDB, OECD, UNDP 2016

African Economic Outlook

5

editorial

In 2016, the emerging common African position on urban development and theinternational New Urban Agenda provide the opportunity to discuss different options
and begin moulding ambitious urbanisation policies into concrete strategies for Africa’s
structural transformation.
This edition marks the 15th anniversary of the African Economic Outlook. It is our hopethat this report will continue to inform decisions and to stimulate a rich dialogue on theway forward for Africa’s development.
Akinwumi Ayodeji Adesina
President,
African Development
Bank Group,
Abidjan6

African Economic Outlook

Angel Gurría
Secretary-General,
Organisation for Economic
Co-operation and Development,
Paris

Helen Clark
Administrator,
United Nations
Development Programme,
New York© AfDB, OECD, UNDP 2016

Acknowledgements
The African Economic Outlook (AEO) was prepared by a consortium of three teams fromthe African Development Bank (AfDB), the OECD Development Centre and the United
Nations Development Programme (UNDP). The Outlook benefited from the overall
guidance of Abebe Shimeles (Acting Director, Development Research Department,
AfDB), Mario Pezzini (Director, OECD Development Centre) and Ayodele Odusola (Chief
Economist and Head of the Strategic Advisory Unit, Regional Bureau for Africa, UNDP).
Willi Leibfritz was the Co-ordinator.
The AfDB team was led by Anthony Simpasa. Key team members included Zorobabel
T. Bicaba and Adeleke Oluwole Salami. The team at the OECD Development Centre was
led by Henri-Bernard Solignac-Lecomte, while the team at UNDP was led by Angela
Lusigi.
Part I on Africa’s performance and prospects was drafted by Willi Leibfritz, basedon the forecast provided by the AfDB Statistics Department (Chapter 1), Helmut Reisen,
Robert Kappel and Birte Pfeiffer (Chapter 2) who also contributed Box 1.1, Mouhamadou
Sy, Zorobabel T. Bicaba and Anthony Simpasa (Chapter 3), Angela Lusigi (Chapter 4)
and Bakary Traoré, Sébastien Markley, Anissa Bensaïd and Héloïse Daste (Chapter 5).
Chapters 2 and 3 benefited from data analysis by Bakary Traoré and Sébastien Markley.
Part II on sustainable cities and structural transformation was drafted by Arthur
Minsat with valuable assistance from Thang Nguyen, Héloïse Daste, Paula Misler,
Mmachukwu Oyeka, Lennart Ploen, Anissa Bensaïd, Luisa Freitas and Paula Rettl as wellas key input from Edgar Pieterse, Susan Parnell and Anton Cartwright (African Centre
for Cities).
In collaboration with the partner institutions and under the overall guidance of
the AfDB regional directors and lead economists, all AfDB country economists havecontributed to the country notes. In most cases, they collaborated with UNDP country
economists and/or Development Centre economists. The work on the country notes
greatly benefited from the valuable contributions of local consultants in selected
countries. The country notes were drafted by the people below.
Country

Authors

Algeria

Tarik Benbahmed, Hervé Lohoues and Mickaelle ChauvinAngolaJoel Muzima and Glenda Gallardo

Benin

Daniel Ndoye, El Hadji Fall and Janvier P. Alofa

Botswana

George J. Honde

Burkina Faso

Tankien Dayo, Facinet Sylla, Amata Sangho Diabate and Hervé Marie Patrice Kouraogo

BurundiJoel Tokindang and Daniel Gbetnkom

Cabo Verde

Adalbert Nshimyumuremyi and Anthony Simpasa

Cameroon

Richard Antonin Doffonsou and Corneille Agossou

Central African Republic

Kalidou Diallo

Chad

Claude N’Kodia and Ali Madaï Boukar

Comoros

Alassane Diabate and Attoumane Boina Issa

Congo

Nouridine Kane Dia and Ginette Mondongou Camara

Congo, Dem. Rep.

Jean Marie Vianney Dabire and Ernest Bamou

Côte d’Ivoire

Pascal Yembiline, Idrissa Diagne, El Allassane Baguia and Bakary Traoré

Djibouti

Guy Blaise Nkamleu

Egypt

Prajesh Bhakta, Assitan Diarra-Thioune and Angus Downie

Equatorial Guinea

Dominique Puthod and Domingos Mazivila

Eritrea

Nyende Magidu and Luka Jovia Okumu

Ethiopia

Admit Wondifraw Zerihun, James Wakiaga and Haile Kibret© AfDB, OECD, UNDP 2016

African Economic Outlook

7

ACKNOWLEDGEMENTSCountry

Authors

Gabon

Dominique Puthod and Celestin Tsassa

GambiaAdalbert Nshimyumuremyi and Yemesrach Assefa Workie

Ghana

Eline Okudzeto, Radhika Lal and Kordzo Sedegah

GuineaOlivier Manlan and Mamadou Bobo Sow

Guinea-Bissau

Yannis Arvanitis, Francis Jony Andrianarison and Inacio Ie

Kenya

Walter Odero, Wilmot Reeves and Julius Chokerah

Lesotho

Edirisa Nseera and Asha P. Kannan

Liberia

Patrick Hettinger and Janice Olivia James

Libya

Kaouther Abderrahim-Ben Salah

Madagascar

Simplice Zouhonbi, Tankien Dayo and Adamson Rasolofo

MalawiPeter Mwanakatwe and Alka Bhatia

Mali

Becaye Diarra, Abdoulaye Konate and Hamaciré Dicko

Mauritania

Marcellin Ndong Ntah, Isiyaka Sabo and Selma Cheikh Malainine

Mauritius

Ndoli Kalumiya and Emmanuel Bor

MoroccoVincent Castel

MozambiqueAndre Almeida Santos, Luca Monge Roffarello and Manuel Filipe

Namibia

Martha Phiri and Fabian Mubiana

Niger

Facinet Sylla and Bakary Dosso

Nigeria

Barbara Barungi, Ojijo Odhiambo, Robert Asogwa and Alemu Zerihun

RwandaEdward Batte Sennoga

Sao Tome and Principe

Flavio Soares Da Gama and Idrissa Sanoussi

SenegalToussaint Houeninvo, Khadidiatou Gassama and Souleman Boukar

Seychelles

Tilahun Temesgen, Kim Harnack and Jacob Oduor

Sierra Leone

Jamal Zayid, Moses Sichei and Milton Korseh-Hindowa

Somalia

Richard Walker and Salome KimaniSouth Africa

Wolassa Lawisso Kumo, Osten Chulu and Arthur Minsat

South Sudan

Guy Blaise Nkamleu and Frederick Mugisha

Sudan

Suwareh Darbo and Yousif Eltahir

Swaziland

Peninah Kariuki and Fatou Leigh

Tanzania

Chidozie Emenuga, Rogers Dhliwayo and Prosper Charle

Togo

Carpophore Ntagungira, Nicolas Kazadi and Jeanne Bougonou

Tunisia

Philippe Trape and Kaouther Abderrahim

UgandaAlexis Rwabizambuga, Vera Kintu Oling, Tony Muhumuza and Simon Peter Nsereko

ZambiaPeter Engbo Rasmussen, Colleen Zamba and Elda Chirwa

Zimbabwe

Mary Manneko Monyau and Amarakoon Bandara

The committee of peer reviewers of the country notes included Adamon Ndungu,
Adeleke Salami, Amadou Boly, Anthony Simpasa, Audrey Chouchane, Bumi Camara,Charlotte Karagueuzian, Cherif Diagne, Dawit Birhanu, El-Haji Mamadou Bah, Emelly
Mutambatsere, Eugene Bempong, Gilbert Galibaka, Jacob Oduor, Jacqueline Odula,
Jennifer Moyo, John Anyanwu, Kevin Lumbila, Linguere M. Mbaye, Mawuko Kokou
Kponnou, Mouhamadou Sy, Philip K. Quarcoo, Qingwei Meng, Sandrine Alissoutin,
Thierry Kangoye, Zeke Ger and Zorobabel Bicaba (AfDB); Betty Camara, Elizabeth Asiedu,
Sylvain Dessy, Eugenie Maiga, Una Osili, Jean-Michel Salmon, Peter Walkenhorst andLucia Wegner.
The macroeconomic framework and database used to produce the forecast andstatistical annex were managed by Koua Louis Kouakou and Chaouch Anouar at the
AfDB. Valuable statistical inputs for updating the database and running the AEO model
were provided by Chaouch Anouar, Koffi Dian Adou, Mbiya Kadisha, Soumaila Karambiri,
Doffou Marc Elisée Monsoh, Slaheddine Saidi, Stephane Regis Hauhouot, Amel Kchouk,
Slim Jerbi and Mustapha Bouzaine in the AfDB Statistics Department, under the guidanceof Charles Leyeka Lufumpa, Maurice Mubila, Koua Louis Kouakou and Nirina Letsara.

8

African Economic Outlook© AfDB, OECD, UNDP 2016

ACKNOWLEDGEMENTS

Bakary Traoré and Sébastien Markley assembled the final dataset for publication at theOECD Development Centre. The project also benefited from the assistance provided by
Rhoda Bangurah, Amira Jlassi, Abiana Nelson and Elisabeth Turner.
The report benefited from extremely valuable inputs and comments from a large
number of African government representatives, private-sector operators, civil society
members, sector specialists in the AfDB country operations departments and field
offices, the UNDP Africa Regional Bureau and Country Offices, the Sahel and West Africa
Club and the OECD Development Centre, Centre for Tax Policy and Administration,
Development Co-operation Directorate, Directorate for Financial and Enterprise Affairs,
Public Governance and Territorial Development Directorate, Economics Department,
and Trade and Agriculture Directorate.
Part II on sustainable cities and structural transformation drew heavily from theknowledge of international experts invited to the AEO 2016 experts’ meeting in Parison 8-9 October 2015: Yunzhong Liu (Development Research Center of the State Council[People’s Republic of China]); Deborah Potts (King’s College London); Nathalie Delapalme
and Yannick Vuylsteke (Mo Ibrahim Foundation); François Paul Yatta (UCLGA); Javier
Sanchez-Reaza and Luc Christiaensen (World Bank); Remi Jedwab (George Washington
University); Susan Parnell (Department of Environmental and Geographical Sciences at
the University of Cape Town); Serge Allou (Cities Alliance); Jeanette Marie Manjengwa(University of Zimbabwe); Felicity Proctor (Proctor Consulting Ltd.); Nick Godfrey
and Russell Bishop (New Climate Economy); Nicolas Ronderos (Consultant); Mariam
Yunusa (UN Habitat); Ronald Wall (IHS-Erasmus University Rotterdam / University of
the Witwatersrand, Johannesburg); Jean-Fabien Steck (Université Paris Ouest Nanterre);
Beacon Mbiba (Oxford Brookes University); Christel Alvergne (UNCDF); Kookie
Habtegaber (WWF); Jytte Agergaard (University of Copenhagen); Anthony Bigio (George
Washington University); Pierrick Hamon (Global Local Forum); Ambassador Dionisio
Pérez-Jácome Friscione (Representation of Mexico to the OECD); Irène Salenson (AFD);
Nora Selmet (International Energy Agency); William Tompson (OECD); Vikramdityasing
Bissoonauthsing (IRCC) and Wondimu Abeje (Wondimu Consult).
Annex 7.A1 was prepared by Ronald Wall (IHS-Erasmus University,
Rotterdam / University of the Witwatersrand, Johannesburg), with assistance by Dorcas
Nthoki, Marina Salimgareeva, Monserrat Budding-Polo Ballinas and Taslim Alade (IHSErasmus University, Rotterdam). The results of this work form part of UN-Habitat’s
forthcoming “State of African Cities Report 2017” developed by Alioune Badiane, Jos
Maseland, Katharina Rochell (UN-Habitat) and Ronald Wall, with support from the AfDB
and the Department for International Development (DFID).
Rana Roy (Consultant), François Yatta (UCLGA), Ronald Wall (IHS-Erasmus University
Rotterdam / University of the Witwatersrand, Johannesburg) and Kookie Habtegaber(WWF) contributed internal research papers. The WWF paper was drafted by Kookie
Habtegaber with input from: Laurent Some, Nigel Dudley, Aurélie Shapiro, Pablo
Izquierdo, Lars Erik Mangset, Stefano Esposito, Kiran Rajashekariah, Nyambe Nyambe,
Denis Landenbergue, Rod Taylor, Stuart Oor, Alexis Morgan, Valerie Burgener and Tabaré
A. Currás (WWF), Julia Pierini (BirdLife Zimbabwe), David Satterthwaite (International
Institute for Environment and Development), Shlomo (Solly) Angel (Marron Institute ofUrban Management, NYU), Stern Nathan Karres (The Nature Conservancy) and Mark
Swilling (Stellenbosch University).
Essential contributions to the thematic chapters were also made by José Tonato andClotilde Baï (AfDB); Marco Kamyia, Oyebanji Oyeyinka, Eduardo López Moreno, Regina
Orvananos, Mariam Yunusa and Gulelat Kebede (UN-Habitat); Edlam Abera Yemeru,
Semia Guermas Tapia and Sandra Zawedde (UNECA); William Cobbett, Rene Peter© AfDB, OECD, UNDP 2016

African Economic Outlook

9

ACKNOWLEDGEMENTS

Hohmann, Laura Lima and Julian Baskin (Cities Alliance); Christel Alvergne (UNCDF);
Nathalie Le Denmat and Charlotte Lafitte (UCLG); Stefanos Fotiou, José Pineda and Nicola
da Schio (UNEP); Thierry Giordano (FAO); Irène Salenson and Marie Bjornson-Langen(Agence Française de Développement); John E. Fernandez and Phebe Dudek (MIT); David
Albrecht (Consultant); David Ménascé (HEC); David Simon (Mistra Urban Futures);
Shlomo (Solly) Angel, Paul Romer, Patrick Lamson-Hall, Brandon Fuller and Alex Blei
(NYU Stern Urbanization Project); Remi Jedwab (George Washington University); Mark
Swilling (Stellenbosch University); Vanessa Watson (African Centre for Cities, Universityof Cape Town); Skye Dobson (Shack/Slum Dwellers International (SDI); Sogen Moodley(Municipal Institute of Learning, Ethekwini Municipality); Yitbarek Mengiste (Ministryof Urban Development, Housing and Construction of Ethiopia); Fantu Cheru (StockholmInternational Peace Research Institute); Charlie Martial Ngounou (Afroleadership);Graeme Harrison (Oxford Economics); Nora Selmet (IEA) as well as Philipp Heinrigs,
Thomas Allen, Rachel Scott, Hugh Macleman, William Tompson, Rudiger Ahrend,
Tadashi Matsumoto, Kwame Frimpong, Antonella Noya, Alexander Pick, Alessandra
Heinemann, Caroline Tassot, Keiko Nowacka, Gaëlle Ferrant and Annelise Thim (OECD).
Amadou Boly and Nadège Désirée Yaméogo (AfDB) provided valuable comments. Finally,
the chapters benefited from the guidance of Carl Dahlman and Nicola Harrington-Buhay(OECD).
The dedication of the editing, translation and proof-reading team was essential to thetimely production of this report. Jill Gaston managed the editorial process with Vanda
Legrandgérard, while Delphine Grandrieux oversaw the production of the publicationin both paper and electronic forms with Louise Schets. Aida Buendía and Pykha were
responsible for the design and layout of the report. Anne-Lise Prigent offered editorialadvice.
Additional financial support to this 2016 edition by Germany (GIZ), Ireland(Delegation of Ireland to the OECD), Italy (Delegation of Italy to the OECD), Portugal(Camões - Instituto da Cooperacão e da Lingua, I.P.) and Switzerland (SDC) is gratefully
acknowledged.

10African Economic Outlook© AfDB, OECD, UNDP 2016

Table of contents
Executive summary.......................................................................................................................................................................... 19
PART I: Africa’s Performance and Prospects.................................................................................................. 21
Chapter 1. Africa’s macroeconomic prospects................................................................................................................ 23
In brief................................................................................................................................................................................................. 24
Africa’s growth slowed but is expected to strengthen again.......................................................................... 24
Domestic demand and improved supply conditions support growthagainst global headwinds....................................................................................................................................................... 29
Growth remains highest in East Africa......................................................................................................................... 32
International commodity prices have declined further .................................................................................... 35
Monetary policy stances diverge as countries face different inflationary
and currency pressures.......................................................................................................................................................... 37
Fiscal positions and current accounts have deteriorated in many countries	������������������������������������� 38
Will Africa reap a demographic growth dividend from its young population?	���������������������������������� 41
Annex 1.A1. Africa’s potential demographic dividend........................................................................................44
Notes....................................................................................................................................................................................................48
References........................................................................................................................................................................................ 49
Chapter 2. External financial flows and tax revenues for Africa...................................................................... 51
In brief................................................................................................................................................................................................. 52
Africa depends heavily on foreign private and public capital........................................................................ 52
Africa faces volatile FDI inflows........................................................................................................................................ 54
Portfolio equity flows are down, but new bonds remain resilient............................................................... 58
Bank credit flows slow as repayments grow............................................................................................................. 60
Remittances are a major, stable resource for African development........................................................... 63
Official development assistance remains stable but falls short of official pledges	������������������������� 65
Domestic revenues fall as resource revenues tumble ........................................................................................ 69
Sustainable benefit is needed from financial flows and public revenues.............................................. 72
Note...................................................................................................................................................................................................... 74
References........................................................................................................................................................................................ 75
Chapter 3. Trade policies and regional integration in Africa............................................................................... 77
In brief................................................................................................................................................................................................. 78
Africa looks to turn strong growth into economic transformation............................................................ 78
Regional integration is an aid to income convergence ...................................................................................... 81
Integrated financial markets open a path to accelerated income convergence	�������������������������������� 85
Intra-African investment is rising, driven by increased regional integration	������������������������������������ 88
Increased trade finance can help integration and job creation..................................................................... 88
References........................................................................................................................................................................................ 89
Chapter 4. Human development in Africa......................................................................................................................... 91
In brief................................................................................................................................................................................................. 92
Human development in Africa has made strong gains, but remains uneven	������������������������������������� 92
Sustainable cities and structural transformation are a priority
for human development in Africa ................................................................................................................................ 102
Sustainable urbanisation must address inequality and exclusion........................................................... 104
Notes................................................................................................................................................................................................. 112
References..................................................................................................................................................................................... 113© AfDB, OECD, UNDP 2016

African Economic Outlook

11﻿TABLE OF CONTENTS

Chapter 5. Political and economic governance in Africa...................................................................................... 115
In brief.............................................................................................................................................................................................. 116
Key governance challenges in Africa are a growing demand for public services,
the threats of terrorism and internal conflicts .................................................................................................... 116
Several African countries are innovating to meet the growing demand for public services 122
Improvements in the business environment require time and must complement
structural reforms to bear fruit...................................................................................................................................... 129
Fighting terrorism requires better regional co-ordination and information sharing 	���������������� 132
Several African countries have seen their electoral processes become fairer	�������������������������������� 134
Note................................................................................................................................................................................................... 138
References..................................................................................................................................................................................... 139

PART II: Sustainable Cities and Structural Transformation.................................................. 143
Chapter 6. The implications of Africa’s urbanisation for structural transformation	����������������������� 145
In brief ............................................................................................................................................................................................ 146
The links between urbanisation and structural transformationin Africa are complex and varied .................................................................................................................................. 146
Urbanisation represents challenges for development and the environment.................................... 162
Policies should focus on productive jobs and public goods for the growing
urban population .................................................................................................................................................................... 170
Now is the time to prepare for Africa’s urban transition................................................................................ 177
Annex 6.A1. Methodology for the cluster analysis on urbanisationand structural transformation in African countries......................................................................................... 181
Notes................................................................................................................................................................................................. 183
References..................................................................................................................................................................................... 184
Chapter 7. How sustainable cities can contribute to Africa’s development............................................ 191
In brief ............................................................................................................................................................................................ 192
Urbanisation improves the conditions for Africa’s economic development...................................... 192
Urbanisation can help accelerate social development .................................................................................... 209
Africa’s urbanisation can contribute to environmental development .................................................. 218
Annex 7.A1. Methodology for mapping financial flows to African cities ............................................ 227
Notes................................................................................................................................................................................................. 228
References..................................................................................................................................................................................... 229
Chapter 8. National urban strategies for sustainable cities in Africa.......................................................... 235
In brief ............................................................................................................................................................................................ 236
New strategies can promote sustainable cities for Africa’s structural transformation 	����������� 236
Priorities include land reform, infrastructure and urban networks .......................................................241
Multi-level governance can promote urban development strategies .................................................... 249
African governments can use various sources to finance national urban strategies	����������������� 254
Note................................................................................................................................................................................................... 264
References..................................................................................................................................................................................... 265
PART III: Country Notes...................................................................................................................................................... 267
STATISTICAL ANNEX................................................................................................................................................................... 327

12African Economic Outlook© AfDB, OECD, UNDP 2016

TABLE OF CONTENTS﻿

Figures
1.1. Africa’s economic growth, 2003-17......................................................................................................................... 25
1.2. Assessment of Africa’s economic situation and six-month expectations,2000 Q1–2016 Q1.................................................................................................................................................................. 25
1.3. Contribution to global growth, 1991-2015, by areas (%)............................................................................. 28
1.4. Impact of China’s transition to lower and more balanced growth on growthin sub-Saharan Africa (SSA)........................................................................................................................................ 28
1.5. Oil prices and terms of trade of Africa’s main oil exporters, 2001-17.............................................. 29
1.6. Number of available hotel rooms in Africa, 2011-15.................................................................................... 31
1.7. Commodity prices, January 1999-January 2016 ............................................................................................. 36
1.8. Export prices of agricultural products, January 1999-January 2016 ................................................. 36
1.9. Import prices of basic foodstuffs, January 1999-January 2016.............................................................. 37
1.10. Consumer price inflation in Africa, 2003-17..................................................................................................... 38
1.11. Current account balance in Africa’s oil-exporting and oil-importing
countries, 2003-17............................................................................................................................................................ 40
1.12. Changes in current account and government budget balances in African countries
between 2014 and 2015, in percentage points of GDP................................................................................ 41
1.13. Africa’s potential demographic dividend .......................................................................................................... 42
1.A1.1. Potential demographic dividend in Africa by region..................................................................................46
1.A1.2. Development and prospects of total fertility (children per woman) in Africa...........................46
1.A1.3. Total fertility rate (TFR) per woman and under-5 mortality
rate per 1 000 in African countries, 2014............................................................................................................. 47
2.1. External financial flows to Africa, average 2004-08, 2009-16............................................................... 52
2.2. Inward FDI by regions 2004-16, USD billion...................................................................................................... 55
2.3. Foreign direct investment to Africa: Resource-rich vs. non-resource-rich countries,
2000-16...................................................................................................................................................................................... 56
2.4. Total FDI inflows into Africa from emerging economies, 2003-15, USD billion......................... 57
2.5. Africa’s inward and outward portfolio flows, 2004–16, USD billion.................................................. 58
2.6. Change in debt service cost, sub-Saharan Africa, 2015............................................................................. 60
2.7. Net commercial bank credit flows to Africa, 2004-17, USD billion .................................................... 61
2.8. Multilateral and bilateral official bank credit flows to Africa, 2004-17, USD billion............... 62
2.9. Africa’s short-term debt, % of total external debt, 2004-14..................................................................... 63
2.10. Remittances per African subregion, 2004-15.................................................................................................... 65
2.11. Net official development assistance disbursements to Africa, 1997-2016 ...................................... 65
2.12. Net official development assistance disbursements to African countries
by income group, 2004-16............................................................................................................................................. 67
2.13. Net official development assistance disbursements to African countries
by region, 2004-16.............................................................................................................................................................. 67
2.14. China’s external assistance expenditures, USD billion ............................................................................ 69
2.15. The revenue mix in resource-rich vs. non-resource-rich Africa......................................................... 70
3.1. Africa’s total trade flows, trade with selected partners
and intra-African trade (USD billion), 2000-14................................................................................................ 79
3.2. Distribution of Africa’s trade: Traditional versus emerging partners, 2000-14.......................... 79
3.3. Intra-African trade by regional economic communities (USD million).......................................... 80
3.4. Gross domestic product per capita of selected African countries relative
to the regional leading economy (USD), 2011 ................................................................................................. 82
3.5. Economic diversification in selected African regional economic communities.......................84
3.6. Financial integration in different regional economic communities, 1970-2011 ....................... 85© AfDB, OECD, UNDP 2016

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3.7. Financial account openness in Africa’s regional economic communities, 1970-2013	���������� 86
4.1. Average annual change in human development, 1990-2014.................................................................. 92
4.2. Human development dimensions........................................................................................................................... 93
4.3. Change in human development in Africa by category, 1990-2014...................................................... 93
4.4. Share of Africa’s population by level of human development, 2015 and 2030............................ 95
4.5. Human development index and components by region of Africa...................................................... 96
4.6. Overall loss in human development from inequality by region.......................................................... 98
4.7. Inequality in the dimensions of human development by group in Africa	����������������������������������� 98
4.8. Gender Inequality Index and components by group in Africa.............................................................. 99
4.9. Gender gaps in social institutions by human development group in Africa	��������������������������� 101
5.1. Top priorities for African citizens........................................................................................................................ 117
5.2. Index of public protests in Africa, 1996-2015................................................................................................ 119
5.3. Top drivers of public protests in Africa, 2013-15......................................................................................... 119
5.4. Political hardening and civil violence, 1996-2015....................................................................................... 121
5.5. Violence by non-state actors in Africa, by type, 2013-15....................................................................... 122
5.6. Government expense per capita vs. government expense as % of GDP, 2014	������������������������� 123
5.7. Public sector management vs. tax-GDP ratio................................................................................................ 124
5.8. Hiring based on merit and qualifications vs. efficiency in public revenue spending	�������� 124
5.9. Out-of-pocket expenditures on healthcare and total health spending in Rwanda,
1995-2013.............................................................................................................................................................................. 127
5.10. Doing Business scores and GDP per capita, 2015............................................................................................ 130
5.11. Change in Doing Business score and GDP per capita between 2010 and 2014	���������������������������� 130
5.12. Net perception rating for policies regarding reliable electric supply by country,
2014-15.................................................................................................................................................................................... 131
6.1. Growth trends in Africa’s urban, rural and total population, 1950-2050 ................................... 146
6.2. Global urban population growth, year 100 to 2050 .................................................................................. 147
6.3. Definitions of urban across 54 African countries...................................................................................... 148
6.4. Global urbanisation levels and GDP per capita in selected countries, 2014	������������������������������ 150
6.5. Annualised labour productivity growth and urbanisation in Africa,
Asia and Latin America, 1960-2010 .................................................................................................................... 151
6.6. Traditional and new patterns of transformation between sectors andtype of employment ..................................................................................................................................................... 152
6.7. Change in employment in trade services and agriculture
in 13 African countries, 2000-10............................................................................................................................ 152
6.8. Change in labour productivity and share of employment in trade services
in 11 African countries, 2000-10............................................................................................................................ 153
6.9. Urban growth rates for selected African countries and Asia, 1960-2010.................................... 154
6.10. Urban dependency ratios in selected developing regions.................................................................... 155
6.11. Urbanisation levels and total fertility rate by typology of African countries	������������������������� 157
6.12. Population increase in North and sub-Saharan Africa, and in Latin America
and the Caribbean, 1950-2050................................................................................................................................. 158
6.13. Contribution to population growth by city size and rural-urban interface by typeof African country, 2000-10....................................................................................................................................... 159
6.14. Urban farming in big cities and small towns among African countries, 2009-14...................161
6.15. Are urbanisation trends sustainable in your country? Africans’ responses	��������������������������� 162
6.16. Urbanisation levels and share of informal work in total employment
in six African countries and 26 non-African countries, 2010............................................................. 163
6.17. Type of work by size of African city and country typology (%), 2009-14..................................... 164
6.18. Urban Multidimensional Poverty Index by world region and AEO 2016 typology group............ 165

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6.19. Self-evaluation of current personal economic conditions by African
urban respondents ........................................................................................................................................................ 166
6.20. Africans saying “Crime is a very big problem in our country”, 2015.............................................. 167
6.21. Operating revenue and capital expenditure per capita in selected African capitals
and intermediary cities............................................................................................................................................... 172
6.22. African cities’ expansion of built-up areas and population growth, 1990-2000......................174
6.23. Projections of urban land cover for Africa, 2000-50.................................................................................. 175
6.24. Is urbanisation perceived as a risk or an opportunity in your country? .................................... 179
7.1. Change in urbanisation levels and urban share of total food expenditures
for major food groups in six West African countries, 1990-2009..................................................... 193
7.2. Composition of the West African food basket by food groups and area, 2010......................... 194
7.3. Urban share of jobs in each post-farm food segment in six African countries...................... 195
7.4. Labour productivity in different segments of the agri-food system
in six African countries............................................................................................................................................... 196
7.5. Travel time and crop production in sub-Saharan Africa, 2000.......................................................... 197
7.6. Population size of big cities and level of economic complexity, 2013............................................ 199
7.7. Change in employment and output of business services as a shareof the total economy of selected African countries, 2000-10.............................................................. 203
7.8. Service trade in Africa, 2000-12............................................................................................................................. 204
7.9. Share of middle class by income in Africa (%), 2008................................................................................ 205
7.10. Main opportunities associated with the middle class for African countries	�������������������������� 206
7.11. Education level of the population aged 15 years or older in Africa, 2009-10	���������������������������� 207
7.12. Annual mean concentration of particulate matter smaller than ten microns
in diameter (PM10) in selected African cities............................................................................................... 210
7.13. Average travel time to nearest urban areas and skewness of the distribution
in Africa, 2010.................................................................................................................................................................... 213
7.14. Projected electricity demand from the sub-Saharan African population gaining
access to electricity, 2020-40................................................................................................................................... 220
7.15. African populations relying on solid biomass for cooking, 2012...................................................... 222
7.16. Access to improved water in urban areas and urban population growthin Africa, 1990-2015....................................................................................................................................................... 223
8.1. Prevalence of strategies on sustainable energy use in Africa, 2015............................................... 246
8.2. Local authorities’ revenues and spending as share of African national budgets, 2013	���� 255
8.3. Experts’ ratings of local government revenue sources, by revenue potential
and stability in primary and secondary cities............................................................................................. 256
8.4. Revenues from transfers and locally generated resources, selected cities
in Africa, Colombia and the Philippines ......................................................................................................... 258
8.5. Examples of the City Prosperity Index for six African cities............................................................... 264© AfDB, OECD, UNDP 2016

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Tables1.1. Shares of selected trade partners in Africa’s exports and imports, 2000 and 2014 (%) ....... 28
1.2. Sectoral changes in Africa’s fast-growing countries, 2009-14............................................................... 32
1.3. Africa’s growth by region, 2014-17.......................................................................................................................... 33
1.4. Debt sustainability analysis in African countries: Assessing risks of debt distress	������������� 39
1.5. Macroeconomic developments in Africa, 2007-17......................................................................................... 43
1.A1.1. Estimates and projections of Africa’s population and working-age population........................ 45
1.A1.2. Estimates and projections of Africa’s potential demographic dividend ........................................ 45
2.1. Financial flows and tax revenues to Africa, 2004-16, current USD billion	����������������������������������� 53
2.2. Funding commitments by origin, USD billion................................................................................................. 61
2.3. The 15 largest recipients of remittances in Africa, 2015...........................................................................64
2.4. Africa’s country programmable aid estimates and projections, USD billion.............................. 68
3.1. Comparison of the richest country in a regional economic community (REC)with regional figures........................................................................................................................................................ 83
3.2. Intra-regional trade in Africa’s regional economic communities as a percentage
of total trade.......................................................................................................................................................................... 83
4.1. African countries by level of human development...................................................................................... 94
4.2. Urbanisation by level of human development in Africa........................................................................ 105
4.3. Inequality and urbanisation by level of human development in Africa...................................... 105
5.1. Top ten countries in the world since 2011 according to Doing Business, by year..................... 129
5.2. Overview of national elections in 2016 and 2017 in Africa.................................................................. 137
6.1. Employment sectors of household heads by sex in Ghana, 2000-10.............................................. 153
6.2. Pace of urbanisation trends in selected African countries, 1980-2012......................................... 162
6.3. Premature deaths from selected major risk factors in Africa, 1990-2010(five-year intervals) and 2013.................................................................................................................................. 168
6.4. Economic costs of premature deaths from selected major risk factors
in Africa (USD million), 2013.................................................................................................................................... 169
6.5. Pan-African and international events on sustainable urbanisationand structural transformation, 2014-18............................................................................................................ 179
6.A1.1. African countries clustered into groups according to their levelsof structural transformation................................................................................................................................... 182
7.1. Examples of instruments for cluster policies in developing countries ....................................... 201
7.2. Mass transportation systems in selected African cities........................................................................ 211
7.3. Main corridors in Africa.............................................................................................................................................. 213
7.4. Urban activities that can reduce cities’ environmental impact........................................................ 218
7.5. Classification of African cities based on socio-metabolic transition............................................ 219
7.6. Sustainable energy projects in Cape Town, South Africa..................................................................... 221
7.7. Typology of ecosystem services from wetlands.......................................................................................... 224
7.8. Sustainable waste management projects in Africa................................................................................... 225
8.1. Urbanisation strategies in 16 African countries......................................................................................... 238
8.2. New technologies for urban governance and data collection............................................................ 240
8.3. Different urban functions of intermediary cities....................................................................................... 248
8.4. Specialised financial institutions in African countries......................................................................... 257
8.5. Land-based financing initiatives in Africa..................................................................................................... 259
8.6. ReCalc scenario replacing fossil-fuel subsidies with investments
in renewable energy for 24 African cities........................................................................................................ 262.

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Annex tables
1. Basic indicators, 2015.................................................................................................................................................... 336
2. Real GDP growth rates, 2007-17.............................................................................................................................. 338
3. Demand composition and growth rate, 2014-17.......................................................................................... 340
4. Public finances, 2014-17 (percentage of GDP)................................................................................................ 342
5. Monetary indicators, 2014-17................................................................................................................................... 344
6. Balance of payments indicators, 2014-17 ........................................................................................................ 346
7. Exports, 2014..................................................................................................................................................................... 349
8. Diversification and competitiveness, 2010-14............................................................................................. 352
9. International prices of exports, 2008-15........................................................................................................... 355
10. Foreign direct investment, 2009-14 (USD million)..................................................................................... 356
11. Aid flows, 2009-14 (USD million)........................................................................................................................... 358
12. External debt indicators ............................................................................................................................................ 360
13. Demographic indicators.............................................................................................................................................. 362
14. Poverty and income distribution indicators.................................................................................................. 364
15. Access to services........................................................................................................................................................... 366
16. Basic health indicators................................................................................................................................................. 368
17. Major diseases................................................................................................................................................................... 370
18. Basic education indicators......................................................................................................................................... 372
19. School enrolment.............................................................................................................................................................374
20. Employment and remittances................................................................................................................................. 376
21. Corruption Perceptions Index (CPI)..................................................................................................................... 378
22. Public protest..................................................................................................................................................................... 380
23. Violence by non-state actors.................................................................................................................................... 382
24. Political hardening.......................................................................................................................................................... 384
25. Demographic projections (all populations are in thousands)............................................................ 386
26. Gender indicators............................................................................................................................................................ 388

Maps
5.1. Intensity of protests in Africa by location, 2015
6.1. Population settlements and urban catchment areas in West Africa, 2000
6.2. African coastal cities affected by climate change
6.3. Current and future urban areas, forest cover and deforestation in Africa
6.4. Accra’s urban expansion (Ghana), 1991-2014
6.5. Algiers’ urban expansion (Algeria), 1987-2014
6.6. Arusha’s urban expansion (Tanzania), 1988-2013
6.7. Nakuru’s urban expansion (Kenya), 1989-2014
7.1. Network of the top 50 foreign direct investments in Africa’s manufacturing cities,
2003-147.2. Services network of top 50 investments from top 10 source cities to top 10 African
destination cities, 2003-14
7.3. Africa’s city regions attracting hi-tech foreign direct investment at four levels, 2003-14
7.4. Current and future urban areas in relation to watersheds in Africa
8.1. Egypt resource flows: Water
8.2. Cairo resource flows: Water
8.3. Recent and projected urban expansion of Hawassa (Ethiopia), 1989-2010, 1989-2040© AfDB, OECD, UNDP 2016

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African Economic Outlook© AfDB, OECD, UNDP 2016

Executive summary
The African Economic Outlook 2016 shows that the continent is performing well in
regard to economic, social and governance issues and has encouraging prospects for thenear future. With its special theme on sustainable cities and structural transformation,
this edition looks closely at Africa’s distinctive pathways towards urbanisation and at
how this is increasingly shifting economic resources towards more productive activities.
Africa’s economic growth remained resilient in 2015 amid a weak global economy,
lower commodity prices and adverse weather conditions in some parts of the continent.
Real GDP grew by an average of 3.6% in 2015, higher than the global average growth of
3.1% and more than double that of the euro area. At this growth rate, Africa remained thesecond fastest growing economy in the world (after emerging Asia), and several Africancountries were among the world’s fastest growing countries. We forecast that Africa’s
economic growth will gradually pick up during 2016/17, predicated on a recovery in theworld economy and a gradual rise in commodity prices. However, given the vulnerable
global economy and the high volatility of commodity prices, this forecast is uncertain.
Domestic factors have underpinned Africa’s resilience, allowing countries tobetter cope with the global headwinds. On the supply side, in countries where weather
conditions were favourable, agriculture boosted growth, but droughts or floods slowed
down growth in countries in East and Southern Africa. In resource-rich countries, growthslowed down as lower commodity prices strained government budgets and affected
investment. Manufacturing activity improved in a few countries but was limited bypersistent power shortages. On the demand side, private consumption and construction
investment remained the main drivers of growth, reflecting relative insulation fromexternal shocks. However, weak global demand curtailed growth of Africa’s exports,
especially minerals and oil, and terrorist attacks and general security problems in somecountries adversely affected tourism.
Given the increased budgetary pressures in most African countries, keeping debt atsustainable levels has become increasingly important. Governments generally continued
to adhere to prudent fiscal policies, limiting spending and improving tax collection. The
rapid depreciation in exchange rates and weakening current accounts fuelled a rise inimported inflation. This prompted affected countries to tighten monetary policy to cool
down inflationary pressures. Some countries benefited from declining inflation due
to lower energy prices. This created additional room for monetary easing through areduction in interest rates to spur growth.
In 2015, net financial flows to Africa were estimated at USD 208 billion, 1.8% lower thanin 2014. Official development assistance rose, but stability in remittances continued tobe the main contributing source of Africa’s net financial flows. Sovereign bond issuancesrose despite higher interest rates, reflecting general resource starvation among issuingcountries. However, direct foreign investment in the oil and metals sectors dropped, as
the extractive sector was buffeted by falling commodity prices. Net portfolio equity andcommercial bank credit flows dried up, reflecting tight global liquidity conditions andfaltering market sentiment. In the wake of slowing growth in large emerging economies,
bilateral trade credit suffered as well. Public policies should now aim to stabilise current
financing sources and explore new ones, to support infrastructure, training andemployment.
Africa’s growth performance over the past 15 years has created new opportunities
for trade. The European Union is likely to continue to be Africa’s main trading partner;
however the Tripartite Free Trade Agreement proposed between three of Africa’s© AfDB, OECD, UNDP 2016

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19

EXECUTIVE SUMMARY

largest trade blocs could increase market size, translating into economic benefits. The
agreement could narrow income gaps in African countries and help regions integrate
financially, provided that governments strengthen structural and regulatory reforms
and foster macroeconomic stability. Governments will also need to give pan-Africanbanks a larger role in financing trade, boost capital market liquidity and attract new
financial sources to finance intra-regional trade.
African countries have steadily progressed in enlarging people’s choices in
education and health and in improving living standards, but the pace is insufficient.
Progress is hampered by inequality between countries, within countries, and between
women and men. It is held back by lack of opportunities for the youth, weak structuraltransformation, especially in sectors dominated by the marginalised groups (including
agriculture and informal sectors), and weak investments in gender equality and women
empowerment programmes beyond the political sphere. Human progress for rapidly
expanding and increasingly mobile populations remains a considerable challenge as
espoused in Agendas 2030 and 2063.
Africa’s urbanisation contributes to human development gains but not for everyone.
Thus, addressing growing urban poverty should be an integral part of new urbanisation
strategies. Underlying tensions between social groups as a result of economic, politicaland social exclusion can be overcome by ensuring that citizens have secure livelihoods
and access to quality services. It also depends on governments enhancing security,
promoting human rights and protecting the most vulnerable in society. This will
become paramount as African citizens strengthen their demands for better economic
opportunities and for more accountable and credible institutions. These demands require
an adequate response through sound regulatory policies and effective delivery of public
services. Several countries have set good examples that are laying the foundation forreaching developmental goals, including a successful political transition in Burkina Faso
in 2015, a Nobel Peace Prize for the Tunisian national dialogue quartet, and successfulreforms to health systems in a few other countries.
Africa’s rapid urbanisation represents an immense opportunity, not just for Africa’s
urban dwellers but also for rural development. As two-thirds of the investments
in urban infrastructure to 2050 have yet to be made, the scope is large for new,wide-ranging urban policies to turn African cities and towns into engines of sustainablestructural transformation. The creation of more productive jobs for the rapidly growing
urban population is central to achieving this objective. Those new urban policies, atnational and local levels, have a key role to play in i) economic development, throughhigher agricultural productivity, industrialisation and services; ii) social development,
targeting safer and inclusive urban housing and robust social safety nets; and iii) soundenvironmental management, by addressing effects of climate change, scarcity ofwater and other natural resources, controlling air pollution, developing clean public
transportation systems, improved waste collection and increased access to energy.
They include stepping up investment in urban infrastructure; improving connectivity
with rural areas; matching formal real estate markets better with the housing demand;
managing urban land expansion; and developing public mass transport systems within
and between cities. The new policies will have to be adapted to the specificities ofAfrica’s urban realities, tap innovative ways of financing the development of sustainable
cities and be implemented through effective multi-level governance systems. In 2016,
the common African position on urban development and the emerging international
New Urban Agenda offer opportunities to discuss options and start articulating those
new urbanisation policies around strategies for Africa’s structural transformation.

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African Economic Outlook© AfDB, OECD, UNDP 2016

PART I
Africa’s performanceand prospects

Chapter 1

Africa’s macroeconomic prospects

This chapter looks at macroeconomic conditions in the different
regions and countries of Africa, as well as in the continent as awhole. It highlights how weaker oil and commodity prices, uncertain
global conditions and domestic political uncertainties are affecting
many African economies and explores how their governments are
responding to these challenges. It examines Africa’s recent economic
growth and prospects for 2016 and 2017 and important driving
forces on the demand and the supply side, as well as headwinds
from adverse developments in terms of trade, which also affectfiscal positions and current accounts.

© AfDB, OECD, UNDP 2016

African Economic Outlook23

1. Africa’s macroeconomic prospects

In brief
Africa achieved impressive economic growth over the past 15 years with theaverage gross real domestic product (GDP) rising from just above 2% during the
1980-90s to above 5% in 2001-14. In the past two years, growth has been more moderate; thistrend is expected to continue in 2016, but strengthen in 2017. Africa’s growth is adversely
affected by headwinds from weaknesses in the global economy and price falls of key
commodities, but is supported by domestic demand, improved supply conditions, prudent
macroeconomic management and favourable external financial flows. The AEO forecast
assumes a gradual strengthening of the world economy and the slow recovery of commodity
prices. However, given the fragile state of economic recovery and the high volatility ofcommodity prices this forecast is uncertain.
Growth remained highest in East Africa, followed by West Africa and Central Africa, and islowest in Southern Africa and North Africa. Assuming gradual improvement in internationaland domestic conditions, growth is projected to accelerate in all regions in 2016/17. In West
Africa, the Ebola epidemic has abated with Guinea, Liberia and Sierra Leone recovering
gradually.
Monetary policy stances diverged as countries faced different inflationary and currencypressures. Monetary policy tightened in countries where current accounts and exchange rates
came under pressure and imported inflation increased, however some countries reduced
interest rates as inflation declined due to lower energy and food prices. As fiscal pressuresintensified governments generally followed prudent fiscal policies. Measures were taken to
limit spending and broaden the revenue base.

Africa’s growth slowed but is expected to strengthen again
Africa has achieved impressive economic growth over the past 15 years. Average
growth of real gross domestic product (GDP) more than doubled from just above 2%
during the 1980s and 1990s to above 5% between 2001 and 2014. In the past two years,
growth has been more moderate with Africa’s economies affected by headwinds fromthe global economy. Average growth of African economies weakened slightly in 2015
to 3.6% (down from 3.7% in 2014), about one percentage point lower than expected in
the AEO 2015. Excluding Libya, where oil production remained volatile, Africa’s overall
growth reached 3.7% in 2015, down from 4.2% in 2014. The AEO macroeconomic outlook
for Africa’s economy assumes a gradual strengthening of the world economy and a slow
recovery of commodity prices. Against this international backdrop Africa’s average
economic growth is expected to remain moderate in 2016 (3.7%), but strengthen in 2017
(to 4.5%) (Figure 1.1). However, the given the fragile state of the global economic recovery
and the high volatility of commodity prices this forecast in uncertain.
The main reasons for the slowdown in growth in 2015 were weaker global
demand and lower international commodity prices, which adversely affected Africa’s
resource-rich countries. Growth of global real GDP and world trade volumes was morethan one percentage point lower than assumed in the AEO 2015. The AEO forecast for2015 was also based on the assumption that international oil prices would remain on
average around 40% lower than in 2014, however prices were almost 50% lower. Metal
prices, notably the price of copper and export prices for some agricultural products, suchas cotton, were also lower than assumed.
Africa’s growth remained higher than world growth despite strong headwinds fromthe international economy. Growth was also much higher than in the Latin America
and the Caribbean region, where GDP declined slightly due mainly to deep recessions
in Brazil and Venezuela. Despite its slowdown, the African continent remained thesecond fastest-growing economy in the world. Several African countries (Côte d’Ivoire,
Djibouti, Ethiopia, Mozambique, Rwanda and Tanzania) were among the fastest-growing
countries in the world with growth between 6% and around 10%.

24

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1. Africa’s macroeconomic prospects

Figure 1.1. Africa’s economic growth, 2003-17
AfricaAfrica excluding Libya

%
8
7
6
5
4
3
2
1
0

2003
2004
2005
2006
2007
2008
2009
2010
Note: (e) estimates; (p) projections.
Source: Statistics Department, African Development Bank.
12 http://dx.doi.org/10.1787/888933349936

2011

2012

2013

2014

2015 (e) 2016 (p) 2017 (p)In emerging and developing Asia – the fastest-growing region in the world – growthdeclined from 6.8% in 2014 to 6.5% in 2015. In the People’s Republic of China, the largest
economy in the region, growth continued to decline to below 7% from 7.7% in 2013 and7.3% in 2014. China’s weaker growth and its transition from investment and exports ofindustrial goods towards consumption and services is an important factor in the recent
drop in commodity prices, which suggests that the “commodity super cycle” of the past
decade has come to an end. While lower commodity prices are providing significant
headwinds to Africa’s commodity exporters, the rebalancing of China’s economy towards
more consumption may provide backwinds to Africa’s economies in the coming
years. African countries best placed to export consumer goods to China, including
agricultural products, are those that will benefit most from China’s switch to moreconsumption-based growth. China’s rising wages may also erode its competitivenessin low-end manufactures and could further increase FDI inflows to Africa (see Box 1.1).

Figure 1.2. Assessment of Africa’s economic situation and six-month
expectations, 2000 Q1–2016 Q1
Good/
better

By the end of thenext six months

Satisfactory/
about the same
At present

Bad/
worse
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Note: Qualitative assessments by participants of the quarterly survey to questions on the present situation of theeconomy and expectations for the next six months.
Source: Ifo institute World Economic Survey (2016).
12 http://dx.doi.org/10.1787/888933349941

The weakening of Africa’s growth is also reflected in an opinion poll conductedamong African participants in the Ifo Institute’s World Economic Survey.1 In the second
half of 2015, both the assessment of the current economic situation and expectations© AfDB, OECD, UNDP 2016

African Economic Outlook25

1. Africa’s macroeconomic prospects

for the next six months deteriorated, which – as becomes now obvious from official
statistics – reflected the weakening of growth. At the beginning of 2016 these indicators
had not yet improved, most probably due to the adverse effects from the still fragile
world economy and further declining commodity prices (Figure 1.2).

Box 1.1. How China’s lower and more balanced growth will affect Africa
The slowing of output growth in major emerging economies has been associated with lower
commodity prices. Next to supply factors, the marked decline in investment and (rebalanced)
growth in China is depressing commodity prices, particularly in metals and energy. Three key
factors have underpinned Africa’s good economic performance since the turn of the century:
high commodity prices, high external financial flows, and improved policies and institutions.
Macroeconomic headwinds for Africa’s net commodity exporters may imply that Africa’s second
pillar of past performance – external financial inflows – will suffer as well.
While lower commodity prices are providing significant headwinds to Africa’s commodity
exporters, the rebalancing of China may also provide backwinds, albeit gradually. The relocation of
low-end manufacturing from China might reinforce positive income effects of lower commodity
prices in oil-importing countries. The backwinds can be expected to stimulate FDI inflows into
Africa. Benefits from reduced fiscal pressures in countries with high fuel shares in imports(Egypt, Ethiopia, Kenya, Mozambique and Tanzania) mirror significant challenges for energy
exporters (Angola, Chad, Congo, Gabon and Nigeria) and other commodity exporters (Ghana,South Africa and Zambia) arising from depressed commodity prices.
Lower commodity prices could shift Africa’s centre of economic gravity from west to east, towards
less commodity-dependent economies (Schaffnit-Chatterjee and Burgess, 2015). Investment
finance could follow, reinforced by the peripheral outreach of China’s One Belt One Road initiative(OBOR), which includes East Africa for infrastructure finance. China’s new Silk Road Fund istargeting the economies along Africa’s east coast. This suggests a shift away from a traditional
focus on securing natural resources towards a more exploratory focus on opportunities for amanufacturing hub in the African region.
China’s slowdown could affect African development finance through several channels:• Growth linkage: the slowdown lowers global growth in general and low-income country

growth in particular, especially for commodity exporters.
• Trade: the slowdown translates into reduced African export earnings and lower corporatesavings and trade credits.
• Prices: the negative income effect in commodity-exporting countries of lower terms oftrade associated with lower metal and mineral prices reduces household, corporate andpublic savings.
• Liquidity supply: lower official foreign-exchange reserves and sovereign-wealth fundassets may translate into lower credit supply to Africa.
China’s high growth has boosted global growth in recent years (Figure 1.3). From 2011 to 2015,
China’s relative contribution to global growth was on a par with advanced countries, despite
stagnating at a high level for a decade. India’s contribution to global growth has also risen
since the early 2000s. However, China has contributed almost 30% to global growth in recent
years, approximately 20 percentage points more than India. As India is more closed and still
considerably poorer than China, it cannot yet offset the impact of China’s slowdown on global
growth and trade.
A recent World Bank (2015) study uses a general equilibrium model to quantify how lower andmore balanced growth in China might affect Africa’s future growth (Figure 1.4). The model
simulated the effects of a slowdown, a rebalancing and the combined effect of both.
The combined effect of China’s lower growth and its rebalancing on sub-Saharan Africa ispositive, as the positive effect from the more balanced growth outweighs the negative effect26

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1. Africa’s macroeconomic prospects

Box 1.1. How China’s lower and more balanced growth will affect Africa (cont.)
from lower growth. According to the simulation, by 2030, China’s transition will increase the levelof GDP in sub-Saharan Africa by 4.7% relative to the baseline. Countries best placed to export
consumer goods to China, including agricultural products, will benefit most from China’s lower
but more balanced growth. According to this analysis, Zambia, a main copper exporter, is the
only country that will not gain from China’s switch to a more consumption-based growth model.
However, this simulation does not consider possible growth effects in Africa from additional
Chinese direct investment. To the extent that rising wages in China lead to higher unit labour
cost, China’s external competitiveness in low-end manufactures will be eroded. China could thus
expand its current presence in Africa’s special economic zones, or encourage the creation of new
ones. Such positive growth effects from foreign direct investment (FDI) would increase as Africancountries reduce bottlenecks in infrastructure and energy supply.
Trade linkages impact on financial flows via trade credits and indirectly via corporate profits.
China’s trade engagement with Africa has risen markedly since 2000. China has crowded out
other trade partners in relative terms, except for India, which tripled in Africa’s export share(Table 1.1). In absolute terms, the trade dynamic of emerging partners was crucial in quadrupling
African exports from USD 142.4 billion in 2000 to USD 566.6 billion in 2014. As a bloc, the groupof emerging partners now buys more African exports than advanced countries. Only 15 years
earlier, their share represented one fifth of total African exports. In terms of trade dynamics andtrade shares, China and India now account for a sizeable portion of Africa’s export earnings.
Trade finance is a potentially strong transmission channel between the financial sector andthe real economy. Export credit and development loans from large emerging market economies(EMEs), notably Brazil, China and India, have occupied a relatively important role as vehicles forfinancing trade with Africa (AfDB et al., 2011). As a result of shrinking surpluses in their current
account and dwindling reserves, the size of export buyer credits, resource-backed credit lines
and hybrid financing mechanisms extended to Africa by China and other EMEs risk being cut
back.
The drop in commodity prices can undermine Africa’s resource mobilisation. The price channel,
by which the EME slowdown impacts Africa’s financing, reinforces the effects of the trade channel.
From the perspective of finance, the impact of changes in commodity prices is unlikely to besymmetric or a zero-sum game. The recycling of large surpluses in the current account of oil
exporters (including African) that has benefited African financing will not be paralleled bycorresponding surpluses of oil importers.
Tax revenues may also be negatively affected in a number of ways. Many countries in Africa
rely on trade taxes (tariffs) to sustain government revenues, so collapsing commodity exports
will worsen fiscal positions. Unlike in non-resource-rich Africa, resource rents accounted formore than 80% of total tax collection in 2013 and 20% of GDP in oil-rich Algeria, Angola, Congo,
Equatorial Guinea and Libya (AfDB/OECD/UNDP, 2015). Conversely, non-resource-rich countries
broadened their tax base and raised tax collection through direct and indirect taxes. A generalised
slump that affects consumption will lower tax revenues also in those countries.
Financial flows to Africa may be harmed by depleted EME reserves. The liquidity-supply channel has
turned markedly since mid-2014. From a total of USD 1.8 trillion in 2000, global foreign exchange
reserves reached a peak of USD 12 trillion in mid-2014. The fast accumulation of global economic
imbalances over the 2000s brought about a significant shift in the world’s wealth in favour of
EMEs running surpluses (OECD, 2010). China alone stockpiled reserves from USD 170 billion in2000 to USD 4 trillion in August 2014, in order to contain appreciation pressures. Since mid-2014,
both foreign exchange reserves and sovereign wealth fund (SWF) assets in emerging economies
have dropped as a result of lower commodity prices and lower gross capital inflows. Net salesof foreign reserves by China, the Russian Federation and Saudi Arabia accounted for most of thedrop. From their peak, these three countries alone have lowered foreign exchange reserves by
USD 1.5 trillion. These countries have been prominent emerging investors in Africa in the past
(AfDB et al., 2011).

© AfDB, OECD, UNDP 2016

African Economic Outlook27

1. Africa’s macroeconomic prospects

Figure 1.3. Contribution to global growth, 1991-2015, by areas (%)
China's contribution

India's contribution

Advanced economies' contribution

%
60
50
40
30
20
10
0
1991-95
1996-2000
2001-05
Source: Author’s calculations based on IMF (2015).
12 http://dx.doi.org/10.1787/888933349957

2006-10

2011-15

Figure 1.4. Impact of China’s transition to lower and more balanced growth on
growth in sub-Saharan Africa (SSA)
China - slowdown

China - rebalancing

China - slowdown + rebalancing

%
8
6
4
2
0
-2

l
ta

ld
or

W

A

to
A

SS

SS

ric

of

Re

st

Af
h
ut

So

M

a

ia
ib

na

Na

m

a

wa

bi

ts
Bo

Za

m

da

a

an

e

da

ni

Ug

za

Ta
n

an

Rw

qu

oz

am

bi

as

ca

r

a
M

ad

ag

ny

Ke

ia

Et

hi

op

ga

l

ria

ne
Se

a
an

ge
Ni

re

Gh

oi
Iv

te

d'

oo

m

Ca

Cô

Bu

rk

in

aF

as

er

n

o

-4

Note: China’s growth is assumed to slowdown to an average of 6% per year over 2016-30 and 4.6% in 2030. China’s
rebalancing is assumed to reduce the share of investment in GDP gradually from 46.7% in 2015 to 35.5% in 2030,
with a corresponding increase in private consumption. The service sector is assumed to increase gradually from
50% of GDP in 2015 to 61% in 2030. As a counterfactual, the analysis assumed no rebalancing and constant annual
real growth in China of 7% during 2016-30.
Source: World Bank (2015), data provided by the Africa Pulse team.
12 http://dx.doi.org/10.1787/888933349965

Table 1.1. Shares of selected trade partners in Africa’s exports and imports,
2000 and 2014 (%)
2000
Traditional partners

Emerging partners

EU25
United States

BrazilChina
India
Russian Federation
TurkeyThailand
Total value (billion USD)

2014

Exports

Imports

Exports

Imports

78.3
51.3
20.4
21.7
2.0
4.6
2.4
0.3
1.9
0.6
142.4

75.4
56.4
10.1
24.6
1.3
4.9
2.1
1.0
1.3
1.2
104.0

46.7
34.0
5.5
53.3
1.7
18.4
6.1
1.0
2.4
1.5
566.6

54.3
37.4
6.4
45.7
3.0
15.3
7.4
0.6
1.0
0.8
531.5

Sources: 2000 data: AfDB et al. (2011); 2014 data: UN Comtrade (2015).

28

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1. Africa’s macroeconomic prospects

Domestic demand and improved supply conditions support growth against
global headwinds
In 2015, on the demand side, private consumption continued to support growth,
helped by lower oil and food prices and growing remittances (see Chapter 2 for details
on external financial flows). Construction investment, both public and private, also
remained an important driver of growth. In contrast, exports remained mostly sluggish
and often declined due to weak global demand. Thus, Africa’s growth was again
supported by domestic factors, which helped to cope with headwinds from the global
economy. Given Africa’s vulnerability to external shocks, promotion of regional tradeand integration has assumed even greater importance (see Chapter 3).
The recent fall in export prices relative to import prices has led to terms of tradelosses, which reduce the purchasing power of domestic output and adversely affectprofits and investment. Assuming an average oil price of USD 37 per barrel in 2016
and USD 48 per barrel in 2017, the terms of trade of Africa’s main oil exporters willagain be lower in 2016 than in 2015, and will only improve in 2017 (Figure 1.5). However,given the recent volatility of oil and other commodity prices, assumptions about their
future development and thus the terms of trade prospects for oil-exporting and othercommodity-exporting countries are highly uncertain, with the risks probably weighted
more towards the downside.
The recent commodity bust again highlighted the vulnerability of economies that
depend on a few commodities, with many governments in resource-rich countries now
increasing their efforts to diversify. Lower exchange rates should also help to improve
the international competitiveness of other sectors.

Figure 1.5. Oil prices and terms of trade of Africa’s main oil exporters, 2001-17
Oil price changes in %Terms of trade changes of main African oil exporters

%
50
40
30
20
10
0
-10
-20
-30
-40
-50
-60

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014 2015 (e) 2016 (p) 2017 (p)Note: (e) estimates; (p) projections.
Source: Author’s calculations.
12 http://dx.doi.org/10.1787/888933349979

Box 1.2. Africa’s terms of trade
Africa’s terms of trade (i.e. the ratio of export prices to import prices) have improved
markedly over the past decade. This improvement was driven mainly by development inresource-rich countries, which benefited from the international commodity price boom fuelled by
the global economic recovery and high and resource-intensive growth in China. Africa’s average(GDP-weighted) terms of trade reached a peak in 2008, rising 65% from its level in 2000. This positive
trend was interrupted by the severe global recession in 2009, when commodity prices plummeted.
After commodity prices recovered, Africa’s terms of trade reached a second peak in 2012,© AfDB, OECD, UNDP 2016

African Economic Outlook29

1. Africa’s macroeconomic prospects

Box 1.2. Africa’s terms of trade (cont.)
over 80% higher than in 2000. In 2014 and 2015, oil and other commodity prices plummeted once
more. Earlier terms of trade gains were partially lost, although Africa’s average terms of tradelevel remained around 50% higher than in 2000 (according to AEO estimates).
Terms of trade changes differ significantly between individual countries. Given their highdependence on oil and non-oil commodities, Africa’s resource-rich countries are particularly
affected by the boom and bust of international commodity prices. At the same time, oilimporting countries suffered from the earlier boom in oil prices and now benefit from the lower
prices. However, resource-rich countries have to cope with highly volatile terms of trade. Thisis most notable for the terms of trade of Africa’s main oil exporting countries, which are highly
correlated with the development of oil prices (Figure 1.5). Measuring the volatility of terms oftrade changes reveals very high volatility in oil-exporting countries such as Algeria, Angola,
Democratic Republic of the Congo, Gabon, Libya, Nigeria and Sudan, as well as in Zambia, which
depends heavily on copper exports. The Standard Deviation (i.e. the amount of variation fromthe mean) of annual terms of trade changes in these countries was around 15 or higher between
2001 and 2014. In contrast, volatility was much lower (SD between 2 and around 5) in countries
that depend less on commodities and/or are more diversified, such as Ethiopia, Kenya, Senegal,
South Africa, Tanzania, Tunisia and Uganda.
The earlier terms of trade boom improved economic prosperity. However, the recent fall in export
prices relative to import prices has partly reversed earlier terms of trade gains. The purchasing
power of domestic output (“command GDP”) has declined relative to real GDP, but growth of real
GDP has also reduced, as lower commodity prices tend to reduce investment and growth in the
resource sector. Other sectors also suffer through their direct linkages with the resource sector
or indirectly where governments respond to lower revenues by cutting spending. However, thisnegative effect on growth is mitigated where lower exchange rates enable other firms to export
more and/or cope better with import competition.
It is important to also consider the magnitude and speed of terms of trade changes, both ofwhich have risen markedly. While economic growth generally benefits from terms of trade gains,
highly volatile shifts in terms of trade can lead to macroeconomic instability and reduce mediumterm growth (Awel, 2012). However, the adverse effects of terms of trade boom and busts on
the economy can be mitigated if monetary and fiscal policies manage to contain inflation andbuild up savings during the boom period. This prevents overheating, limits the real appreciationof the exchange rate and also creates fiscal space, which is needed to counteract an economic
downturn in the following terms of trade bust. However, if policies are pro-cyclical and unable
to contain inflation during the boom, large terms of trade changes will be more disruptive andpolicies will be less able to mitigate the adverse effects on the economy when the terms of trade
deteriorate. (For more details about the recent policies of individual countries see the respective
Country Notes.)

On the supply side, many African countries have further improved conditions fordoing business. Among the 51 African countries evaluated in the Doing Business report(World Bank, 2016a), 23 improved their ranking in 2015. Conditions for doing business
improved most in Kenya, Uganda, Seychelles and Mauritania (as measured by improved
rankings). In 20 other countries, conditions (as measured by scores) remained thesame or improved, but their rankings declined nonetheless as scores in other countries
improved more. In Gabon and Zambia, both the score and the ranking declined, as was
the case in Rwanda, which was among the top reformers in recent years. But Rwanda
still ranks second best after Mauritius among African countries in ease of doing business(see Chapter 5).

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1. Africa’s macroeconomic prospects

In 2015, agriculture supported growth in countries where weather conditions
remained favourable and investment had increased productivity. However, several
countries experienced a headwind on growth (notably Ethiopia, Malawi, Namibia, South
Africa, Zambia and Zimbabwe) due to droughts or floods. This sector remains vulnerable
to weather conditions and volatile prices of agricultural products. In resource-richcountries, growth declined as lower commodity prices strained government budgets
and investment. In some countries, production in extractive industries remained
unchanged or increased slightly despite lower commodity prices (Nigeria and Zambia),
while in others it declined (Botswana, Equatorial Guinea, Gabon, Guinea, Sierra Leone
and South Africa).
Manufacturing activity improved in a few countries (Ethiopia, Kenya, Rwanda
and South Africa), but was often constrained by weak export demand and/or power
shortages. New investment is expected to boost manufacturing in the coming years inseveral countries (e.g. Botswana and Mauritius). The construction sector continued toboost growth in many countries, often driven by public infrastructure programmes, butalso by private investment including in housing. The service sector also remained an
important driver of growth in Africa. Both traditional services such as transport, trade,
real estate, public and financial services and new information and telecommunication
technologies remain important drivers for productivity and growth.
Tourism is also an important and growing service sector in Africa. The numberof available hotel rooms continued to increase (Figure 1.6). However, according to theWorld Tourism Organization (UNWTO, 2016), international tourist arrivals in Africa
declined in 2015 by 3% to 53 million. In North Africa, arrivals declined by 8% and in
sub-Saharan Africa by 1%, although the latter returned to positive growth in the second
half of the year. In some countries, tourism was adversely affected by terrorism andsecurity problems in the region (Burkina Faso, Cameroon, Egypt, Kenya and Tunisia).
Meanwhile, in several countries tourism boosted growth in 2015 (Ethiopia, Madagascar,
Mauritius, Rwanda, Seychelles and Zimbabwe).

Figure 1.6. Number of available hotel rooms in Africa, 2011-15
North Africa

Sub-Saharan Africa

2012

2013

AfricaNumber of rooms
60 00050 00040 00030 000
20 000
10 000
0

2011

2014

2015

Source: AfDB/NYU Africa House/ATA (2015).
12 http://dx.doi.org/10.1787/888933349983

An examination of the fastest-growing African countries over the past five years
reveals very different sector patterns (Table 1.2). In Nigeria, structural changes seem to
be in accordance with traditional three-sector theory, as shares of the primary sector© AfDB, OECD, UNDP 2016

African Economic Outlook31

1. Africa’s macroeconomic prospects

declined while those of other sectors increased.2 The share of agriculture also declined
in many other countries, but increased in Kenya and Tanzania. The share of extractive
industries declined in some countries but increased in others as new production started
and boosted growth (oil in Ghana and iron-ore mining in Sierra Leone). The shareof manufacturing increased in only a few countries (Niger, Nigeria and Uganda), but
remained broadly constant or even declined in many others. In contrast, the construction
and service sectors were important drivers of growth in many countries.
In short, African countries are achieving growth performance with quite different
sectoral patterns. However, the simplistic three-sector theory can be misleading as
productivity is not only raised by factor reallocation between sectors, but also throughmodernisation and reallocation within sectors, as well as via better linkages between
sectors. In particular, higher productivity in agriculture can boost food processing andleather processing and manufacturing to the benefit of both sectors (McMillan andHarttgen, 2015).

Table 1.2. Sectoral changes in Africa’s fast-growing countries, 2009-14(Changes of shares in GDP in percentage points)
Mining andAgriculture,
quarrying
forestry, fishing including oil andand hunting
gas extraction

Manufacturing

Construction

Electricity, gas
and water

Services

Burkina Faso

-0.7

5.4

-3.6

4.2

0.3

-5

Congo

0.1

-3.6

0.1

1.8

0.1

1.5

Democratic Republicof the Congo

-1.9

0.4

-1.5

0.5

0

2.5

Ethiopia

-10.2

0.6

0.3

4.1

-0.4

5.6

Ghana

-12.2

7.4

-1

3.7

-0.1

2.2

Kenya

3.3

0.2

-1.7

0.6

-0.3

-2.1

Malawi

-5.3

0.2

-2.1

1.9

-0.1

5.4

Mozambique

-2.2

2

-1.8

0.5

-0.1

1.6

Niger

-1.6

3.3

1

0

-0.1

-2.6

Nigeria

-16.1

-17.1

6.5

1.9

0.4

24.4

Rwanda

-1.2

1.1

-0.5

1.5

0.1

-1

Sierra Leone

-8.2

17.2

-0.6

-0.5

0.1

-8

Tanzania

1.5

1.6

0

2.1

-0.5

-4.7

Uganda

-2.5

-0.5

1.5

2.1

-0.4

-0.2

Zambia

-2.9

-2.3

-1.2

3.4

0.1

2.9

Note: Selected countries with average annual real GDP growth during this period of above 5%.
Source: Author’s calculations based on data from the Statistics Department, African Development Bank.

Growth remains highest in East Africa
Economic growth varies across countries and regions, reflecting factors such as
differences in income levels, dependence on commodity exports, political and social
stability, and macroeconomic and structural policies. In 2015, growth continued tobe highest in East Africa, followed by West Africa and Central Africa, and remained
lowest in Southern Africa and North Africa. Assuming a gradual improvement ininternational and domestic conditions, growth is projected to accelerate in all regions in
2016/17 (Table 1.3).

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1. Africa’s macroeconomic prospects

Table 1.3. Africa’s growth by region, 2014-17(Real GDP growth in percent)2014

2015 (e)2016 (p)2017 (p)Africa

3.7

3.6

3.7

4.5

Central Africa

6.1

3.7

3.9

5.0

East Africa

6.5

6.3

6.4

6.7

North Africa

1.4

3.5

3.3

3.8

Southern Africa

2.8

2.2

1.9

2.8

West Africa

6.0

3.3

4.3

5.5

Memorandum items:
Africa excl. Libya

4.2

3.7

3.8

4.5

Sub-Saharan Africa (SSA)

5.0

3.6

4.0

4.9

SSA excl. South Africa

5.9

4.2

4.7

5.6

Note: (e) estimates; (p) projections.
Source: Statistics Department, African Development Bank.

In 2015, East Africa was again the continent’s fastest-growing region and is expected
to continue its high growth path in 2016/17. The region benefits from large FDI inflows,
although there is some uncertainty about the actual development of these flows in 2015(see Chapter 2). The region’s strong growth performance in 2015 was widespread withmany countries achieving growth of more than 5% (Djibouti, Ethiopia, Kenya, Rwanda,
Tanzania and Uganda) and expected to continue on a high growth path in 2016/17. Sudan
also performed better following the shock of the secession in 2011. Growth in thesecountries was often driven by services and construction including public investment
programmes, but also partly by industry and – where weather conditions remained
favourable (Sudan and Tanzania) – by agriculture. Conversely, in South Sudan the fallin oil prices and oil production and the political conflict had a strong negative impact
on real GDP, which contracted in 2015. The future outlook depends in particular on thetimely implementation of the latest Peace Agreement. In Eritrea, the economy stagnated
due to low export demand and difficult business and investment conditions, and in
Comoros the energy crisis continued to weigh on growth.
In West Africa, growth slowed in 2015 due to the sharp fall in commodity prices
and the Ebola crisis. In Nigeria, Africa’s largest economy, oil production remained
low and growth of the non-oil sector weakened as the government cut spending due
to lower oil revenues. Private-sector activity was also adversely affected by tightermonetary policy and foreign exchange restrictions, which were implemented to counter
depreciation of the currency. Growth is expected to recover gradually with the help of amore expansionary government budget. The Ebola crisis has a significant impact on theeconomies of Guinea, Liberia and in particular Sierra Leone, with the fall in commodity
prices further adding to the shock (see Box 1.3). However, some other countries in theregion achieved relatively high growth in 2015 (Benin, Côte d’Ivoire, Mali, Senegal andTogo) and their outlook for 2016/17 remains favourable.
In Central Africa, growth also weakened in 2015. Growth in the Republic of theCongo (Congo) declined as the government responded to falling oil revenues by cutting
infrastructure investment. In Equatorial Guinea, GDP fell as oil production declined, andthis trend is likely to continue in 2016/17. In the Central African Republic, GDP recovered
despite the political conflict and security risks, and with improved security and anormalisation of international co-operation the economy should continue to pick up.
Cameroon continued its trend of solid and broad-based growth driven by agriculture© AfDB, OECD, UNDP 2016

African Economic Outlook33

1. Africa’s macroeconomic prospects

and forestry, construction, industry and oil production, despite security problems inparts of its northern border region. In Gabon, the government continued its investment
programme and boosted growth despite lower oil revenues. In the Democratic Republic of
the Congo, growth moderated in 2015 but remained solid, driven by agriculture, services
and industries, with production increasing in the majority of extractive industries.
In Southern Africa, growth slowed down in 2015 and is expected to recover only in2017. Weak international conditions including lower commodity prices, the drought andother factors, such as power shortages, dampened growth in the region in 2015. South
Africa continued its low growth trajectory and is expected to weaken further in 2016
before recovering in 2017. Many factors, notably low commodity prices, weak export
demand, and power shortages, strikes and the drought in agriculture, are depressing
consumer and business confidence and production. As South Africa is an important
export destination for neighbouring countries its weakness affects the whole region.
In other countries in the region that depend even more on commodity exports, notably
Angola (oil) and Zambia (copper) as well as Botswana (diamonds), growth also declined.
In Mozambique, growth moderated in 2015 but remained solid, and was boosted by higher
production in agriculture and the power and extractive industries sectors. Despite asignificant reduction in 2015, FDI also remained a major driver of Mozambique’s growth.
In North Africa, the macroeconomic situation remains uneven. In Libya, disruptionin oil production and ongoing political conflicts and uncertainty led to another fall in realGDP. Ending the fighting between rival militias and establishing a national government
is key for an economic recovery. Tunisia achieved only modest growth in 2015 boosted bygood harvests, while production in other sectors remained weak. Mining and industry
sectors were adversely affected by weak exports and tourism, which had recovered
gradually, declined once again after terrorist attacks. In Algeria, growth remained steadythanks to a rebound in oil production. Morocco achieved the highest broad-based growthin the region supported on the demand side by private consumption and investment andon the production side by the construction sector and agriculture, which benefited fromgood weather conditions and past investment in irrigation. Tourism was also adversely
affected by security problems in the region but to a much lower extent than in Tunisia.
In Egypt, growth strengthened as the political scene stabilised and business sentiment
improved. Higher wages and social spending supported consumption and investment
also increased. On the production side, the service sector boosted growth although
tourism was again adversely affected by security concerns. Current plans for economic
reforms and mega projects will, if fully implemented, further strengthen the economy.

Box 1.3. The Ebola crisis
Thanks to international support and national policies, the spread of the Ebola Virus
Disease (EVD) in the three most-affected countries has been contained. The World
Health Organization (WHO) declared West Africa “free of Ebola”, although there is stilla risk of flare-ups. The three West African countries most hit by the EVD outbreak,
Guinea, Liberia and Sierra Leone, are on their way to recovery. The epidemic caused
tremendous human hardship and resulted in high economic and social costs in thesecountries including possible reversals of gains achieved in various areas. By mid-March
2016, in these three countries there had been 28 603 reported cases of the virus (0.13%
of the total population in these countries) and 11 301 reported deaths (4 809 in Liberia,
3 956 in Sierra Leone and 2 536 in Guinea) according to WHO. A large number of healthworkers also died as a result of infection. Health systems must now be restored tofunctioning status and further improved. Governments are taking measures not only
to restore gains lost due to the EVD crisis, but also to better cope with the risks of
epidemics and other health threats, and improve access to quality health services.

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1. Africa’s macroeconomic prospects

Box 1.3. The Ebola crisis (cont.)
During the height of the epidemic, economic activity came to a standstill in the mostaffected regions, unemployment increased and children could not go to school. As thesecountries also depend on commodity exports (iron ore in Sierra Leone and Liberia,
aluminium, oil, gold and diamonds in Guinea), these economies suffered a “double
shock”, as commodity prices declined sharply. As a result of these shocks, real GDP
shrank in Sierra Leone in 2015 by about one fifth. In Guinea and Liberia, the impact was
smaller with GDP estimated to reach levels similar to 2014. In the three years prior to
the Ebola outbreak (2011-13), and before the commodity price declines, average growthamounted to almost 14% in Sierra Leone, above 8% in Liberia and above 3% in Guinea.
The economic costs from these shocks include high fiscal costs. Despite massive budget
support from donors and direct donor spending to fight the epidemic, fiscal positions
weakened in 2014/15. There are also ongoing surveillance and prevention costs. Given the
reduced fiscal space, governments now face the challenge of preventing excessive debt
and ensuring medium-term fiscal sustainability, while preserving growth-enhancing
government expenditures such as infrastructure investment. The economic forecast
for these countries is cautiously optimistic. In Guinea and Liberia, real GDP growth isexpected to accelerate in 2016 to 4% and almost 3%, respectively, and to strengthen
further in 2017. In Sierra Leone, growth is expected to recover only by 2017, but the levelof GDP will still be much lower than in 2014.

International commodity prices have declined further
Commodity prices, which started to edge down in 2013, fell sharply during thesecond half of 2014. The decline continued during 2015 and the beginning of 2016
(Figures 1.7, 1.8 and 1.9). Between mid-2014 and January 2016 the oil price declined bymore than 70% and is presently at its lowest level in 13 years, almost 30% lower than atits lowest level during the 2008/09 global recession. The main reason for the plunging
prices is global oversupply. With new suppliers coming on stream, demand has not
kept pace with supply but is restrained by slower economic growth in industrial andemerging countries, including China. Slowing demand from China and other countries
also reduced copper prices to their lowest level in more than seven years. Prices of othercommodities, such as iron ore and gold, and export prices of some agricultural products,
notably cotton, also declined, with gold price recovering recently. The decline of coffee
prices was more moderate and the price of cocoa remained high in 2015.
The AEO 2016 economic forecast for Africa is based on the assumption that the priceof oil and other commodities will stabilise and slowly recover. But given current low
levels, average prices will still be lower in 2016 than in 2015, and will only increasein 2017. Assuming an average oil price level of USD 37 per barrel in 2016 and USD 48
per barrel in 2017, oil prices will decline by 27% in 2016 before rising by around 30% in
2017. However, given the uncertainties affecting the global economy in general and oil
and commodity markets in particular, these assumptions involve significant risks, withdownside risks probably more significant than upside risks.
Africa’s main commodity exporters are heavily affected by these price declines.
In some countries production in extractive industries has continued to increase, thus
boosting GDP, while in others production has been cut. The low price levels also weighagainst profits and can have adverse effects on investment and exploration, thus
reducing growth potential. In several African countries, revenues from oil and non-oil
commodity exports are the main source of finance for both import demand and, throughtax revenues, government expenditure. These countries now have to cope with weakercurrent accounts and exchange rates and additional fiscal pressures. However, lower© AfDB, OECD, UNDP 2016

African Economic Outlook35

1. Africa’s macroeconomic prospects

oil prices also have beneficial effects as they reduce costs for heating, transport andproduction in energy-intensive sectors. Import prices of basic foodstuffs also continued
to decline in 2015. Taken together with lower energy prices, this decline mitigates
inflationary pressures, increases the purchasing power of households, tends to boost
domestic demand and could also alleviate poverty.
Commodity prices can affect Africa’s economic growth through various channels.
The overall effect depends on the size of oil and non-oil commodity exports and oil
and food imports. Analysis by the African Development Bank shows that, in the shortterm, the growth impact (per percentage price change) through the export channel islargest for oil prices, followed by metal prices and export prices of agricultural products.
However, over the longer term, the latter have the largest impact on growth in exporting
countries. According to this analysis, the average commodity price increase between
2010 and 2014 explains about 30% of growth in Africa’s commodity-exporting countries(AfDB, forthcoming). However, this implies that if commodity prices remain at current
low levels, growth prospects for Africa’s commodity-exporting countries would remain
weaker than in AEO projections, which assume a gradual recovery of commodity prices
during 2016/17.

Figure 1.7. Commodity prices, January 1999-January 2016
Petroleum

Aluminium

CopperGold

January 2000=100
700
600
500
400
300
200
100

Ja
n
A 9
pr 9
Ju 9 9O l9
c 9
Ja t 9n 9
A 0
pr 0
Ju 0 0O l0
c 0
Ja t 0
n 0
A 0
pr 1
Ju 01
O l0
c 1
Ja t 0n 1
A 0
pr 2
Ju 0 2O l0
c 2
Ja t 0n 2
A 0
pr 3
Ju 0 3O l0
c 3
Ja t 0n 3
A 0
pr 4
Ju 0 4O l0
c 4
Ja t 0n 4
A 0
pr 5
Ju 0 5O l0
c 5
Ja t 0n 5
A 0
pr 6
Ju 0 6O l0
c 6
Ja t 0
n 6
A 0
pr 7
Ju 07
O l0
c 7
Ja t 0n 7
A 0
pr 8
Ju 0 8O l0
c 8
Ja t 0n 8
A 0
pr 9
Ju 0 9O l0
c 9
Ja t 0
n 9
A 1
pr 0
Ju 10
O l1
c 0
Ja t 1
n 0
A 1
pr 1
Ju 11
O l1
c 1
Ja t 1
n 1
A 1
pr 2
Ju 12
O l1
c 2
Ja t 1
n 2
A 1
pr 3
Ju 13
O l1
c 3
Ja t 1
n 3
A 1
pr 4
Ju 14
O l1
c 4
Ja t 1
n 4
A 1
pr 5
Ju 15
O l1
c 5
Ja t 1n 5
16

0
Source: World Bank (2016b).
12 http://dx.doi.org/10.1787/888933349994

Figure 1.8. Export prices of agricultural products, January 1999-January 2016
Cocoa

Arabica coffee

CottonJanuary 2000=100
600
500
400
300
200
100

Ja
n
A 9
pr 9
Ju 9 9O l9
c 9
Ja t 9n 9
A 0
pr 0
Ju 0 0O l0
c 0
Ja t 0
n 0
A 0
pr 1
Ju 01
O l0
c 1
Ja t 0n 1
A 0
pr 2
Ju 0 2O l0
c 2
Ja t 0n 2
A 0
pr 3
Ju 0 3O l0
c 3
Ja t 0n 3
A 0
pr 4
Ju 0 4O l0
c 4
Ja t 0n 4
A 0
pr 5
Ju 0 5O l0
c 5
Ja t 0n 5
A 0
pr 6
Ju 0 6O l0
c 6
Ja t 0
n 6
A 0
pr 7
Ju 07
O l0
c 7
Ja t 0n 7
A 0
pr 8
Ju 0 8O l0
c 8
Ja t 0n 8
A 0
pr 9
Ju 0 9O l0
c 9
Ja t 0
n 9
A 1
pr 0
Ju 10
O l1
c 0
Ja t 1
n 0
A 1
pr 1
Ju 11
O l1
c 1
Ja t 1
n 1
A 1
pr 2
Ju 12
O l1
c 2
Ja t 1
n 2
A 1
pr 3
Ju 13
O l1
c 3
Ja t 1
n 3
A 1
pr 4
Ju 14
O l1
c 4
Ja t 1
n 4
A 1
pr 5
Ju 15
O l1
c 5
Ja t 1n 5
16

0
Source: World Bank (2016b).
12 http://dx.doi.org/10.1787/888933350007

36

African Economic Outlook© AfDB, OECD, UNDP 2016

1. Africa’s macroeconomic prospects

Figure 1.9. Import prices of basic foodstuffs, January 1999-January 2016
Maize

Rice

Wheat

January 2000=100
450
400
350
300
250
200
150
100
50

Ja
n
A 9
pr 9
Ju 9 9O l9
c 9
Ja t 9n 9
A 0
pr 0
Ju 0 0O l0
c 0
Ja t 0
n 0
A 0
pr 1
Ju 01
O l0
c 1
Ja t 0n 1
A 0
pr 2
Ju 0 2O l0
c 2
Ja t 0n 2
A 0
pr 3
Ju 0 3O l0
c 3
Ja t 0n 3
A 0
pr 4
Ju 0 4O l0
c 4
Ja t 0n 4
A 0
pr 5
Ju 0 5O l0
c 5
Ja t 0n 5
A 0
pr 6
Ju 0 6O l0
c 6
Ja t 0
n 6
A 0
pr 7
Ju 07
O l0
c 7
Ja t 0n 7
A 0
pr 8
Ju 0 8O l0
c 8
Ja t 0n 8
A 0
pr 9
Ju 0 9O l0
c 9
Ja t 0
n 9
A 1
pr 0
Ju 10
O l1
c 0
Ja t 1
n 0
A 1
pr 1
Ju 11
O l1
c 1
Ja t 1
n 1
A 1
pr 2
Ju 12
O l1
c 2
Ja t 1
n 2
A 1
pr 3
Ju 13
O l1
c 3
Ja t 1
n 3
A 1
pr 4
Ju 14
O l1
c 4
Ja t 1
n 4
A 1
pr 5
Ju 15
O l1
c 5
Ja t 1n 5
16

0

Source: World Bank (2016b).
12 http://dx.doi.org/10.1787/888933350018

Monetary policy stances diverge as countries face different inflationary andcurrency pressures
In many African countries, inflation remained moderate in 2015. However, Africa’s
average inflation remains higher (7.4%) than median inflation (4.3%) due to particularlyhigh inflation in several countries: South Sudan (41.1%), Malawi (21.2%), Sudan (16.9%),
Eritrea (12.5%), Egypt (11.2%), Angola (10.2%) and Zambia (10.1%) (Figure 1.10). Inflationarypressures increased in countries where currencies depreciated in the wake of lower
commodity prices, eroding external and fiscal positions and global risk perceptions. In
2015, central banks continued to maintain or achieve price stability, in accordance with
their mandate. They used different monetary frameworks to pursue their objectives,
such as inflation targeting (Ghana and South Africa) or other regimes, often with money
aggregates as operational and intermediate targets (Berg et al., 2015). Exchange rate
regimes also differ between countries. In many countries, central banks are labouring
to improve the effectiveness of their policies for macroeconomic management. This isparticularly difficult in countries with underdeveloped financial markets, and in cases
where countries are hit by external shocks and central banks are faced with conflicting
targets. This was the case in 2015 when external balances deteriorated and exchange
rates came under pressure in resource-rich countries after the fall of oil and othercommodity prices. In Nigeria, monetary policy was first eased to stimulate the economy
and foreign reserves were used to defend the currency. But towards the end of 2015,
foreign exchange restrictions were implemented to stabilise the exchange rate andhalt the erosion of foreign reserves. The authorities are expected to gradually lift the
restrictions and adopt a more flexible exchange rate policy. Since the end of 2015, aStandby Credit Facility agreement with the International Monetary Fund (IMF) together
with further monetary and fiscal tightening is being used to stabilise the exchange rateand shore up reserves.
Several other countries also coped with worsening external positions, sharply
falling exchange rates and inflationary pressures. They generally responded bytightening policies (e.g. Algeria, Angola, Ghana, Kenya, Lesotho, Malawi, South Africa,
Uganda and Zambia). But several other countries (e.g. Botswana, Morocco, Mauritius)© AfDB, OECD, UNDP 2016

African Economic Outlook37

1. Africa’s macroeconomic prospects

continued accommodative monetary policy or saw room for further easing with a viewto stimulating the economy, as inflation remained low or declined due to lower oil andfood prices. The Central African Economic and Monetary Union (CEMAC) 3 also responded
to lower growth and moderate inflation and further reduced its benchmark interest rate
to 2.45%. In contrast, the West African Economic and Monetary Union (WAEMU) 4 kept its
benchmark interest rate constant at 3.5%. In 2015, inflation in WAEMU countries was on
average below 1.5% and lower than in CEMAC countries, where it was around 3%.

Figure 1.10. Consumer price inflation in Africa, 2003-17
Median inflation

Average inflation

%
12
10
8
6
4
2
0
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015(e) 2016 (p) 2017 (p)Note: (e) estimates; (p) projections.
Source: Statistics Department, African Development Bank.
12 http://dx.doi.org/10.1787/888933350023

Fiscal positions and current accounts have deteriorated in many countries
Falling commodity prices significantly impacted government budgets in resourcerich countries already in 2014, with pressure increasing in 2015. Many countries had
accumulated reserves during the preceding boom period and were able to cope withthese headwinds. But some had recorded relatively large budget deficits in 2014, which
increased further in 2015 (Algeria, Congo, Libya, South Sudan and Zambia). Somecountries less dependent on oil or other commodities also face significant budgetarypressures, and a few ran deficits in 2015 close to 10% of GDP or higher (Congo, Egypt,
Eritrea and Gambia).
However, a few countries recorded budget surpluses in 2015 (Botswana, Lesothoand Seychelles), and many experienced relatively small budget deficits of around 3%
of GDP or lower (Burkina Faso, Comoros, Democratic Republic of the Congo, Ethiopia,
Gabon, Guinea-Bissau, Mauritania, Nigeria, Sudan, Swaziland and Zimbabwe). Most
governments are taking measures to limit budget deficits.
Given increased budgetary pressures, maintaining debt at sustainable levels assumes
even greater importance. According to the World Bank and IMF debt sustainability
analysis, almost half of countries assessed in recent years are at a moderate risk of debt
distress and almost a quarter are at low risk, while more than a quarter are at high risk.
The risk assessment worsened for six countries (compared to AEO 2015), which moved
from moderate to high-risk classification (Cameroon, Ghana and Mauritania) or from
low to moderate risk (Congo, Ethiopia and Madagascar). Comoros moved in the otherdirection from high to moderate risk (Table 1.4).

38

African Economic Outlook© AfDB, OECD, UNDP 2016

1. Africa’s macroeconomic prospects

Table 1.4. Debt sustainability analysis in African countries:
Assessing risks of debt distress
Low risk

Moderate risk

High risk

Benin (January 2013)

Burkina Faso (May 2015)

Burundi (April 2015)

Kenya (September 2015)

Cabo Verde (September 2014)

Cameroon (December 2015)

Liberia (February 2015)

Comoros (February 2015)

Central African Republic (October 2015)

Nigeria (March 2015)

Congo (September 2015)

Chad (May 2015)

Rwanda (June 2015)

Democratic Republic of the Congo (October 2015) Djibouti (December 2015)

Senegal (September 2015)

Côte d’Ivoire (December 2014)

Ghana (September 2015)

Tanzania (July 2015)

Ethiopia (October 2015)

Mauritania (February 2015)

Uganda (November 2015)

Gambia (April 2015)

Sao Tome and Principe (July 2015)

Guinea (February 2015)

Sudan (December 2014)

Lesotho (July 2014)

Zimbabwe (July 2014)

Madagascar (December 2015)
Malawi (March 2015)
Mali (December 2014)
Mozambique (August 2015)
Niger (March 2015)
Sierra Leone (November 2015)
South Sudan (December 2014)
Togo (November 2014)
Zambia (June 2015)
Note: Date of most recent analysis in parentheses.
Source: Joint World Bank-IMF Low Income Countries Debt Sustainability Analysis (LIC DSA).

Measures to limit indebtedness differ between countries and include spending cuts,
tax rate increases, tax base broadening and improved tax collection. On the spending
side, the narrower fiscal space increases the importance of using spending effectively
to improve provision of basic services for the whole population and boost economic
growth. Lower energy prices make it politically easier to phase-out energy subsidies andseveral countries have already implemented such measures.
On the revenue side, a balance must be struck between different objectives, inparticular creating more revenues and avoiding adverse effects on economic growth.
Broadening the tax base by reducing tax preferences and exemptions and improving
tax administration is generally preferable to increasing statutory tax rates. An effective
tax administration requires a highly qualified and well-equipped staff that can workwithout political interference. The task of tax collectors is eased if the tax burden isrelatively low, if the number of taxes is relatively small, and if taxation law is clear,
relatively simple and gives tax collectors minimal discretionary power to determine
tax liability. Reducing corruption and improving the quality of public spending, suchthat people perceive taxes as essential for financing public goods and services, also
facilitates tax collection (Leibfritz, 2015).
In Africa, there is significant potential for further improving tax collection. According
to the World Bank’s Paying Taxes 2016 report, Africa remains a difficult region in which
to pay tax but many countries are implementing measures to reduce compliance costs
for taxpayers (World Bank /PwC, 2015). Several countries have recently implemented or
improved electronic systems for filing and paying taxes, such as Cabo Verde, Morocco,
Mozambique, Rwanda, Seychelles, Tanzania and Zambia. Five African countries standout in terms of ease of paying taxes and are listed among the 50 best-practice countries
in the World Bank report. These are Mauritius (ranked 13), South Africa (20), Seychelles(43), Zambia (46) and Rwanda (48). However, many African countries still rank poorly inthis international comparison, largely because of their high administrative burden on
taxpayers and the complexity of their tax systems.

© AfDB, OECD, UNDP 2016

African Economic Outlook39

1. Africa’s macroeconomic prospects

The sharp fall in oil prices not only increased pressure on government budgets,but also led to a sharp deterioration in current accounts for oil-exporting countries(Figure 1.11). During the oil price boom, Africa’s main oil-exporting countries generally
recorded large surpluses in their current accounts, but since last year all hold deficits.
These were particularly large in the Republic of the Congo and Libya, where oil production
was disrupted by ongoing political conflict. Oil-importing countries are benefitingfrom lower oil prices and some have improved their current accounts. But on average,
the current account deficit of these countries improved only marginally despite relief
from lower international oil and food prices. Lower export prices and export volumes
outweigh lower import prices for oil and food. In some countries, weaker exchange rates
also pushed up import prices.

Figure 1.11. Current account balance in Africa’s oil-exportingand oil-importing countries, 2003-17
Oil-exporting countries

Oil-importing countries

% GDP
20
15
10
5
0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015 (e) 2016 (p) 2017 (p)-5-10Note: (e) estimates; (p) projections.
Source: Statistics Department, African Development Bank.
12 http://dx.doi.org/10.1787/888933350037

Most African countries have now a “twin deficit” with both the government budget
and the current account in deficit. Where this leads to declining foreign reserves andinflationary pressures, it can pose serious risks to macroeconomic stability. External andfiscal deficits are sometimes interrelated, but the causal relationship can go both ways.
For example, a twin deficit could be caused by a decline in export revenues, which leads
to lower government revenues while imports and government spending are maintained
at existing levels, with the result that both external and fiscal positions deteriorate.
However, a twin deficit could also originate from the government budget if an increasein public spending is not accompanied by higher public revenue or private net savings,
causing both fiscal and external positions to deteriorate. A combination of lower export
earnings and higher public expenditure could also lead to a twin deficit.
In 2015, worsening of current accounts was often accompanied by deterioration of
the fiscal position (Figure 1.12). For resource-rich countries such as Algeria, Chad, Congo,
Gabon, Libya, Nigeria, South Sudan and Zambia, the deterioration of the external balance(due to lower export earnings) led to the deterioration of the fiscal balance (due to lower
tax revenues from extractive industries). In several countries, currency depreciation
also contributed to the recent deterioration of external balances by pushing up importprices. However, weaker currencies will eventually result in an improvement in tradebalances, with domestic firms better able to compete with foreign firms, both in export
and domestic markets (J-curve effect).540

African Economic Outlook© AfDB, OECD, UNDP 2016

1. Africa’s macroeconomic prospects

Prevention of unsustainable twin deficits therefore requires not only prudent
fiscal policies, but also competitive real exchange rates and further improvement inconditions for domestic firms and foreign direct investment. Both fiscal and external
deficits will then eventually decline. If the remaining current account deficits are to alarge extent financed through FDI they will be sustainable, as this type of financing does
not increase external debt.

Figure 1.12. Changes in current account and government budget balancesin African countries between 2014 and 2015, in percentage points of GDP
Change in fiscal balance
5

0

-5

-10

-15

-25

-20

-15

-10

-5

0

5
10
15
Change in current account balance

Note: The positive-sloped trend line and the R-square of 0.44 in the regression between the change in current
account balance and fiscal balance suggest that both balances are related, although there are other influencing
factors.
12 http://dx.doi.org/10.1787/888933350041

Will Africa reap a demographic growth dividend from its young population?
Africa is the continent with the fastest-growing population in the world. From 2000 to2015, population numbers increased by more than 370 million from 814 million to almost
1.2 billion. According to United Nations projections (medium scenario), the population
will rise to almost 1.7 billion in 2030 and almost 2.5 billion in 2050.6 Africa’s share of
the world population is predicted to increase from currently around 16% to almost 20%
in 2030 and above 25% in 2050. A young and growing population is generally seen as
providing a “demographic dividend” to GDP growth and GDP per capita growth throughlabour supply. The underlying reason is growth of the labour force and the proportion of
population of working age.
In coming decades, Africa will have the most favourable demographics in theworld, in terms of the development of people at working ages. Its population at working
age (defined as 15-64) is increasing rapidly and faster than the total population. Thisabsolute and relative increase of potential labour supply opens a window to boost
Africa’s annual growth of GDP per capita by up to half a percentage point over the next
15 years (Figure 1.13). However, measuring the positive mechanical demographic effects
on labour supply and growth (see Annex 1.A1) only provides a starting point for analysisof the effects. It is important to also consider the labour market and productivity. The
positive labour supply effect on growth will only materialise if enough jobs are created.
Otherwise, people will be discouraged from entering the labour force (causing labour
market participation to fall) or, after entering the labour market, will be unable to finda job (causing unemployment to rise). This requires a fundamental change in policy, as
Africa has failed in the past to create enough good jobs despite higher economic growth(Page and Shimeles, 2014; Gallup, 2015).

© AfDB, OECD, UNDP 2016

African Economic Outlook41

1. Africa’s macroeconomic prospects

Figure 1.13. Africa’s potential demographic dividend
Percentage points of GDP
0.6
0.5
0.4
0.3
0.2
0.1

20
0
20 1
0
20 2
03
20
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
0
20 9
1
20 0
2011
2012
2013
2014
2015
1
20 6
2017
2018
20 19
2
20 0
2
20 1
2
20 2
2
20 3
2
20 4
2
20 5
2
20 6
2
20 7
2
20 8
2
20 9
3
20 0
3
20 1
3
20 2
3
20 3
3
20 4
3
20 5
3
20 6
3
20 7
3
20 8
3
20 9
4
20 0
4
20 1
4
20 2
43
20
4
20 4
4
20 5
4
20 6
4
20 7
4
20 8
49
20
50

0

Note: Potential impact on GDP per capita growth (in percentage points) as calculated by the percentage change
in the proportion of the working-age population.
12 http://dx.doi.org/10.1787/888933350057

The demographic effect on productivity growth is linked to impacts on savings,
investment, labour efficiency and innovation. In principle, productivity growth inyoung populations should increase in each of these areas. As birth rates decline, bothfamilies and the government will have more resources available per child to provide
better education and health care, which boosts productivity over time. With relatively
more people at working age, the savings rate could increase and also raise productivity
through more investment. Migration of workers to areas with higher levels of income
and productivity, notably in cities, could also increase Africa’s productivity. By the mid2030s, about half of Africans are expected to live in cities (see Chapters 6, 7 and 8).
However, a number of downside risks could impact productivity growth. In particular,
the growing labour force may lack the necessary skills (human capital), and firms andpublic infrastructure may not provide adequate physical capital. Africa’s demographics
also raise a number of questions: Will current low levels of productivity in agriculture
and the effects of global climate change compromise Africa’s ability to provide foodsecurity for a growing population? How can Africa attain environmental sustainability
in the face of rising populations and increasing economic activity?
Africa’s future demographics thus offer opportunities but also create challenges.
Africa’s “economic renaissance” of the past two decades gives reason to hope that thecontinent will reap the demographic dividend in coming decades. But as much depends
on how policy makers respond to these challenges, it is difficult to judge which view will
finally prevail (AfDB/OECD/UNDP, 2015: 139ff; Basu and Basu, 2015; Canning, Raja andYazbeck, 2015; Leridon, 2015; Sachs, 2015).
These considerations suggest that countries in East, West and Central Africa havethe potential to reap a significant demographic dividend, while the dividend will bemuch smaller in Southern Africa and North Africa (see Annex 1.A1). To exploit thispotential, countries must make managing demographic transition a key policy priority.
It is of the utmost importance to:• reducebottlenecks that still constrain demand for labour by promoting
entrepreneurship and private-sector activity in general, while simultaneously
helping young people to obtain the skills needed to obtain a decent job (see theSpecial Theme on Promoting Youth Employment in AfDB et al., 2012)• ensure food security and environmental sustainability• speed up the demographic transition towards lower birth rates by improving healthcare, education and family planning.
42

African Economic Outlook© AfDB, OECD, UNDP 2016

1. Africa’s macroeconomic prospects

Table 1.5. Macroeconomic developments in Africa, 2007-17(Summary table)
2007-11

2012

2013

2014

2015(e)2016(p)2017(p)Central Africa

5.9

6.3

3.3

6.1

East Africa

6.4

4.5

7.2

6.5

3.7

3.9

5.0

6.3

6.4

North Africa

3.6

9.6

1.7

1.4

3.5

6.7

3.3

3.8
2.8

Real GDP growth (%)

Southern Africa

3.8

3.4

3.7

2.8

2.2

1.9

West Africa

6.3

5.2

5.7

6.0

3.3

4.3

5.5

Africa

4.7

6.4

3.9

3.7

3.6

3.7

4.5

Africa (excluding Libya)

5.0

3.9

4.3

4.2

3.7

3.8

4.5

Memorandum items
North Africa (including Sudan)

3.6

9.0

1.9

1.6

3.6

3.5

4.0

Sub-Saharan Africa

5.4

4.5

5.2

5.0

3.6

4.0

4.9

Sub-Saharan Africa excluding South Africa

6.2

5.1

5.9

5.9

4.2

4.7

5.6

Oil-exporting countries

4.8

7.9

3.5

3.7

3.5

3.9

4.6

Oil-importing countries

4.5

4.2

4.5

3.8

3.6

3.4

4.4

Consumer prices (inflation in %)Central Africa

7.0

3.5

1.8

2.4

2.1

2.3

2.4

East Africa

12.7

19.3

12.8

12.5

9.3

7.9

8.0

North Africa

7.9

7.6

5.1

6.4

7.6

6.3

6.7

Southern Africa

8.1

6.5

6.4

6.3

5.8

7.9

8.0

West Africa

9.8

10.5

7.7

7.2

8.3

8.7

8.0

Africa

8.9

9.2

6.8

7.2

7.3

7.2

7.2
7.0

Memorandum items
North Africa (including Sudan)

8.2

9.4

7.1

8.4

8.2

6.8

Sub-Saharan Africa

10.0

10.2

7.8

7.6

7.2

7.8

7.6

Oil-exporting countries

9.7

10.4

7.5

8.2

8.8

8.3

8.4

Oil-importing countries

7.6

7.4

5.7

5.6

5.2

5.6

5.6

Overall fiscal balance, including grants (% GDP)
Central Africa

4.0

-0.4

-1.3

-2.2

-4.2

-4.0

-2.9

East Africa

-2.5

-3.8

-4.0

-3.6

-4.6

-4.4

-3.7

North Africa

-1.3

-3.1

-6.7

-11.1

-13.3

-12.1

-11.3

Southern Africa

-1.7

-2.3

-2.9

-4.0

-3.9

-3.9

-3.8

West Africa

-2.4

-2.2

-0.3

-0.2

-2.9

-3.6

-3.3

Africa

-1.5

-2.6

-3.3

-4.8

-6.6

-6.5

-5.9

Memorandum items
North Africa (including Sudan)

-1.3

-3.1

-6.3

-10.1

-11.8

-10.7

-10.0

Sub-Saharan Africa

-1.6

-2.3

-1.9

-2.2

-3.7

-3.9

-3.5

Oil-exporting countries

-0.8

-1.5

-2.7

-5.3

-8.1

-8.1

-7.3

Oil-importing countries

-2.4

-4.1

-4.2

-4.0

-4.4

-4.0

-3.6

-10.6

External current account, including grants (%GDP)
Central Africa

-2.3

-3.0

-6.5

-7.6

-10.2

-10.4

East Africa

-5.8

-7.2

-10.0

-9.3

-8.9

-7.1

-7.2

North Africa

5.5

1.6

-1.4

-5.1

-9.3

-7.5

-6.6

Southern Africa

-2.1

-2.6

-3.6

-5.3

-6.1

-5.8

-5.6

West Africa

4.4

0.8

0.7

-1.8

-4.6

-4.4

-3.2

Africa

1.5

-1.0

-2.6

-4.8

-7.3

-6.4

-5.8
-6.5

Memorandum items
North Africa (including Sudan)

4.4

0.6

-2.1

-5.5

-9.0

-7.3

Sub-Saharan Africa

-0.4

-2.2

-3.2

-4.8

-6.5

-6.0

-5.4

Oil-exporting countries

6.6

3.5

0.9

-2.9

-7.3

-6.4

-5.4

Oil-importing countries

-5.2

-7.4

-7.9

-7.9

-7.3

-6.4

-6.3

Note: (e): estimates; (p): projections.
Source: Statistics Department, African Development Bank.

© AfDB, OECD, UNDP 2016

African Economic Outlook43

1. Africa’s macroeconomic prospects

Annex 1.A1. Africa’s potential demographic dividend
Growth in the proportion of the working-age population is boosting growth of percapita GDP (see Box 1.A1.1). Over the past 15 years, the potential demographic impact
on Africa’s average annual GDP per capita growth amounted to 0.2%, and is expected
to double to 0.4% in the coming 15 years, before declining marginally to 0.3% between
2030 and 2050. The potential demographic dividend will be particularly large in East,
West and Central Africa (Tables 1.A1.1 and 1.A1.2 and Figure 1.A1.1), as the demographictransition to lower birth rates has been delayed in these regions, but is now accelerating.
This raises the proportion of the working-age population and reduces the dependency
ratio. In contrast, the lowering of birth rates in North and Southern Africa is moreadvanced and the speed of the demographic transition is slowing (Figure 1.A1.2).
The future demographics of Africa can be mapped onto the Demographic Transition
Model (DTM), which describes population change over time.7 East, West and Central
Africa match stage 3 of the model relatively well, while demographic transition in Northand Southern Africa (or at least in the more developed countries in these regions) ismore advanced and can be characterised as stage 4. In countries where birth rates arestill high, policies could help to accelerate their decline. This would further reduce
population growth and increase the potential demographic dividend, as the proportionof the working-age population would increase faster and the dependency ratio would
fall further. According to the theory of demographic transition, there is a positive
relationship between fertility and child mortality. In order to achieve a desired numberof surviving children, fertility tends to be high when child mortality is also high, anddeclines when child survival increases. While other factors also affect fertility, theimpact of child mortality seems to be obvious for African countries (Figure 1.A1.3). Thisimplies that better health care and education together with adequate family planninghelp to speed up the demographic transition and further improve economic growth andwelfare.
In contrast to Africa, the proportion of the working-age population is alreadydeclining in more developed countries, as well as in some emerging countries. In the
coming years, China will face a pronounced reduction in the proportion of the workingage population, partly as result of the former one-child policy. China’s demographic
dividend of past decades could thus act as a “tax” weighing on growth of potential output(West, 2015). Indeed, over the past 15 years China’s demographic transition boosted
annual growth of potential GDP per capita by 0.5% (Table 1.A1.2). However, over the next
15 years the change in demographics will, all things being constant, reduce growth by asimilar amount (i.e. a turnaround of 1%).

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1. Africa’s macroeconomic prospects

Table 1.A1.1. Estimates and projections of Africa’s population and working-age population
Levels in million (rounded)

Annual average growth in %

2000

2015

2030

2050

2002-152016-30

2031-50

Population

814

1 186

Working-age population

439

658

1 679

2 478

2.5

2.3

2.0

985

1 534

2.7

2.7

2.2

Population

259

394

Working-age population

133

211

579

878

2.8

2.6

2.1

336

547

3.1

3.1

2.5

Population

96

152

232

369

3.1

2.9

2.4

Working-age population

49

79

128

224

3.2

3.3

2.8

Population

172

224

282

354

1.8

1.6

1.1

Working-age population

102

140

181

226

2.2

1.7

1.1

Population

51

63

70

78

1.3

0.8

0.5

Working-age population

31

41

47

53

1.8

0.9

0.6

Population

235

353

516

798

2.7

2.6

2.2

Working-age population

125

188

292

484

2.8

3.0

2.6

AfricaEast Africa

Central Africa

North Africa

Southern Africa

West Africa

Note: The working-age population is aged 15-64.
Source: Author’s calculations based on UN DESA (2015).

Table 1.A1.2. Estimates and projections of Africa’s potential demographic dividend
Proportion of population at working age (%)(Age groups 15-64)

Percentage change in the proportionof population at working age (annual average)

2000

2015

2030

2050

2001-152016-30

2031-50

Africa

53.96

55.53

58.56

61.90

0.2

0.4

0.3

East Africa

51.26

53.44

57.98

62.33

0.3

0.6

0.4

Central Africa

50.67

51.66

55.30

60.56

0.1

0.5

0.5

North Africa

59.12

62.61

64.06

63.77

0.4

0.2

0.0

Southern Africa

60.47

65.11

66.99

68.23

0.5

0.2

0.1

West Africa

53.09

53.36

56.54

60.61

0.0

0.4

0.4

Memorandum items:
World

63.00

65.70

64.70

62.70

0.3

-0.1

-0.2

More developed regions

67.50

66.00

61.10

57.80

-0.1

-0.5

-0.3

Less developed regions
excluding China

59.60

63.30

64.60

64.30

0.4

0.1

0.0

China

68.30

73.20

68.00

58.90

0.5

-0.5

-0.7

Note: Percentage change refers to the potential demographic impact on annual GDP per capita growth. It refers to thepercentage change (not the percentage point change) of the proportion of the working-age population calculated as:
100*(t/t-1 -1). For example, the potential annual average demographic dividend 2015-30 for Africa is calculated as
100*(58.56/55.3-1)/15 = 0.4.
Source: Author’s calculations based on UN DESA (2015).

© AfDB, OECD, UNDP 2016

African Economic Outlook45

1. Africa’s macroeconomic prospects

Figure 1.A1.1. Potential demographic dividend in Africa by region
2001-152016-30

2031-45

Percentage points of GDP
0.6
0.5
0.4
0.3
0.2
0.1
0
East Africa

Central Africa

West Africa

North Africa

Southern Africa

Note: The potential impact on GDP per capita growth (in percentage points) is calculated by the percentagechange in the proportion of the working-age population (2001-50).
Source: Author’s calculations based on UN DESA (2015).
12 http://dx.doi.org/10.1787/888933350060

Figure 1.A1.2. Development and prospects of total fertility (children per woman) in Africa
1970-75

2015-2020

2030-35

Children per woman
8
7
6
5
4
3
2
1
0

AfricaEast Africa

Central Africa

North Africa

Southern Africa

West Africa

Source: UN DESA (2015).
12 http://dx.doi.org/10.1787/888933350075

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1. Africa’s macroeconomic prospects

Figure 1.A1.3. Total fertility rate (TFR) per woman and under-5 mortality
rate per 1 000 in African countries, 2014
TFR
8
7
6
5
4
3
2
1
0
0

20

40

60

80

100

120

140

160

200
180
Under 5-mortality rate

Note: The regression line is TFR = 2.322 + .0237 * U-5MR and the R-square of the regression between the under-5
mortality rate and TFR is 0.623. This mono-causal (and therefore simplistic) approach suggests that TFR of 6 is
associated with U-5MR of 155, thus reducing TFR to 3 requires a reduction of U-5MR to around 30.
Source: Author’s calculations based on AEO 2015 statistics.
12 http://dx.doi.org/10.1787/888933350087

Box 1.A1.1. Calculating the potential demographic growth dividend
The mechanical demographic impact through labour supply on gross domestic product (GDP) canbe seen from the following identities:(1) GDP = (GDP/E) * E = PROD * E
Where E is the number of employed workers and GDP/E = PROD is productivity per worker.
Economic growth is then:(1a) Growth of GDP = growth of E + growth of PROD
With growth of PROD, the share of the employed workers in the labour force (employment rate)
and the share of the labour force in the population at working age (participation rate) all remaining
constant, the change in growth of GDP is equal to the change in growth of the labour force (LF) andthe change in growth of the working-age population (WAPOP).
(1b) Change in growth of GDP = change in growth of employment (E) = change in growth of labour
force (LF) = change in growth of working-age population (WAPOP).
The population POP consists of those employed (E) and those non-employed (NE), where NE is thesum of children, pensioners and people at working age who are not employed.
(2) POP = E + NE
Dividing equation (1) by equation (2) gives GDP per capita:(3) GDP/POP =* PROD

Taking logs of equation 3 and differentiating with respect to time yields:(3a) Growth of GDP/POP = growth of+ growth of PROD

Where is the employment rate (i.e. the share of employed persons in the total population), thus
incorporating both participation and employment ( = E/POP). If the share of the labour force inthe population at working age (participation rate) and the share of the employed in the labour
force (employment rate) remain constant, the growth of GDP per capita is equal to the sum of
productivity growth and the growth of the proportion of the working-age population (WAPOP/POP).
(3b) Growth of GDP/POP = growth of PROD + growth of WAPOP/POP
Hence, all other things being equal, increase in the growth of the proportion of the working-age
population will increase growth of per capita GDP.

© AfDB, OECD, UNDP 2016

African Economic Outlook47

1. Africa’s macroeconomic prospects

Notes
1. The quarterly Ifo World Economic Survey (WES) attempts to draw an up-to-date picture of thecurrent economic situation and the short-term outlook in about 120 industrial, emerging anddeveloping countries. Unlike the official statistics, which are primarily constructed around
quantitative information, WES consists of qualitative information including appraisals andexpectations of economic experts. The 1 100 survey participants work in research institutes,
universities, think tanks, and chambers of industry or financial institutions. In Africa, thesurvey covers 30 countries and receives on average 150 responses quarterly.
2. According to traditional three-sector theory, the share of the primary sector (agriculture andextractive industry) in overall activity is high during early stages of development, but tends todecline as economies develop. The share of the secondary sector (manufacturing) increases
during the low and middle stages of development and declines at higher income levels when
labour costs make manufacturing less competitive. In contrast, the share of the tertiary sector(services) continuously increases and becomes most important at higher income levels.
3. The CEMAC members are Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea
and Gabon.
4. The WAEMU members are Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger,
Senegal and Togo.
5. The J-curve effect suggests that trade balances initially worsen following currency depreciation,
as imports become more costly and exports less valuable. However, the trade balance
eventually improves due to low-priced exports, with export volumes increasing and import
volumes falling, as local consumers purchase less of the more expensive imports and buy more
local goods.
6. The medium scenario assumes that Africa’s total average fertility (children per woman)declines from 4.71 in 2010-15 to 3.11 in 2045-50.
7. The Demographic Transition Model (DTM) distinguishes five stages: i) high stationary
population with both high birth rates and death rates; ii) early expanding population withdeclining death rates, especially among children, as health care improves, while birth rates
remain high; iii) late expanding population with continued falling death rates, while birth rates
also decline as a result of improved economic conditions, better education and women’s status,
and access to contraception; iv) stabilising population with both low birth and death rates(most economically advanced countries are at this stage); and v) declining population withfertility rates falling below the replacement rate (around two children) and the proportion of
the elderly increasing (ageing populations).

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1. Africa’s macroeconomic prospects

References
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turbulence”, in African Development Report 2015, African Development Bank, Abidjan.
AfDB/NYU Africa House/ATA (2015), Africa Tourism Monitor: Unlocking Africa’s Tourism Potential,
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AfDB et al. (2012), African Economic Outlook 2012: Promoting Youth Employment, OECD Publishing, Paris,
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AfDB et al. (2011), African Economic Outlook 2011: Africa and its Emerging Partners, OECD Publishing,Paris, http://dx.doi.org/10.1787/aeo-2011-en.
AfDB/OECD/UNDP (2015), African Economic Outlook 2015: Regional Development and Spatial Inclusion,
OECD Publishing, Paris, http://dx.doi.org/10.1787/aeo-2015-en.
Awel, A.M. (2012), “Terms of trade volatility and economic growth in sub-Saharan Africa”, MPRA
papers no. 48166, University Library of Munich, Germany.
Basu, A.M. and K. Basu (2015), “The prospects for an imminent demographic dividend in Africa:
The case for cautious optimism”, in C. Monga and J.Y. Lin (eds.), The Oxford Handbook of Africa andEconomics, Vol. II: Policies and Practices, Oxford University Press, Oxford.
Berg, A. et al. (2015), “Monetary policy issues in sub-Saharan Africa”, in C. Monga and J.Y. Lin (eds.),
The Oxford Handbook of Africa and Economics, Vol. II: Policies and Practices, Oxford University Press,
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Canning, D., S. Raja and A.S. Yazbeck (2015), Africa’s Demographic Transition: Dividend or Disaster?,Agence Française de Développement, Paris and World Bank, Washington, DC.
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com/services/186197/gallup-global-report-great-jobs-pdf.aspx.
Ifo Institute (2016), World Economic Survey (I/2016), CESifo Group Munich – Ifo Institute, Munich.
IMF (2015), Regional Economic Outlook: Sub-Saharan Africa 2015, International Monetary Fund,
Washington, DC, www.imf.org/external/pubs/ft/reo/2015/afr/eng/pdf/sreo0415.pdf.
Leibfritz, W. (2015), “Fiscal policy in Africa”, in C. Monga and J.Y. Lin (eds.), The Oxford Handbook of
Africa and Economics, Vol. II: Policies and Practices, Oxford University Press, Oxford.
Leridon, H. (2015), “Afrique subsarienne : une transition démographique explosive”, Futuribles,
No. 407 (July-August), pp. 5-21.
McMillan, M. and K. Harttgen (2015), “Africa’s quiet revolution”, in C. Monga and J.Y. Lin (eds.),
The Oxford Handbook of Africa and Economics, Vol. II: Policies and Practices, Oxford University Press,
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OECD (2010), Perspectives on Global Development 2010: Shifting Wealth, OECD Publishing, Paris,
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Paper, 2014/043, United Nations University–WIDER, Helsinki.
Sachs, J.D. (2015), “Africa’s demographic transition and economic prospects”, in C. Monga and
J.Y. Lin (eds.), The Oxford Handbook of Africa and Economics, Vol. II: Policies and Practices, Oxford
University Press, Oxford.
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United Nations, Department of Economic and Social Affairs, Population Division, New York.
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Madrid, http://www.e-unwto.org.
West, J. (2015), “Great Asian Slowdown”, Asian Century Institute, 21 November, asiancenturyinstitute.
com/economy.
World Bank (2015), Africa Pulse: An Analysis of Issues Shaping Africa’s Economic Future, Vol. 12, WorldBank Group, Washington, DC, www.worldbank.org/en/region/afr/publication/africas-pulse-ananalysis-issues-shaping-africas-economic-future-october-2015 (accessed 20 January 2016).
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© AfDB, OECD, UNDP 2016

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49

Chapter 2External financial flows
and tax revenues for Africa
Despite falling commodity prices, Africa’s external financial flows
have remained stable overall. This chapter analyses trends in thoseflows; from foreign direct investment and portfolio equity whichfell, to remittances and official development assistance which are
increasing. It also studies Africa’s tax revenue collection that has
dropped because of lower resource revenues. The chapter looks
at the policy challenges and opportunities related to attracting
financial inflows ranging from the need to stabilise foreign inflows
and implementing medium- to long-term structural policies aspart of the African Union’s Agenda 2063 to step up the continent’s
development.

© AfDB, OECD, UNDP 2016

African Economic Outlook51

2. External financial flows and tax revenues for Africa

In brief
The estimated 208.3 billion USD of external finance – foreign investment, trade, aid,
remittances and other sources that Africa attracted in 2015 – was 1.8% lower than the previous
year. The total sum is projected to rise again to USD 226.5 billion in 2016. Falling commodity
prices, particularly for oil and metals, were one of the key causes for the 2015 fall. Portfolio
equity and commercial bank credit flows dried up, reflecting tightening global liquidity anda market sentiment wary of risks. Rising remittances and increased official development
assistance largely kept the figure up. African governments have to stabilise financial inflows
in the short term and use them for sustained economic diversification for the longer term.
Falling resource revenues mean governments must also find ways to broaden the tax baseaway from oil and commodities.

Africa depends heavily on foreign private and public capital
Flows of finance into Africa – foreign direct investment, portfolio equity and bonds,
commercial bank, bilateral and multilateral bank credit, official development assistanceand public domestic revenues – have remained broadly stable despite weak conditionsin other parts of the world.
Total external flows to Africa for 2015 were estimated at USD 208.3 billion, downfrom an estimated USD 212.2 billion in 2014. But the figure was predicted to pick up to
USD 226.5 billion in 2016.

Figure 2.1. External financial flows to Africa, average 2004-08, 2009-16
current USD billion and % of GDP
Remittances

Official development assistance

Foreign direct investments (FDI)

Net official bank credit flows (bilateral and multilateral)
Total flows with corrected UNCTAD projection

Portfolio investments

Commercial bank credit (net)
UNCTAD projection for FDI

Total external financial flows in % of GDP (Africa)

Current USD, billion
250% of GDP
20
18

200

16
14

150

12
10

100

8
50

6
4

0

2
-50

Average 2004-08

2009

2010

2011

2012

2013

2014

2015 (e)2016 (p)0Note: ODA estimates (e) and projections (p) are based on the real increase in country programmable aid (CPA) in OECD
(2016). The forecast for remittances is based on the projected rate of world growth according to the World Bank.
Source: Authors’ calculations based on IMF (2014b, 2015c); OECD (2016); African Economic Outlook data; World Bank
(2015a).
12 http://dx.doi.org/10.1787/888933350091

There are two starkly different numbers of crucial foreign direct investment (FDI).
According to International Monetary Fund (IMF) (2015a) estimates released in October
2015, foreign investment into Africa increased by 16% over the year. In contrast, theUnited Nations Conference on Trade and Development (UNCTAD) (2016) estimateda 31.4% drop (Figure 2.1) from 2015. Such a decline would suggest that total external

52

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2. External financial flows and tax revenues for Africa

finance decreased to USD 188.8 billion, a sharp 11% fall from 2014. Portfolio inflows
dropped by 42%. Commercial bank credit also declined considerably in 2015, though theoverall effect was minimal as it is a minor source of external finance in Africa.
Remittances and official development assistance (ODA) played a key role in the overall
figure. Remittances increased by 1.2% and ODA by 4.0%. Gross inflows of multilateral andbilateral official credit flows increased, but because of a heavy amortisation schedule in2015, the net contribution to financial flows decreased 10%.

Falling portfolio investment sends private flows to Africa down in 2015
Private financial flows to Africa increased from an average of USD 87 billion in
2004-08 to USD 129 billion in 2011 despite the downturn after the 2008-09 global
financial crisis. However, since 2012 the private finance decreased from USD 146 billion
to USD 136 billion in 2015. It is projected to increase by 8% in 2016 (Table 2.1).
Foreign direct investment into Africa grew steadily from 2007 to 2013. In 2014,
however, FDI fell back to USD 49.4 billion, but increased to USD 57.5 billion in 2015,
according to IMF (2015a) estimates. Africa has attracted investment from industrialised
countries such as France, the United Kingdom and the United States and emerging
economies such as China, India, South Africa, and United Arab Emirates. Investment
is still mainly directed at resource-rich countries, but non-resource-rich countries are
becoming more attractive. The extractive sector, infrastructure and consumer-oriented
industries are the main draws for investment.
The lower UNCTAD estimate for investment in Africa in 2015 reflects a sharp drop into
Mozambique (-21%), Nigeria (-27%), and South Africa (-74%). If UNCTAD rather than IMF
data were used, private finance to Africa would have dropped by 19.5% to USD 116 billion
in 2015. Total financial flows would have decreased 12.8% to USD 188.8 billion.
Portfolio flows decreased from USD 23 billion in 2014 to USD 13 billion in 2015. There
was a net portfolio equity exit in the second half of 2015. Bond flows remained relatively
stable. Compared to other sources of foreign finance, net commercial bank credit is verysmall. Since 2014, net commercial bank credit flows fell from USD 3.8 billion in 2014
to USD 500 million in 2015 and are expected to further decrease in 2016. Remittances
remain the most important single source of external finance with USD 64 billion in 2015.
Compared to volatile foreign investment and portfolio flows, remittances are consideredmore stable and may even be counter-cyclical in the face of external economic shocks(UNDP, 2011). While developed countries such as the United States, France and theUnited Kingdom dominate remittances to Africa, Arab states and money moving from
Cameroon, Côte d’Ivoire and South Africa are also important. The World Bank predicts aslight increase in remittances for 2016 to USD 65.6 billion. But Europe’s weak growth andthe slump in oil prices for Gulf producers may affect remittances to Africa (Table 2.1).

Table 2.1. Financial flows and tax revenues to Africa, 2004-16, current USD billion
Foreign

2004-08 2009

2010

2011

2012

2013

2014

42.8

55.1

46.0

49.8

49.7

54.2

49.4

57.5

66.3

Portfolio investments

7.5

1.2

32.7

21.0

32.3

22.8

23.1

13.4

15.2

Remittances

36.7

44.9

52.5

57.0

61.9

61.2

63.8

64.6

66.4

Commercial bank credit (net)

0.5

-1.3

-1.7

0.8

1.8

4.5

3.8

0.5

-1.2

-1.0

11.0

14.8

14.5

14.0

23.3

17.8

16.0

21.0

Private Inward foreign direct investments (FDI)

Public Net official bank credit flows (bilateral and multilateral)

Domestic

2015e 2016p

Official development assistance (net total, all donors)

39.0

48.0

47.7

51.5

51.1

56.7

54.2

56.4

58.7

Total foreign flows
Tax revenues

125.5
281.0

158.9
302.9

192.0
367.8

194.8
453.2

210.7
458.8

222.8
468.5

212.2
461.2

208.3

226.5

Note: ODA estimates (e) and projections (p) are based on the real increase in country programmable aid (CPA) in OECD (2016). The
forecast for remittances is based on the projected rate of world growth according to the World Bank.
Source: Authors’ calculations based on IMF (2014b, 2015c), OECD (2016) and African Economic Outlook data, World Bank (2015b).

© AfDB, OECD, UNDP 2016

African Economic Outlook53

2. External financial flows and tax revenues for Africa

Official financial flows have remained stable
Official development assistance in grants and concessional loans increased in 2015,
after a small drop in 2014. At USD 56 billion in 2015, ODA remains the most importantsource of public finance for Africa and is expected to increase by 4.1% in 2016. Net
official bank credit from bilateral and multilateral stakeholders have decreased from
USD 17.8 billion in 2014 to USD 16 billion in 2015 but is expected to reach USD 21 billion
in 2016.
Important lenders for Africa’s infrastructure investment are the People’s Bank of
China, the China Development Bank, and the Export-Import Bank of China. In addition
to established lenders such as the World Bank, the African Development Bank and theEuropean Investment Bank, the New Development Bank BRICS, founded in 2014, is
expected to significantly contribute to Africa’s campaign to reach the United Nations’Sustainable Development Goals by complementing existing public and private financial
institutions (UN DESA, 2015b; UN DESA, 2016).
Overall, African countries’ total domestic public revenues are down. This is mostly
due to a fall in taxes on resource revenues. While countries with commodities havebeen confronted with a drop in tax-GDP ratios across all categories, non-resource-richcountries have increased tax revenues and tax-GDP ratios.

Africa faces volatile FDI inflows
Foreign investment into Africa increased by 16% from to USD 57.5 billion in2015, according to IMF figures. Flows to North Africa reversed a downward trend, as
investment increased by 20% from USD 17.2 billion in 2014 to USD 20.7 billion in 2015.
East Africa has seen higher FDI since 2010. In 2015, the figure rose 16% to USD 8.9 billion
in 2015 from USD 7.7 billion the previous year. For West Africa investment rose from
USD 9.3 billion to USD 9.7 billion. Central Africa saw a decline from USD 6.6 billion in2014 to USD 5.4 billion. Southern Africa received USD 12.9 billion of FDI in 2015 against
USD 8.7 billion in 2014, and USD 11.4 billion in 2013.
The leading African investment destinations in 2015 were: Egypt (USD 10.2 billion),
Mozambique (USD 4.7 billion), Morocco (USD 4.2 billion), South Africa (USD 3.6 billion),
Ghana (USD 2.5. billion), the Democratic Republic of the Congo (USD 2.5 billion),
Zambia (USD 2.4 billion), Tanzania (USD 2.3 billion), Ethiopia (USD 2.1 billion), Guinea(USD 1.9 billion), and Kenya (USD 1.9 billion). Africa has attracted foreign investment
from many countries, notably from the United Kingdom, France, the United States, andfrom the emerging economies China, India, South Africa, and the United Arab Emirates(Figure 2.2).
Terrorist activity and deteriorating security in some Sahel countries and politicalinstability are a threat to investment. External and domestic factors influence Africa’s
investment return, including economic slowdowns in emerging economies and theweak recovery in the European Union. Declining oil and metals prices have led foreign
investors to scale down operations in resource-rich countries. There is a positive side
too. African manufacturing and services may benefit from increased inflows due to thestronger US dollar and China’s yuan renminbi. Investment from the emerging economies
in Africa’s skills and infrastructure development can help to overcome the reliance on
resource-driven FDI.
Without Egypt, investment to North Africa would have dropped. FDI to Egypt
increased from USD 5.5 billion in 2014 to USD 10.2 billion in 2015. United Arab Emirates
investors have played an important role in Egypt’s recovery. Flows into Morocco fell
to USD 4.2 billion in 2015 from USD 4.7 billion in 2014. But Morocco became the third-

54

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2. External financial flows and tax revenues for Africa

largest recipient of foreign investment in Africa in 2015. European firms were leading
investors in Morocco, which benefits from historic ties and proximity to Western
Europe, as well as a proactive FDI policy and skilled workers who earn lower wages thanin Europe. Investment into Tunisia has been seriously affected by political and economic
turbulence since 2009. FDI has declined by more than 40% since 2012 to USD 1.1 billion
in 2015. The precarious political and security situation in the Sahel is a risk for West andCentral Africa.

Figure 2.2. Inward FDI by regions 2004-16, USD billion
Central Africa

East Africa

North Africa

Southern Africa

West Africa

USD billion
30
25
20
15
10
5
0

Average 2004-08

2009

2010

2011

2012

2013

2014

2015 (e)2016 (p)Source: Authors’ calculation based on IMF data (2014b, 2015c).
12 http://dx.doi.org/10.1787/888933350102

Investment in commodities has suffered. Nigeria has seen a sharp decrease ininvestment over the past five years from USD 8.1 billion in 2011 to USD 1.4 billion in 2015.
Ghana attracted the biggest share of West African FDI (USD 2.5 billion), followed by Guinea(USD 1.9 billion), Côte d’Ivoire (USD 1.0 billion) and Mauritania (USD 0.8 billion). Countries
such as Liberia, Senegal, Sierra Leone, and Togo received less than USD 500 million eachin 2015.
In East Africa, Tanzania (USD 2.3 billion) and Uganda (USD 1.3 billion) received
stable investments in 2015. Uganda’s oil sector is expected to be the country’s maininvestment magnet in future. Kenya’s investment has risen from USD 500 million in2013 to USD 1.9 billion in 2015. Ethiopia’s has gone up from USD 1.2 billion in 2013 to
USD 2.1 billion in 2015. Ethiopia’s FDI is mainly in labour-intensive areas. Although the
32 projects launched there in 2015 accounted for only 4.4% of total investment in Africa,these made up 18.5% of the jobs from the FDI in Africa. Ethiopia has slowly been opening
up to foreign investment in the manufacturing and retail sectors (fDi Markets, 2016).
The Democratic Republic of the Congo received USD 2.5 billion in 2015 and theRepublic of the Congo USD 1.5 billion, in each case half of the 2014 levels. South Africa
remains a key foreign investment destination in Southern Africa but its USD 3.6 billion
was down from USD 8.2 billion in 2013 and USD 4 billion in 2014. Mozambique – the biggest
recipient of foreign investment to Southern Africa in 2015 – attracted USD 4.7 billion.

Consumer-oriented sectors in Africa attract growing foreign investment
Resource-rich countries still get the most foreign investment, but countries withno major commodities to rely on are taking a larger share of FDI. Countries that are notresource-rich received an estimated 37% of Africa’s FDI in 2015, compared to 30% in2010 (Figure 2.3). In 2015, the FDI-to-GDP ratio for non-resource-rich countries stood at© AfDB, OECD, UNDP 2016

African Economic Outlook55

2. External financial flows and tax revenues for Africa

4.4%, up from 3.8% in 2010. The ratio for resource-rich countries increased from 2.0 %to 2.5% from 2010 to 2015. Several countries without significant resources are attracting
investors, including Kenya, Tanzania and Uganda, reflecting the shift towards consumer
goods. Kenya is becoming an East African business hub for manufacturing, transport,
services and information and communications technology (ICT) (McKinsey, 2015aand 2015b).

Figure 2.3. Foreign direct investment to Africa:
Resource-rich vs. non-resource-rich countries, 2000-16
Resource-rich countries (left axis)

Non-resource-rich countries (left axis)

Resource-rich countries (right axis)

Non-resource-rich countries (right axis)

USD billion
45% of GDP
5.0

40

4.5

35

4.0
3.5

30

3.0

25

2.5

20

2.0

15

1.5

10

1.0

5

0.5

0

Average 2004-08

2009

2010

2011

2012

2013

2014

2015

2016

0

Source: Authors’ calculations based on IMF (2014b, 2015c).
12 http://dx.doi.org/10.1787/888933350114

The Herfindahl-Hirschman index, a concentration ratio, indicates a shift to ICT,
services, and manufacturing across Africa. The index went down from 0.43 in 2003
to 0.18 in 2014 and 0.14 in 2015. This trend is also confirmed by data on announced
greenfield projects in 2015 which showed that services and manufacturing accounted
for about 54% of the total value of projects in Africa (fDi Markets, 2016). Investment
is starting to diversify into consumer-market oriented industries, including ICT, retail,food and financial services.
African cities are future hubs of investment
With urbanisation, African cities are growing consumer markets increasingly
targeted by foreign investors. Disposable income and spending power in Africa’s major
cities will grow (Oxford Economics, 2015). Forecasts show that the GDP of major cities
is increasing. The most important ones will be Cairo, Cape Town, Johannesburg, Lagos
and Luanda. This ranking reflects the quality of the business climate, infrastructure andlogistics, and availability of skilled workers.
A recent surge in infrastructure investment indicates that states are investing intransport corridors to connect urban agglomerations and transform them into urban
clusters. Examples include the Greater Ibadan-Lagos-Accra urban corridor, the Maputo
Development Corridor, and the Northern Corridor between East and Central Africa. These
investments will surge with deeper market integration through reduced transport andtrade costs. They will also foster competition and productivity, which will make African
hubs more attractive for foreign investors.

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2. External financial flows and tax revenues for Africa

China, India and other emerging economies are important FDI providers
While the European Union countries and the United States remain the largest
investors in Africa, the emerging economies are a vital source too. India’s share ofannounced greenfield investment projects grew from 3.3% in 2003-08 to 6.1% in 20092015. China’s share, however, fell from 4.9% to 3.3%. In 2015 the United States had a 9.7%
share of all greenfield investment, while the EU accounted for 37.4% (fDi Markets, 2016).
The most important emerging investors are Bahrain, China, India, Qatar, South Africa,and United Arab Emirates (Figure 2.4). Middle East investors, who have injected morethan USD 100 billion over the past decade, lead the way.

Figure 2.4. Total FDI inflows into Africa from emerging economies,
2003-15, USD billion
USD billion
90
80
70
60
50
40
30
20
10

a
al

ay

si

m
M

et

Na

y
Vi

ke

ra
iA

Tu
r

a
bi

a
ud

Ko

re
Sa

il
az
Br

it
wa
Ku

ia
ss
Ru

r
ta
Qa

n
ai
hr
Ba

So

ut

h

Af

ric

a

a
in
Ch

a
di
In

Un

i te
d
Em A r a
ir a btes0Source: Authors’ calculations based on fDi Markets (2016).
12 http://dx.doi.org/10.1787/888933350123

Greenfield investment in Africa fosters services and manufacturing
Although greenfield investment declined in 2015, there is a trend toward services,manufacturing and special economic zones, which can nurture structural change in
Africa. In 2015, the leading investors in terms of announced greenfield investment were
Italy (USD 7.4 billion), the United States (USD 6.9 billion), France (USD 5.8 billion), theUnited Kingdom (USD 4.9 billion) and the United Arab Emirates (USD 4.3 billion). The
United States had 96 greenfield projects in 2015 and the United Kingdom 77 projects. The
United Arab Emirates had 50 projects and India 45 projects (fDi Markets 2016).
Services and manufacturing remain key investment areas. Some 39.7% of announced
greenfield FDI projects in Africa and 24.6% of related capital expenditure were in
manufacturing in 2015. The services sector took 51% of projects and 28.4% of capital
expenditure. There were large investments in manufacturing, mainly in electronicequipment, motor vehicles and food. Africa’s services-related FDI stock increased
considerably (fDi Markets, 2016).
The relocation of manufacturing and services from emerging and advanced countries
to Africa due to wages and efficient special economic zones may gain momentum if
support programmes are effectively managed. East African countries are an example of
how the continent can exploit comparative advantages:© AfDB, OECD, UNDP 2016

African Economic Outlook57

2. External financial flows and tax revenues for Africa• East African countries are economically more diverse than resource-rich countries

and relatively well-integrated as a region. Kenya, Tanzania, Uganda, Burundi and
Rwanda form the East African Community (EAC) which has established a common
market.
• The EAC countries plus the wider East Africa, including Ethiopia, Madagascar,

Mauritius and Seychelles, together have 300 million people with a combined GDP
of USD 530 billion.

Portfolio equity flows are down, but new bonds remain resilient
Portfolio inflows to Africa in 2015 were half the size of the period from 2012 to 2014.
While bond issuances have remained resilient, portfolio equity inflows were reversedin the second half of 2015. Over the last decade, portfolio equity inflows to Africa haveincreased their share of total investment, with peaks in 2006 and 2012. A key development
during the 2000s has been the increasing reliance of African governments on markets
for foreign and domestic debt financing.
Compared to the emerging economies, portfolio flows to Africa’s leading markets
have been relatively resilient. According to the World Bank (2016a), global investors
withdrew about USD 52 billion from emerging market equity and bond funds in thethird quarter of 2015.
During the 2008-09 global financial crisis, portfolio inflows fell sharply. Since 2010,
by contrast, gross portfolio inflows to Africa have stayed positive. They peaked in 2010
and 2012, adding up to more than USD 32 billion each year. The ending of quantitativeeasing in the United States, oil market uncertainty and political risks have weighed oninvestor sentiment towards Africa recently, however. In 2015, gross portfolio inflows toAfrica fell by USD 10 billion compared to 2013 and 2014, to USD 13.4 billion. For 2016, they
are expected to stay flat.
Gross portfolio outflows from Africa stayed at roughly USD 5 billion each year from2013 to 2015. Consequently, Africa’s net portfolio flows (inflows minus outflows) haveremained positive since 2010. On balance, they have contributed net foreign savings to
Africa worth USD 82 billion during 2010-15, or USD 13.7 billion annually on average.

Figure 2.5. Africa’s inward and outward portfolio flows, 2004–16, USD billion
Inward portfolio investments

Outward portfolio investments

Net portfolio flows

Current USD billion
35
30
25
20
15
10
5
0
-5
-10
Average 2004-08

2009

2010

2011

2012

2013

2014

2015

2016

Source: Authors’ illustration based on IMF (2015c).
12 http://dx.doi.org/10.1787/888933350134

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2. External financial flows and tax revenues for Africa

Equity portfolio flows have been volatile over the past two decades. From a net equity
outflow for 2009 they jumped to a net inflow in 2010 of almost USD 20 billion. Since then,they have levelled off, to a mere USD 1.2 billion for 2015. While equity flows can be an
important form of participatory finance, they are not a reliable source of foreign finance.
International public offerings (IPOs), by contrast, matter more for corporate finance inAfrica. From 2010 to 2014, Africa has successfully raised corporate capital through IPOs
and further offers that exploited booming African stock markets. Box 2.1 provides detail.
Volatile portfolio equity flows were reflected in most African equity markets that
produced negative returns in the second half of 2015. Many observers see the US Federal
Reserve’s policy tightening as the culprit for the recent retrenchment. Domestic factors
have also contributed to reduced investor demand for assets from emerging economies.
Slower world growth added to investor concerns, particularly against the backdrop of
the commodity price slump.

Box 2.1. Raising capital through initial public offerings
The ease with which firms list on stock markets through international public offerings (IPOs)
matters for Africa’s corporate finance. IPO Watch Africa 2014 found that USD 37.4 billion was raised
through 90 IPOs and further offers from 2010 to 2014 in African capital markets. The IPOs brought
in USD 6.3 billion. Twenty-four African companies were listed on equity markets in 2014, raising
USD 1.7 billion through 24 IPOs and some further listings. Listings on the Johannesburg Stock
Exchange accounted for 32% of Africa’s total IPO capital in 2013 and 44% in 2014.
Reflecting improved investor sentiment across the continent during 2010-14, recent IPO trends
indicate a greater share of capital raised on markets outside of South Africa. Further offers, incontrast to IPOs, remained dominated by capital raised in South Africa, which accounted for 87%
of proceeds in 2014.
Several top IPOs in 2013 and 2014 had a notable international component, either foreigncompanies raising capital directly on African exchanges, or African companies marketingshares to international investors through dual listings or sales to institutional buyers abroad.
In addition to the USD 31.1 billion raised through further offers on African exchanges from 2010
to 2014, USD 1.2 billion of further offer capital was raised by African companies on international
exchanges.
Johannesburg (South Africa) has the most companies listed and the biggest capitalisation in
Africa, followed by Cairo (Egypt), Lagos (Nigeria) and Casablanca (Morocco).
Source: PWC (2014).

Bond issues rose substantially in sub-Saharan countries from 2011 to 2014. In 2011,
there were USD 1 billion in bond issues. By the end of 2014 the figure was USD 6.2 billion(Vellos, 2015). Some countries had benefited from debt relief programmes such as the
Heavily Indebted Poor Countries initiative and the Multilateral Debt Relief Initiative. Up
to mid-2014, steady global market conditions and the potential for higher returns forinvestors had paved the way for more access to international markets, where the average
return for these bond issues is about 6.6%, with an average maturity of 10 years. In 2015,
in the face of declining bank credit flows and net portfolio outflows, some countries
continued to tap the international bond market to finance investment programmes. Côte
d’Ivoire’s sovereign bond issue in 2015 was followed by Gabon, Zambia, Ghana, Angola,
and Cameroon. Angola and Cameroon issued maiden 10-year bonds (World Bank, 2016c).
The six countries issued bonds worth USD 6 billion by the end of 2015. Eurobond issues
by sub-Saharan countries with stronger economies (excluding South Africa) held up wellin 2015 (Masetti, 2015). Bond issues in 2015 compare to annual volume at record levels
in 2013 and 2014 when 12 countries, many of them debut issuers, placed bonds worth
USD 12 billion in international capital markets.

© AfDB, OECD, UNDP 2016

African Economic Outlook59

2. External financial flows and tax revenues for Africa

Bond spreads reflected the tough economy, the change in investor sentiment andrating changes, especially in the second half of 2015. While new issues went ahead,
Africa’s borrowers had to offer significantly higher yields, and yields on secondary
markets jumped to multi-year highs. For Zambia and Côte d’Ivoire, primary market
yields increased by 70 and 100 basis points respectively, and for Ghana, by 260 basis
points to 10.8% in relation to the last issues in 2014. Angola, a new bond debt issuer, had
to offer a yield of 9.5%.
As all outstanding sovereign Eurobonds in Africa are denominated in US dollars,
any depreciation will affect the local currency value of debt service payments. Thisis potentially more harmful for interest burdens than rising spreads. Currency falls
against the US dollar since mid-2014 have been most severe for the Zambian kwacha, theAngolan kwanza, the Namibian dollar, the Ugandan shilling and the Tanzanian shillingwhich lost between 20% and 51% year-on-year against the US dollar. Zambia has been
hit hardest. Its debt service costs rose in 2015 by 18 percentage points of GDP (left-handscale in Figure 2.6) and by 106% in local currency terms (right-hand scale).

Figure 2.6. Change in debt service cost, sub-Saharan Africa, 2015
Percentage points of GDP year on year (left)% year on year (right)
120

18
16

100

14
12

80

10

60

8
6

40

4

20

2
0

ria
ge
Ni

hi

op

ia

a
Et

o

da

ni
za
Ta
n

an
Rw

ng
Co

la
go

a
ny
Ke

An

l
ga
ne
Se

da
an

oi
Iv
d’
te

Ug

re

n
bo
Cô

Ga

a

ia

an
Gh

ib
m
Na

Za

m

bi

a

0

Source: Masetti (2015).
12 http://dx.doi.org/10.1787/888933350143

Bank credit flows slow as repayments grow
Official bank credit flows to Africa from multilateral sources rose again in 2015,
while bilateral official bank credit was sharply curtailed. Commercial bank credit to
the continent has turned negative in net flow terms as shrinking disbursements fell
short of rising amortisation payments. Some countries are increasingly vulnerable todeteriorating debt financing profiles and sensitive to macro-fiscal shocks.
Net bank credit flows to Africa concentrated overwhelmingly on official bank credit
in 2015. Figure 2.7 reveals that, by contrast, private commercial banks sharply reduced
their new lending. Commercial bank lending was particularly cut for North African
borrowers. Gross commercial bank credit flows to Africa fell from USD 9.5 billion in2014 to USD 3.8 billion in 2015. Allowing for amortisation, net commercial bank lending
to the continent shrank from USD 3.8 billion in 2014 to just USD 500 million in 2015.
Future commercial bank lending is projected to fall further in 2016 and 2017. Despite
scheduled repayments contained at roughly USD 3 billion for 2016 and 2017, respectively,
net commercial bank credit flows will likely subtract from rather than add to Africa’s
domestic savings. Net private bank credit flow is projected at a negative USD 1.16 billion
in 2016 and USD 2.96 billion in 2017.

60

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2. External financial flows and tax revenues for Africa

Figure 2.7. Net commercial bank credit flows to Africa, 2004-17, USD billion
Amortisation

Disbursements

Disbursements - amortisation

USD billion
12
10
8
6
4
2
0
-2
-4
-6
-8

Average 2004-08

2009

2010

2011

2012

2013

2014

2015

2016

2017

Source: World Bank (2016c).
12 http://dx.doi.org/10.1787/888933350158

Data on sources for bank credit to Africa is hard to find. The People’s Bank of China,
the China Development Bank, and the Export-Import Bank of China have supported largescale investment in African infrastructure but do not publish up-to-date information(Pigato and Tang, 2015). For other bilateral and multilateral lenders, Economist Corporate
Network (ECN) (2015) lists the World Bank, African Development Bank, Development
Bank of Southern Africa, Export-Import Bank of the United States, African Export-Import
Bank, European Investment Bank, Agence Française de Développement (AFD), Japan
Bank for International Cooperation (JBIC), Islamic Development Bank and Kreditanstalt
für Wiederaufbau (KfW) as the largest creditors.
Despite steady growth in private sector funding over the past decade, official
development finance backs 80% of infrastructure funding with China heading the list ofinvestors, according to a 2015 report by ECN. An important source of foreign finance for
Africa stems from official creditors, including export credit agencies (Box 2.2). According
to the Infrastructure Consortium for Africa Report 2013, grants compose around 30% offunding extended, while 67% comes from bank credit and export credit flows.

Box 2.2. Who is funding Africa’s infrastructure?
The Infrastructure Consortium for Africa (ICA) acts as a platform to increase infrastructure financing,help remove policy and technical barriers, facilitate co-operation, and increase knowledge
through monitoring, reporting and sharing best practices. Its annual reports provide someevidence on funding commitments for Africa’s infrastructure in four sectors – energy, transport,
water, and information and communication technology. Table 2.2 provides data for the biggest
creditors with annual commitments above USD 1 billion reported.

Table 2.2. Funding commitments by origin, USD billion
Origin

2013

2014

China
EuropeUnited States
World Bank
AfDB
Arab Coordination GroupJapan
South Africa
Total

13.4
7.4
7.0
4.5
3.6
3.3
1.5
1.2
99.6

3.1
6.4
n.a.
6.5
3.6
3.5
2.1
1.0
74.5

Source: ICA (2014, 2015).

© AfDB, OECD, UNDP 2016

African Economic Outlook61

2. External financial flows and tax revenues for Africa

Official bank credit disbursements to Africa, from bilateral and multilateralsources, have almost doubled since 2008 (Figure 2.8). Then, these sources provided
USD 18.6 billion. By 2015, they had reached USD 34.7 billion and are projected to rise in2016 to USD 39.5 billion. Allowing for amortisation in each corresponding year, Figure 2.11
also provides evidence on net official bank credit flows.
Net official credit flows (disbursements minus amortisation) have declined in2015, mainly due to a heavy amortisation schedule on bilateral liabilities. Payments tobilateral official creditors jumped to USD 13 billion in 2015 and are projected at that levelfor 2016, too. This compares to much lower payments for 2009–14 when amortisation tobilateral official creditors averaged USD 5.4 billion. Northern Africa has seen net officialbank credit flows curtailed, as bilateral credit to the region turned negative from 2014,
mostly as a result of Egypt’s heavy amortisation schedule. The main bilateral borrowers
in sub-Saharan Africa were Republic of the Congo and Côte d’Ivoire, mainly throughagreements with China. While bilateral official lending accounted for 53.7% of total toAfrica in 2013, it fell below multilateral lending in 2014.

Figure 2.8. Multilateral and bilateral official bank credit flows to Africa,
2004-17, USD billion
Multilateral, disbursements
Bilateral, amortisation

Bilateral, disbursements

Multilateral, amortisation

Bilateral, disbursements - amortisation

Multilateral, disbursements - amortisation

USD billion
70
60
50
40
30
20
10
0
-10
-20
-30

Average 2004-08

2009

2010

2011

2012

2013

2014

2015

2016 (e)2017 (p)Note: (e) estimates; (p) projections.
Source: World Bank (2016c).
12 http://dx.doi.org/10.1787/888933350165

Multilateral development banks currently provide the most significant volume ofbank credit resources to Africa (Figure 2.8). While net bilateral bank credit flows have
dropped since 2014, the rise of net multilateral bank disbursements to sub-Saharan Africa
has continued unabated. New gross multilateral disbursements for African borrowers
have risen to record levels, USD 17.3 billion in 2015. Disbursements are projected to risein 2016 to more than USD 21 billion, but the World Bank predicts they could drop sharply
after.
There is a striking divergence in the percentage share of short-term debt (with amaturity of less than one year) in total external debt between sub-Saharan and North
Africa (Figure 2.9). In sub-Saharan Africa, the prevalence of official over private flows
and the dominance of multilateral development bank credit has helped to keep theshare of short-term debt in total external debt contained below 10% in recent years. As aresult, the external debt is less volatile and reversible. By contrast, the percentage shareof short-term debt in total external debt has been rising in North Africa. In 2014, theshare reached 22.5%.

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2. External financial flows and tax revenues for Africa

Figure 2.9. Africa’s short-term debt, % of total external debt, 2004-14
North Africa

Sub-Saharan Africa

%
25

20

15

10

5

0

Average 2004-08

2009

2010

2011

2012

2013

2014

Source: World Bank (2016c).
12 http://dx.doi.org/10.1787/888933350176

Lower oil and base metal prices since 2014 will make commodity exporting countries
more vulnerable to debt. The latest list of debt sustainability analyses for low-income
countries (for the Poverty Reduction and Growth Trust Fund) shows that during 2015 thedebt sustainability outlook had worsened for Cameroon, Central African Republic, theRepublic of the Congo, Ethiopia, Ghana, and Zambia. Debt vulnerability had already beenhigh in Burundi and Chad, while Sudan and Zimbabwe were listed as in debt distress.
Among trust fund eligible countries, the debt sustainability outlook improved during
2015 only in Senegal, thanks to the incorporation of heavy remittances in the country’s
debt analysis.

Remittances are a major, stable resource for African development
Remittances represent a key source of capital for African countries. They can beleveraged to spur investment and growth, but efforts to maximise their development
impact face major obstacles. And recent developments in the resource-rich countriesof the Middle East and Russia and the relative stagnation of European Union growthsuggest that remittances will slow.
Of an estimated 23.2 million migrants from sub-Saharan Africa, 26% live inOECD countries and 65.6% in Africa (World Bank, 2016b). The largest home countriesof migrants were Burkina Faso, the Democratic Republic of the Congo, Côte d’Ivoire,
Nigeria, Somalia, and Sudan. Africa hosted 18 million migrants, with the majority going
to Côte d’Ivoire, Ethiopia, Kenya, Nigeria, and South Africa.
Developed countries dominate remittances to Africa, but African countries like
Cameroon (USD 2.4 billion in 2015), Côte d’Ivoire (USD 1.3 billion), and South Africa(USD 1.1 billion) transferred large remittances to other African countries. Four countries
account for nearly half of remittances sent to Africa: the United States (USD 8.4 billion),
Saudi Arabia (USD 8.3 billion), France (USD 6.9 billion), and the United Kingdom(USD 5.2 billion) (World Bank, 2015a). Bilateral remittances to Africa amounted to
USD 63.8 billion in 2015. Low-income countries such as Liberia, Gambia, Comoros andLesotho received the largest amount of remittances as a share of GDP (Table 2.3).

© AfDB, OECD, UNDP 2016

African Economic Outlook63

2. External financial flows and tax revenues for Africa

Table 2.3. The 15 largest recipients of remittances in Africa, 2015
ranked by % of GDP% GDP

USD per capita

Current USD, billion

Liberia28.18

132.17

0.57

Gambia

23.74

91.24

0.18

Comoros

22.76

167.74

0.13

Lesotho19.87

211.170.40

Cabo Verde

11.81

369.470.19

Senegal

11.54

107.84

1.61

Sao Tome and Principe

8.93

143.33

0.03

Togo

8.30

48.00

0.34

Mali

8.17

54.90

0.89

Morocco

6.48

199.37

6.68

Tunisia5.17

206.17

2.29

Madagascar

4.49

17.64

0.43

Guinea-Bissau

4.41

25.68

0.05

Nigeria

4.23

116.75

20.86

Uganda

4.22

26.39

1.05

Benin

2.70

19.13

0.21

Source: Authors’ calculations based on World Bank (2015b).

The regional distribution of remittances will remain uneven
Official remittances to African countries are unevenly distributed, with North
African (49.5%) and West African (40.8%) countries receiving the bulk of flows in 2014
(Figure 2.10). Remittances to North Africa were expected to remain stable in 2015, rising
to USD 31.7 billion. They are expected to increase to USD 32.1 billion in 2016 (World
Bank, 2015b). Egypt has seen steadily increasing remittances (USD 7.1 billion in 2009 but
USD 20.4 billion in 2015) and is now the largest recipient of remittances in North Africa.
Large amounts also went to Morocco (USD 6.7 billion in 2015, USD 6.9 billion in 2014), andTunisia with USD 2.3 billion (2014 and 2015).
Remittances to sub-Saharan Africa are projected to rise 1.6% to USD 32.3 billion in2015 and are expected to grow again to USD 33.6 billion in 2016. Nigeria alone accounts
for about two-thirds of total remittances to sub-Saharan Africa, but these are estimatedto have remained flat in 2014 and 2015 at roughly USD 21 billion. There was howeverstrong growth in Kenya (10.7%), South Africa (7.1%) and Uganda (6.8%).
Remittance dependency varies. In Gambia, Lesotho, Liberia and Comoros remittances
equalled about 20% of GDP in 2015.
Growth in African remittances is expected to slow due to the weak economic growthin Europe, the impact of lower oil prices in the Middle East, the depreciation of the euro
and the tightening of migration controls in many remittance source countries.
Countries with a large population of migrants could harness the potential of
remittances to develop their financial sector and spur investment and growth. But moretransparency is needed.
Several African countries are tapping into the pool of remittances’ funds by issuingbonds for investments in their homelands. Money raised through diaspora issues could
be used to finance projects of interest to overseas migrants, such as housing, schools,
hospitals and infrastructure. According to the African Development Bank, Africa could
potentially raise USD 17 billion a year by using future remittances as collateral. A numberof obstacles prevent African countries from deriving the full benefit of remittances.
Low international oil prices could reduce remittances from the Gulf states in themedium-to-long term. In the short term, however, significant foreign exchange reserves
and strong fiscal positions could support current spending, delaying the impact of64

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2. External financial flows and tax revenues for Africa

low oil revenues on migrant jobs. Remittances to all of Africa are expected to growto USD 65.7 billion in 2016 (World Bank, 2016b). Conflict in the Middle East is causing
international displacement and remains a major risk factor for remittances.

Figure 2.10. Remittances per African subregion, 2004-15
current USD billion
North Africa
Southern Africa

Central Africa

West Africa

East Africa
Total remittances to Africa as % of GDP

Current USD, billion
70

%
3.5

60

3.0

50

2.5

40

2.0

30

1.5

20

1.0

10

0.5
0

0
Average 2004-08

2009

2010

2011

2012

2013

2014

2015e

Source: Authors’ calculations based on World Bank (2015b).
12 http://dx.doi.org/10.1787/888933350186

Official development assistance remains stable but falls short of official pledges
There has been a rise in net official development assistance from a low of USD 21 billion(at constant 2012 values) to a 2013 peak of USD 50 billion (Figure 2.11). According to theOECD, in 2014, total net ODA to Africa dropped by USD 3 billion. With Africa’s strong
GDP growth, the value of the assistance has fallen from a 2009 peak of 2.63% of African
recipients’ GDP to below 2% by 2014. Country programmable aid (CPA), the amount of
aid which donors can allot to an individual country and which is considered a goodpredictor of ODA, had been programmed to increase from 2015. The projection of net
ODA disbursements for 2015 and 2016 is based on CPA projections, adjusted to total ODA.

Figure 2.11. Net official development assistance disbursements to Africa, 1997-2016
constant 2012 USD billion
Other ODA

Bilateral debt relief

Humanitarian aid

Projection

Constant 2012 USD billion
60
50
40
30
20
10
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Authors’ calculations based on OECD (2016).
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2. External financial flows and tax revenues for Africa

In the Addis Ababa Action Agenda (UNDESA, 2015a) adopted at the Third International
Conference on Financing for Development, and endorsed by the UN General Assembly in2015, ODA providers reaffirmed past commitments. Many developed countries promised
to reach the target of devoting 0.7% of gross national income (GNI) to ODA and 0.15%
to 0.20% of GNI to least developed countries. Members of the OECD’s Development
Assistance Committee (DAC) have also committed to reverse the decline of ODA to Africa
by adhering to the 0.7% target. In the Addis Ababa Action Agenda, donors are specificallyasked to maintain 2013 ODA levels as a minimum.

Multilateral aid and ODA from DAC donors remain stable
Multilateral aid to Africa remained stable in 2014 and reached USD 20.6 billion.
A similar figure was reached in 2013. The most important contributors in 2014 wereEuropean Union institutions (USD 6.7 billion), the International Development Association(IDA) (USD 6.4 billion), the Global Fund (USD 2 billion) and the African Development Fund
(USD 1.9 billion). While EU institutions increased ODA to Africa by 13.6% between 2013
and 2014, the Global Fund decreased disbursements by 22%.
Multilateral aid to Africa may be replaced by non-concessionary multilateral lending
and thus fall over the next decade. When countries’ per capita income grows above
thresholds for IDA eligibility, they lose their entitlement to multilateral aid, despite
the fact that they may have a great number of people in extreme poverty. Reisen andGarroway (2014) project that Cameroon, Guinea, Kenya, Mauritania and Senegal will by
2025 move out of IDA eligibility (per capita GNI below USD 1 215 in 2016). They also
project Côte d’Ivoire, Ghana, Lesotho and Nigeria to graduate from the higher, historical
IDA eligibility of USD 1 965.
Bilateral ODA from DAC donors also remained almost stable in 2014 at USD 29 billion.
The major donors have been the United States (USD 9.3 billion), the United Kingdom(USD 4.3 billion), Germany (USD 3 billion) and France (USD 2.9 billion). ODA from
non-DAC members listed in OECD statistics decreased in 2014, mainly because of aid
cuts by the United Arab Emirates, Turkey and Kuwait. Non-DAC aid fell about 25% to
USD 4.4 billion, mainly because of a 31% reduction in aid from the United Arab Emirates
and Saudi Arabia to Egypt.

Just over half of ODA to Africa reaches low-income countries
Just over half of ODA to Africa goes to low-income countries (LICs) (Figure 2.12).
The LIC share of Africa-bound development assistance declined from a peak of 58.9% in2010 to 52.1% in 2013. There was a slight rebound in 2014. In USD terms, ODA to African
LICs has remained stable at roughly USD 27 billion from 2011 to 2014. It is estimated tohave risen to USD 27.5 billion in 2015. According to CPA projections, the distribution of
ODA to low-income, lower-middle income and upper-middle income African countries is
expected to remain almost stable in 2016.

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2. External financial flows and tax revenues for Africa

Figure 2.12. Net official development assistance disbursements to Africancountries by income group, 2004-16
Low-income countries

Lower-middle income countries

Upper-middle income countries

2011

2014

%
100
90
80
70
60
50
40
30
20
10
0

Average 2004-08

2009

2010

2012

2013

2015

2016

Source: Authors’ calculations based on OECD (2016).
12 http://dx.doi.org/10.1787/888933350209

East Africa and West Africa are the main recipients of ODA
East and West Africa are the continent’s leading recipients of official development
assistance from all recorded donors (Figure 2.13). Ethiopia (USD 3.6 billion), Kenya(USD 2.7 billion) and Tanzania (USD 2.6 billion) topped the list in East Africa. Nigeria(USD 2.5 billion) was the leader in the West. Other major recipients in 2014 were Egypt(USD 3.5 billion), Morocco (USD 2.2 billion) and Mozambique (USD 2.1 billion). Theseseven countries accounted for 36% of total official assistance to Africa.
Several Southern African countries, notably Lesotho, Swaziland, Angola and South
Africa, saw less aid in 2014 against 2013. North African countries received 13.5% less,largely due to declining ODA to Egypt and Sudan.

Figure 2.13. Net official development assistance disbursements to Africancountries by region, 2004-16
North Africa

Central Africa

East Africa

Southern Africa

West Africa

USD billion
60
50
40
30
20
10
0
Average 2004-08

2009

2010

2011

2012

2013

2014

2015

2016

Source: Authors’ calculations based on OECD (2016).
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African Economic Outlook67

2. External financial flows and tax revenues for Africa

Survey predicts increased country programmable aid to Africa
The 2015 Global Outlook on Aid (OECD, 2015) survey indicates that country-specificaid to the poorest countries should recover, in line with recent donor pledges, after
several years of decline.
The survey provides an overview of global aid allocations up to 2018 based on the2015 DAC Survey on Donors’ Forward Spending Plans, tracing CPA flows. The survey
highlights programmed increases starting in 2015 (Table 2.4).

Table 2.4. Africa’s country programmable aid estimates and projections,
USD billion
2014

2015

2016

2017

2018

Sub-Saharan Africa

35.1

37.1

38.6

38.9

39.4

North Africa

8.8

8.7

9.0

9.3

9.4

Africa, Total

45.5

47.4

49.3

49.9

50.6

Source: Authors’ calculations based on OECD data (2016).

According to the 2015 survey on forward spending plans, CPA was to increase by
USD 2.7 billion in 2015. Multilateral agencies are stepping up their efforts with larger
disbursements after receiving cash injections. Least developed and low-income countries
will benefit most from this increase, with aid expected to grow by 5.7% in real terms in2015. Overall CPA to low- and middle- income countries (LMICs) was projected to remain
stable in 2015, signalling that donor finance to this group of countries is safeguarded. For
upper middle-income countries, overall CPA levels are expected to fall by 4.4%, mostly
to the higher income countries.
On a geographical basis, CPA to sub-Saharan Africa was projected to grow more thanfor other zones, with a predicted rise of 5.7% because of more concessional lending.
Global CPA is projected to remain stable up to 2018 with more help to least developed
countries after DAC members decided in December 2014 to allocate more ODA to thecountries most in need. Two thirds of the least developed countries will see a rise in CPA,
with Ebola-affected countries such as Guinea getting significant help.
China’s aid to Africa is increasing
China’s aid to Africa is believed to be increasing even though estimates of the totalvary widely. China’s aid to Africa is not reported by the OECD and therefore not includedin the above data. The Chinese government also does not provide detailed information
about its overseas aid. The China Africa Research Initiative provides information
based on the China Statistical Yearbook and other Chinese sources. Figure 2.14 showsa clear upward trend of Chinese aid to Africa from about USD 600 million in 2000 to
USD 3.2 billion in 2013.

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2. External financial flows and tax revenues for Africa

Figure 2.14. China’s external assistance expenditures, USD billion
USD billion
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: China Africa Research Initiative (2016).
12 http://dx.doi.org/10.1787/888933350229

Domestic revenues fall as resource revenues tumble
After a decade-long improvement in domestic resource mobilisation, falling resource
prices have brought down African domestic public revenues, according to data collectedby the African Development Bank through country missions for the African Economic
Outlook. Countries without resources have increased tax revenues and tax-GDP ratios,
however.
The 2015 Addis Ababa Action Agenda (UN, 2015a) made domestic public revenues the
top action area. Mobilising public revenues is central to achieving the United Nations
Sustainable Development Goals on increasing productivity levels and making growthmore inclusive. Domestic resource mobilisation reinforces a country’s ownership of
public policy and allows it to move towards financial autonomy. African countries still
face formidable challenges raising more and better taxes, mostly as a result of economic
structure and the prevalence of the informal sector.

A big fall in resource revenues has lowered Africa’s total revenues since 2013
Africa increased public domestic revenues up to 2013, collecting a total of
USD 468 billion in that year. Since then, however, the amount has declined because offalling resource revenues. In 2014, Africa’s tax authorities collected USD 461 billion, anannual decrease of 1.5%. As public revenues tumbled in large resource-rich countries
in 2015, Africa’s total public revenues decreased. Public revenues in Africa’s resourcerich countries (USD 373 billion) far outweighed those in non-resource-rich countries(USD 88 billion) in 2014.1
Resource revenues – from oil or mineral extraction but also some crops such ascocoa exports – are the main contributor to Africa’s revenue. However, after peaking
at USD 171 billion in 2012, resource revenues have fallen. They shrank by 8.3% in 2014,
compared to 2013, to USD 155 billion. In 2015, resource revenues fell markedly in Algeria,
Angola, Ghana, Libya, Nigeria and South Africa, mostly as a result of plunging oil andmetals prices. In some countries there was a 20% fall from 2013 resource revenues. Côte
d’Ivoire, Sudan and Zambia, however, escaped the trend despite lower oil and copper
prices. The revenue-GDP ratio in resource-rich African countries has fallen from 26.3%
in the peak year 2012 to 23.3% in 2014.

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2. External financial flows and tax revenues for Africa

Figure 2.15. The revenue mix in resource-rich vs. non-resource-rich Africa
revenue-GDP ratios, 2004-14
Direct taxes

Indirect taxes

Trade taxes

Resource revenues

% GDP
16
A. Resource-rich countries

12

8

4

0
Average 2004-08

2009

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

% GDP
10
B. Non-resource-rich countries

8

5

3

0
Average 2004-08

2009

Source: Authors’ calculation based on African Economic Outlook data.
12 http://dx.doi.org/10.1787/888933350231

Non-resource-rich countries have increased tax revenues and tax ratios
Non-resource-rich countries have steadily increased public revenues by diversifying
from trade sources to direct income and profit taxes, as well as indirect consumptionbased taxes. Public revenues rose from USD 62 billion to USD 88 billion between 2010
and 2014. As revenues rose faster than GDP, the average tax ratio in non-resource-richcountries has gradually climbed from 8.2 % of GDP in 2010 to 10.2% of in 2014.
The tax ratios are still very low by international standards. Tax revenues are 34.4% of
GDP on average in OECD countries. Correcting tax-GDP ratios for structural differences(mainly GDP per capita, sectoral composition of output, degree of urbanisation and trade
openness) produces a measure of tax efforts – how much a country collects against its
potential tax revenues. Africa displays a large heterogeneity in tax efforts. Daude et al.
(2012) find that many African countries topped an international tax effort index in 2008.

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2. External financial flows and tax revenues for Africa

Box 2.3. A new database of comparable revenue statistics in Africa
To enhance the comparability, quality and accessibility of public revenue data in Africa,
the African Union Commission, the African Tax Administration Forum and the OECDlaunched the first edition of Revenue Statistics in Africa in March 2016, with the supportof the AfDB, the World Customs Organisation and the Centre de rencontres et d’études desdirigeants des administrations fiscales (CREDAF) (see Box 2.4 in AfDB et al., 2015).
Tax officials from Cameroon, Côte d’Ivoire, Mauritius, Morocco, Rwanda, Senegal, South
Africa and Tunisia worked with the partner institutions to organise their revenue datafor 1997-2014 according to a tax classification system already used by 57 other countries
in the world. It made their statistics effectively comparable between themselves andwith other countries for the first time.
This new database will facilitate policy analysis, help measure or forecast the impact ofreforms, devise common policies within regional economic communities, identify bestpractices, engage in international dialogue and peer learning, and report to citizens andelected representatives.
The work contributes to the financial chapter of the African Charter on Statistics inrolling out the Strategy for the Harmonisation of Statistics in Africa. It also supports thefirst 10-year implementation plan (2014-2023) of the African Union’s Agenda 2063, whichaims to “develop and implement frameworks for policies on revenue statistics andfiscal inclusiveness for Africa.” At a global level, the work will support the Sustainable
Development Goals’ target 17.1 to “improve domestic capacity for tax and other revenue
collection” and target 17.19 to “support statistical capacity building in developing
countries.”
Source: OECD/ATAF/AUC (2016).

Revenue-to-GDP ratios in African resource-rich countries fall across all categories
There are two diverging country groups in terms of revenue-GDP ratios. Ratios
fell across all broad tax categories in resource-rich countries after a steep decline ininternational prices cut their revenues. Since 2011, resource revenues as a proportion of
GDP have dropped by 3.7 percentage points from 2011 to 2014, down from 13.4% to 9.7%.
Resource revenues had accounted for more than 80% of total revenue collection and 20%
of GDP in oil-rich Algeria, Angola, Congo, Equatorial Guinea and Libya still in 2013 (AfDB/
OECD/UNDP, 2015).
Resource-rich countries also suffered a pro-cyclical drop in the tax-GDP ratio of
direct income and profit taxes as well as indirect taxes, as shown in Figure 2.15. Aslong as resource-based income permeates the economies of resource-rich countries,
it is a formidable policy challenge to diversify revenues toward income, profits andconsumption. These tax bases are also affected by the slump in commodity prices inresource-rich countries unless the entire economy is moved away from resource sectors.
Progressive income taxes could really attenuate the pro-cyclical features of income
taxation.
Direct and indirect taxes rise gradually in non-resource-rich Africa
Countries that are not resource-rich have, conversely, broadened their tax base andraised revenues through higher direct and indirect taxes. Figure 2.15 shows a continuous
rise in the GDP ratios of direct and indirect taxes. This helped non-resource-richcountries to increase their total (unweighted) tax ratio from 8.5% in 2011 to 10.2% in 2014.

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2. External financial flows and tax revenues for Africa

Good growth performance and improved tax collection have enabled domestic resource
mobilisation, although the tax ratios in Africa’s non-resource-rich countries remaincomparatively low.
Several countries in East Africa were noted in 2015 for increasing revenues fromindirect (mostly consumption-based) taxes and direct taxes on incomes and corporate
profits. Ethiopia doubled indirect and direct tax revenues between 2012 and 2015; Kenya
and Rwanda displayed a dynamic upward trend in tax revenues as well into 2015. Overall,non-resource-rich countries in East Africa have a well-balanced mix of indirect, direct
and trade taxes, which should help them to maintain a more stable and predictable flowof resources to finance public action.

Sustainable benefit is needed from financial flows and public revenues
Mobilising domestic and foreign resources in the face of lower commodity prices anda rebalancing Chinese economy throws up policy challenges – and opportunities. Policyquestions arise about how governments of commodity exporting countries absorb the
earnings shortfall in the short term. It is also important for Africa’s governments tomove in the longer term to diversify their economies to ensure sustainable benefit fromfinancial flows and public revenues.
A wide range of policies are possible for a great diversity of different countries. The
main structural distinction runs between countries that are net exporters or importersof fossil fuels and industrial metals. The main financial distinction applies to the level ofdomestic savings, whether external debt is sustainable and the level of foreign-reserve
buffers. A further distinction relates to the degree of exchange rate flexibility. Finally,
the quality of domestic governance and institutions play a key role in how successful
financial resources will be in helping to make growth inclusive and sustainable.
Stabilising finance for development is a major short-term challenge. Reduced
financial foreign flows require higher domestic tax revenues, more stimulus for foreign
inflows and better use of foreign reserves, if austerity measures are to be contained:• Savings needed. Africa is the developing region with the world’s lowest saving rate.

This is holding back investment and future output. Africa’s saving rate has been
declining since 2009 and the IMF (2015a) projects that the 2015 domestic savings
rate will drop further to just 15.4 % of GDP. This compares to an estimated averagerate of 31.9% for all the emerging and developing countries in 2015. Recent IMF(2015c) analysis suggests that the median country in sub-Saharan Africa has
a potential for a three to 6.5 percentage point increase in tax revenue. With oil
prices down, countries may consider removing oil subsidies and increasing nonoil fiscal revenues. They can raise the value-added tax (VAT). However, economic
diversification is needed to support non-oil fiscal revenues.
• Fiscalreforms. As resource revenues recede, governments need to broaden
the tax base away from the resource sector towards consumption-based taxes.
Resource-based revenues can give unexpected answers to challenges, as the case of
Democratic Republic of the Congo (DRC) shows. The government received a record
USD 2 billion in 2014, despite falling commodity prices. The Extractive Industries
Transparency Initiative (EITI, 2016) has reported on DRC’s efforts to increasefinancial transparency. Resource-rich countries tend to be energy and carbon
intensive. Carbon taxes, as planned in South Africa, help to reduce greenhouseemissions and diversify the tax base.

• Higher tax-GDP ratio. African countries without resource wealth need to augment

their tax-GDP ratios to the minimum benchmark of 20% proposed by the
Sustainable Development Solutions Network (SDSN, 2013). Countries must invest

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2. External financial flows and tax revenues for Africa

in strengthening systems to assess and collect taxes, as well as enforce compliance,
improve spending efficiency and curb illicit financial flows.
• Risky bonds. Stimulus for foreign inflows must go hand in hand with financial

discipline. Issuing short-term foreign-currency bonds to bridge financing gaps isrisky. Certain financial flows can create credit boom distortions and exchange rate
appreciation due to the implicit credit guarantee and ill-regulated financial sectors.
Sudden withdrawals can cause a slump. The ensuing bail-out cost and the slump
in turn cause lower savings. Debt-creating financial flows are inferior to foreign
direct investment, which in turn is associated with higher GDP growth (Reisen and
Soto, 2001).
• Stronger reserves. The use of official foreign reserves (or buffer stocks as in Chile)

may help some prepare for periods of trouble. However, depleting reserves below
certain levels (such as the level of short-term domestic and foreign debt) will trigger
currency attacks as seen in Zambia in 2015. The difference between the rising local
currency cost of Eurobonds – an average 20% in Africa – and a fall in growth rates
to low single digits creates unpleasant debt dynamics, which are unlikely to becompensated by a surplus in the non-interest current or fiscal accounts.
Apart from dealing with the short-term effects of the external shocks, Africa’s
governments need to determinedly implement medium- to long-term structural
policies. The African Union’s Agenda 2063 (AU, 2015) specifies seven aims, including
economic and social transformation. With almost 200 million people aged between 15
and 24, Africa has the world’s youngest population and it is growing rapidly. Half of theincrease in the global labour force over the next 25 years will originate in Africa.
Africa must create productive jobs for its 500 million potential new labour force.
The commodity sector is too capital intensive to offer hope to Africa’s young population.
While commodity exporters, like Nigeria, Angola and Zambia, have been hit hard by
China’s slowdown, others like Ghana, Kenya, Uganda, Mozambique and Ethiopia areshowing greater resilience. They have been forced to diversify their economies, in part
because of their dearth of raw materials. Whether African economies come through thechallenges generated by lower commodity prices will depend on comparative advantages,
the quality of economic policy and the fast implementation of measures. As spelled out
in the AEO 2015 (AfDB/OECD/UNDP, 2015), no single sector holds the solution. Labourintensive manufacturing, commodities processing, higher productivity agricultural andrural employment, all need to absorb the labour force. Regional economic integration
is essential for Africa to realise its full growth potential, to participate in the global
economy and to share the benefits of an increasingly connected global marketplace.
Regional trade is still hampered by Africa’s deficient infrastructure. Among the Agenda
2063 aims, building infrastructure, lowering barriers to business investment andfostering education merit special attention to help Africa’s structural transformation
aims:
• Cut

volatility. Foreign direct investment, bank credits and portfolio equity
flows reflect the global economic environment, but domestic factors also havecontributed to turbulence. There is a need for regulatory reforms and stability,
including stronger action against militant threats, which have had a cut growth inaffected countries.

• Boost aid. Africa’s aid outlook should observe the Addis Ababa Action Agenda. Donors

are asked to maintain 2013 official development assistance levels as a minimum.
ODA should be prioritised for low-income and lower middle income Africa.
• Remittances. Money from overseas workers represent a key source of finance for

Africa. This finance could spur growth and can be used as a catalyst to develop thefinancial sector.

© AfDB, OECD, UNDP 2016

African Economic Outlook73

2. External financial flows and tax revenues for Africa• Integration.

Some countries benefit from stronger intra-regional co-operation,
proximity to Western Europe and deeper co-operation with emerging markets.
These countries can assist the growth of others. Further international supportof intra-regional investment in corridor roads, electricity, Internet networks andrailways will boost growth and regional exchange.

• Infrastructure gap. There has been significant investment in infrastructure in

recent years, much of it from China, but African countries are still chasing otherdeveloping countries in almost all measures of infrastructure coverage. Access towater, road transport and electricity are particularly limited. Quickly closing theinfrastructural gaps would boost growth. A 2014 analysis by Ernst and Young andthe Infrastructure Consortium for Africa (ICA) showed that with funds available
and projects started, the gap is being closed. But it found that work had yet to begin
on two-thirds of identified projects. Africa does not need to identify new sources offunding but rather ensure that planned projects are completed within a reasonable
timeframe. This will ensure projects deliver returns to investors and help to attract
new investment. Africa needs to remove barriers to finishing projects by lowering
the cost of doing business.
• Business costs. The benefit from infrastructure investment is greatly reduced

if there are no accompanying improvements to institutions and regulations.
According to the World Bank’s (2015c) Doing Business indicators, median Africancountries rank 151st out of 189, compared with a median 48th for all emerging
market countries. Reducing the cost of doing business attracts local and foreign
investment. The region undertook the largest number of regulatory reforms making
it easier to do business, accounting for about one third of worldwide reforms in 2015(see Chapter 5).
• Human capital. Though progress has been made in the past decade, Africa still

trails other world regions for health, education and training – human capital.
More investment is needed in these areas to support industrial development. Highvacancy rates while there is also large scale unemployment confirms Africa’s skills
mismatches.

Note
1. In line with IMF (2015b), we consider Algeria, Angola, Botswana, Cameroon, Chad, Democratic
Republic of the Congo, Republic of the Congo, Côte d’Ivoire, Egypt, Equatorial Guinea, Gabon,
Ghana, Guinea, Liberia, Libya, Mauritania, Namibia, Nigeria, Sierra Leone, South Africa, South
Sudan, Sudan, and Zambia as resource-rich countries.

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OECD (2015), 2015 Global Outlook on Aid, OECD Publishing, Paris, www.oecd.org/dac/aidarchitecture/2015%20FSS%20Survey%20flyer.pdf (accessed 20 January 2016).
OECD/ATAF/AUC(2016),
Revenue
Statistics
http://dx.doi.org/10.1787/9789264253308-en-fr.

inAfrica,OECD

Publishing,Paris,

Oxford Economics (2015), Future Trends and Market Opportunities in the World’s Largest 750 Cities. How
the Global Urban Landscape Will Look in 2030, Oxford, England. www.oxfordeconomics.com/Media/
Default/landing-pages/cities/OE-cities-summary.pdf (accessed 18 December 2015).

© AfDB, OECD, UNDP 2016

African Economic Outlook75

2. External financial flows and tax revenues for Africa

Pigato, M. and W. Tang (2015), China and Africa: Expanding Economic Ties in an Evolving Global
Context, World Bank Group, Washington DC, http://documents.worldbank.org/curated/
en/2015/03/24177102/china-africa-expanding-economic-ties-evolving-global-context (accessed
15 January 2016).
PWC (2014), IPO Watch Africa 2014, Price Waterhouse Cooper, http://www.pwc.co.za/en/assets/pdf/
ipo-watch-africa-2014.pdf (accessed 15 December 2015).
Reisen, H. and C. Garroway (2014), The Future of Multilateral Concessional Finance, BMZ/GIZ: Berlin.
www.ifad.org/events/ifi_trends/giz_mcf.pdf. (accessed 15 December 2015).
Reisen, H. and M. Soto (2001), “Which types of capital inflows foster developing-country growth?”,International Finance, Vol. 4(1), pp. 1-14, Spring.
SDSN (2013), An Action Agenda for Sustainable Development, Report to the UN Secretary-General,
Sustainable Development Solutions Network, Paris and New York.
UN DESA (2016), World Economic Situation and Prospects 2016, United Nations Department of Economic
and Social Affairs, New York, www.un.org/en/development/desa/policy/wesp/ (accessed:
1 February 2016).
UN DESA (2015a), DESA Briefing Note on The Addis Ababa Action Agenda, United Nations Departmentof Economic and Social Affairs, New York, www.un.org/esa/ffd/ffd3/wp-content/uploads/
sites/2/2015/07/DESA-Briefing-Note-Addis-Action-Agenda.pdf ( accessed 15 January 2016).
UN DESA (2015b), World Economic Situation and Prospects 2015, United Nations Department of Economic
and Social Affairs, New York., United Nations, New York, www.un.org/en/development/desa/
policy/wesp/ (accessed 1 February 2016).
UNCTAD (2016), “FDI recovery is unexpectedly strong, but lacks productive impact”, Global
Investment Trends Monitor, No. 22, United Nations Conference on Trade and Development, Geneva,
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UNDP (2011), Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty,
United Nations Development Programme, New York, www.undp.org/content/dam/undp/library/
Poverty%20Reduction/Towards_SustainingMDG_Web1005.pdf (accessed 20 November 2015).
Vellos, R. (2015), Sub-Saharan Africa’s bond issuance boom, World Bank, Washington, DC,
http://blogs.worldbank.org/opendata/sub-saharan-africa-s-sovereign-bond-issuance-boom(accessed February 2016).
World Bank (2016a), Global Economic Prospects, January, World Bank, Washington, DC,
www.worldbank.org/en/publication/global-economic-prospects, (accessed February 2016).
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February 2016).

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Chapter 3

Trade policies and regional integrationin Africa
Accelerated growth in Africa since 2000 has increased the opportunities
for enhanced trade while the continent is also looking to step up
integration between its regions to further boost growth and job
creation. This chapter looks at developments in trade, investment flows,
integration and income convergence between regions and countries.
It suggests ways for policy makers to spur growth and seize tradeopportunities so that the income gap can narrow more speedily. The
financial sector, infrastructure and new, bigger free trade areas are all
analysed to see how they can help the effort.

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3. Trade policies and regional integration in Africa

In brief
Africa must embrace structural and regulatory reforms and enhance financial integrationto accelerate efforts that have led to increased exchanges with emerging countries in therest of the world and between its own countries and regions. Intra-African trade remains
below levels seen in other parts of the world but there are ways to change this. While theEuropean Union should remain Africa’s main trade partner for the foreseeable future, anaccord between three regional blocs, the Tripartite Free Trade Area, could change Africa’s
commercial landscape by increasing market size and creating economies of scale. The
gains could also help narrow income gaps between African countries and enhance regional
financial integration. African countries must foster macroeconomic stability and improve
the investment environment to strengthen the role of pan-African banks in facilitating tradefinance and boosting capital markets. Success in stimulating trade and growth depends on
the policy and investment climate, depth of financial integration and commitment to reform.

Africa looks to turn strong growth into economic transformation
Africa has key factors for success
Growth has accelerated in Africa since 2000 at an average annual rate of 5%. Several
factors explain this performance:
1. Greater political stability: The number of violent conflicts has decreased since theturn of the century, boosting political stability.
2. Improved macroeconomic conditions: Prudent fiscal and monetary policies anddebt relief have helped contain fiscal deficits and lower inflation. Government
reforms have also improved the business environment.
3. Greater public investment in infrastructure. This has helped some countries without
natural resources, such as Ethiopia and Rwanda, to attain growth of 8% or more.
4. High commodity prices. During the 2000s, Africa’s resource-rich countries havebenefited from greater demand for commodities, especially from China and otheremerging economies. The recent decline in prices has scaled back growth however.
5. Foreign direct investment and other financial flows and domestic demand. These
factors have responded strongly to a good policy environment and together they
have played a key role in Africa’s growth. Yet, the potential of intra-African trade
has not been fully exploited.

Trade increases despite a fall in US exchanges
Africa’s trade with the rest of the world has remained high, except with the UnitedStates. From 2000 to 2008, Africa’s trade increased by an annual average of 16%. Becauseof the 2008-09 global financial crisis, trade fell sharply by 24% from 2008 to 2009. Since
2010, Africa’s exports have recovered, growing by an annual average of 8.5%. Trade with
the United States has persistently declined however. In 2015, trade with the UnitedStates fell to USD 70.5 billion from a peak of USD 124.6 billion in 2011, an 11% decline(Figure 3.1). Historically, oil, gas and petroleum products have dominated US imports
from sub-Saharan Africa. In 2007, these accounted for 93% of US imports. By 2013 thefigure had declined to 67% as the United States stepped up its campaign for energy
self-sufficiency and increased production of domestically produced oil to avoid imports.

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3. Trade policies and regional integration in Africa

Figure 3.1. Africa’s total trade flows, trade with selected partners
and intra-African trade (USD billion), 2000-14
EU27

China

IND+BRA+KOR+TUR +RUS

Intra-African

USA

USD billion
450
400
350
300
250
200
150
100
50
0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Source: Authors’ calculations based on UN COMTRADE, via http://wits.worldbank.org/wits/.
12 http://dx.doi.org/10.1787/888933350245

The European Union remains the key export market for Africa’s products. However,since the financial crisis, euro area demand (72.5% of European Union gross domestic
product [GDP]) has been weak, hurting demand for Africa’s products. As a result, Africa’s
exports to Europe have increased by a modest 0.2% per year since the 2008-09 financial
crisis. Africa has been helped by its diversified trade. Declining exports to the UnitedStates and the weak growth in Europe have given an increasing importance to Brazil,
Russia, India and China (the BRICs countries), and other emerging economies (Figure 3.2).
In 2009, only 24% of Africa’s exports went to emerging countries. In 2014, the BRICs,
Korea, Turkey and others accounted for nearly half of Africa’s total exports to the world.

Figure 3.2. Distribution of Africa’s trade:
Traditional versus emerging partners, 2000-14
Trade with emerging economies (USD billion)
Traditional (as % of total)

Emerging (as % of total)%
90

USD billion
500

80

450

70

400
350

60

300

50

250

40

200

30

150

20

100

10

50

0

0
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Source: Authors’ calculations based UN COMTRADE, via http://wits.worldbank.org/wits/.
12 http://dx.doi.org/10.1787/888933350251© AfDB, OECD, UNDP 2016

African Economic Outlook79

3. Trade policies and regional integration in Africa

Africa’s exports to emerging economies are dominated by China and mainlycomprise oil, metals and other primary products. This exposes the continent to China’s
shifting economic model from investment and export to an economy based on domestic
consumption and services. This could slow demand for Africa’s products and affectlong-term growth. Currently, China accounts for 27% of sub-Saharan Africa’s global
exports with primary commodities representing about 83% of exports to China (Pigato
and Tang, 2015).
Trade between African regions is also growing, though it remains low compared toother parts of the world. In 2000, intra-regional trade accounted for 10% of Africa’s total
trade. In 2014, it was 16%. This trade is mainly in manufactured goods, which are lesssusceptible to price shocks. Manufactured products account for 60% of total regional
trade (AfDB, 2015). Moreover, trade to other regions increased for all of Africa’s regional
economic communities except the six-nation Central African Economic and Monetary
Community (CEMAC) (Figure 3.3).

Figure 3.3. Intra-African trade by regional economic communities (USD million)
CEMAC

COMESAECCASECOWAS

SADC

USD million
60 00050 00040 00030 000
20 000
10 000
0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Source: World Trade Organization (2015).
12 http://dx.doi.org/10.1787/888933350266

Mega trade blocs gain groundIn recent years, moves towards “mega” regional trade agreements, such as the
proposed Transatlantic Trade and Investment Partnership (TTIP) between the UnitedStates and European Union, have gained momentum. The aim is to remove tariff andnon-tariff trade barriers and restrictions on investment, in a wide range of sectors.
The US-EU agreement, when completed, would combine the world’s two largest economic
entities. The TTIP could also jump-start discussions on the Doha Development Agenda
and renew interest in trade liberalisation.
In Africa, the Tripartite Free Trade Area (TFTA) and the proposed Continental Free
Trade Area (CFTA) are designed to spur intra-regional trade and investment. The TFTA
takes in the 19-nation Common Market for Eastern and Southern Africa (COMESA),
the five-country East African Community (EAC) and 15-member Southern African
Development Community (SADC). This makes it the largest free trade zone in Africa’s
history, accounting for over 58% of continental output, 48% of its countries and 57% of
Africa’s population. The TFTA also accounts for 25% of intra-regional trade, where otherblocs account for an average of 15%.
To boost regional trade, the TFTA focuses on i) harmonising existing regional
trade agreements; ii) facilitating the flow of goods between countries and alongtransport corridors; iii) improving links between members by developing cross-borderinfrastructure; and iv) allowing free movement of business persons.

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3. Trade policies and regional integration in Africa

Reflecting the African Union’s vision of enhanced regional co-operation, themain objective of the CFTA is to take the whole continent into an African Economic
Community with a free market of more than 1 billion people that uses the growing
middle class and associated demographic dividend. This initiative dates back to the 1991
Abuja Treaty that provided a roadmap for African regional integration. Negotiations forthe establishment of the CFTA were officially launched in June 2015 during an African
Union summit in Johannesburg, South Africa. The aim is to establish the CFTA by 2017.
Given the fragmentation and small size of African markets, a continent-wide common
market offers a unique opportunity to invest in cross-border infrastructure, to spur
regional integration and to boost growth and employment creation. Once created, theAfrican Economic Community’s proposed continent-wide free trade area would reduceoverlaps between Africa’s regional communities.
It is difficult to assess the real impact of the CFTA. However from past experience,
it brings benefits to members through “trade creation” rather than “trade diversion”(Freund and Ornelas, 2010).

Regional integration is an aid to income convergence
Regional integration aims to promote political and economic co-operation. Most
Africans live in countries where domestic markets are too small and fragmented toachieve the economies of scale necessary to compete internationally. Closer integrationis therefore crucial for the continent. Growth is a key aim for each country and so isthe desire to narrow divergences in income, unemployment and other social outcomes.
Despite compelling evidence that regional integration leads to income convergence(Camarero, Flores, Jr. and Tamarit, 2006; Jones, 2002), some studies have indicated there isno systematic relationship between trade integration and convergence (Milanovic, 2006;
Sohn and Lee, 2006).

Convergence indicators across Africa show mixed patterns
Regional integration helps convergence between poor and rich economies throughthree key factors. First, integration encourages capital and labour mobility, which canincrease output and productivity. Agreements, whether free trade areas or customs
unions, offer potential benefits to all countries involved through increased trade volume.
Finally, regional integration promotes the spread of technology through the exchange ofgoods, ideas and knowledge.
Forming regional economic communities has had a mixed impact on income
convergence in Africa. The eight countries in the West African Economic and Monetary
Union (WAEMU) show the highest income convergence rate. Incomes have narrowed at
an average rate of 19.6% between WAEMU’s richest and poorest countries over 15 years.
As illustrated in Figure 3.4A, in almost all WAEMU countries, the per capita GDP has
risen compared to Côte d’Ivoire, the region’s leading economy. Benin and Senegal havecaught up with Côte d’Ivoire, while Niger and Togo are still behind. This could mean that
poorer countries grew faster than richer ones to narrow the gap. The convergence may
also be explained by the slowdown of the Côte d’Ivoire economy during the country’s
political crisis of the early 2000s.
Incomes in the Economic Community of West African States (ECOWAS), which has
15 members, have also narrowed, though the convergence rate is lower at an estimated
11.4%. Countries like Ghana or Nigeria have been slowly catching up with Cabo Verde,
the region’s richest country. Over the past 15 years, per capita GDP in Nigeria and Ghana,relative to Cabo Verde, has increased by 21.6% and 5%, respectively. However, Côte
d’Ivoire has lagged behind the leading countries. Since 2000, when its political crisis
began, GDP per capita has declined 37% relative to that of Cabo Verde. In the CEMAC
region, income convergence has been estimated at just 5.5%. Over the past five years,
Congo has slowly been catching up with Equatorial Guinea while Chad has remained
behind (Figure 3.4B).
© AfDB, OECD, UNDP 2016

African Economic Outlook81

3. Trade policies and regional integration in Africa

The EAC had a convergence rate of 8.5%. This reflects rapid and sustained economic
growth, although there are significant cross-country variations. Against Kenya, therichest country in the region, the GDP per capita of Rwanda and Tanzania grew by 50%
and 24%, respectively, between 2000 and 2014. But the GDP per capita of Burundi, thepoorest country, decreased by 26% compared to Kenya.
In the five-nation Southern African Customs Union (SACU), incomes have convergedby 13.3%. While countries are globally falling behind Botswana, the richest economy in
the group, Namibia is slowly reducing its gap with South Africa, the second richest. Stillin Southern Africa, SADC countries show a slightly lower convergence rate, estimated at
11.2%. In COMESA, which includes countries in East and Southern Africa, the convergence
rate is estimated at 14.8%.

Figure 3.4. Gross domestic product per capita of selected African countries
relative to the regional leading economy (USD), 2011
Burkina Faso
Senegal

Benin
Togo

Niger

Congo

Guinea-Bissau

A. WAEMU countries relative to Côte d’Ivoire

0.8

0.4

B. CEMAC countries relative to Equatorial Guinea

0.35

0.7

0.3

0.6

0.25

0.5

0.2

0.4

0.15

0.3

South Africa

Tanzania

UgandaNamibia

0.6

0.6

0.5

0.5

0.4

0.4

0.1

0

0
20

02

20

00

0.1

20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14

0.3
0.2

01

0.3
0.2

20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14

0.7

Swaziland

02

0.8

0.7

20

0.8

Lesotho

D. SACU countries relative to Botswana

01

1.0
0.9

00

01
02

Rwanda

0.9

20

20

20

20

20

20

01
02

BurundiC. EAC countries relative to Kenya

20

20

0
00

0
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14

0.05

00

0.1

20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14

0.1

0.2

1.0

Cameroon
Chad

20

0.9

Central African Republic

Mali

Source: AfDB statistics.
12 http://dx.doi.org/10.1787/888933350279

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3. Trade policies and regional integration in Africa

Income convergence in Africa remains low
African countries have made progress in removing some national obstacles
to narrowing the income gap. However, income convergence is always going to be along-term task and one carried out at different speeds. Table 3.1 illustrates the disparities
within each regional economic community: with few exceptions, the richer economy isoften smaller in size and a poor growth performer.

Table 3.1. Comparison of the richest country in a regional economic
community (REC) with regional figures
Total GDP, PPP
2011 USD of
the REC (2014),
billion

Real GDP per
capita growth(2005-14)

GDP, PPP 2011
USD (2014),
billionTotal population
Populationof the REC (2014),(2014), million
millionEquatorial Guinea (CEMAC)

0.81

27.2

181

0.82

48.20

Côte d’Ivoire (WAEMU)

1.44

68.9

204

22.00

110.00

Cabo Verde (ECOWAS)

3.63

3.2

1340

00.51

340.00Kenya (EAC)

2.54

126.0

342

45.00

157.00Botswana (SACU)

3.32

34.1

744

20.20

62.00

Seychelles (SADC)

4.48

2.3

1050

0.09

297.00Source: Authors’ calculations based on World Bank (2015).

Policy makers need to quickly address three key issues to bolster income convergencein Africa’s regional communities. First, there are huge differences within and between
Africa’s regions. Intra-African trade remains the lowest among all the continents. In
2014, trade between regions accounted for approximately 16% of Africa’s total (Table 3.2).
For Asia, Europe and the Americas, intra-regional trade represented, on average, about
61%, 69% and 56%, respectively, of their total trade in 2014.
There are also differences between Africa’s regions. CEMAC has the lowest
proportion of intra-regional trade, a commonly used measure of regional integration, atjust 2.1% in 2014. This is mainly because of the limited trade integration in this economic
zone. The EAC and SADC are Africa’s most integrated regional communities. In 2014,
the SADC had the highest proportion of intra-regional trade at 19.3% of its total tradefollowed by the EAC at 18.4%. WAEMU and SACU had intra-regional trade proportions of
15.3% and 15.7%, respectively.

Table 3.2. Intra-regional trade in Africa’s regional economic communities
as a percentage of total trade
2000

2010

CEMAC (Economic and Monetary Community of Central Africa)

1.19

2.74

2014
2.08

COMESA (Common Market for Eastern and Southern Africa)

4.82

7.36

11.00

EAC (East African Community)

17.73

18.65

18.37

ECOWAS (Economic Community of West African States)

8.91

8.27

8.92

SACU (Southern African Customs Union)

2.56

14.47

15.67

SADC (Southern African Development Community)

11.73

18.18

19.34

WAEMU (West African Economic and Monetary Union)

15.24

12.70

15.30

North Africa

2.52

3.69

5.32

Africa

9.18

13.80

15.71

Note: WAEMU includes Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo; CEMAC
includes Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon and Republic of the Congo;
COMESA includes Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Libya,
Madagascar, Malawi, Kenya, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe;
SADC includes Angola, Botswana, Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius,
Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe; and ECOWAS
includes Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali,
Niger, Nigeria, Senegal, Sierra Leone and Togo.
Source: Authors’ calculations based on WTO(2015).

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3. Trade policies and regional integration in Africa

Second, lack of economic diversification has limited trade between African countries
and regions. For a majority of countries, production and exports are concentrated inoil and gas, minerals and agriculture raw materials. As a result, there is no scope tocapitalise on the comparative advantage associated with those products. The mostdiversified economies are in East and Southern Africa, while West Africa and Central
Africa are among the least diversified. The CEMAC countries are the least diversified.
SACU is the second most diversified economic community.
In terms of export diversification strategy, differences also exist. Some countries
are trying horizontal diversification by producing new products. Kenya, Ethiopia andUganda have, for example, moved into cut flowers. This supplements or partiallyreplaces traditional exports such as coffee and tea (Yokoyama and Alemu, 2009) and thenew products help counter the volatility of global commodity prices. Other countries
are trying vertical diversification, moving up the manufactured products value chain.
Madagascar, for example, is capturing vertical value chains in clothing and apparel. This
strategy requires more sophisticated processing and marketing.
Africa’s regional communities can lay the foundation for diversification by creating
common markets, pooling resources and providing a framework for the regional
management of infrastructure such as transportation corridors. They can also
strengthen human resources capacity, health, security, the environment and services
across the regions. In addition, harmonising technological standards and regulations,and reforming customs and border controls will improve Africa’s business climate.
Africa’s improved investment climate has provided opportunities for increased
investment from inside and outside Africa. Benin, Kenya, Mauritania, Senegal and
Uganda were among the top 10 most improved economies in 2014-15 in areas tracked by
the World Bank’s Doing Business 2016 survey. Together, they implemented 39 regulatory
reforms making it easier to do business. Sub-Saharan Africa accounted for about 30% of
the regulatory reforms making it easier to do business in 2014-15, followed by Europe
and Central Asia.

Figure 3.5. Economic diversification in selected African regional economic
communities
EAC
SACU
SADC
WAEMU
ECOWAS
COMESA
CEMAC
0
0.1
0.2
Note: Lower values mean higher diversification.
Source: Yameogo et al. (2014).
12 http://dx.doi.org/10.1787/888933350285

0.3

0.4

0.5

0.6

Economic transformation can help create sustained growth and other benefits.
However, structural change is needed to bring lasting results. Countries need to reallocate
labour from low to high productivity activities and to use their relative demographic
advantage.

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3. Trade policies and regional integration in Africa

Third, sufficient and efficient infrastructure is critical for the promotion ofinclusive and sustainable growth and income convergence in regional communities.
African economies can set a course for deep integration if infrastructure networks
are designed to link production centres with distribution hubs across the continent.
Such infrastructure will enable Africa to compete effectively, tap into regional markets,
benefit from globalisation through investment and trade and therefore achieve income
convergence (AfDB et al., 2013). The Programme for Infrastructure Development in
Africa estimates that Africa will need to spend up to USD 68 billion annually until 2020
on capital investment and maintenance.
Countries have made notable progress at a regional level developing crossfrontier infrastructure. The Ethiopia-Kenya Power Interconnector and the ZambiaTanzania-Kenya Power Interconnector will link the Southern Africa Power Pool andthe East Africa Power Pool and create a large regional electricity market. The Grand
Inga Hydro Power Plant on the banks of the River Congo in the Democratic Republic of
the Congo, when fully developed, could have a power generation capacity exceeding
44 000 megawatts – half of Africa’s current installed electricity capacity.
Other major projects include the multinational Mali-Côte d’Ivoire Road Development
and Transport Facilitation Project on the Bamako-Zantiebougou-Boundiali-San-Pedro
Corridor. This will help open up production areas in the two countries, improving
competitiveness, economic diversification and poverty reduction in the participating
countries. The network will turn the port of San Pedro in Côte d’Ivoire into a key transit
point for neighbouring landlocked countries such as Mali and Burkina Faso.

Integrated financial markets open a path to accelerated income convergence
Deeper financial integration should speed up income convergence. Africa has alreadyseen 15 years of high economic growth. Better integration of financial markets could
spur more growth and speed up income convergence by setting favourable conditions forbetter risk sharing and the phasing out of constraints, such as low competition and hightransaction costs. Regional financial integration could enlarge domestic market size,
broaden and deepen financial systems, achieve economies of scale, and make resources
more available and more efficiently allocated. Countries and regions with lower growth
rates would have a better chance to add growth and reach higher living standards.

Figure 3.6. Financial integration in different regional economic communities,
1970-2011
EAC

AfricaCEMAC

COMESASADCECOWAS

USD million
20 00018 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000

2
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10

19
7

19
7

0

0
Note: The median of the sum of assets plus liabilities in USD.
Sources: Lane and Milesi-Ferretti (2006), and authors’ calculations.
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3. Trade policies and regional integration in Africa

Africa’s financial integration has progressed rapidly over the past 15 years. The
stock of assets and liabilities, a good indicator of financial integration, has increased
uniformly across Africa’s sub-regional communities (Figure 3.6). One reason could be theincrease in Africa’s international trade. From the mid-1990s up to the 2008-09 financial
crisis, the sum of merchandise trade (exports plus imports), a sign of trade openness,has increased sustainably and since 2009 has grown at an annual average rate of 2.6%.
Also, since the early 2000s, African countries have implemented macroeconomic,
financial and structural policies to remove impediments on external financial activities.
From the mid-1990s, the financial account became more open (Figure 3.7) to cross-bordertransactions, except in the CEMAC area.

Figure 3.7. Financial account openness in Africa’s regional economic
communities, 1970-2013
EAC

AfricaCOMESASADC

CEMAC
ECOWAS

0.5

0

-0.5

-1.0

-1.5

-2.0
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Notes: Higher values mean higher financial integration.
Sources: Chinn and Ito (2006) and authors’ calculations.
12 http://dx.doi.org/10.1787/888933350309

Banking systems in Africa have boomed, as reflected in the expansion of pan-Africanbanks. Many African countries traditionally depend on bank financing (Sy, 2015) and in
the last decade, some large African banking groups have widened their regional footprint.
This reflects progressing economic and financial integration in Africa. Ecobank, a leading
pan-African bank which has its headquarters in Lomé, Togo, increased its affiliates from11 to 36 countries while Bank of Africa, based in Nigeria, increased from 1 to 19 countries
and Attijariwafa Bank of Morocco from 1 to 12 (Beck et al., 2014). However the expansionof these banks raises regulation and supervision issues given that cross-border banking
may increase the likelihood of financial contagion. Consequently, harmonised regulationand supervision frameworks are crucial. Furthermore, since most African countries still
use the Basel I international banking regulations, regulatory and supervisory rules will
have to be brought in line with Basel III guidelines.
Mobile banking and other financial innovations have become a challenge toconventional ATM cash machines and electronic bank payments. Expanding mobile
communication networks and access to mobile phones in Africa has led banks to workwith telecommunication companies to pioneer mobile banking systems that bringfinancial services closer to clients. For example, from its home market in Senegal, the
WARI money transfer payment service has expanded to 24 African countries.

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3. Trade policies and regional integration in Africa

Thus, beyond the traditional GDP indicators of financial development such as
domestic credit to the private sector or bank deposits, electronic payments are of
growing importance and need to be taken into account to show the growing size andsophistication of Africa’s financial systems.
International and domestic sovereign bond issues are on the rise. Although banks
remain the main financial sector players in Africa, bond markets have developed overthe last decade. Many countries have issued bonds on international markets in recent
years, reflecting the desire to diversify sources of financing. In 2006, African countries
raised USD 200 million from global capital markets through bonds. In 2015, this figurerose to USD 6.25 billion. However the move by the United States to end its quantitativeeasing monetary policy, which has stoked a rise in interest rates and appreciation of
the US dollar, could push up borrowing costs and the size of external debt in domestic
currency terms.
Local bond markets could be an alternative but this must accompanied bymacroeconomic stability and rationalisation of government borrowing to reduce interest
rates. This would in turn crowd in private sector bond issuance which is essential in
deepening the domestic capital markets and hence expand financing sources. The
corporate bond market in Africa is underdeveloped. Few countries have an outstanding
bond to GDP ratio higher than 5%. In 2014, the total outstanding African debt securities
in local currency amounted to USD 486 billion.
To help develop local bond markets, the African Development Bank Group launched
the African Financial Markets Initiative (AFMI) in 2008. The AFMI seeks to enhance themedium-to-long term development of African bond markets so governments can improve
the terms at which they borrow in domestic financial markets, reducing dependence on
foreign currency denominated debt.
Local bond markets would also increase corporate financing options, act as a catalyst
for the development and stability of financial markets, boost regional financial market
integration and improve the availability and transparency of African fixed income data.
The size of an economy and the development of stock markets are strongly linked.
But lack of stock market integration is holding back Africa’s financial integration. Africa
has more than 25 stock markets. However, many are fragmented, illiquid and little
active. A major exception is the Johannesburg Stock Exchange (JSE) which accounts fornearly 65% of Africa’s total market capitalisation. There have been initiatives to merge
some to benefit from economies of scale. The CEMAC group is a monetary union with
two stock markets, yet with only four listed companies. The total market capitalisationis less than 0.5% of CEMAC’s total GDP.
However, some economic zones like ECOWAS are actively encouraging securities
listings. Rules on some individual and cross-border stock exchanges – notably the Bourse
Régionale des Valeurs Mobilières (BRVM), which covers eight West African countries,
the Nigerian Stock Exchange and the Ghana Stock Exchange – allow foreign companies
to have multiple and cross-border listings.
Stock markets could learn from the model of the new generation of pan-Africanbanks helping financial integration and investment within regions and across thecontinent. The number of stock markets will have to be rationalised to allow the right
regulatory and supervisory framework for pan-African stock markets.

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Intra-African investment is rising, driven by increased regional integration
Investment between Africa’s regions could be a crucial driver of financial integration,
but so far it is limited. Foreign direct investment into Africa has risen from about
USD 10 billion in 2000 to about USD 55 billion in 2015. Investment within Africa has
played a key role in this expansion.
In terms of project finance, intra-African investment accounts for 19% of total
investment in Africa (EY, 2015).
Intra-African investment is less targeted at the extractive sector, helping recipient
countries to diversify away from the volatile resources industries.
Investment within Africa has been led by South Africa, Nigeria and Kenya, mainly
in banking, retail and telecommunications. Morocco, through banking and insurancecompanies such as Attijariwafa and Saham Insurance, has become a major investor but
mainly in French-speaking countries. South Africa is the top investor in its region. About
80% of foreign investment into Botswana, Lesotho, Namibia and Swaziland comes fromSouth Africa (World Bank, 2016). For some small countries such as Benin and GuineaBissau, finance from other African countries accounts for more than 30 % of their foreign
inflow.
The African investment flow is growing but is not yet the torrent that many countries
want. The potential is much higher and other regions of the world generate a lot more of
their own investment. Intra-African investment accounts for only 12% of Africa’s total
foreign investment. In Asia, intra-regional investment makes up 33% of the continent’s
total.
Two reasons may explain why Africa is not investing in itself. Despite recent tradeliberalisation, Africa still has high tariff and non-tariff barriers that hinder foreign
investment. Africa also has regulatory and structural impediments. Goods and financial
markets are fragmented. This prevents the leveraging of cross-border investment
opportunities. Africa’s financial integration needs co-operation between financial
regulators in different countries to harmonise their rules.
There are signs of change. The growth of pan-African banks in recent years has
revolutionised Africa’s financial sector. They now account for a large share of investment
between African regions. The resilience of Africa’s growth performance, supported bystrong consumer demand, could also be a launchpad for intra-African investment in
consumer-focused areas such as financial services and telecommunications. Current
initiatives to rationalise and bring together Africa’s regional communities could
dismantle obstacles to bigger markets. The creation of the TFTA, in particular, could
boost intra-African trade and investment.

Increased trade finance can help integration and job creation
Despite the increase in Africa’s internal trade in recent years, it remains confined.
Limited finance is devoted to intra-African trade. Banks operating in Africa accountfor about one-third of Africa’s total value of trade finance, estimated at USD 320 billion(AfDB, 2014). However only 19% of bank trade finance is devoted to intra-African trade
and this is not uniformly distributed across Africa. With 6%, North Africa has the lowest
proportion of bank intermediated trade finance. In East and Southern Africa, around
27% each of bank intermediated trade finance is devoted to intra-regional trade, thehighest in Africa.
The expansion of Africa’s trade finance could strengthen regional integration andfoster job creation. Africa’s total exports comprise 80% raw commodities and 20%
manufacturing. In contrast, 60% of intra-Africa trade is manufactured products, against
40% for primary commodities. Manufacturing is a good driver of productive employment
and would push Africa further up the global value chain.

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3. Trade policies and regional integration in Africa

References
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AfDB (2014), Trade Finance in Africa, African Development Bank, Abidjan.
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Competitiveness_Report_2013.pdf
Beck, T. et al. (2014), “Making cross-border banking work in Africa”, Deutsche Gesellschaft fürInternationale Zusammenarbeit (GIZ) GmbH, Bonn, Germany.
Camarero, M., R. Flores, Jr. and C. Tamarit (2006), “Monetary union and productivity differences in
Mersocur countries”, Journal of Policy Modelling 28, pp.53-66.
Chinn, M. and H. Ito (2006), “What matters for financial development? Capital controls, institutions,and interactions”, Journal of Development Economics, Vol. 81, Issue 1, October, pp. 163-192.
EY (2015), Africa Attractiveness Survey: Making Choices, www.ey.com/Publication/vwLUAssets/EYafrica-attractiveness-survey-2015-making-choices/$FILE/EY-africa-attractiveness-survey2015-making-choices.pdf.
Freund, C. and E. Ornelas (2010), “Regional trade agreements”, CEP Discussion Paper No. 961 in the
Annual Review of Economics 2, September, pp. 139-167.
Jones, B. (2002), “Economic integration and convergence of per capita income in West Africa”,
African Development Review, 14(1), pp. 18-47.
Milanovic, B. (2006), “Economic integration and income convergence: Not such a strong link?”, The
Review of Economics and Statistics 88(4), pp. 659-670.
Lane, P. and G.M. Milesi-Ferretti (2006), “The external wealth of nations mark II: Revised andextended estimates of foreign assets and liabilities, 1970–2004”, International Monetary Fund,IMF Working Paper WP/06/69, www.imf.org/external/pubs/ft/wp/2006/wp0669.pdf.
Pigato, M. and W. Tang (2015), “China and Africa: Expanding economic ties in an evolving global
context”, World Bank, Working Paper N° 95161.
Sohn, C.H. and H. Lee (2006), “How FTAs affect income levels of member countries”, The World
Economy 29(12), pp. 1737-1757.
Sy, A. (2015), “2015: A crucial year for financing development in Africa”, Foresight Africa: Top Priorities
for the Continent in 2015, Washington, DC, Brookings Institution, pp.22-26, www.brookings.
edu/~/media/Research/Files/Reports/2015/01/foresight%20africa/financing%20african%20
development%20sy.pdf.
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on Trade and Development, Geneva, http://unctad.org/en/pages/PublicationWebflyer.
aspx?publicationid=937.
World Bank (2016), Global Economic Prospects: Sub-Saharan Africa, World Bank, Washington, DC,
www.worldbank.org /content/dam/Worldbank/GEP/GEP2016a/Global-Economic-ProspectsJanuary-2016-Sub-Saharan-Africa-analysis.pdf.
World Bank (2015), World Development Indicators database, World Bank, Washington, DC,
www.worldbank.org.
World Trade Organisation (2015), Statistics, http://stat.wto.org.
Yaméogo, N.D. et al. (2014), “Diversification and sophistication as drivers of structuraltransformation for Africa: The economic complexity index of African countries”, Journal of
African Development, Vol. 16(2), pp. 1-31.
Yokoyama, K., and A.M. Alemu (2009) “The impacts of vertical and horizontal export diversification
on growth: An empirical study on factors explaining the gap between sub-Sahara Africa andEast Asia’s performances”, Ritsumeikan International Affairs, Institute of International Relations
and Area Studies, Ritsumeikan University, Oita-ken, Japan.

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89

Chapter 4

Human development in Africa

This chapter reviews Africa’s progress from a human development
perspective and provides projections building on current trends.
A sub-regional approach is employed to examine the expansion ofpeople’s capabilities in relation to living standards, healthy lives andincreasing knowledge. The chapter also explores the negative impact
of inequality – including gender inequality – on all levels of humandevelopment. Human progress in expanding cities and settlements
is considered in the context of the global 2030 Agenda and Africa’s
Agenda 2063. The chapter concludes with a range of best practices
from country experiences in promoting human progress throughmore equitable and sustainable human settlements.

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4. Human development in Africa

In brief
African countries have made steady progress with gains in education, health and living
standards. However, the pace of progress in human development varies by country andsub-region and is insufficient to reach the 2030 Agenda targets for sustainable development.
Progress is hampered by several factors: inequality weakens the impact of growth on poverty
reduction, weak structural transformation limits work opportunities, and limited advancesin gender equality hamper skills and entrepreneurial development. Ensuring human progressfor youthful, rapidly expanding and increasingly mobile populations remains a considerable
challenge in all African countries. Work is central to ensuring that Africa’s current urbanisation
pathways contribute to gains for all. Policy responses to rising exclusion, urban poverty andinequality are essential to achieve the 2030 Agenda and Agenda 2063 goals for inclusive humandevelopment in sustainable cities and settlements. These must address existing tensions
between social groups, as a result of economic, political and social exclusion, through theprovision of secure livelihoods, quality social services, enhanced security, private sector
investment, improved human rights and affordable social protection.

Human development in Africa has made strong gains, but remains uneven
Human development in Africa must be sustained and accelerated
Progress on the core dimensions of human development is improving in Africa at thesame rate as all developing countries combined. The African region currently ranks third
behind East Asia and South Asia in terms of the annual percentage change in humandevelopment index (HDI) values (Figure 4.1). UNDP’s Human Development Index is anaggregate indicator of achievement in three key dimensions of human development:
health, education and income. Concretely, the HDI measures the capacity to lead a longand healthy life, to be knowledgeable and to have access to resources necessary for adecent standard of living.

Figure 4.1. Average annual change in human development, 1990-2014
1.6
1.4

1.38

1.34

1.2

1.06

1.0

1.06
0.90
0.75

0.8

0.73
0.58

0.6
0.4
0.2
0

South Asia

East Asiaand the Pacific

AfricaArab States

Latin America
Europeand the Caribbean and Central Asia

Developing
countries

World

Source: UNDP (2015a).
12 http://dx.doi.org/10.1787/888933350319

Human development goes beyond the accumulation of wealth. It embodies the processof enlarging people’s choices to live their lives in a way that is equitable, participatory,
productive and sustainable. These choices are created by expanding human capabilities
and functioning (UNDP, 1999). Human development therefore encompasses a number

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4. Human development in Africaof additional dimensions including self-respect, human rights, a sense of community,
opportunities for creativity and productivity, and political, social, economic and cultural
freedom. To achieve sustainable human development, governments and citizens mustbuild an enabling environment that includes participation in political and community
life, environmental sustainability, human security and rights, and more equal outcomes
and opportunities for women and men (Figure 4.2).

Figure 4.2. Human development dimensions
Long and healthy life
Directly enhancing
human abilities

Knowledge
Decent standard of living

Dimensionsof human development

Participation in politicaland community life
Environmental
sustainability

Creating conditions
for human development

Human security
and rights

Source: UNDP (2015b).

The gap between low and high human development in African countries is closing
over time. The rate of progress in African countries with poorer conditions in relation
to income, health and education1 is faster than the average of all developing countries
combined (Figure 4.3). However, the rate of human progress for all African countries has
declined in recent years from the high growth rates achieved between 2000 and 2010.
This decline is a reflection of the slowdown in increases in income per capita relative toimprovements in education and health outcomes. This slowdown is of concern as mostAfrican countries still remain in the low human development category.

Figure 4.3. Change in human development in Africa by category, 1990-2014
High human development

Medium human development

Low human development%
2.0

Developing countries

1.8

1.8
1.6
1.4
1.2
1.0

1.2
1.0

1.2

1.0
0.9

0.8

1.0
0.8

0.8

0.7

0.6
0.4

0.4

0.2

0.2
0

1990-2000

2000-10

2010-14

Source: Authors’ calculations based on UNDP (2015a).
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4. Human development in Africa

In terms of regional variation, North Africa has the highest proportion of medium
and high human development countries (Table 4.1). Southern Africa and Central Africa
also have mix of low and medium human development countries. However, in Eastand West Africa, the majority of countries are in the low human development category
with a few exceptions. The focus must therefore remain on accelerating and sustaining
progress especially for low human development countries.

Table 4.1. African countries by level of human development

RegionLow humandevelopment(less than 0.550)

Medium humandevelopment(0.550-0.699)

Central

Cameroon
Central African
Republic
Chad

Congo (Democratic
Republic of the)Madagascar

East

BurundiComoros
Djibouti
Eritrea
Ethiopia
Kenya

RwandaSouth Sudan
Sudan
Tanzania
UgandaNorth

Mauritania

Congo
Equatorial Guinea
Gabon
Seychelles

Egypt
MoroccoSouthern Angola
Lesotho
MalawiMozambique
Swaziland
Zimbabwe

Botswana
Namibia
Sao Tome andPrincipe

West

Mali
Niger
Nigeria
SenegalSierra Leone
Togo

Cabo Verde
Ghana

Benin
Burkina Faso
Côte d’Ivoire
GambiaGuineaGuinea-Bissau
Liberia

High humandevelopment(0.700-0.799)

Algeria
Libya
South
AfricaZambiaTunisia

Mauritius

Source: UNDP (2015a).

Africa’s youth is at risk from slow human progress
Africa still faces a significant deficit in terms of people’s capabilities and choices,with implications for Africa’s youthful population. Three out of every four Africans live
in a country with poor foundations for human development, while globally one in every
five individuals lives in a low human development country (UNDP, 2015a). Africa is ayouthful continent, with over 50% of the population under the age of 18.5 and 19% of the
population aged between 15 and 24 years old (UN DESA, 2015). This deficit therefore hastremendous short and long-term implications for inclusive growth and development.
Over time, the number of Africans living in low human development conditions islikely to fall. In 2015, 36 African countries were in the low human development category,
while 17 were in the medium to high human development categories. If Africancountries continue on the same trajectory, the number of countries experiencing low
human development is projected to fall to 22 in 2030 and to five countries by 2063 (UNDP,
forthcoming).
However, if the current rate of human progress remains steady, global andcontinental poverty targets will not be met in all countries. In 2015, approximately
879 million Africans lived in countries with low human development, while 295 million
lived in medium and high human development countries (Figure 4.4). Recent population
projections for individual African countries estimate a fall in the number of Africans
living in low human development countries to 456 million by 2030 (UNDP, forthcoming).
However, these projections imply that the ambitious goals set by 2030 Agenda andAgenda 2063 to eliminate poverty by 2030 and 2063, respectively, will not be met.

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4. Human development in Africa

Figure 4.4. Share of Africa’s population by level of human development,2015 and 2030
Low human development

2030

Medium human development

28

High human development

51

2015

21

75

0

20

20

40

60

80

5

100
%

Source: Authors’ calculations based on UNDP (2015a) and UN DESA (2015).
12 http://dx.doi.org/10.1787/888933350348

Expanding people’s capabilities and choices in low human development countries
would have a positive impact on Africa’s youth. At present, the majority of young
Africans live in poverty and work at an early age rather than furthering their education.
It is estimated that up to 17% of Africa’s 15-17 year olds are working and out of school
compared to 15% in Asia Pacific, and only 2.2% in Eastern Europe and Central Asia (ILO,
2015). Youth aged between 15 and 24 who are working, including those in urban areas,
are more likely to live in poverty. While, globally, two thirds of youth can be categorised
as working poor, in sub-Saharan Africa nine out of ten working youth are poor or nearpoor (ILO, 2015). The highest proportion of working poor youth are found in South Asia(94%) followed by sub-Saharan Africa (93%) and South East Asia and the Pacific (67%).
North Africa has a lower proportion with 59% of youth defined as poor or near poor,
while the Middle East and East Asia have 40% and 35%, respectively.
The lowest youth poverty rates are found in Latin America and the Caribbean, andCentral and South Eastern Europe at 22% and 21%, respectively. These rates are likely
a reflection of the higher proportion of youth still in education in these regions, rather
than in the workforce. Ongoing efforts by African governments and regional institutions
to promote faster industrialisation and regional integration, through investment ininfrastructure, skills and food security, are expected to improve Africa’s trajectory.

Regional variation in human development is driven by weak enabling conditions
Raising living standards across Africa is key to accelerating human development.
Significant strides have been made to extend life expectancy through concerted efforts
to reduce child and maternal mortality, improve food security and nutrition, halt
deaths from HIV/AIDS and provide access to anti-retroviral drugs, and reduce conflicts.
Significant progress has also been made in schooling as demonstrated by a rise in the
expected years of education. However, there remain challenges to providing quality
education for all that will supply the skills required by the rapidly changing marketplace.
Progress in human development varies substantially by region with higher levels
achieved in North Africa and Southern Africa. This is the result of more years of schoolingand higher incomes, as well as social programmes that support human development
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4. Human development in Africa

the average expected duration of schooling in North and Southern Africa is 12 years.
This is higher than the African average of 10 years, but lower than the maximum of 18
years, which is equivalent to a Master’s degree. In addition, North Africa has achieved anaverage life expectancy of 72 years, which is equal to the average life expectancy for all
developing countries globally. The average life expectancy in East Africa is only 62 years,
while life expectancy in Central, Southern and West Africa ranges from 58 to 60 years.
However, in all regions the standard of living, as measured by the gross national
income (GNI) per capita, remains inadequate. An average global inhabitant receives
USD 14 301 annually in 2011 purchasing power parity prices, while an average North
African receives only USD 9 900, a Southern African receives USD 6 800 and a Central
African receives USD 6 400. Inhabitants of East and West Africa lag behind with anaverage GNI per capita of only USD 3 800 and USD 2 300, respectively (UNDP, 2015a). The
aggregate HDI and other sub-components (life expectancy and expected schooling) also
differ by region (Figure 4.5).

Figure 4.5. Human development index and components by region of Africa
Human development index

Life expectancy

Expected schooling

GNI per capita

North Africa

Southern Africa

Central Africa

East Africa

West Africa
0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Notes: Average life expectancy, schooling and GNI per capita values, as compared to benchmarks (85 years life
expectancy, 18 years expected schooling and USD 75 000 GNI per capita).
Source: Authors’ calculations based on UNDP (2015a).
12 http://dx.doi.org/10.1787/888933350356

Persistent low human development is strongly correlated with the relatively highpopulation growth rate in low human development countries. High population growth
mitigates the positive impact of economic growth and social progress on humandevelopment. Low human development countries have the highest fertility rates andtwice the average annual population growth of medium and high human development
countries. The average annual population growth rate for low human development
countries is 2.6%, compared to 1% and 1.9% for high and medium development countries,
respectively (UNDP, 2015a). Nine of the ten countries in the world with the highest total
fertility rates are African (UN DESA, 2015).
High population growth leads to high dependency and a delayed demographic
dividend. High fertility implies that the burden on the working population to support
the aged and the young is unlikely to decline rapidly. In Africa, children under the ageof 15 account for 41% of the population (UN DESA, 2015). High dependency reduces

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4. Human development in Africa

the potential demographic dividend from the growing number of youth entering theworkforce, usually characterised by rising levels of national productivity and diversified
economies. This is because high dependency diverts time, resources and investments
away from productive activities towards care-related activities and household
consumption, which slows the pace of economic diversification and human development.
Policy responses and determined action are required to tackle population growth andcreate productive employment opportunities to harness the youth bulge and use thisdemographic dividend for Africa’s development.
Africa faces critical hurdles to creating the enabling conditions for humandevelopment in terms of effective public participation in governance and non-realisationof rights. The annual Ibrahim Index of African Governance (IIAG, 2015a) shows thatparticipation remains one of the lowest scoring areas for most African countries. Thisis particularly true for the indicator on “political rights”, which measures the extent
to which citizens are free to “participate in the political process including the right tovote freely for distinct alternatives in legitimate elections, compete for public office, join
political parties and organisations and elect accountable representatives” (IIAG, 2015b).
Another key enabling condition for human development is environmental
sustainability. However, significant environmental threats to human development
persist in the region including the unsustainable utilisation of Africa’s rich natural
resources, which constitute the cornerstone of Africa’s economic growth. African
experts have prioritised sustainable land, biodiversity and waste management, and an
effective response to natural disasters and climate change, as key areas of intervention
for Africa’s sustainable development (UNEP, 2015).
The persistent gender gap in economic opportunities, human development, and law
and institutions poses an additional threat. The weakening of legislation on violenceagainst women overrides the positive impact of improvements in gender equality thathave taken place in education, the labour force, politics and the judiciary. These effects
are demonstrated in the Africa Gender Equality Index (AfDB, 2015) and the Mo Ibrahim
Index of African Governance Gender sub-index (IIAG, 2015b). Progress and gaps inrelation to gender equality are covered in Table 26 in the Statistical annex of this report,with data from the African Development Bank, OECD and UNDP.

Inequality threatens long-term development
Africa’s human development progress is hampered by inequality in the distributionof opportunities and outcomes within countries. This reduces the impact of interventions
aimed at promoting human development. When inequality in the distribution of health,education and income across the population in each country is taken into account,every region in the world registers a drop in the value of human development. This gap
between the human development value and the adjusted human development value canbe expressed as an overall loss in human development due to inequality.
African countries display the highest inequality gap in human development followedby South Asia, the Arab States and Latin America (Figure 4.6). East Asia and the Pacificand Eastern Europe and Central Asia present the smallest gap in human development
due to inequality. These regions have low levels of inequality in health and education
outcomes. As such, reducing inequality remains a critical focus for African countries
in the implementation of the Sustainable Development Goals (SDGs), including the two
dedicated goals on inequality: Goal 5 (gender equality) and Goal 10 (reducing inequality
within and among countries).

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4. Human development in Africa

Figure 4.6. Overall loss in human development from inequality by region
Europe and Central Asia

13

East Asia and the Pacific19

Latin America and the Caribbean

24

Arab States

25

South Asia

29

Sub-Saharan Africa

33
0

5

10

15

20

25

30

35
%

Source: UNDP (2015a).
12 http://dx.doi.org/10.1787/888933350361

African countries with high human development have the lowest overall inequality
gap. For example, Cabo Verde and Mauritius – countries with medium and high humandevelopment, respectively – have the lowest levels of overall human development
inequality. Central African Republic, Chad, Comoros, Guinea Bissau and Sierra Leone– all countries with low human development – have high levels of overall humandevelopment inequality.
However, the relative importance of inequality for each dimension of humandevelopment varies across high, medium and low development countries (Figure 4.7).
In low human development countries, inequality across the population is highest in
education and health compared to inequality in income. In medium development
countries, however, the disparity is highest in income compared to education andhealth. For high human development countries, the disparities are highest in educationcompared to income and are lowest in health.

Figure 4.7. Inequality in the dimensions of human development by group in Africa
Coefficient of human inequality

Inequality in life expectancy

Inequality in education

Inequality in income

%
40
35

35
29

30
24

25
20

26

28

37

37

34

32

35

32

29

28

19

18

15
11
10
5
0
High human development

Medium human development

Low human development

All

Source: Authors’ calculations based on UNDP (2015a).
12 http://dx.doi.org/10.1787/888933350376

Income inequality has immediate and long-term implications for humandevelopment. It has a decisive impact on economic growth, human capabilities andopportunities, and the transfer of poverty and poor human development outcomes98

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across generations. Melamed and Samman (2013) provide a comprehensive review of
the relationship between income inequality and growth. In particular, they highlight the
emerging consensus that income inequality has a negative impact on poverty reduction
at all levels of growth. For example, between 1981 and 2005, economic growth enabled
millions of people to escape poverty. However, growth in income inequality ensured
approximately 600 million people remain trapped in poverty (Hillebrand, 2009: 7).
Income inequality in the absence of effective distributional mechanisms contributes
to unequal education and health attainment. There is evidence that higher income
inequality contributes to lower growth, as lower income households are less able to leadhealthy lives and access education (Dabla-Norris et al., 2015). This variation in healthand education outcomes could be a result of disparity in individual access to economic
resources, as well as inequality in the allocation of resources by geographic location,
gender and economic or social group.
This inequality in education and health outcomes becomes a long-term barrier tohuman progress. The negative impact extends to inequitable access to employment,
decent wages, entrepreneurship and opportunities to participate in decision making.
These all contribute to the inter-generational transfer of low human development,
which dampens the poverty-reducing impact of economic growth and transformationand promotes an ongoing cycle of social exclusion and poverty.

Gender inequality slows human progress and hinders structural transformation
Gender inequality remains a barrier to human development in most countries inAfrica. According to the Gender Inequality Index, which examines gender inequality inhealth, education, political representation and the labour market, low human development
countries have the highest aggregate levels of gender inequality 2 (Figure 4.8). Analysis of
this aggregate score reveals that the majority of African countries at all levels of humandevelopment still face low levels of political representation for women, and there are
significant variations in labour force participation, health and education.

Figure 4.8. Gender Inequality Index and components by group in Africa
High human development

Medium human development

Low human development

Gender Inequality Index

Ratio of female/maleparticipationin the labour force

100
90
80
70
60
50
40
30
20
10
0

Ratio of females/maleswith secondary education

Maternal mortality
per 100 000

Ratio of females/males
in parliament

Source: Authors’ calculations based on UNDP (2015a).
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Many African countries exhibit low levels of female representation in leadership,
albeit with large variations. Female representation accounts for over 60% of the lower
house of parliament in Rwanda (dropping to 39% in the upper house) but only 3% inComoros. Overall, female representation accounts for over 30% of parliament in only
14 African countries (IPU, 2015). Reducing this gender gap has the potential to make
African societies more vibrant and its institutions more resilient and responsive. In
particular, countries with higher female representation in parliament show increased
attention to reform in areas such as family land law and land rights, and greater public
acceptance of women as political leaders (AfDB, 2015).
Gender inequality in the labour market results in lost benefits to individuals,
households and society. Female labour force participation in high human development
countries in North Africa and beyond is low, with only 15% to 44% of working age females
in the labour force compared to 65.4% in sub-Saharan Africa. This has significant
economic implications, as annual economic losses due to gender gaps in the labour force
have been estimated at USD 60 billion for the Africa region (Bandara, 2015).
For women in the workplace, low levels of education, poor conditions of work andlow remuneration pose an additional challenge to obtaining a fair return on their labour.
Recent statistics for 2007-11 show that the female to male literacy ratio for sub‑SaharanAfrica is only 76 compared to the world average of 90 (UNSD, 2016). Estimates also
indicate that 74% of working women in Africa are in low productive agriculture andinformal employment, compared with 61% of men (ILO, 2013). Women employed invulnerable work or the informal economy tend to experience poor working conditions,have limited access to social security and representation, and receive lower earnings
than other workers (Vanek et al., 2014).
Inequalities in care and domestic work prevent many women from spending time on
education and paid work. Time-use surveys show that women are typically responsible
for the majority of unpaid care work such as household chores and caring for children
and elderly relatives. Women report doing more than four times as much unpaid careand domestic work than men in Ethiopia, Madagascar and Mauritius, and three times asmuch in Benin, Ghana, Rwanda, South Africa and the United Republic of Tanzania (UNWomen, 2015).
Poor maternal health as a result of early marriage, high adolescent births and low
access to reproductive health robs women of the capability to lead long, healthy andproductive lives. In 42 out of 53 African countries for which data are available, more
women die in childbirth than the average number for all developing countries. Between
240 and 1 100 Africa women die in childbirth per 100 000 live births every year comparedto the average of 225 for all developing countries (UNSD, 2016). Seven out of the ten
countries with the highest rate of early marriage for girls are in Africa (UNICEF, 2014). In
addition, Africa has twice the number of adolescent births as all developing countries
combined (UN DESA, 2015).
Low health expenditures limit access to reproductive health services. Low humandevelopment countries in Africa spend only USD 134 per capita on health, compared toan average of USD 561 for medium human development countries and USD 827 for highhuman development countries (World Bank, 2016). This leads to a significant unmet
need for family planning in African countries of 23.2% against a global average of 12.8%
for all developing countries, due to supply and demand constraints (Alkema et al., 2013).
Gender inequality persists due to discriminatory social institutions, power
structures, traditions and socio-cultural norms. Discriminatory social institutions
include formal and informal laws, social norms and practices that restrict or exclude
women and consequently curtail their access to rights, justice, land ownership, andaccess to resources and empowerment opportunities. These discriminatory institutions
contribute to inequity and unequal development outcomes for women and men(OECD, 2014).
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Research confirms the benefits of enhancing women’s rights and expanding women’scapabilities through empowering women and providing equal access to productive
assets, markets and justice. The benefits impact all individuals, communities andsociety, and include enhanced food security (UNDP, 2012). Countries with higher values
for discriminatory social institutions also perform poorly on the Human Development
Index (OECD, 2014). Efforts to map gender gaps in social institutions by humandevelopment group show that low human development countries fare poorly in all areasof social discriminatory institutions (Figure 4.9).

Figure 4.9. Gender gaps in social institutions
by human development group in Africa
High human development

Medium human development

Low human development

Social Institutions and Gender Index (SIGI)
0.7
0.6
0.5
Restricted civil
liberties - subindex

0.4
0.3

Discriminatory family
code - subindex

0.2
0.1
0

Restricted resources
and assets - subindex

Restricted physicalintegrity - subindex

Son bias - subindex

Note: The OECD’s Social Institutions and Gender Index (SIGI) measures gender gaps in social institutions related
to discriminatory family code, restricted physical integrity, son bias, restricted resources and assets, andrestricted civil liberties. Higher SIGI values indicate higher inequality.
Source: Authors’ calculation based on Social Institutions and Gender Index data (OECD, 2014).
12 http://dx.doi.org/10.1787/888933350396

Women in low, medium and high human development countries continue to facediscriminatory social and institutional practices that interfere with their fundamental
rights and human progress. Women in low and medium human development countries
typically face discrimination in terms of restricted access to resources and assets, which
affects their capacity to make decisions over natural and economic resources. Women in
low human development countries face the highest levels of discrimination in relation
to family code and physical integrity. Discriminatory practices including early marriage,
parental authority and inheritance rights limit decision-making power and status in
the household and family, restrict women’s and girl’s control over their own bodies andpromote violence against women.
Women in medium human development countries face higher levels of discriminationin terms of civil liberties. Discriminatory laws and practices restrict women’s access topublic spaces, their political voice and their participation in all aspects of public life.
Women in high human development countries face obstacles in relation to son bias.
Family preference for sons over daughters translates into bias with regard to caring,
nurturing and allocating resources.

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Sustainable cities and structural transformation are a priority for humandevelopment in Africa
The 2030 Agenda and Africa’s Agenda 2063 aim to accelerate human development
through sustainable settlements
The Millennium Development Goals (MDGs) highlighted the potential of growing
urbanisation to increase living standards. They also recognised the threats to groups
excluded from growing prosperity, especially those located in slums. The MDGs aimed
to achieve by “2020, a significant improvement in the lives of at least 100 million slum
dwellers”. Many African countries have since made significant progress in improving
access to social services such as water and sanitation in cities. However, humanprogress for those living in slums is still constrained by lack of basic services such as
improved drinking water and adequate sanitation and poor energy supply, combinedwith insecure tenure, non-durable housing and overcrowding. According to UN-Habitat,
61.7% of urban Africans in sub-Saharan Africa live in slums (UN-Habitat, 2013b). This
figure is significantly higher than that of South Asia, which at 45% has the secondhighest incidence of slum prevalence (UNECA et al., 2015).
The Sustainable Development Goals (SDGs) and the 2030 Agenda deepen the focus
on equity and rights in human settlements. The 2030 Agenda states that inclusive,
safe, resilient and sustainable cities and settlements are critical to advancing humandevelopment and structural transformation. Goal 11 affirms the need to ensure
the human rights of those in vulnerable situations, women, children, persons withdisabilities and older persons. It also identifies a range of human capabilities criticalfor human progress, including education, health, environmental sustainability,
participation in community and political life and gender equality.
These global commitments to promoting the resilience of cities and humansettlements aim to safeguard social gains from capital investment in urban
infrastructure. It is of critical importance for their implementation in Africa to ensurebalanced investment in urban and rural settlements, promote linkages and eliminate
urban or rural biases.
Africa’s Agenda 2063 aims to accelerate economic and social transformation fromnatural resource-based economies with most of the population employed in agriculture
to more diversified economies. Labour will move from low productive sectors, suchas agriculture and the informal sector, towards more productive sectors, such asindustry and services. This economic transformation will be accompanied by a socialtransformation with migration from rural to urban areas expected to result in a decline
in birth and dependency rates (Timmer et al., 2012).
Cities and other settlements play a central role in the objectives of Agenda 2063.
These include goals related to inclusive and sustainable development, and continental
integration, unity and renaissance. The vision for Agenda 2063 is to develop cities
and other settlements as hubs that enhance access to social services and improved
living standards, while also creating a network of interconnected cities. Agenda
2063 therefore prioritises critical investments in economic and social infrastructure
required to accelerate structural transformation.
Key stakeholders engaged in the implementation of Agenda 2063 objectives
for human settlements should therefore take into consideration key elements fromthe 2030 Agenda regarding the distribution of benefits across populations and their
participation in the planning and governance of cities.

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Sustainable settlements will prioritise decent work for youth and women
Expanding cities are hubs for present and future work, however the nature of work
is becoming more technology intensive. Work provides incomes and livelihoods and istherefore an integral part of human development. Work can enhance human development
through its contribution to reducing inequality, securing livelihoods and empowering
individuals. However, globalisation and technical progress are changing the world ofwork. The digital revolution has influenced productivity and work opportunities inAfrica, which increasingly require access to mobile phones and Internet services (UNDP,
2015). This is the case for emerging high-tech industries and the service sector, as wellas informal activities facilitated by mobile phones and services.
More equitable access to economic opportunities arising from the changing worldof work could create greater opportunities for Africa’s young and growing population.
Unequal access to digital services, especially for women, youth and informal
settlements, is generating barriers to work that have an impact on present and future
human development. Estimates show that only 19.3% of the population in sub-SaharanAfrica uses the Internet, with imbalances found between women and men and ruraland urban areas. Provision of Internet access in Africa equivalent to developed countries
could generate 44 million new jobs, representing a boost to the young and unemployed(Deloitte, 2014). As African countries continue to prioritise infrastructure development,
distributional imperatives must be addressed up front to prevent uneven access fromperpetuating existing inequalities.
Barriers to work are compounded by low skills, particularly for youth, creating achallenge for the generation of present and future work opportunities in the region. A
healthy and educated workforce is critical to productivity and economic growth. Yet,
youth in sub-Saharan Africa have the lowest literacy rates of any region: only 62.7%
for women and 74.7% for men (UNSD, 2016). As the population shifts to cities and work
becomes more technical, this skills deficit is likely to impede access to emerging wellpaying jobs and lock many into low-paying informal work. This situation underscores
the link between the underlying gap in capabilities for many Africans and the inability
to benefit from emerging work opportunities in cities. Priority actions must focus not
only on service delivery and infrastructure improvements, but also on empowerment
and eliminating barriers for disadvantaged workers, including young women and men.

Efficient and equitable cities require the engagement of all citizens
Policy imperatives for enhancing access to decent work and livelihoods in cities
include effective and inclusive service delivery, accountable governance processes anda human rights-based approach to infrastructure expansion. Pro-poor and gendersensitive policies that aim to narrow disparities and achieve human development requirea stronger commitment to the principles of good governance. Important elements ofinclusive governance in cities include upholding the rule of law, promoting human rights,
and transparent, participatory and accountable decision-making processes (Leete, 2008).
Inclusive governance also requires active engagement on the part of the poor, women,
men and youth to ensure pro-poor and gender-sensitive policies that narrow rich-poor
disparities.
Greater citizen engagement especially among women contributes to sustainable
cities. Such engagement is key to determining resource allocations for the provisionof quality and affordable energy services, water, sanitation and shelter in a more
equitable manner. Governance programmes and tools designed to improve women’s
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to greater citizen empowerment, improved gender equality and accountability, and thedevelopment of vibrant and sustainable living environments with equitable economic
and social benefits in sustainable towns and cities (WomenWatch, 2012). In Peru,
decentralisation and new laws that encompass citizen protection and participation led
to a higher level of engagement among women in local co-ordinating councils (LCCs)
and monitoring committees, resulting in a more equitable allocation of resources(UN-Habitat, 2013a).
The rapid growth of urban areas in Africa with low levels of development hasconstrained the ability of most governments to make the requisite investments inphysical infrastructure and human capital necessary for productivity rises and to
manage the unintended negative impact of urban growth. A focus on effective resource
mobilisation and management of financial, human and technical resources is therefore
key. For human development in cities to be sustainable, the government and citizens
must improve urban planning and design to promote resource efficiency, increase accessto sustainable transport and energy, and improve access to water, sanitation and waste
management (Mutizwa‐Mangisa, 2012). Implementing these reforms while fostering
participation and inclusion would decrease the number of slums dwellers and reduce
the ecological footprint of cities.
Africa can also draw lessons from other regions regarding human progress insustainable cities. Asia and Latin America (Mahbub ul Haq, 2014) show that a higher
level of urbanisation does not necessarily yield better human development outcomes.
Sustainable cities can advance human development through increased economic
activities, enhanced employment opportunities and improved access to basic services(see Chapter 7). However, lack of proper management can result in increased deprivation,rising inequality and growing exclusion, which constrain human development.

Sustainable urbanisation must address inequality and exclusion
Current urbanisation pathways reduce the pace of human development
Africa’s current urbanisation pathways and growing internal mobility create humandevelopment gains, but not for all. Broad-based gains in human development fromurbanisation depend on the availability of employment and livelihood opportunities forincoming residents, and an equitable distribution of infrastructure and basic services.
If urbanisation occurs without a corresponding increase in economic opportunities
and services, the resulting cities will be characterised by concentrations of relatively
richer people purchasing low-level services from those migrating to cities, slums andconcentrations of basic infrastructure services catering to the higher income parts of thecity (Freire, Lall and Leipziger, 2014). There is a danger that the current growth of African
cities could result in a poverty transfer from rural to urban areas, thereby creating wider
disparities.
The impact of urbanisation on development is a double-edged sword. Population
concentration contributes to human development progress, while potentially leading
to increases in inequality that fuel underlying tensions between social groups. A
strong correlation has been observed between national urbanisation rates and national
levels of human development. For example, urban population as a share of total
national population in African countries with high human development is close to 60%(Table 4.2). However, urbanisation falls to less than 40% in low HDI countries (UNSD,
2016). This finding is broadly similar to the global finding for high-income and high HDI
countries compared to low HDI countries. Rates of urbanisation are much higher in highhuman development countries (62%), but are also rising in low human development
countries (35%).

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Table 4.2. Urbanisation by level of human development in Africa
African countries by level of humandevelopment

Share of population residing in urban areas (%)
2015

Urban growth (%)

2030

Low human development

36.1

43.1

3.8

Medium human development

57.5

63.7

2.6

High human development

58.4

62.6

9.7

Source: UNSD (2016).

While a direct causality cannot be implied, economic and social channels leadfrom growing urbanisation to human development. These channels include more
economic and livelihood opportunities, and better provision of urban services andinfrastructure to more citizens, leading to better indicators of health, education andincome compared to rural areas. Historically, urbanisation is associated with economic
and social transformation, greater geographic mobility, lower fertility, longer life
expectancy and population ageing. Cities become important drivers of development andpoverty reduction in both urban and rural areas when they enhance economic activity,
productivity and trade, strengthen links between rural and urban areas, and provide
greater opportunities for political participation.
Urban transition often contributes to widening gaps between social groups withincities, leading to conflicts and insecurity, mainly as a result of political and social
exclusion. There are limited data to determine the extent to which relative poverty incities rises as a result of differentials in income between the rich and the poor. However,there is evidence that some of the most urbanised countries, such as Botswana, Central
African Republic, Seychelles and South Africa, also have high-income inequality(Table 4.3). In many cases, only limited attention has been paid to the problem of urban
poverty with fewer interventions focusing on reducing relative poverty, exclusion andinequality in cities. UN-Habitat refers to this overwhelming focus on rural poverty atthe expense of urban poverty as the “urban penalty”. There is an assumption that “all”
urban dwellers are healthier, more literate and more prosperous than rural population(UN-Habitat, 2007).

Table 4.3. Inequality and urbanisation by level of human development in Africa
African countries
by level ofhumandevelopment

Urban residents in
slums
%

‘000s

Countries
with highly urban
populations(over 50% urban)

Countries
with over 60%
of urban populationin slums

High income inequality
Palma ratio and Gini
coefficient

Low humandevelopment

63%

173 555 Cameroon, Côte d’Ivoire,
Gambia, Guinea Bissau,
Liberia, Mauritania

Burkina Faso, Central African Central African Republic,
Republic, Chad, Comoros,
Comoros, Lesotho
Democratic Republic of theCongo, Liberia, Madagascar,
Mauritania, Mozambique,
Niger, Sierra Leone, Somalia,
South Sudan

Medium humandevelopment

41%

25 527

Botswana, Cabo Verde, Congo, Equatorial Guinea, Sao Tome
Gabon, Ghana, Morocco, Sao and Principe
Tome and Principe, South Africa

Botswana, Namibia, South
Africa, Zambia

High humandevelopment

8%

593

Algeria, Libya, Tunisia,
Seychelles

Seychelles

Notes: The Palma ratio is the ratio of the richest 10% of the population’s share of gross national income (GNI)
divided by the share of the poorest 40% based on the work of Palma (2011). The Gini coefficient is the measureof deviation of the distribution of income among individuals or households within a country from a perfectly
equal distribution. A value of 0 represents absolute equality and a value of 100 represents absolute inequality.
Source: UNSD (2016).

Many urban slum dwellers have to cope with poor health, lack of education, poorquality housing, limited and more expensive access to public services such as pipedwater, sanitation facilities and garbage collection, and insecure land tenure. In low human© AfDB, OECD, UNDP 2016

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development countries, three out every five urban dwellers live in a slum compared totwo out of five in medium development countries and less than one in ten in high humandevelopment countries (UNSD, 2016). Studies show that pneumonia, diarrhoea, malaria,
measles and HIV/AIDS – the five diseases that cause more than half of deaths amongchildren – are prevalent in urban slums as a result of poor living conditions (UN-Habitat,2007). Poor service delivery and insecurity in slums has a twofold impact on women andgirls who bear the burden of care work in the household. Women and girls are typically
responsible for fetching water when supply is poor. This can take hours out of their day,reducing time for education, employment, childcare and rest (Women Watch, 2012)
The largest share of slum dwellers is found in low human development countries,
which encounter greater challenges in catering for new urban entrants, as they have thelargest share of urban residents living in slums without adequate access to economic andsocial services (Table 4.3). At the same time, large income disparities are found in Africancountries at all stages of human development. The richest 10% of the population haveover five times the income of the poorest 40% in high and medium human development
countries (Botswana, Namibia, Seychelles and South Africa). Wide income disparities
are also found in low human development countries (Comoros, Central African Republicand Lesotho).
Young women and men in urban areas face particular challenges in relation to social
exclusion and poverty. African youth represent a wide spectrum in terms of level of
education and skills, with urban youth having access to opportunities that may not be
accessible for rural youth. However, some evidence indicates that the majority of Africa’s
urban youth are underprivileged and live in informal settlements (UN-Habitat, 2008).
Youth residing in informal urban settlements in sub-Saharan Africa are more likely tohave a child, be married or lead a household than their counterparts in non-slum areas(Gupte, Lintelo and Barnett, 2014).
Recent evidence shows that new cities in Africa increasingly cater for higher income
groups, creating a periphery of low-income neighbourhoods. UN-Habitat notes that thisis mainly due to inappropriate urban development strategies and a lack of governancecapacities in secondary cities, which are absorbing the bulk of the urban population.
This leads to a bias towards providing services for the urban elite (UN-Habitat, 2014).

Effective strategies are needed to overcome exclusion and inequality
Lessons from selected countries highlight best practices to enhance inclusive andequitable human development in the face of rising mobility. The practices are drawn
from countries with high mobility and good human development outcomes, as wellas countries with high mobility but low human development. Underlying factors
contributing to high human development or low human development in the context of
rapid urbanisation are mapped against opportunities to promote human development inan urbanising environment. While progress has been made in both instances, tacklingincome and social inequality in the context of growing cities remains imperative in both
low human development and high human development countries.
Algeria, Seychelles and Tunisia are highly urbanised countries with high humandevelopment outcomes (Box 4.1). In Algeria, 71% of the population lives in urban areas
with good coverage of social services and a well-educated workforce. However, there is arelatively high degree of gender inequality with few working-age women in the workforce
and a higher than average maternal mortality rate for high human development Africancountries. While almost one third of parliamentarians are female, access to secondary
education is especially low for girls.
Seychelles and Tunisia are on opposite ends of the spectrum in terms of inequality.
Tunisia has a low level of income inequality, while Seychelles has a much higher level of

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income inequality. In Tunisia, 67% of the population lives in urban areas with only 7% of
the population living on less than USD 1 dollar a day, while only 8% of urban residents
live in slums (UN DESA, 2014).
Income inequality in Tunisia is moderate with the income of the richest 10% of the
population 1.5 times higher than the poorest 40%. In general, gender inequality is low
with low maternal mortality and a high share of women in parliament. However, labour
force participation for women is extremely low and girls have less access to secondary
education than boys.
In Seychelles, 54% of the population lives in urban areas. Income inequality isrelatively high with the income of the richest 10% six times higher than the poorest
40%. Gender parity in secondary education has been achieved and two out of every
five parliamentarians are female compared to the average for high human development
countries of one in five.
There are broad similarities among these high human development countries
regarding pathways to inclusive human development for settlements. In Algeria,
Seychelles and Tunisia, similarities include enhanced access to work, the wide coverage
and effectiveness of social protection systems, good health and education systems,
safety and the rule of law.
However, to harness opportunities from urbanisation these countries must address
rising social exclusion. Existing gaps need to be addressed in social protection, youth
employment and gender inequality, especially in the area of work. These countries alsoneed to create a suitable climate for domestic and external investments in order tocreate more jobs and generate public and private income in cities. Attention to reducing
vulnerability and promoting environmental sustainability is also critical in fragile
contexts.

Box 4.1. Highly urbanised countries with high human development outcomes:
Algeria, Seychelles and Tunisia
Algeria
Provision of quality social services has led to good health indicators in child nutrition, maternalmortality and child mortality. There is also broad access to water and sanitation, good national
security and personal safety.
In education, the availability of skilled education workers, as a result of investment in high pupil
to teacher ratios, has resulted in high literacy rates, and primary and secondary completion forboth girls and boys.
However, the region’s high youth employment and low youth participation in the labour force,
especially for women, must be addressed to unlock growth and improvements in living standards,
and reduce social exclusion from poverty and inequality.
Improving the current weak business environment could also unlock sustainable economic andemployment opportunities. Areas of focus include flow of investment capital, the soundnessof banks and more efficient customs procedure. The quality of electricity supply, road and airtransport have also deteriorated.
Effective participation and the realisation of rights enhance economic and social opportunities forall. Building on the country’s ratification of human rights conventions and recent improvementin the representation of women in politics, there is a need for more progress on political rights
and the removal of barriers to effective governance by political representatives. The country
should aim to increase women’s participation in the labour force, enhance gender equality in theworkplace and strengthen legislation on violence against women.

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Box 4.1. Highly urbanised countries with high human development outcomes:
Algeria, Seychelles and Tunisia (cont.)
Seychelles
A comprehensive welfare system and policies to support low-income families and the unemployed
have reduced vulnerability and poverty. A good investment climate and living conditions are tied
to a high level of safety, including personal safety and national security. Economic activity is
spurred by well-developed infrastructure including rail, air, electricity, water and sanitation, IT
and strong digital connectivity.
Despite low unemployment rates (3%), youth unemployment is significantly higher (20%).
Attention to the existing skills mismatch between education outcomes and private sector needs,
and differences in youth expectations and available work, could result in more employment
opportunities for youth. In addition, deteriorating gender equality in the workplace, especially inthe private sector, is overshadowing improvements in gender equality in education and the highlevel of participation among women in politics.
Increased investment would provide more economic opportunities to close the income gap.
In addition, attention should focus on the business regulatory environment, the efficiency of
customs procedures, the removal of constraints on investment flows and the soundness of banks.
The biggest challenge noted by the private sector is access to finance. High carbon dependence
and vulnerability to the effects of climate change constitute a significant barrier to sustainableurbanisation. More innovation and institutional co-ordination can speed up efforts to address
vulnerabilities linked to rising sea levels, marine degradation (coral bleaching), increasing
urbanisation and extreme weather phenomena, including floods and droughts.
Tunisia
The government supports active labour market programmes (ALMPs) that include wage subsidies
targeting high-skilled youth and provide a stipend, training and social security contributions. On
average, 6.4% of GDP is spent on social protection and labour programmes, such as pensions,maternity and disability benefits, and emergency household loans. The provision of health andeducation services and public expenditure on social sectors account for 19% of GDP.
A high proportion of youth are unemployed, and youth with higher levels of education and womenare more likely to be unemployed. A large proportion of unemployed in Tunis are low skilled.
Expanding labour market programmes and ensuring equity and gender parity in employment
could therefore enhance human progress and counter rising social and economic exclusion
among lower and middle-income households.
Up to 45% of workers in the private sector are employed in the informal sector with reduced
access to social benefits. Addressing barriers to investment, such as the deteriorating investment
climate, high taxes and rising labour costs, could provide a boost to employment and growth.
Gaps in social protection include inefficiency, fragmentation and inequity, and low privatesocial security contributions. The system could be enhanced by reducing reliance on inequitable
universal subsidies, improving identification and targeting, and building graduation mechanisms.
Sources: IIAG (2015a), ILO (2015), UNDP (2015a), World Bank (2015) and UNSD (2016).

The second set of countries are urbanising yet have low levels of human development,such as Benin, Gambia and Nigeria (Box 4.2). In Benin, 44% of the population lives in urban
areas, higher than the average of 36% for low human development countries. Income
inequality is moderately high, as the richest 10% have twice the income of the poorest 40%.
About 40% of rural residents live below the national poverty line, but only 31% of urban
residents are considered poor. Gender inequality is relatively high with low representationof women in parliament and low access among girls to secondary education.

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In Nigeria, 48% of the population lives in urban areas. Income inequality is moderatewith the richest 10% of the population accounting for twice as much income as thepoorest 40%. About 50% of urban dwellers live in slum conditions. 53% of the rural
population lives below the poverty line, but only 34% of urban residents are consideredpoor. Gender inequality is relatively high due to a high rate of maternal mortality, a very
low share of women in parliament and low labour force participation rates for women.
Gambia is a low human development country with six out of ten people living inurban areas. Income inequality is moderate: the richest 10% have almost three times
the income of the poorest 40%. One out of three urban residents (34%) live in slum
conditions. While 74% of the rural residents live below the national poverty line, only
33% of urban residents are considered poor. There is high gender inequality due to thelow share of women in parliament, high maternal mortality and low access for girls tosecondary education.
These countries display similarities as well as differences in terms of enablers ofinclusive human development in cities. In all countries, progress has resulted from
economic opportunities found in cities, as well as the presence of a healthy and educatedworkforce. There is, however, variation in the level of participation in governance, safety
and rights, which act as barriers to broader inclusion.
Several development areas that require attention are broadly similar acrosscountries. To enhance human development in cities and elsewhere, these countries need
to focus on improving availability and access to physical and digital infrastructure. They
also need to reduce social exclusion and gender inequality in the workplace, undertake
efforts to engage youth and build resilience to natural disasters.

Box 4.2. Countries that are urbanising but have low levels of humandevelopment: Benin, Gambia and Nigeria
Benin
Participation in politics and elections is high with democratically elected politicalrepresentatives able to govern effectively. A competitive business regulatoryenvironment and good investment climate are overshadowed by challenges related
to bureaucracy and red tape, customs procedures and the soundness of banks. Good
personal safety and national security create an environment conducive for economic
and social progress. In addition, effective and independent judicial processes support
the realisation of rights including political, property and human rights.
Improving infrastructure could boost investment and economic opportunities inurban areas. The road and rail network and electricity supply, IT infrastructure anddigital connectivity need particular attention. Better digital infrastructure could have apositive impact on accountability, if the current low levels of access to information andonline services are improved.
Education outcomes are relatively poor with low literacy levels, gender imbalances
and a falling education system quality in terms of the extent to which the education
system meets the needs of a competitive economy. Access to water and sanitation is
low with a negative impact on health outcomes. Efforts to increase the accountabilityof public officials and reduce the diversion of public funds could help to increase theeffectiveness of public investments.
Youth unemployment is high for educated youth: 39.3% of youth with tertiary education areout of work compared with 22.7% for secondary education and 4.7% for primary education.
A significant proportion of the population is fundamentally excluded from society due topoverty and inequality. Efforts to improve social safety nets to address poverty, old age,
illness, unemployment and disability would provide a much-needed boost.

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Box 4.2. Countries that are urbanising but have low levels of humandevelopment: Benin, Gambia and Nigeria (cont.)
GambiaThe country enjoys high health and education outcomes, especially in cities, whichhave higher literacy and enrolment rates creating a pool of skilled labour. Youthin cities are highly literate: between 69% and 75% of youth in Banjul, Brikama andKanifing are literate. More economic opportunities in cities reduce poverty. Only 7.6%of the population are considered poor in Banjul, compared to 38% in Kanifing, 57% in
Brikama and 56% nationally. However, 63% are employed in the informal sector, with ahigher share of women (74%) than men (55%). Mechanisms to promote equal access toopportunities for women and men have resulted in a high gender balance in educationand female participation in the labour force. However, there are gaps related to genderequality in the workplace, low rates of women in politics, and the status of legislation
on violence against women is deteriorating.
Deteriorating road networks and poor rail transport, electricity supply, IT infrastructureand digital connectivity hamper the expansion of economic opportunities in cities.
Beyond infrastructure, there is a critical need to provide housing for the poor. The current
poor state of public transport and the high cost of taxis force many commuters to walkto work. Improving the efficiency of public transport through the implementation of
low-cost, modern systems could improve competitiveness and economic opportunities.
Youth account for almost 37% of the population, the majority of which live in cities.
Banjul, Brikama and Kanifing all have a higher youthful population than the national
average. Many youth work in agriculture, low-value services and the informal sector. A
large proportion of Gambia’s youth is unemployed (38%), with unemployment higher
among young women (45%) than young men (30%). Providing more opportunities for
economic engagement is critical.
The main city Banjul is a low-lying island threatened by coastal erosion. A one-meterrise in sea level could submerge the city. Challenges affecting drainage and sewage
systems also need to be addressed.
Although Gambia has ratified a number of international human rights conventions,the country faces challenges related to political rights and participation, elections andfreedom of expression.
Nigeria
Significant investments in infrastructure estimated at USD 95 billion are beginning tobear fruit, particularly in the logistics and power sectors. For example, the Lagos Rail
Mass Transit is a modern rail-based public transport system based on a public-private
partnership model that generates its own electricity. Existing strong labour policies andnational poverty reduction policies, expenditure and revenue-sharing frameworks canbe used to drive equitable and inclusive growth in cities. Good health outcomes are
the result of improvements in immunisation, child and maternal mortality and childnourishment. However, access to water and sanitation is constrained, which has an
impact on health outcomes.
Overcoming constraints in the business environment could unlock domestic andinternational investment. Key constraints relate to starting a business, contract
enforcement, registration, paying taxes, trading across borders and electricity supply.
There is room to further develop infrastructure to expand economic opportunities. Road,
air, rail, water, electricity supply and IT infrastructure require particular attention.

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Box 4.2. Countries that are urbanising but have low levels of humandevelopment: Benin, Gambia and Nigeria (cont.)
Efforts to improve current low levels of education provision and quality could reverse
low literacy rates and poor outcomes at secondary and tertiary levels, which is criticalfor growing a competitive economy.
A significant proportion of the population is excluded due to poverty and inequality,
including gender inequality. There is need to address poor gender equality in theworkplace, women’s participation in the labour force and politics, and legislation on
violence against women.
Improvements are needed in terms of safety, the rule of law, national security, politicalviolence and human trafficking. Positive developments have taken place in online
services, and in terms of accountability, transparency and corruption in the public
sector, but diversion of public funds is increasing.
Sources: Ernst and Young (2013), IIAG (2015a), ILO (2015), UNDP (2015a), World Bank (2015) and UNSD
(2016).

Policy imperatives are crucial for inclusive human development in sustainable cities
These examples showcase specific models of equitable and sustainable settlementsin Africa and point to key policy reforms and development actions to create equitable andsustainable cities. The analysis presented in the previous section highlights three key
policy areas for attention: i) addressing social exclusion through work and effective social
protection; ii) creating an enabling environment for private investment; and iii) enhancing
environmental sustainability and reducing vulnerability to environmental shocks andclimate change. These policy areas mirror the rights-based framework proposed by
UN-Habitat, which encompasses cities that have an inclusive vision, flexible plans andimplementation mechanisms, and institutions that are accountable and efficient (UNHabitat, 2010). In particular, the following areas merit greater attention by policy makers(see also Chapter 8):• Enhanced public capacity for innovative urban planning and management strategies

that eliminate urban bias and provide effective social services and infrastructure
for urban residents. This involves strengthening government accountability andthe ability for public and private providers to provide quality public services tohigher population densities, including security, that promote job growth and private
sector investment. Sustainable cities must deal with the additional complexityof changing dynamics in urban governance, and provide an active role for local
government in service provision.
• Appropriate skills, educational content and job matching. Fostering more equitable

human development in the cities of the future requires greater diffusion of
appropriate skills and technology and education systems. These should be tailored
for a competitive workforce through more effective partnerships between educatorsand employers.
• Social protection policies and programmes. Effective implementation of regulationthat protects the rights of workers and residents is essential, alongside programmesthat provide comprehensive and affordable social protection for the most vulnerable.
• Effective

participation and equitable resource allocation. Successful cities
promote equity and sustainability in government finances, taxation and planning
processes. Taxation policies have a significant impact on improving equity andreducing existing disparities (Freire, Lall and Leipziger, 2014). In addition, full civic© AfDB, OECD, UNDP 2016

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engagement for both women and men must ensure that urban institutions respondadequately to localised needs (Leete, 2008).
• Building

resilience and environmental sustainability through technology. In
natural resource-constrained environments, efforts to foster more equitable
human development in cities must integrate environmentally resilient technology
into the provision of services and infrastructure. Adequate disaster risk reduction
and resilience building must also form part of long-term strategies for equitable
and sustainable human development.

Notes
1. Health is assessed by life expectancy at birth (United Nations Statistics Division), and educationis measured by mean years of schooling for adults over 25 years, and expected years of schoolingfor children of school-entering age (UNESCO). The standard of living is measured by grossnational income per capita (World Bank). The HDI only captures part of human development
and does not reflect aspects related to inequalities, poverty, human security, empowerment,
governance or environmental sustainability.
2. Other important dimensions of gender equality missing from the GII, including economic
empowerment, human development, laws and institutions, are captured in the Africa Gender
Equality Index (AfDB, 2015) and the Social Institutions and Gender Index (OECD, 2014).

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Chapter 5

Political and economic governancein Africa
This chapter assesses the governance trends affecting Africa’s
economic outlook by examining the most recent metrics on thefunctioning of African public institutions. It looks at how the qualityof public service delivery and the performance of institutions meetcitizens’ expectations. It also lays out the improvements citizens
are asking for and how governments are responding. Finally, thechapter outlines the prospects for 2016. Key findings are presented
first, and details of how these findings were arrived at are provided
in subsequent sections.

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In brief
While employment has been the main concern for Africans over the last decade, demands
for better services and infrastructure have been on the rise since 2008, and worries about
terrorism and violence are less and less confined to conflict zones. Not only are Africancountries reforming their public institutions, they are also taking their business environments
seriously, which can yield economic dividends over the long term but typically has limited
impact in the short term. Some indicators and expert reports hint at improvements in rules
and regulations affecting businesses.
The severity and geographic scope of politically motivated violence in the form of terrorism
or communitarian conflict has been increasing in Africa over the past few years. This has
spurred African countries to work together to find regional solutions, but international
co‑operation is difficult.
African citizenries are increasingly becoming effective at demanding and obtaining
improvements in governance. Success stories include the Nobel-prize winning institutions ofTunisia that managed to create a freer and more democratic society as well as new forms ofcivil oversight in some countries to give citizens other ways to influence policy beyond voting
and protesting.

Key governance challenges in Africa are a growing demand for public
services, the threats of terrorism and internal conflicts
This chapter defines governance as the way different state and non-state actors
make public decisions and manage economic and social resources for development.
State entities, political parties, civil society organisations and private sector actors allplay a role in the process. The chapter provides an overview of what the latest data
available tells us about governance in Africa, current trends and how this relates tooverall development outcomes.
As governance is multi-dimensional, a variety of measures and indicators are
considered. These can be divided into four main areas:• theprovision of public goods and services through good management andoptimisation of financial resources• the regulation of economic institutions and the state’s effectiveness in fostering

economic activity• the interaction of political institutions with citizens• the construction of trusted institutions capable of strengthening social cohesion.

Citizens’ expectations towards governments and key areas of tensions are thestarting point of this chapter. This section presents the main results of opinion polls
and surveys, as well as findings from updates of the African Economic Outlook (AEO) civil
tension indicators.

Opinion surveys show that citizens demand better economic opportunities, as well as
better governance of public institutions
The main issues stressed by African respondents to polls are better public services,
better institutions and better job opportunities. The MyWorld 2015 survey by the UN
highlights good education, better healthcare and an “honest and responsive government”
as the top three priorities for Africans (Figure 5.1). These are followed by the desire forbetter job opportunities and better access to public infrastructure such as clean water,
sanitation and roads.

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Figure 5.1. Top priorities for African citizens
26 608

A good education

23 849Better healthcare

19 24118 707

An honest and responsive government
Better job opportunities

17 09016 575
16 059

Access to clean water and sanitation
Protection against crime and violence
Affordable and nutritious food

11 057
9 711
8 720
8 630
8 285
7 287
7 264
6 848
5 919

Better transport and roads
Freedom from discrimination and persecution
Equality between men and women
Political freedoms
Support for people who cannot work
Reliable energy at home
Protecting forests, rivers and oceans
Action taken on climate change
Phone and Internet access

0

5 000

10 000

15 000

20 00025 00030 000Note: This graph represents the answers to the question: “What are the six most important issues for you andyour family?” (35 310 respondents in all 54 African countries).
Source: UN/ODI/Ipsos MORI (2016).
12 http://dx.doi.org/10.1787/888933350406

Other opinion surveys show similar results. The Afrobarometer survey conducted
in 2014/15 found that the three most important problems that Africans in general want
their government to address are unemployment (32.4%), health (29.8%) and education(24%), while rural Africans see better electricity and roads as a first priority. The 2015 Pew
global survey, which includes nine African countries, also found that top concerns were
employment, healthcare and education (Pew Research Center, 2015).
Employment has been the most pressing issue for African citizens throughout
the 2000s, according to Afrobarometer surveys, but demand for better services andinfrastructure has been on the rise since 2008. For instance, results from this survey
over the years show that demand for better education, health, electricity, transportation,water supply and sanitation is rising. In the survey round of 2002/03, nearly 65%
of respondents cited concerns about jobs and income as one of their three biggest
concerns. The same poll conducted in 2014/15 showed this number had declined to 54%
as respondents increasingly cited services and infrastructure issues. Respondents in
13 countries now cite infrastructure as their most pressing problem (Leo et al., 2015).
Major concerns diverge in some countries. Outliers include Nigeria, which is facing the
Boko Haram insurgency, and South Africa, which has a high urban crime rate. Nearly one
third of respondents cited insecurity as a major national problem. In Egypt and Tunisia –two countries that underwent regime change during the Arab Spring – and Burundi andMali – two post-conflict states – concerns about security and crime were cited as the second
most frequent issue after jobs and income. Problems related to food security appeared
among the top three issues in only two countries of the Sahel region, Niger and Mali.
Affordable access to housing was at the top of the list of concerns in the Afrobarometer
survey in three of the wealthier African countries: Algeria, Egypt and South Africa.
Regarding political institutions, citizens are demanding fairer and more competitiveelections. Elections are common practice in most African countries, and citizens wantthem to be more competitive and inclusive. A large proportion of African citizens
believe that elections are a good principle for good governance, but a much lower
proportion feel that electoral processes in their countries are honest (Gallup, 2012‑13).
Africans increasingly demand good governance outcomes: In 32 African countries
out of 34 countries, the majority of citizens preferred democracy to “other kinds ofgovernment” in the 2011-13 Afrobarometer survey (Bratton and Houessou, 2014). On© AfDB, OECD, UNDP 2016

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average, this index of demand for democracy was at 71% in 2012. In 16 countries, thescores ranged between 74% in Burundi and 90% in Zambia (many West African countries
appear in this list of 16 countries). And citizens surveyed see elections as the best signof a democratic regime.
Afrobarometer data shows that higher levels of freedom of speech and information
are associated with a higher rating of government performance and trust, notably in thefight against corruption. A solid majority of 69% of citizens support the role of media inoversight of governments (Mitullah and Kamau, 2013).

Public protests are mainly related to jobs, public services and political disagreements
Looking at a variety of metrics is necessary to improve our understanding of citizens’
expectations of governments and other public institutions. Opinion surveys, as describedabove, and the results of elections are among the best indicators available. However,tracking various forms of public protest and the reaction to them provides an additional
indication of the extent to which these opinions and motivations are strong enough toinspire action. Interpreting the variations in civil tension indices requires great care:while they may have economic costs, more frequent demonstrations and strikes may
also reflect the maturation of increasingly open governance systems. Following the 2011
regime change in Egypt, constitutional changes were accompanied by riots and protests,
undermining the Egyptian economy (Masry, 2015). In South Africa, a five-month-longstrike in the mining sector cost about ZAR 12 million in 2014 and is estimated to haveknocked off about two percentage points from GDP growth in the first quarter of 2015
(OECD, 2015a). The strike – the most costly in South African history – did not result in
substantially higher wages (SARB, 2014). The AEO governance indicators presented inthis section help gauge the trends in public protests and their motivations (Box 5.1).

Box 5.1. Assessing the quality of governanceA key to understanding Africa’s growth story over the last decade is assessing the quality of
governance. Both economic theory and some cross-country comparisons suggest governance is a
key factor in economic development, and it correlates with faster growth, higher investment andincreased poverty reduction (ADB, 2013).
Synthesising measures of different aspects of governance into a single evaluation is challenging
because the concept of governance is broad (Rhodes, 2012). It is difficult to capture with existingdata and often without uniform benchmarks to guide policy (Lin and Monga, 2012; Whaites etal., 2015). Academic debates and empirical work has led to many competing indicators of good
governance being proposed. These indicators can be divided into two main types: perceptionbased measures and fact-based measures. Where information seems to be lacking the most is infact-based measures (ADB, 2013; The Effective Institutions Platform, 2015).
The AEO governance indicators are a fact-based measure of governance evaluating the qualityof the interactions between governments, other political institutions and citizens. They track
when African citizens are unsatisfied enough with institutions to take public action and how
African institutions respond to this discontent. Public protests, which are defined as strikes or
any type of demonstration with political, economic or social motives, are tracked on a daily basis
via news reports by journalists and press agencies across Africa and verified by AFP and Reuters.
By contrast with other forms of civil tensions – including violence, inter-community conflicts
and terrorist acts against populations – which are also monitored, public protests represent a
democratic way of voicing demands. Each relevant event is counted and then weighted based onsuch factors as intensity, duration, number of casualties, etc. The methodology is presented in
the Statistical Annex of this report.

Public protests took a sharp downturn in 2015, following a steady rise since 2010
(Figure 5.2). Ebola in West Africa and terrorist attacks in several countries led to reduced
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imposed on rallies in Guinea, Liberia and Sierra Leone and in the context of officiallydeclared states of emergency1 in Chad, Egypt, Mali, Niger and Tunisia. Protests in South
Africa and Gabon declined in duration and intensity compared with 2014. Finally, North
African countries witnessed a decrease overall in the level of protests compared with 2014.

Figure 5.2. Index of public protests in Africa, 1996-2015
Public protest index (base 100 = 2000)
600
500
400
300
200
100
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Note: Public protests refer to strikes and any demonstration with political, economic or social motives. Each
event is weighted by its intensity (number of protesters) and duration (number of weeks). See more details in
the methodological annex of the report.
Source: Authors’ calculations based on news reports by journalists and press agencies across Africa, verified by
AFP and Reuters.
12 http://dx.doi.org/10.1787/888933350412

The top motivations for public protests in Africa from 2013-15, as reported by
newswires, tend to be poor economic conditions and public services. Although there
are slight differences between the results of opinion polls and the motivations behindvarious protests across Africa, some convergence appears on economic issues andon issues of political fairness. The top motivations for public protests continue to be
demands for wage increases, followed by demands for a change of government andbetter working conditions (Figure 5.3).

Figure 5.3. Top drivers of public protests in Africa, 2013-15
Demand for salary increase (from private entities)
Demand for salary increase (from government)
Better working conditions (from government)
Demand for dissolution of government or stepping down of the head of state
Better public service delivery (from government)
Accountability and more transparency
Reaction to executive overreach (arrests of journalists, protesters, opposition, etc.)
Governance and management (private entities)
Unpaid salaries/premiums (from government)
Election results or procedures
Political or legal reforms or proposals thereofStandard of living (e.g. consumer prices, taxes)
More political rights and civil liberties, more equality
Population divides over rules/liberties and related matters
Unemployment/pressure for new recruitment plan (from government)
Layoffs/pressure for new recruitment plan (from private entities)
International/global matters

6.7%
5.9%
5.6%
4.2%
4.0%
3.4%
2.9%
2.8%
2.6%
2.1%
2.0%
2.0%
1.9%
1.9%
0

50

100

150

200

9.1%
8.9%

11.8%

250 300 350
Total weights

Note: Public protests refers to strikes and any demonstration with political, economic or social motives. Each
event is weighted by its intensity (number of protesters) and duration (number of weeks). See more details in
the methodological annex of the report.
Source: Authors’ calculations based on news reports by journalists and press agencies across Africa, verified by
AFP and Reuters.
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5. Political and economic governance in Africa

There were significant differences between major cities and the rest of the country
in terms of the types of protests. Protests and civil unrest may be localised or affect theentire country. In general, there seemed to be more economic protests in rural areas
and more political protests in urban areas (Map 5.1). These results should neverthelessbe interpreted with care since the lines between rural/urban and political/economic
motives may sometimes be blurred.

Map 5.1. Intensity of protests in Africa by location, 2015

Note: The size of the bubbles represents the intensity of public protests in 2015 (e.g. the number of protests
weighted by the number of protesters and duration). See more details in the methodological annex of the report.
Source: Authors’ calculations based on news reports by journalists and press agencies across Africa, verified by
AFP and Reuters.

Terrorism represents a growing share of violence by non-state actors
Like in other parts of the world, terrorism has been a growing factor of violence inAfrica in recent years, causing long-term social and economic damage in addition to
immediate injury, death and destruction. The full negative impact of terrorist attacks
and cross-border violence on social progress is not easily assessed. Nevertheless, reports
by international organisations in West Africa, for example, provide some evidence of theextent to which the Boko Haram insurgency has been degrading the security situationin Nigeria and the areas neighbouring Lake Chad. Attacks resulted in more than120

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5. Political and economic governance in Africa

15 000 dead and have displaced more than 2.1 million people across Cameroon, Chad,
Nigeria and Niger since 2009, according to the International Organization for Migration.
Within the first three months of 2015, more than 1 000 civilians were killed. In Nigeria
alone, approximately 600 teachers have been killed since the start of the Boko Haraminsurgency to December 2015. Over 2 000 schools remain closed – some of them for
more than a year. In addition, hundreds of schools have been attacked, looted or set
on fire. More than 1 million children aged 7 to 15 in the region are out of school, of
which 380 000 left school within four years, putting them at high risk of dropping out
altogether (UNICEF, 2015a).
Looking at the broad trends, the extent and intensity of tracked acts of violence
by non-state actors slightly increased in 2015 in Africa (Figure 5.4). The Global Peace
Index (GPI) 2015 shows that on average the world became slightly less peaceful, withscores deteriorating in 86 countries, 21 of which were in Africa. Libya experienced thelargest decline in peacefulness scores worldwide, as activities by criminal networks
and jihadist groups increased (IEP, 2015). The Horn of Africa is also under the threat ofterrorism, notably Kenya and Somalia, with multiple attacks by Al-Shabaab terrorists
not only against government forces and symbols of power but also against civilians. The
attack on the University of Garissa in Kenya in April 2015 left 147 dead.
Inter-community tensions have also been contributing to this increase. For example,
in Kenya, acts of terror committed by Al-Shabaab led to inter-community mistrust in
2015. Tensions directed towards Kenyan Somalis have risen as a result. In South Africa,a wave of unrest targeting foreign-owned shops, mainly in Durban and Johannesburg,
resulted in seven dead in April 2015 before government forces took control of thesituation.

Figure 5.4. Political hardening and civil violence, 1996-2015
Civil violence

Political hardening

Index (year 2000 =100)
250

200

150

100

50

0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Note: Each violent act has been weighted by its intensity (number of deaths and/or injured people) according toa scaling methodology detailed in the annex of this report.
Source: Authors’ calculations based on news reports by journalists and press agencies across Africa, verified by
AFP and Reuters.
12 http://dx.doi.org/10.1787/888933350431

Over 2013-15, the three major drivers of violence by non-state actors were:i) terrorism; ii) inter-community conflicts, often fuelled by clashes over scarce resourcesand ethnic resentments; and iii) complaints about electoral processes whereby politicalparties have ignited or aggravated civil strife through violence (Figure 5.5).

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5. Political and economic governance in Africa

Figure 5.5. Violence by non-state actors in Africa, by type, 2013-15
In 2013

In 2014

In 2015

Terrorist acts against populations
Attacks against government forcesFighting between armed groups
Violence between communities (religious, ethnic, etc.)
Physical assaults/assasination of political personnalities
Violence between supporters of a political leader
Kidnapping
Violence linked to strikes, demonstrations or riots
Crime against civilians (by a rebellion or armed groups)
Violence related to elections
Other
Immolation, etc.
Allegation of ethnic cleansing
0

100

200

300

400

500
600
Total weights

Note: Each violent act has been weighted by its intensity (number of deaths and/or injuries) according to a scaling
methodology detailed in the annex of this report.
Source: Authors’ calculations based on news reports by journalists and press agencies across Africa and verified
by AFP and Reuters.
12 http://dx.doi.org/10.1787/888933350448

Several African countries are innovating to meet the growing demand for public
services
What are the challenges and opportunities in governments’ ability to deliver public
services for its citizens effectively? With growing populations and increasing democratic
assertiveness, public service delivery is faced with capacity constraints. Where thishappens, institutions have no choice but to innovate and change. Indicators of governancequality suggest that demands by African citizens on their institutions are leading not
only to improved services but also to reforms to improve institutional capacity. Finally,
there are examples of international initiatives reinforcing the effectiveness of service
delivery.

The performance of African governments in delivering public services varies greatly
across the continent
In the 46 African countries surveyed in the Gallup World Polls in 2013 and 2014,
wide variations can be observed in the net satisfaction rate of service delivery inhealth, education, transport and housing, reflecting highly heterogeneous citizens’
appreciation of state performance. The wording of the questions was: “In the city or
area where you live, are you satisfied or dissatisfied with…?”. With regards to public
transportation systems, while there was a net dissatisfaction rate of 15.2% on average,
the results ranged from a net dissatisfaction rate of 62% in Central African Republic to a
net satisfaction rate of 42% in Mauritius. In health service delivery, Africans are mostly
dissatisfied with its provision by their governments, with a net dissatisfaction rateof 22% on average. However, a positive rating of governments’ performance in healthdelivery was recorded in nine countries, ranging from 5% in Botswana to 59% in Rwanda.
As for states’ performance in delivering good and affordable housing, 17% of people weredissatisfied on average across the 46 countries, with again wide disparities, ranging
from 65% net dissatisfaction in Libya to 32% net satisfaction in Rwanda. Education is the122

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5. Political and economic governance in Africa

service delivery showing the highest net satisfaction rating, with a net balance of 5.1%
of African citizens satisfied on average. Twenty states showed a positive satisfaction
rate, while 24 had a negative satisfaction rate (data were missing for two countries). A
similar survey by Afrobarometer confirms the relatively more positive perception ingovernments’ performance in delivering education, with an average 20% satisfaction
rate in the 33 countries surveyed.
Government expenses in Africa are lower in absolute terms in relation to GDP thanin other regions. The average expense-to-GDP ratio is 29.7% in Africa, compared to 40.9%
in OECD countries on average. In 2014, African governments spent under USD 2 000
per capita, with Libya (LBY) and Seychelles (SYC) as the two exceptions (Figure 5.6).
In comparison, Brazil (BRA) spent about USD 4 300 per capita, China (CHN) roughly
USD 2 500 but India (IND) only USD 360.

Figure 5.6. Government expense per capita vs. government expense
as % of GDP, 2014
AfricaOECD

Other countries

Government expense as percentage of GDP
1.0
0.9

LBY

0.8
0.7
0.6
0.5
CHN

0.4
IND

0.3

BRA
SYC

0.2
0.1
0
10

100

1 000

10 000100 000

General government expense per capita in 2014 (USD)
Source: Authors’ calculations based on IMF (2015a).
12 http://dx.doi.org/10.1787/888933350454

Even at low levels of tax collection, several countries in Africa display high levelsof efficient public sector management by global standards. Figure 5.7 plots countries
in Africa and the rest of the world according to their tax-to-GDP ratios and the qualityof public sector management as measured by their ratings in the Country Policy andInstitutional Assessment (CPIA) of the World Bank. It helps identify some of the public
sector management success stories. For example, despite tax-to-GDP ratios under 20%,
Cabo Verde (CPV), Ethiopia (ETH), Rwanda (RWA) and Senegal (SEN) achieve abovemiddling CPIA scores. By contrast, other countries with higher tax-to-GDP ratios have
low scores. The majority of African countries have both low tax-to-GDP ratios and low
public sector management scores.
Similar disparities are observed in terms of the readiness of administrations topromote staff on the basis of merit and professional skills. Figure 5.8 compares spending
efficiency with an estimate of the degree to which merit is prioritised in hiring (World
Economic Forum [WEF] Executive Opinion Survey, 2014). Like in comparator groups,
however, the more hiring is based on qualifications, the more efficiently public revenue
is allocated. Rwanda scores among the best performing countries on both accounts.

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Figure 5.7. Public sector management vs. tax-GDP ratio
AfricaOther countries

CPIA public sector management and institutions cluster average (1=low to 6=high)
CPV
RWA
ETH

3.5

SEN
MOZ

LSO

ZWE
AGO
SSD
1.5
0

20

40

60
Tax-to-GDP ratio (%)

Note: The public sector management and institutions cluster includes property rights and rule-based
governance, quality of budgetary and financial management, efficiency of revenue mobilisation, quality of
public administration, and transparency, accountability and corruption in the public sector.
Source: Authors’ illustration based on World Bank (2016a) and IMF (2015a).
12 http://dx.doi.org/10.1787/888933350465

Figure 5.8. Hiring based on merit and qualifications
vs. efficiency in public revenue spending
AfricaOECD

Other countries

Efficiency in spending public revenue (1=extremely inefficient in providing goods and services, 7=extremely efficient)
7
RWA

4

ZMB
KEN
ZAF

MRT
NGA

1

1

4

7
Promotion of merit and qualifications (1=low, 7=high)Notes: Question 1.7 In your country, to what extent do government officials show favouritism to well-connected
firms and individuals when deciding upon policies and contracts? (1=always show favouritism; 7=nevershow favouritism). Question 1.8 In your country, how efficiently does the government spend public revenue?
(1=extremely inefficient in providing goods and services; 7=extremely efficient).
Source: Authors’ illustration based on WEF (2014).
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According to Africans, corruption – the exercise of public power for private gain –remains a primary obstacle to the state providing public services and protecting public
interest. In 2015, 58% of the African respondents of Transparency International’s survey
for its Global Corruption Barometer thought corruption had increased (Transparency
International, 2015). In the 12 months preceding the survey 22% of public services users
had paid a bribe across sub-Saharan Africa (SSA), equivalent to nearly 75 million people.
African anti-corruption bodies tend to lack resources, and very often a high proportionof citizens think their governments are still performing poorly in fighting corruption.
On average 64.4 % of Africans declared their government is handling the fight against
corruption badly or fairly badly, while 30.6% think government actions against corruption
are handled well or fairly well (Afrobarometer, 2015). Formal oversight institutions
frequently face limitations in performing their function of holding governments toaccount (IBP, 2015).
Accountability and the existence of checks and balances on public administrations
and public policies are key for effectively providing public goods, delivering services andfunding infrastructure. Accountability is a cornerstone of citizens’ perception of good
governance and crucial for the quality of public policies and the provision of public goods(World Bank, 2002). A lack of checks and balances enables corruption, which results inlarge financial costs and losses of quality in service delivery. For example, the office of
the auditor general in Kenya, an independent public body promoting good governanceand accountability in the management of public resources, revealed that less than 1.2 %of public spending was incurred lawfully and corresponded to accountancy rules (Kenya
National Audit Office, 2015). This seriously undermines the capacity of states to respondto citizens’ needs.

Policy initiatives are leading to more efficient, effective and inclusive services
African countries can improve their service delivery despite the great diversity ofpolicy contexts. Both academic literature and some recent policy reforms across thecontinent suggest that some general principles of policy improvement can apply to many
countries. For instance, better priority setting, improved consistency of responsibility
assignment across levels of government or agencies, better user information and betterbalanced provider payment schemes are worth pursuing in many African countries(OECD, 2010a). If these general principles apply to many countries, however, individual
policies do not. A one-size-fits-all approach to reform is not advisable.
Decentralisation can help improve service delivery when most of the regions
are economically and fiscally sustainable. In several African countries, regions ormunicipalities rely primarily on government transfers (AEO, 2015). Administrative
performance can be improved through local elections and civil society mobilisation
when local government finances do not rely only on central transfers (Cabral, 2011).
O’Neil and Cammack et al. (2014) find that in the case of local governments in Malawi,
devolution is more likely to succeed in cities than in rural districts, as the former
have better infrastructure, can generate more revenue and have more potential for
performance monitoring, including by citizens.
Better management and optimisation of financial resources can significantly
improve public service delivery. For example, the private not-for-profit (PNFP) contracting
experiments in Uganda have shown positive results in terms of resource allocation andservice delivery. Since 1997 and under the process of decentralisation and devolution© AfDB, OECD, UNDP 2016

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5. Political and economic governance in Africaof power to local governance, the Ministry of Health has granted public subsidies to
PNFP providers with the aim of expanding access to healthcare through public-private
partnerships (PPPs), especially in underserved parts of the country. PNFP facilities now
play a significant part in Uganda’s healthcare system, as about one third of all healthfacilities in the country are operated by them (Lundberg, 2008).
The spread of information and communication technology (ICT) in Africa can also
improve policy making and make a difference for people. Mobile phones are the mostwidely available type of infrastructure across Africa, with availability ranging from 70%
to 100% in 2015 (Leo et al., 2015). Telemedicine (i.e. e-health) is one of many examples of
ICT providing cost-effective solutions to some of the health challenges facing developing
countries. Government policies can help establishing reliable and coherent privacy andsecurity frameworks and accountability mechanisms that both encourage inclusivenessand respond to innovation.
• In Ghana, since 2012, the Novartis Foundation has been leading a PPP initiative

providing teleconsultation services across 21 communities, in co-operation
with sectoral ministries, the national health insurance agency and medical
associations. The 24-hour teleconsultation centre pilot model helped reduce 31%of referrals, improved emergency transport facilitation, and the road map for scale
up throughout the whole country is expected to be complete by December 2017
(Novartis Foundation, 2016).
• In Kenya, which already leads globally in mobile money payment facilities throughits m-PESA service, an upsurge in telemedicine is enabling rural patients and healthpractitioners to interact through video conferencing with staff in Kenya’s main
hospitals. This has improved quality of care at little cost (Arrow and Sanghi, 2015).
• Tanzania has launched a programme to help parents register their children’s births

by mobile phone, as 80% of Tanzanians do not have birth certificates according toa 2012 census (Reuters, 2015a). This has a direct impact on access to public services
in education and health and deprives the government of crucial demographic data
to plan service provision for children and match decision-making with populationneeds (UNHCR, 2014).
In terms of reform efforts, Ghana, Mauritius and South Africa are among the wealthier
African countries having implemented successful healthcare systems (KPMG, 2012). In
Ghana the National Health Insurance Scheme (NHIS) initiated in 2003 has successfully
reduced the proportion of out-of-pocket spending in total private healthcare spending,with salutary consequences for the poorest Ghanaians. In Mauritius, basic healthcare
is provided even if the share of out-of-pocket expenditure is still high. In South Africa,
NGOs and government are collaborating in sometimes innovative ways to improvehealthcare outcomes for poorer areas.
Improved effectiveness is first and foremost achieved through sound policies. Despite
very low levels of health spending (16 USD per capita in 2010) – the second lowest figure
in Africa – Ethiopia has made progress in improving healthcare, mostly by reforming
health administration services (KPMG, 2012). In Rwanda (Box 5.2), government has
overcome very low per capita health expenditure (57 USD per capita in 2010, although
the health budget as a proportion of the total budget is the highest in Africa) to deliver
acceptable outcomes by combining different modes of financing, successfully lobbying
for external funding and by making improvements to government health bureaucracy apriority (WHO, 2014).

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Box 5.2. Overview of the major improvements in Rwanda’s health system
Under its Health Sector Strategic Plan 2009-2012 (HSSP II), Rwanda recorded outstanding
socioeconomic progress following tremendous improvements and innovations in national
healthcare policies. Since 2005, the country has developed a comprehensive financing frameworkfor health systems based on best practices in global healthcare financing:On the supply side, the central government increased transfers to local governments though fiscal
decentralisation and offered peripheral health facilities on the basis of needs and performance.
Policy actions included a health insurance system, with cross-subsidies from richer to poorer
categories and medicine supply facilities (procurement and distribution). Currently, the Rwanda
minister of health is conducting a series of reforms in its health management information
systems, including automation.
On the demand side, Rwanda made exceptional progress in protecting households against
catastrophic health expenditures by strengthening pre-payment mechanisms such as communitybased health insurance and other health insurance schemes. There are also direct payments to the
population through in-kind incentives. Those efforts have dramatically reduced the burden of outof-pocket payments. General out-of-pocket expenditures dropped from USD 9.5 in 2006 to USD 4.09
in 2010 (WHO, 2014). Life expectancy at birth increased from 51 in 2002 to 64.5 in 2013 (NISR, 2013).
Figure 5.9. Out-of-pocket expenditures on healthcare and total health spending in
Rwanda, 1995-2013
Out-of-pocket health expenditure (% of total expenditure on health)
Health expenditure per capita, PPP (constant 2011 USD)%30

USD (constant 2011 PPP)
180
160

25

140

20

120
100

15

80

10

60
40

5

20

0

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: WHO (2014) and authors’ calculations based on World Bank (2015).
12 http://dx.doi.org/10.1787/888933350480

A better allocation of international aid can help improve service delivery in low-income
countries and fragile states
The effectiveness of international aid in helping improve public service delivery has
been challenged in the last decade. An OECD analysis in 2015 found six SSA states are bothfragile states and potentially under-aided: Chad, Madagascar, Malawi, Gambia, Guinea,
Niger, Sierra Leone and Togo (OECD, 2013a). Such geographical gaps in aid distribution
are a consequence of a lack of co-ordination. This is partly due to each donor having
its own political priorities and incentives, leading to individual allocation decisions
that vary greatly and do not depend on country needs or institutional performance.
However, the Ebola virus outbreak of 2014/15 showed that fragile states are vulnerable
to catastrophe and should not be neglected. Additional aid channelled as budget support
can indeed help such countries when it is accompanied by targeted technical assistancethat supports capacity-building and public financial management (Box 5.3).

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5. Political and economic governance in Africa

Box 5.3. Enhancing aid effectiveness in fragile states
The OECD defines fragile states as “having weak capacity to carry out basic functionsof governing populations, and lacking the ability to develop mutually constructive andreinforcing relations within society” (OECD, 2011).
The dramatic consequences of the Ebola virus outbreak show that epidemics canbecome humanitarian disasters in countries with weak services. Significant problems
were raised not only because of the insufficient resources for the health sector but also
because of the fragmentation of the care delivery process and information failures. The
under-resourced healthcare systems in Guinea, Liberia and Sierra Leone, where 99% of
the victims of Ebola were concentrated, struggled to contain the impact of virus.
Targeting aid to assist governments in the provision of basic services can greatly
improve the health environment and increase resilience to epidemics. Even after they
were declared free of Ebola in December 2015, the social and economic challenges inthese countries remains critical. The World Bank estimates that the tragic outbreak cost
USD 2.2 billion in foregone economic growth in 2015 in Guinea, Liberia and Sierra Leone(World Bank, 2016b). Economic activity and investment have still not recovered. About
70 000 births were not registered during the epidemic, putting children at risk (UNICEF,
2015b). The World Bank warned in a report that mortality may increase in Liberia by
111% due to the deaths of healthcare workers in the country. Meanwhile, new healthrisks continue to arise and the healthcare system remains badly damaged. More than
500 people already died of meningitis in Niger in 2015, where schools have been shut
down. The WHO warns of a high risk this disease becomes an epidemic in 2016 in the
African meningitis belt from Mali to Ethiopia. This demonstrates that the structural
deficiencies in health delivery still need to be addressed. Without improving the qualityof healthcare infrastructure and services, these diseases will continue to inflict a vastly
disproportional impact on these countries.
The contracting out of government functions and services to external providers is anestablished practice in many developed and developing countries. In fragile situations,the use of external providers has allowed developing and developed countries alike toprovide essential services, such as clean water, and core functions, ranging from customs
services to domestic resource mobilisation. When not done properly, contracting out
risks bypassing or substituting the state and can undermine the development of its
capacity to manage and deliver these services or functions.
Sources: OECD(2010b), OECD (2011), UNICEF (2015b), World Bank (2016b).

Aligning aid modalities with state-building processes can reinforce effective
service delivery in the long term. For example, asymmetry in aid allocations has beenon the development agenda since the adoption of the Accra Agenda for Action (AAA)in 2008. Strengthening strategic partnerships with national stakeholders is needed, inparticular in the case of fragile countries. Some other international initiatives are also
bearing fruit in health sector. The Roll Back Malaria (RBM) Partnership, launched in 1998
as a partnership between the World Health Organisation (WHO), the United Nations
Children’s Emergency Fund (UNICEF), the United Nations Development Programme(UNDP) and the World Bank, has obtained encouraging results against malaria: in ten
years the number of deaths dropped by 50% in 11 African countries (WHO, 2015). The
second Global Malaria Action Plan for the period 2016-25 aims to maximise performancethrough a multi-sectoral framework engaging action for households beyond healthcare
provision (RBM/UNDP, 2013). Another example is the polio eradication initiative, a PPP
led by national governments and financed by a wide range of donors and foundations.
About USD 11 billion invested since its launch in 1988 has reduced the incidence of polioby 99%, with only 75 cases worldwide in 2015, none of which is in Africa (International
Monitoring Board Polio, 2015).

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Improvements in the business environment require time and mustcomplement structural reforms to bear fruit
The quality of governance by public institutions affects economic growth throughits impact on the business environment. The ability of the private sector to contributeto economic growth depends not only on economic factors such as supply, demandand inputs but also on the set of regulatory, legal and social constraints to its decisionmaking (Hausmann, Rodrik and Velasco [2005]; OECD [2007]; Xu [2010]; Monga and Lin[2015]). African countries, for their part, have been improving their business regulatoryenvironments.

African countries are making it easier to do business, and several appear among theworld’s top reformers
Many African countries have made efforts in recent years to improve their businessenvironments. The World Bank keeps track of the number of reforms to administrative
procedures undertaken each year by each country in its annual Doing Business report.
The most common types of reforms have been in the categories for starting a businessand getting credit. Between 2014 and 2015, 15 countries undertook reforms in the firstcategory and 13 in the second. Since 2010, African countries have regularly been amongthe 10 best reformers (Table 5.2). Uganda, Kenya and Mauritania are the top three Africanreformers in the 2016 report.

Table 5.1. Top ten countries in the world since 2011 according to Doing Business, by yearOrder

2009/102010/112011/122012/132013/142014/15

1

Kazakhstan

MoroccoPolandUkraineTajikistan

Costa Rica

2

RwandaMoldova

Sri Lanka

RwandaBenin

Uganda3

Peru

Macedonia, FYR

UkraineRussian Federation

Togo

Kenya

4

Viet Nam

Sao Tome andPrincipe

Uzbekistan

Philippines

Côte d’Ivoire

Cyprus5

Cabo Verde

LatviaBurundiKosovoSenegalMauritania

6

Tajikistan

Cabo Verde

Costa Rica

Djibouti

Trinidad and Tobago

Uzbekistan

7

ZambiaSierra Leone

Mongolia

Côte d’Ivoire

Congo, Dem. Rep.

Kazakhstan

8

Hungary

BurundiGreeceBurundiAzerbaijan

Jamaica9GrenadaSolomon Islands

SerbiaMacedonia, FYR

IrelandSenegal10

Brunei Darussalam

Korea

Kazakhstan

GuatemalaUnited Arab Emirates

Benin

3

2

1

4

5

5

Total
AfricanNote by Turkey:
The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single
authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic ofNorthern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey
shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union:
The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The informationin this document relates to the area under the effective control of the Government of the Republic of Cyprus.
Source: World Bank (2016c).

African countries are improving their Doing Business scores, although from a low basis
when compared to the rest of the world. In 2015, six countries out of 54 in Africa wereabove the global median value for this score, while 26 out of 37 of the countries in thebottom quintile were African (Figure 5.10). However, some of the low-income countries
such as Rwanda have scores close to the level of OECD countries. Mauritius ranked 32
in the world, ahead of 12 OECD countries. By contrast, despite high per capita incomes,
several resource-rich countries – whose wealth is less dependent on the quality of theirbusiness environment – displayed lower scores.

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5. Political and economic governance in Africa

Figure 5.10. Doing Business scores and GDP per capita, 2015
AfricaOECD

Other countries

Linear (Africa)

OECD

OthersLog of GDP per capita
12
11
10
9
8
7
6
5
25

35

45

55

65

75

85
Doing business scores

Source: Authors’ calculations based on World Bank (2016c) and IMF (2015a).
12 http://dx.doi.org/10.1787/888933350492

Reforms may yield improvements over the long term, but short-term benefits are hard
to come by
In general, the relationship between economic growth and improvement in the
Doing Business scores is weak in the short-tem. Haidar (2011) estimated that GDP growthincreases 0.15 percentage points of GDP on average with every positive reform. However,in practice, benefits are masked by the effects of more powerful constraints, such as
unreliable electricity supply, low confidence in political institutions, standards andtrade relations and informal practices or opacity in delivering trade licences. Figure 5.11
shows how the change in Doing Business scores over 2010-14 has been weakly correlatedwith the change in GDP per capita over the same period.

Figure 5.11. Change in Doing Business score and GDP per capita between 2010 and 2014
AfricaOECD

Other countries

Change in GDP per capita, 2009-14
1.0
0.8
0.6
0.4
0.2
0
-0.2
-0.4

-5

0

5

10

15

20

Change in Doing Business score, 2010-14

Note: 2010-14 is the longest period in which there was a consistent time series for Doing Business scores (themethodology was changed in 2014).
Source: Authors’ calculations based on World Bank (2016c) and IMF (2015).
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Indicators of competitiveness show Africa still lags behind other regions. The WEF’s
Global Competitiveness Index (GCI) measures what drives an economy’s productivity
and prosperity. It is a mix of economic indicators and the results of a survey of businessleaders to measure how attractive a country is for investment. Although it does not cover
every country in Africa, there is general convergence between it and the World Bank’s
Ease of Doing Business index. Africa lags behind other regions of the world not just in
the regulatory environment but also in general attractiveness to investment (Kessides,2015). Rwanda, Botswana, Mauritius and South Africa are the top-performing Africancountries in both the Doing Business Index and the GCI. On the other hand, Cameroon,
Gambia and Senegal have good GCI scores but poor Doing Business scores. Tunisia had ahigh score in the Doing Business Index but a low one in the GCI.

To create new economic opportunities obstacles such as infrastructure bottlenecks
must be lifted
One difficulty in establishing a link between good governance and good economic
performance is that changes in laws, regulations and policies will have less effect whensubstantial corruption or informal practices continue to prevail. Hallward-Driemeierand Pritchett (2015) point out that the World Bank’s Doing Business scores represent dejure regulations and do not correspond to what is reported by businesses in the WorldBank Enterprise Surveys. For example, the average number of days required to starta business in Egypt was reported as 138.9 in 2013 in the Entreprise Survey, while thenumber of days recorded while compiling the Doing Business data set was eight. On theother hand, the data used in the Doing Business scores included 86 days required to starta business in Zimbabwe in 2011, while according to the Enterprise Survey it was only
six days on average. Very often, small and medium-sized entrepreneurs suffer morefrom informal administrative practices and red tape. In countries with high levels ofcorruption, businesses may even contribute to worsening this problem by using bribery
to speed up administrative procedures. In other words, seemingly bold reforms do notnecessarily have a meaningful economic effect.

Figure 5.12. Net perception rating for policies regarding reliable electric supply bycountry, 2014-15
National approval rating (%)
110
90
70
50
30
10
-10
-30
-50

M
au
Bo ritit s uswa
A l nager
Ke i aM Na nyaoz mi
S o a mb b i au t iqh ue
Ca Af
bo r ic
Ve ar
M S en dead e
Bu ag g a l
rk ascin a
aF r
Z a a som
Si M bi a
er a lr a aw
Le i
on
To e
Tu go
ni
si
N a
M ige
or r
Ca oc
m co
S w er o
a z onil a
Cô G ndte ha
d na
Z i ’I v o
m ir
ba e
b
Li we
b
L e er i a
so
th
Be o
ni
n
Ta Ma
n z lian
Eg i aBu y p tru
Ni n dige
Ug r iaan
Gu d ainea-70

Note: The Afrobarometer survey includes a range of questions on how the respondents perceive theirgovernment’s performance on handling certain issues. Countries with negative scores have more respondents
who think the government is doing badly on handling the specified topics. The range is from -100% (the worse)
to +100% (the best).
Source: Leo et al. (2015), based on Afrobarometer 2014/15 (http://afrobarometer.org/online-data-analysis/
analyse-online).
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Key economic infrastructure needs better maintenance policies and goodmanagement systems. In most African countries in 2014/15, a majority of citizens believedgovernments performed poorly on handling the provision of reliable electricity and roadmaintenance (Figure 5.12, Afrobarometer, 2015). Inadequate public infrastructure is a key
obstacle to growth, particularly in SSA. For example, Patat (2015) points out that due topoor infrastructure, major hydro-electric projects face losses on their lines of up to 50%,
often causing power outages in major African cities. Unreliable electricity production inturn seriously affects economic activities in countries such as Ghana, Nigeria, Senegal
and South Africa. In Ghana, long electricity cuts came on top of a sharp slowdown in
the economy, sparking anger among voters (Reuters, 2015b). Severe electricity shortages
in South Africa have become the greatest obstacle to economic activity and growth.
This is a problem that may only be solved through structural reforms in infrastructure
management (IMF, 2015b).

Fighting terrorism requires better regional co-ordination and information
sharing
African co-operation mechanisms have been set up against terrorism. The African
Peace and Security Architecture (APSA), led by the African Union and created in 2002,
offers a multidimensional framework directed at handling the prevention, management
and resolution of conflicts in Africa. To make the APSA operational and to enhance
security co-operation in the Sahelo-Saharan region, 11 neighbouring countries launched
the Nouakchott process in 2013 (OECD, 2014). The Sahel G5, which includes Burkina Faso,
Chad, Mali, Mauritania and Niger and was institutionalised in December 2014, is anotherinitiative aiming to better co-ordinate its members’ development and security policies.
In addition, the Multi-National Joint Task Force was formed in May 2014 by Nigeria, Niger,
Chad, Cameroon and Benin to fight Boko Haram (Box 5.4).
International efforts have been made to help African countries deal with security
issues. In the context of the EU-Africa partnership, the European Union Training Missionin Mali (EUTM Mali) has deployed around 200 EU instructors in Koulikoro to provide
training to official Malian armed forces, with a budget of EUR 27.7 million and a 24-month
mandate from February 2013. The EUCAP Sahel mission offers another example of EU
co-operation with Africa on security matters. It provides advice to the Nigerien and
Malian authorities in setting up an integrated approach against terrorism and organised
crime. France has been engaged militarily fighting jihadists in Northern Mali since 2012in accordance with the United Nations Resolution 2100. Operation Barkhane replaced
Operation Serval in August 2014, with a broader mandate to counter terrorism acrossthe Sahel region. At the 2015 US-Africa summit, the US administration announced two
initiatives to strengthen security and peace in Africa: The African Peacekeeping Rapid
Response Partnership (APRRP, or A-Prep) and the Security Governance Initiative (SGI).
A-Prep is a new investment of USD 110 million per year for five years to build the capacityof African militaries to rapidly deploy peacekeepers in response to emerging conflicts.
Legal mechanisms to combat terrorism face implementation issues. There are
already 19 international conventions dealing with terrorism (UNODC, 2016). In West
Africa, the Economic Community Of West African States (ECOWAS) adopted several
legal instruments to foster judicial co-operation between West African countries (OECD,
2013b) though implementation has been slow due to differences in legal systems, weak
operational capacity and divergent priorities between countries (Yabi, 2010). New antiterrorism laws passed in 2015 have been criticised as exposing civil organisations andpolitical activists to abuses, raising concerns over possible infringements on the rule oflaw and civil and political rights (AFP, 2015a).

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Box 5.4. Regional efforts against Boko Haram
The fight against transnational terrorism requires extensive cross-border co-ordinationand co-operation. After the kidnapping of more than 200 schoolchildren in Chibok,
Nigeria, a Multi-National Joint Task Force (MNJTF) was established in May 2014 by
Nigeria, Niger, Chad, Cameroon and Benin. It was set up outside ECOWAS regional
conventions through the Lake Chad Basin Commission and formalised through the
UN Security Council. Its 8 700-strong force has been deploying slowly, in part due todiplomatic difficulties between Anglophone Nigeria and its Francophone neighbours(AFP, 2015b). After taking office on 29 May 2015, Nigerian President Muhammadu Buhari
re-launched the regional co-operation effort, holding many face-to-face meetings withhis counterparts. However, although the MNJTF was meant to have been in effect since
30 July 2015, as of February 2016 it was still pending.

In addition to tackling terrorism and cross-border risks, policies addressing theroot causes of conflicts and sources of vulnerability can improve the effectiveness ofthe peacebuilding processes within the countries. For instance, insecurity driven byinter‑community conflicts and land disputes is a threat to political stability. Informal
mining is one of the factors spurring illicit financial flows (Box 5.5).

Box 5.5. The need for better regulation of mining activities
Estimates of illicit flows of money in West Africa amount to over USD 15 billion, of
which USD 3.5 billion originates from artisanal and small-scale gold mining (OECD,
forthcoming).
Illegal mining activities are fuelling inter-community tensions in certain cases inWest-Africa. Violent disputes can be the consequence of conflicts over resources as isevidenced by attacks over illegal mining activities in some countries. On 22 December
2015, violent clashes over land boundary issues and illegal gold mining activities
occurred between the populations of Djélimala in Guinea and Karatou in Mali. The
Malian and Guinean ministers organised a joint meeting with the local populations
and advocated the banning of gold mining until the authorities had settled the landboundary issues (L’essor, 2016). In 2013, Angovia in Côte d’Ivoire experienced a violent
clash between gold panners and the local population (RFI, 2013).
Disputes around land and access to natural resources pose a particular strategic risk,
as the cost of inaction can be huge. If the presence of natural wealth can lead to civil
unrest in relatively stable countries, it poses a particular hazard in regions that are
already under the threat of armed groups. Eastern Democratic Republic of the Congo(DRC) has been destabilised for more than 20 years by armed conflicts triggered bycompetition for the control of mining resources in the region. A UN report highlighted
that the conflict in the eastern DRC is sustained by the prosperous trafficking of natural
resources by organised criminal networks. Around 98% of the net profits from illegal
natural resource exploitation goes to transnational organised criminal networks
operating in and outside the DRC. It is estimated that 57% of mines in eastern DRC havean armed group presence. Illegal taxes are collected from 36% of the mines and provide
the militias their income (UNEP et al., 2015). But armed groups retain only 2% of the
net profits from illegal natural resource exploitation, the bulk goes to transnationalorganised criminal networks.

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Several African countries have seen their electoral processes become fairer
The process by which governments are selected and replaced plays a key role ineconomic development, as does the way in which the governments are monitored.
Democratic consolidation in African countries has been associated with economic
growth (Masaki and van de Walle, 2015). Principles such as transparency, accountability,
non-discrimination or equality can increase development outcomes (OECD, 2012;
Malhorta, 2015).
Strong political institutions are essential to not only sustaining governance gains,
but also to responding adequately to citizens’ needs. Elections are necessary but not
sufficient to assessing the state of governance. The 17 Sustainable Development Goals,
which were adopted in 2015, include commitments to building capable institutions.
Some countries have seen moves toward stronger and more trusted institutions overthe past year. The years 2016 and 2017 will be important steps to testing these positive
signals for good governance in Africa.

Fair and competitive elections help to enhance peace building and trust
The year 2015 demonstrated that when held in accordance with the law and principles
of fairness elections can play a crucial role towards strengthening the legitimacy andcredibility of institutions. In Benin, the intensity of political protests decreased sharply
following the announcement of elections to be held in 2016 and a court ruling against a
constitutional change that would have allowed the president to stand for a third term (IEP,
2015). In Burkina Faso, in the wake of national protests and a popular uprising leading
to the fall of President Blaise Compaoré after 26 years in power, a democratic transition
led to the election of Marc Christian Kaboré as the new president in December 2015. The
transitional regime led by the diplomat Michel Kafando undertook economic and social
reforms and a fight against corruption. The process was nevertheless characterisedby tensions: the army attempted a coup in September 2015, which eventually failed,shifting power back to the transitional regime. Guinea-Bissau registered one of thelargest improvements in the world in their Global Peace Index score due mainly to theholding of credible and predominantly peaceful elections in 2014 (Ibid). In Zambia, after
the death of the sitting president Michael Sata in October 2014, the country held peacefulpresidential elections in January 2015.
Despite these peaceful and democratic changes in 2015, election time is still often
associated with surges in protests in several countries. As shown in Figure 5.3, protests
over elections results or procedures were among the main protest motives reported
from 2013-15. For example, the Ibrahim Index of Good Governance (IIAG) shows that
Ghana remains one of the best performers in terms of democratic gains in Africa(Mo Ibrahim Foundation, 2015). Yet in 2015, supporters of the main opposition party
held demonstrations asking to update the electoral list, which they claimed contained
non-existent candidates and non-Ghanaians (AFP, 2015c; Reuters 2015c). In Togo, there
was a general strike of schools and public hospitals, with thousands marching in thecapital Lomé to protest the results of the presidential election of 25 April 2015. In theCongo, a referendum organised in October 2015 to change the constitution was met withsome protests.
Elections are an essential component of democracy and open governance, but somecountries are still struggling to make them transparent and fair. The African think tank
the Institute for Empirical Research in Political Economy (IERPE) has scored half of thecountries in Africa below 4.5 on a scale of 0 to 10 in its index for the freedom, fairness
and competitiveness of elections from 2000-13. The index encompasses all the different
stages of the electoral process, from the campaign and the election to the post-electoral
period, as well as aspects such as procedures, freedom of assembly and legal restrictions

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on political parties (IERPE, 2015). This indicates a need to further improve the electoral
processes. Occurrences of vote-buying have been reported (Gutiérrez-Romero, 2014),
and political figures may seek political gains by instrumentalising societal divisions
to fuel conflict (Bayart, 1989 and 2009). For example, since the overthrow of President
Bozizé by the Seleka militia in 2013, the Central African Republic has gone through asevere political crisis which has exacerbated inter-community violence and destroyed
economic progress. The crisis has completely paralysed the economy and prevented
public administration and taxation, therefore depriving the country of resources.

Civil societies are playing an increasing role in political governance
Civil society movements in Africa seem to shape ways for citizens to influence
the quality of governance and political stability, as in Burkina Faso and Tunisia. Thesemovements follow different patterns and different intensities in different countries(Box 5.6). There are now initiatives in seven countries that aim to hold officials
accountable by other means than public protests or demonstrations (McNeil andMalena, 2010). They range from participatory budgets to independent budget analysis,
participatory monitoring of public expenditures and citizen evaluation of public
service. In Benin, the Social Watch Network, initially created to monitor the Millennium
Development Goals (MDGs), broadened its activities at the national level by developing
strong partnerships and establishing good governance practices among stakeholders(McNeil and Malena, 2010).
More generally, accountability ecosystems within public administrations need to bestrengthened to enable civil society to perform its oversight functions. Despite somesuccesses, most African countries provide insufficient information for civil society andthe public to understand or monitor budgets. Findings from the 2015 World Bank Open
Budget Survey reveal that seven African countries are among the 12 characterised by alack of budget transparency, weak legislatures, weak auditors and few or no opportunities
for public participation (IBP, 2015). Only South Africa, the third best worldwide, scoredvery well across all dimensions. Malawi had a high ranking, at 18. Francophone West
African countries, for their part, made remarkable progress from 2010 to 2015.

Box 5.6. The rise of civil society in Africa
Some civil society movements have played an important role in the political debate and in somecases were instrumental in regime change. In Burkina Faso, the association Le Balai citoyen acted
as a major pacific democratic force in the popular uprising leading to the fall of the Compoaré
regime in 2014. Made up of musicians, magistrates, journalists and students, it acted as amediator between the military, the opposition and the population and campaigned to preserve
the due process of the transition (Le Monde Diplomatique, 2015). In September 2015 when the
RSP (Regiment de sécurité présidentielle) attempted a coup, this group maintained pressure onthem to hand power back to the transitional civilian regime. This regime change was a caseof democratic transition, where a civil society movement transcended ethnic divisions – often
instrumentalised in conflicts in Africa – and united citizens around common aspirations for asocial compact based on representativeness, protecting the public interest and democratic debate.
Tunisia offers an example of successful actions led by civil society organisations: A quartet
organisation received the Nobel Peace Prize in 2015 for its decisive contribution to the establishmentof a pluralist democracy in Tunisia (Norwegian Nobel Committee, 2015). In the wake of the ArabSpring, Tunisia managed to consolidate real democratic gains, and this award is the symbol ofthe success of civil society organisations in conflict resolution. The coalition was made up of theGeneral Union of Tunisian Work (Union générale tunisienne du travail, UGTT), the Tunisian Union
of Industry, Commerce and Arts and Crafts (Union Tunisienne de l’Industrie, du Commerce et del’Artisanat, UTICA), the Tunisian League of Human Rights (Ligue tunisienne des droits de l’homme,
LTDH) and the National Order of Tunisian Lawyers (Ordre national des avocats de Tunisie).

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Box 5.6. The rise of civil society in Africa (cont.)
As such, it was able to establish a national dialogue, whose success is based on a true understandingof the local reality and the coalition’s inclusiveness and diversity. By gathering different parts ofthe population for the common goal of social justice, this experience shows that civil society canplay a crucial role in building and strengthening institutions in a given country.
Africa has seen others examples of civil society initiatives. In Morocco, the pro-reform movement
M20 played a significant role in the modernisation of the constitution in 2011 (AEO, 2012). In 2011
and 2012, the Senegalese movement Y en a marre was active in pushing for better public services
in the country. The Tournons la Page alliance, which has chapters in Cameroon, Congo, Gabon,
the DRC, Belgium and France, is seeking to form a transcontinental movement promoting theprinciple of democratic change. However, the models are still fragile and the patterns are quitedifficult to replicate.
Civil society organisations can thus play important roles in democratic transitions. The challenge
is to maintain credibility and momentum.

Elections will take place in nearly half of African countries in 2016 and 2017
Looking forward, 26 African countries will hold national elections in 2016 and2017. These represent opportunities to gauge how African institutions are maintaining
governance gains and democratic consolidations (Table 5.2). Democratisation andstronger institutions are interrelated. When free and fair, elections can lead todemocratisation and a stronger legitimacy for public institutions.
As countries progress and their societies are more demanding about the quality of
governance, public institutions and civil societies need to play their part in improving
the functioning of government. Government institutions and public services must
be able to respond when citizens call for better economic opportunities. Key politicaltensions also need to be addressed through sound policies to sustain human well-being
and development outcomes. In addition to their ability to serve the needs of populations,the effectiveness of African institutions in supporting development depends on theirability to foster peacebuilding and trust. This includes better processes, methods ofgoverning and more efficient decision making, with effective control and compliance.
Constitutionally mandated institutions improve the accountability, transparency andresponsiveness of institutions (Sandbrook and Oelbaum, 1997), which in turn has an
impact on the economic outlook.

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Table 5.2. Overview of national elections in 2016 and 2017 in Africa
Country

Voting for

Date

Benin

president

06/03 /2016 and 20/03/2016(second round)

Cabo Verdepresident

31/08/2016

Central African Republicpresident and national assembly

14/02/2016

Chadpresident

10/04/2016

Comorospresident

21/02/2016

Congo, Rep.

president

20/03/2016

Côte d’Ivoire

national assembly

Dec/2016*

Democratic Republic of the Congo

president and national assembly

27/11/2016*

Djibouti

president

08/04/2016

Equatorial Guinea

president

30/11/2016

*

Gabon

national assembly, president

16/08/2016*

Gambianational assembly

01/12/2016

Ghana

president and national assembly

07/11/2016

Morocconational assembly

07/10/2016

Niger

president and national assembly

21/02/2016

Sao Tome and Principe

president

31/07/2016

Seychellespresident and national assembly

31/10/2016

Ugandapresident and national assembly

18/02/2016

Zambiapresident, national assembly

11/08/2016*

Algeria

national assembly

2017

*

Angolanational assembly

2017

*

Kenya

president, national assembly and senate 31/08/2017

Lesothonational assembly

2017

Liberiapresident, national assembly

2017

*

Madagascar

president

2017*

Rwandapresident

2017*

Senegalnational assembly

2017

*

Sierra Leone

national assembly

2017

*

*

*

*
*

Note: *Election dates to be confirmed.
Source: International Foundation for Electoral Systems (IFES) (2016); International Institute for Democracy andElectoral Assistance (IDEA) (2016).

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5. Political and economic governance in Africa

Note
1. For example, protests were restricted or banned from August 2014 until the official end of
the Ebola epidemy in Guinea (29 December 2015), Liberia (November 2015) and Sierra Leone(7 November 2015).
• Chad established a state of emergency on 09 November 2015, and Mali did so several times

between 20 November 2015 and 31 March 2016.
• Egypt, which is facing repetitive jihadist attacks against government forces, instituted a stateof emergency from 24 October 2014 to 23 July 2015, renewing it for three months in August
2015.
• Niger declared a state of emergency from 11 February 2015 to 26 January 2016, in particularin the Difa region.
• Tunisia was hit by three waves of terrorists attacks in 2015. It instituted a state of emergency

for the whole country for three months from the end of June 2015 to early October 2015, thenfor four months from 24 November 2015 to 21 March 2016.

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PART II
Sustainable cities andstructural transformation

Chapter 6

The implications of Africa’s urbanisation
for structural transformation
While there is growing awareness that urbanisation is profoundlytransforming African societies, little attention has been paid so
far to ways in which that process may be harnessed to accelerate
the continent’s structural transformation in a more effective andsustainable manner. In pursuit of that ambition, this chapter
analyses the diversity and uniqueness of the continent’s urbanisation
experiences. Chapters 7 and 8 then focus on options for seizing theopportunities that urbanisation provides. An annex to Chapter 6
explains the methodology for the cluster analysis on urbanisationand structural transformation in diverse African countries.

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6. The implications of Africa’s urbanisation for structural transformation

In brief
Africa is urbanising at a historically rapid rate, bringing about considerable opportunities
and challenges. Africa’s urbanisation can allow for structural transformation, if accompanied
by productive employment and sufficient public goods. Urbanisation patterns are diverse
across Africa, but they generally confirm that unplanned urbanisation can challenge
structural transformation.
Current urbanisation patterns should be more sustainable for economic, social andenvironmental development. In many African countries, a large portion of the urban labour
force remains trapped in low-productivity informal services activities and access to public
goods is unequal. Urban activities are increasingly connected with rural areas, which
remain a pillar of African economies. Despite Africa’s slow industrialisation, the costs ofenvironmental degradation are large and increasing, adding to the economic and social
challenges of urbanisation. Specifically, policies must ensure that infrastructure keeps up
with rapid urban growth and connects urban centres and must actively promote urban
planning and governance. Agenda 2063 and the Sustainable Development Goal 11 on cities
provide new impetus for fulfilling Africa’s urbanisation potential.

The links between urbanisation and structural transformation in Africa arecomplex and varied
The first section below informs the reader of the fast pace and magnitude of Africa’s
urbanisation in light of the most recent evidence. It frames Africa’s urbanisation in
the context of the “second wave” of the world’s urbanisation process led by Asia. The
following section analyses Africa’s experience of rapid urbanisation with slow structuraltransformation. This contrasts with that of many world regions, most clearly OECD andEast Asian countries. The third section looks at the variety of urbanisation patterns
observed on the continent. The final section takes account of the staying power ofAfrica’s rural economy.

Africa is urbanising at a historically rapid rate
The African continent is urbanising fast. The share of urban residents has increased
from 14% in 1950 to 40% today. By the mid-2030s, 50% of Africans are expected to become
urban dwellers (Figure 6.1).1 Urbanisation is likely to continue and level off at about 56%
around 2050.

Figure 6.1. Growth trends in Africa’s urban, rural and total population, 1950-2050
Urban population

Rural population

Total population

Million
3 000
2 500
2 000
1 500
1 000
500
0

1950 1955 1960 19651970

1975 1980 1985 1990 1995 2000 2005 20102015 2020 2025 2030 2035 2040 2045 2050

Note: Forecasts start from 2010 based on UN DESA’s medium fertility scenario.
Source: UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350529

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6. The implications of Africa’s urbanisation for structural transformation

Considering their magnitude and speed, the urbanisation of Africa and Asia
simultaneously correspond to the second major wave of urbanisation in the history of
mankind. The first major urbanisation wave took place in Europe, Northern America,
and to some extent Latin America and the Caribbean between 1750 and 1950 when theurban population increased from 15 million to almost 462 million. The current wave
of urbanisation is bigger and faster. An additional 2.1 billion people are projected to beliving in African and Asian cities between today and 2050 (Figure 6.2).

Figure 6.2. Global urban population growth, year 100 to 2050
Urban population

Total population

Billion
10
9
8
7
6
5
4
3
2
1
0
100

200

300

400

500

600

700

800

900

1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000
Years

Note: Vertical bar indicates projection after year 2010.
Source: Data on total population between year 100 and 1940 from Kremer (1993), data on urban population
between year 100 and 1925 from Graumann (1977), and data from 1950 to 2050 from (UN DESA, 2014) using UN
DESA’s medium fertility scenario from 2010 onwards.
12 http://dx.doi.org/10.1787/888933350538

The magnitude of the current wave of urbanisation calls for a more environmentfriendly and less resource-consuming process than in the past. In China, as in several
OECD countries, rapid urbanisation has come with environmental degradation
proportional to development and poverty reduction: 12 of the 20 most polluted cities
in the world are located in China, and about 90% of rivers around urban areas areseriously polluted (World Bank, 2007; Zheng and Khan, 2013). In addition, Africa’s
urbanisation is taking place in a resource and climate-constrained world unknown toearlier urbanisation (Swilling, 2015; Currie et al., 2015). Ensuring that the ongoing wave
of urbanisation is more sustainable than in the past is of strategic importance to Africa
and to the world at large.
As Asia, Africa is urbanising twice as fast as did Europe. It took Europe 110 years
to move from 15% urban in 1800, to 40% in 1910. Africa has achieved the sametransformation in almost half the time: 60 years. Africa’s urbanisation is estimated tohave gained 5.9 percentage points between 2000 and 2015, second only to Asia, which
gained 10.7 percentage points during the same period. In 2015, almost 472 million
Africans lived in urban areas (authors’ calculations based on UN DESA, 2014).
Even more striking is the rapid growth of Africa’s urban population in absoluteterms, or without relating urban growth to rural population growth (see Box 6.1). The
size of Africa’s urban population nearly doubled in 20 years from 237 million in 1995 to
472 million in 2015. Africa’s urban population is expected to almost double again between
2015 and 2035. Not so long ago, in 1990, Africa was the world’s region with the smallest
number of urban dwellers: 197 million. Soon, in 2020, Africa is forecasted to have thesecond highest number of urban dwellers (560 million) after Asia (2 348 million).

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African Economic Outlook147

6. The implications of Africa’s urbanisation for structural transformationBox 6.1. Definitions of urban areas, various agglomerations,urbanisation and urban population growth
The official definitions of urban areas vary across African countries (Figure 6.3). Thirtyfive African countries define an urban area by population size, however the size varies. The
threshold is between 1 500 to 3 000 inhabitants in 16 countries; 5 000 inhabitants in 11 countries;
10 000 inhabitants in 5 countries; 20 000 in Nigeria and 30 000 in Mali. Twenty-four countries
define their urban areas according to administrative or political criteria, whereas for 11 countries
the definition takes into account the presence of non-agricultural activities. Socio-economic
activity defines urban areas for only 9 countries, while infrastructure is less commonly used in
the national definitions. The lack of a single, accurate definition hinders collecting and tabulatingurban statistics and prevents harmonised comparisons at regional and international levels(AfDB/OECD/UNDP, 2015). This report uses urbanisation data from UN DESA’s World Urbanization
Prospects (2014), which is based on official data produced by national statistical offices.

Figure 6.3. Definitions of urban across 54 African countries
Population size
Administrative
demarcation
Share of non-agriculturalactivities
Socio-economic
activity
Infrastructure
0

5

10

15

20

25

30

35
40
Number of countries

Source: Authors’ classification based on UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350541

Urban agglomerations carry various names, often depending on their size. Cities usually referto large urban agglomerations; they can be big, intermediate or small. Towns refer to evensmaller urban agglomerations and villages to the smallest. It is noteworthy, however, that no
objective threshold exists and that the distinction between city and town is more common in
the English language than in French and Portuguese, the other languages in which this reportis published. A megacity is an urban agglomeration with a population of 10 million people or
more, and a megalopolis a large agglomeration of adjacent urban centres. A conurbation is anurban agglomeration composed of several cities, initially separated by rural areas, whose growth
has overlapped while remaining administratively independent. An urban corridor links cities ofdifferent sizes through transport and economic axes. Urban settlement is an all-encompassing
category without reference to size.
Urbanisation differs from urban population growth. Urbanisation is the increase in the share ofa country’s total population living in urban areas. It is typically measured as the level showing
the percentage of a country’s total population that is urbanised. Deep changes accompany thisincrease, notably economic, social and environmental ones (see Box 6.2). Urban population growthis the absolute growth in a country’s urban population. A country does not urbanise when urban
population growth is lower than rural population growth.

Contrary to widely-held assumptions, Africa is urbanising fast mainly because towns
and intermediate cities are growing. Between 2000 and 2010, urban agglomerations
with fewer than 300 000 inhabitants accounted for 58% of Africa’s urban growth;
agglomerations with 300 000-1 million inhabitants only 13%; and those with over148

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6. The implications of Africa’s urbanisation for structural transformation

1 million inhabitants 29%. Between 2010 and 2030, the small agglomerations are
forecasted to make up 51% of the urban growth; the intermediate ones 16%; and thebiggest 33%.
Africa’s fast pace of urbanisation and urban growth contrasts with the slow pace ofstructural transformation, as the next sub-section shows. Urbanisation and structuraltransformation have not been mutually supportive in many African economies.
Urbanisation is part of structural transformation
Economic theory since Adam Smith and Alfred Marshall has long analysed thelinks between development and urbanisation. Early “dual economy” models viewed
urbanisation as a process of rural-urban migration where surplus agricultural workers
moved from rural areas into more productive jobs in modern urban industries andservices (Haggblade, Hazell and Brown, 1989; Fei and Ranis, 1963; Johnston and Mellor,
1961; Lewis, 1954). Labour-saving technologies and rising agricultural productivity
through a “green revolution” can push surplus agricultural workers away from traditional
activities in rural areas (Gollin, Parente and Rogerson, 2002). Cities provide a large anddiversified pool of labour, a more dynamic local market, more cost-effective access to
suppliers and specialised services, lower transaction costs, more diversified contact
networks and greater knowledge-sharing opportunities, and an environment thatencourages innovation (Krugman, 1991; Spence, 2012; World Bank, 2009; AfDB, 2010).

Box 6.2. Definition of structural transformation
In its economic sense, structural transformation is the process of moving economic
resources from low to higher productivity activities (AfDB/OECD/UNDP/UNECA, 2013).
Its basic mechanics entail a push factor away from traditional agriculture best described
as a “green revolution” and a pull factor into higher productivity manufacturing orservices best known as an “industrial revolution”. Structural transformation involves
moving away from low-productivity agriculture and re-allocating economic resources
to higher productivity activities. The process may also happen within a single sector
such as agriculture.
Structural transformation brings about deep changes to societies. In particular, it
entails urbanisation and a reduction in total fertility ratios. Fertility ratios fall as peopleacquire more education, earn higher incomes and live in denser environments (Timmer
and Akkus, 2008). Dysfunctions will inevitably be part of such radical transformations.
In various regions of the world, these processes have not been linear.

Big and small cities can benefit from agglomeration economies by using fewer
resources to support a larger population. Increasing returns from agglomeration makes
cities more attractive. Cities offer cultural vibrancy and diverse choices for services.
This attractiveness further draws talents and investments, creating a virtuous circle ofurbanisation and development. These advantages allow cities to increase productivity
and hence economic gains through three broad functions: matching, sharing and learning(Kayizzi-Mugerwa, Shimeles and Yaméogo, 2014; Turok, 2014; Duranton and Puga, 2004):• First, cities help firms match their unique requirements for labour, material inputs andpremises better than towns. Larger markets bring more choices and opportunities.
cities afford firms access to a wider range of shared services andinfrastructure because of the scale of activity.

• Second,• Third, firms gain from the superior flow of information in cities, which promotes morelearning and innovation and results in higher value-added products and processes.
Hence, industrialised countries have gone through an urbanisation process. Globally,urbanisation closely relates to national income: all countries that pass the USD 10 000
per capita threshold are at least 50% urbanised (Figure 6.4).

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.4. Global urbanisation levels and GDP per capita in selected countries, 2014
Size of population

Fitted line for high-income countries% of urban to total population
100
BrazilMexicoRussian Federation
Iran Turkey
South Africa
China
Indonesia
ThailandNigeria
Egypt
DRC
Viet Nam
India
Tanzania

75

50

25

Japan
United Kingdom

Korea

France
Italy

United States
Germany

Ethiopia00

10 000

20 00030 00040 00050 00060 00070 00080 000GDP per capita, USD 2005 (PPP)

Note: Exponential fit line for high income countries. Each bubble reflects the size of a country’s total population.
Source: UN DESA (2014) and World Bank (2015).
12 http://dx.doi.org/10.1787/888933350555

However, urbanisation is a necessary but insufficient condition for structuraltransformation. Many countries that are more than 50% urbanised still have low-income
levels. Urbanisation per se does not bring economic growth, though concentrating
economic resources in one place can bring benefits (Henderson, 2003). Further, rapid
urbanisation does not necessarily correlate with fast economic growth: Gabon has ahigh annual urbanisation rate at 1 percentage point despite a negative annual economic
growth rate of -0.6% between 1980 and 2011 (Chen M. et al., 2014).
In addition, the benefits of agglomeration greatly depend on the local context, including
the provision of public goods. Public goods possess non-rivalry and non-excludable benefits.
Lack of sufficient public goods or their unsustainable provision can impose huge costson third parties who are not necessarily involved in economic transactions. Congestion,
overcrowding, overloaded infrastructure, pressure on ecosystems, higher costs of living,and higher labour and property costs can offset the benefits of concentrating economic
resources in one place. These negative externalities tend to increase as cities grow. Thisis especially true if urban development is haphazard and public investment does not
maintain and expand essential infrastructure. Dysfunctional systems, gridlocks, power
cuts and insecure water supplies increase business costs, reduce productivity and deter
private investment. In OECD countries, cities beyond an estimated 7 million inhabitants
tend to generate such diseconomies of agglomeration (OECD, 2006). Hence, the balance
between agglomeration economies and diseconomies may have an important influenceon whether city economies continue to grow, stagnate or begin to decline.
OECD experiences demonstrate that many different patterns of urbanisation canlead to structural transformation, such as industrialisation. Urban structures havevaried a great deal among OECD countries; there is no one-size-fits-all pattern. In
several countries, primate cities like London and Paris dominate the urban networks.
Other countries such as Germany or Italy have more balanced urban networks whereintermediary cities, such as Stuttgart or Turin, have driven industrialisation. Moreover,rural regions can grow faster than urban ones. Between 1995 and 2007, OECD regionswith lower levels of development tended to grow faster than richer regions, suggestinga catching-up growth process (OECD, 2012a). In Italy, clusters of small and medium
enterprises in intermediary cities fostered industrialisation through specialising inclosely related industries and forming interconnected production networks.

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6. The implications of Africa’s urbanisation for structural transformation

Structural transformation has been slow in a context of changing employment patterns
Weak linkages between urbanisation and structural transformation are observablein many regions of the world, though most recent examples are found in Africa andLatin America (UN-Habitat and UNECA, 2015). Previous editions of the African Economic
Outlook have documented the slow pace of structural transformation in a majority of
African economies, notably when compared with Asia’s performance (AfDB/OECD/
UNDP, 2013; AfDB/OECD/UNDP, 2015; see also McMillan and Harttgen, 2014). Figure
6.5 puts this comparison in perspective by showing the paces of urbanisation andstructural transformation in 3 regional samples: although the 11 African countries areurbanising at a comparable speed to the 11 countries from Asia, labour productivity has
been progressing more slowly; the 9 Latin American countries have experienced fasterurbanisation but even slower structural change than the African ones.

Figure 6.5. Annualised labour productivity growth and urbanisation in Africa,
Asia and Latin America, 1960-2010
Structural change

Within-productivity growth

Annual percentage point change in urbanisation level

Annual productivity growth (%)
8

Annualised percentage point change in urbanisation level
0.8

7
0.6

6
5

0.4

4
3.6

3
2
1

1.7
1.2

0

2.1
0.8

0.2

0.3

-0.4

-1

0.5

0.6

2.7

3.1

0.7

0.5

0.2

1.6
0.8

0.4

1
-0.1

-1.3

0

-2
1960-75

1975-90

1990-2000

Africa2000-101960-75

1975-90
Asia

1990-2010

1960-75

1975-90

1990-2010

Latin America

Note: The following countries are included in Africa: Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius,
Nigeria, Senegal, South Africa, Tanzania and Zambia. Asia: China, Hong Kong (China), India, Indonesia, Japan,
Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. Latin America: Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, Mexico, Peru and Venezuela. “Within-productivity growth” refers to gains incurred
within existing economic activities through capital accumulation or technological change. “Structural change”
is incurred from reallocation of labour from low-productivity to high-productivity activities which increases
aggregate labour productivity of the economy. Although this analysis uses a ten-sector categorisation with alonger time frame than AfDB/OECD/UNDP/UNECA (2013) albeit with less African countries (11 vs. 19), the final
results of the two analyses are consistent.
Source: Structural change figures adapted from Figure 1 and Figure 2 in De Vries et al. (2015) and urbanisation
data computed from UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350566

The quasi halt of industrialisation in many African countries at the end of the 20th
century seems to be a turning point. De Vries, Timmer and de Vries (2015) show that,
following independence, manufacturing employment progressed quickly in Africa,
from 4.7% in 1960 to 7.8% in 1975. During this period, urbanisation levels increased by
0.40 percentage points a year. The development trajectory thus seemed to follow theclassic dual economic model explained above. Between 1975 and 1990, however, politicaland economic turmoil wiped out the nascent manufacturing sector while urbanisation
continued. Structural change slowed down, as services kept absorbing workers released
from agriculture, but with much lower returns than industry. With Africa’s growth
picking up considerably since the early 2000s, structural change has become positive
again, albeit still at a slower pace than in Asia.

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6. The implications of Africa’s urbanisation for structural transformation

Many countries seem to be by-passing the manufacturing stage altogether in favourof services and risk the consequences of premature deindustrialisation. The sub-Saharanservices sector grew from 47% of gross domestic product (GDP) in 1965 in aggregate to 58%
in 2014, absorbing the bulk of growth in labour force in the process. Large-scale reallocation
into services traditionally occurs in post-industrialised countries owing to the faster
growth of labour-saving technologies in manufacturing and demand shifts away frommanufactured products (Figure 6.6). There are thus concerns that African countries – andtoday’s developing countries at large – are moving into the service sector too early without
having gone through a proper experience of industrialisation (Rodrik, 2015). “Prematuredeindustrialisation” may affect future growth prospects, because industrialisation is themost efficient path to sustained growth and economic convergence.

Figure 6.6. Traditional and new patterns of transformation between sectors
and type of employment
A. Traditional pattern

Agriculture

B. New patterns

Manufacturing

Services

Agriculture

Informal

InformalOrganised

Organised

Manufacturing

Services

Source: Adapted from Rodrik (2014).

Farmers may prefer to move into traditional or informal urban services because urban
informal work is often more productive than agricultural work, even if considerably lessproductive than formal employment. In Ghana, the differential between urban informal
work and rural farming work was estimated at 2:1 (Spence, Clarke Annez and Buckley,
2009: xiv). This productivity gap largely benefits the trade, hotel and restaurant service
sector, which is the largest service sector and mostly consists of informal, micro andsmall enterprises such as hawkers and convenience shops. Hence, Figure 6.7 shows that,in 9 out of 13 African countries, a decrease in agricultural employment between 2000
and 2010 was related to the increase in employment in the trade, hotel and restaurant
service sector (formal and informal services included).

Figure 6.7. Change in employment in trade services and agriculture
in 13 African countries, 2000-10
Percentage point increase in trade employment share
10
Botswana
Ghana

8

Malawi

Ethiopia

6
4

Kenya

Mauritius

ZambiaSenegal2South Africa

0Tanzania

Egypt

Morocco

6

12
15
18
9
Percentage point decrease in agricultural employment share-2
Nigeria
-3

-3

0

3

Note: The size of the bubble reflects the relative share of the country’s labour force in trade employment in 2000.
Source: Authors’ calculations based on the GGDC 10-sector database (Timmer, de Vries and de Vries, 2014).
12 http://dx.doi.org/10.1787/888933350585

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6. The implications of Africa’s urbanisation for structural transformation

But the large exodus of low-skilled workers into trade, hotel and restaurant services
reduces the productivity of this sector. In 72 out of the 11 African countries in Figure 6.8,
the sector appears as the least productive activity in services while accounting for 10% to
25% of total employment. This sector has experienced productivity loss in real terms inthe same 7 countries. Between 2000 and 2010, Ghana’s wholesale and retail trade sector
has increased its employment share from 17% to 25% without increasing its economic
output.

Figure 6.8. Change in labour productivity and share of employment in tradeservices in 11 African countries, 2000-10
Increase in labour productivity, constant 2005 PPP logarithmic scale
1.5
Nigeria10.5South Africa

Mauritius

Tanzania0

Zambia Kenya
Senegal

Ethiopia

Botswana

Ghana

Malawi

-0.5
-3

0

3

6
9
Percentage point increase in share of trade employment

Note: Productivity is adjusted by sectoral price levels in real terms, which is available for 11 sub-Saharan Africancountries. The size of the bubble reflects the relative share of the country’s labour force in trade employment
in 2000.
Source: Authors’ calculations based on the GGDC 10-sector database (Timmer et al., 2014).
12 http://dx.doi.org/10.1787/888933350596

Low-productivity informal urban jobs prevail particularly in countries that urbanised
while benefiting from rents stemming from natural resources extraction and agricultural
exports. Focusing on Côte d’Ivoire and Ghana, Jedwab (2013) finds windfalls from cocoa
exports have been disproportionately spent on non-tradable goods and services, giving
rise to “consumption cities”. In Ghana, census data shows that informal jobs grew withurbanisation from 74% to 82% of total employment between 2000 and 2010 (Table 6.1).
Informal jobs remain more prevalent among female than male workers.

Table 6.1. Employment sectors of household heads by sex in Ghana, 2000-10
Total

Male

FemaleEmployment sector

2000

2010

2000

2010

2000

Public

9.6%

8.7%

10.8%

9.7%

6.5%

2010
6.5%

Private formal

14.6%

8.4%

15.4%

10.3%

12.7%

4.3%

Private informal

74.0%

82.0%

71.7%

79.0%

79.7%

88.6%

Semi-public or parastatal

1.0%

0.2%

1.2%

0.2%

0.5%

0.1%

Non-governmental or internationalorganisations

0.2%

0.7%

0.3%

0.8%

0.1%

0.3%

Other

0.5%

0.1%

0.5%

0.1%

0.5%

0.0%

Total
Number of people

100%

100%

100%

100%

100%

100%

3 052 266

4 585 293

2 170 609

3 132 907

881 657

1 452 386

Source: Ghana Statistical Service, 2000 and 2010 Population and Housing Censuses, quoted in Potts (2013).

Rapid growth of African cities has compounded the consequences of slow structuraltransformation
The failed attempts in the decades following independence at accelerating
industrialisation amid rapid growth of the urban population may explain inpart why structural transformation has not accompanied urbanisation in the© AfDB, OECD, UNDP 2016

African Economic Outlook1536. The implications of Africa’s urbanisation for structural transformationcase of most African countries, particularly in sub-Saharan countries. Naturaldemographic growth in urban areas has prevailed over economic migration of aworking-age labour force from rural areas. This has outstripped the capacities of cities
to provide productive economic opportunities and services.
Urban fertility remains much higher than in Asia and contributes to the majorityof urban growth in Africa (Figure 6.9). While Africa’s urbanisation rate has been second
to Asia’s, Africa’s urban population growth rate was the world’s fastest at 4% between
1960 and 2010. In 2010-14, the urban fertility rate remains at more than five children
per woman in Burundi, the Democratic Republic of the Congo (DRC), Mali, Niger andNigeria. To illustrate, a family of 4 rural migrants in 1960 would have become a familyof 43 in 2010 at sub-Saharan Africa’s annual increase of 2.9%, compared with 24 at Asia’s
increase of 1.7% (Jedwab, Christiaensen and Gindelsky, 2015).

Figure 6.9. Urban growth rates for selected African countries and Asia,
1960-2010
Migration residual

Urban natural increase

Annual urban growth (%)
7
6
5
4
3
2
1
0

e

e

ag

ag

er

As

ia

n

av

av
an

Af

ric

Re
n
ca

fr i
Ce

nt

ra

lA

er

pu

al

bl

aw

ic

i

i
al

M

aF
rk

in

M

as

o

ia
op
hi
Bu

ny

a
Et

ad
M

Ke

ca
ag

as

oi
Iv
d'

Cô

r

re

a
an

l

te

Gh

ria

t

ga
ne
Se

ge
Al

yp
Eg

Tu
n

is

ia

-1

Note: The Asian average includes 12 countries: Bangladesh, China, India, Indonesia, Japan, Malaysia, Myanmar,
Pakistan, Philippines, Korea, Sri Lanka and Thailand. The African average is a simple average of the 13 Africancountries in the sample.
Source: Adapted from Web Appendix Table 3 in Jedwab, Christiaensen and Gindelsky (2015).
12 http://dx.doi.org/10.1787/888933350602

The contribution of migration to Africa’s urbanisation has decreased. Migration fromrural areas accounted for at least half of all urban growth in sub-Saharan Africa during
the 1960s and 1970s but about 25% of urban growth in the 1980s and 1990s (Brockerhoff,1995).3 Rural-urban migration accounts for less than a third of urban population growthin 22 African countries. It accounts for over 50% in only 7 African countries (Burkina
Faso, Cabo Verde, Lesotho, Namibia, Rwanda, Seychelles and South Africa), whereas it
contributed to half of Asia’s urban population growth (Potts, 2009; Tacoli, McGranahan
and Satterthwaite, 2015). Dissatisfaction with local public services has been one of themain reasons why Africans migrate to urban areas; this differs from Asia and Latin
America where better employment opportunities attract people to cities (Dustmann and
Okatenko, 2014; AfDB/OECD/UNDP, 2015). Changing weather patterns, land pressures,conflict and natural disasters also push African rural dwellers to urban areas (Box 6.5).

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6. The implications of Africa’s urbanisation for structural transformation

Africa’s urban population in working age is now supporting more people independency-age than the urban population in any other world region. On average,
100 people of working age in urban Africa support 75 economically inactive people. This
compares to 100 workers per 61 dependents in Latin America, 53 in the Middle East and
50 in Asia. The high rate of child dependency is the main cause of urban Africa’s highdependency ratios. For every 100 urban workers, there are 70 children under 15 years
old. In contrast, Africa has the lowest urban old-age dependency ratio, along with the
Middle East. This results from low life expectancy. For every 100 people of working age,
5 are over 65 years old.

Figure 6.10. Urban dependency ratios in selected developing regions
AfricaLatin America and the Caribbean

Middle East

Asia

Number of dependent-age people per 100 working age people
80
75
70
70
61

60

53
50

50

51

47
42

40
30
20

10

10

5

5

8

0
Total dependency

Child dependency

Old-aged dependency

Note: Averages are unweighted. Sample includes 43 African countries, 21 Asian countries, 23 Latin Americancountries and 9 Middle East countries based on data between 2000 and 2010.
Source: Authors’ calculations based on data shared by Jedwab et al. (2015).
12 http://dx.doi.org/10.1787/888933350615

Rapid urban growth does not in itself impede structural transformation if
accompanied by sufficient productive employment and public goods. In fact, concentrating
people in urban areas provides an opportunity to spread the costs of providing public
goods over a larger number of users, thus reducing the marginal cost per user. However,despite their diverse forms, policies of productivity and public goods have failed in many
African countries. This may help explain the lack of linkages between urbanisation andstructural transformation in diverse groups of African countries.

African countries show diverse patterns of urbanisation, fertility transition andstructural transformation
To further analyse Africa’s urbanisation process requires understanding the wide
diversity of situations found across its 54 countries. We can group African countries into
five types according to their stages in three processes: urbanisation, fertility transitionand structural transformation. The latter is expressed in the economy notably by thechanging role of agriculture and by the importance of natural resource extraction.
Figure 6.11 shows where countries stand visually in this typology by comparing theirurbanisation levels and total fertility rates. Annex 6.A1 presents the methodology used
for this analysis and lists the countries per group.
• The diversifiers are the five African countries at the most advanced stage of thethree processes. Their urbanisation levels range between 40% and 67%. They arealso close to completing their fertility transition with total fertility ratios of about© AfDB, OECD, UNDP 2016

African Economic Outlook1556. The implications of Africa’s urbanisation for structural transformation

three or fewer children per woman. These countries are Egypt, Mauritius, Morocco,
South Africa and Tunisia. This group has Africa’s highest level of income (above
USD 10 000 gross national income [GNI] per capita in 2013 with the exception of
Morocco) and of human development (with a Human Development Index [HDI]
value above 0.60).4 Between 1960 and 2010, a natural increase in the population
drove urban growth in Egypt and Morocco. These two countries are more advancedin their structural transformation. Agriculture generates less than 16% of grossdomestic product (GDP) and manufacturing 13-18% of GDP. The main challenge
for these countries is to increase both productivity and economic complexity, as
they have not yet been able to transition to sophisticated manufacturing. Indeed,
the share of manufacturing in GDP peaked for all five countries in the diversifiers’
group during the late 1980s and the 1990s and has since declined. Several countries
have de-industrialised significantly. For example, South Africa’s manufacturing
workforce has shrunk from 16.8% of total employment in 1981 to 11.6% in 2011,
shifting towards services; the size of its manufacturing sector decreased from
23.6% in 1990 to 13.3% of GDP in 2014.
early urbanisers are seven countries that have made progress in theirurbanisation and fertility transition without having been able to diversify theireconomic base. Mostly found in West Africa, they include Côte d’Ivoire, Ghana
and Senegal. These countries are about 35-50% urbanised and have total fertility
ratios of about five children per woman. They are typically low- to lower-middle
income countries (USD 1 000-4 000 GNI per capita in 2013), with low-to-medium
levels of human development (HDI values between 0.40 and 0.57). Between 1960
and 2010, both migration and natural population increase have driven their urban
growth. Migration out of agriculture has pushed the labour force to urban areas.
Yet the manufacturing sector is small, 2%-14% of GDP, and can hardly absorb thehigh proportion of unskilled labour. The urban informal services sector has grownsignificantly. The common challenge for these early urbanisers is to break intohigher value activities particularly in the urban formal sector. They should focus
on manufacturing that can absorb a low-skilled labour force, pursue ambitious
education policies, develop higher value-added urban services, further raise
agricultural productivity and continue their demographic transition.

• The• The late urbanisers are eight countries that are predominantly rural yet have begun

their urbanisation and fertility transition and structural transformation more
recently. They are located in East Africa and include Ethiopia, Kenya and Tanzania.
Less than a third of their population typically lives in urban areas. Their total
fertility rates are four to six children per woman. Income levels are low (USD 1 0003 500 GNI per capita in 2013), and levels of human development are low-to-medium(HDI values between 0.38 and 0.54). Manufacturing makes up less than 4-12% ofGDP. While starting from a low base, several of these countries including Ethiopia
and Rwanda have positively transformed their economic structures within the pastten years. These are the main challenges for the late urbanisers: continue to improvetheir infrastructures, particularly transportation linking different urban growthcentres, break into manufacturing and higher value services as they continue tomove out of agriculture, urbanise, and accelerate their demographic transition.
Developing a network of intermediary cities can support the rapid urbanisationthat is currently taking place.
• The agrarians are nine pre-dominantly rural countries that are still at a very

early stage of their urbanisation and fertility transition. Many agrarian countries
are landlocked, such as Niger, Chad and Malawi. Typically less than a third of156

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6. The implications of Africa’s urbanisation for structural transformation

the population resides in urban areas, and women have on average at least six
children. These countries’ income levels did not exceed USD 1 900 GNI per capita
in 2013, and they have low levels of human development (HDI values between
0.48 and 0.34). Their economies are predominantly agriculture-based: agriculture
makes up 25-58% of their GDP and manufacturing 4-12%. For these countries, anatural population increase drove urban population growth between 2000 and2010. Though rural-urban migration may increase as they are now starting theirurban transition, their urban economies have not developed enough to attract
much rural migration to urban areas. The agrarian countries are challenged to
begin the structural transformation process more decisively by raising agricultural
productivity and engaging in a well-planned urbanisation process. Once they haveaccelerated structural transformation, they will likely start the fertility transition.
• The natural resources-based countries have urbanised with windfalls from natural

resources, which have attracted labour out of agriculture. Compared with othercountries at similar income levels, these 13 countries show a higher degree ofurbanisation (40-78%), generally higher fertility rates and a high degree of urban
primacy with the capital usually disproportionally bigger than other cities. The
share of GDP in agriculture is low at 3-21%. These countries exhibit huge variationsin income levels (USD 500-20 000 per capita), in the types of natural resources they
produce (e.g. hydrocarbons, minerals and metals) and in their geography (e.g. Libya
is predominantly arid while Nigeria is mostly rain-fed). Their common challenges
are to use their competitive advantage in international trade to diversify theireconomic base away from natural resources and to decrease fertility particularly
in urban areas. However, they currently need specific policies to face the adverse
global conditions of lower commodity prices.

Figure 6.11. Urbanisation levels and total fertility rate by typology
of African countries
Diversifiers

9

Early urbanisers

Late urbanisers

Agrarians

Natural resources-based

Total fertility rate, 2010-15

8NER

Agrarians

7
BDI

6

MWI

5

SOM

TCD

COD AGO

UGA

BFA
SSD
ERI
ETH

4

GIN

TZA

KEN
RWA

Late urbanisers

3

MLI
MOZ

2

SDN

MDG

NGA
ZMB
SEN
SLE
TGO
CAF

BEN

LBR

Early urbanisers

CIV
CMR

MRT

COG
GAB

GHA

EGY

ZWE

BWA

MUS

Diversifiers

40

50

MAR

ZAF

TUN

DZA
LBY

1
0

10

20

30

60

70

80

90

Urbanisation level (%), 2015
Note: Natural resources-based countries are not clustered in the figure because they are more scattered acrossthe board. The history and ability of states to invest resource rents can have implications for their development.
Source: UN DESA (2015, 2014).
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African Economic Outlook157

6. The implications of Africa’s urbanisation for structural transformation

Rural areas and towns remain pillars of Africa’s urbanisation
As seen above, urbanisation is not synonymous with the decline of agriculture, letalone of the broader rural economy. In most cases, agricultural output continues to grow– though at a slower pace – and accompanies the rise of industry and higher-value-added
services as a share of GDP. Some rural regions may even develop faster than some urban
ones.
Africa’s urbanisation is not a breakaway from its rural areas for many reasons. First,
slow structural transformation, continued demographic growth in the countrysideand declining migration flows to big cities mean that rural areas remain pillars ofmany African countries. Second, urbanisation holds new promise for rural areas byproviding greater demand for rural products, upgrading the agricultural supply chain
and enhancing the rural factor market (see Chapter 7 for a more detailed discussion).
Third, the traditional divides between rural and urban areas have increasingly blurred:
almost three-fourths of Africa’s population lives within a rural-urban interface made up
of rural areas and cities with fewer than 500 000 inhabitants. Fourth, those trends are
not linear and demand careful analysis. Several countries for instance have experienced
a deceleration of urbanisation or even de-urbanisation episodes.
Rural population growth will abate only slowly
A characteristic of African urbanisation is that rural population growth will abate
only slowly. Except in the diversifiers’ group, most of Africa’s rural areas are not emptying
fast (AfDB/OECD/UNDP, 2015; OECD 2016). Thus, while Africa urbanises, its rural
population will continue to grow at a rate of more than 1% per annum beyond 2045. SubSaharan Africa is expected to grow by more than 353 million additional rural dwellers
between 2015 and 2050. Continuing rural population growth in most of sub-SaharanAfrica contrasts with other world regions. Globally, rural population is forecasted tostart shrinking no later than by 2020. Figure 6.12 shows that sub-Saharan Africa is theregion of the world where the rural population will continue to grow the most (in stark
contrast to Latin America and the Caribbean).

Figure 6.12. Population increase in North and sub-Saharan Africa,
and in Latin America and the Caribbean, 1950-2050
Sub-Saharan Africa

North Africa

Million
1 200

Latin America and the Caribbean

Million
1 200

800

800

600

600

400

400

200

200

0

0
19
5
19 0
5
19 5
60
19
6
19 5
7
19 0
7
19 5
8
19 0
8
19 5
9
19 0
9
20 5
0
20 0
0
20 5
1
20 0
1
20 5
2
20 0
2
20 5
3
20 0
3
20 5
4
20 0
4
20 5
50

B. Rural population
1 000

19
5
19 0
5
19 5
6
19 0
6
19 5
7
19 0
7
19 5
8
19 0
8
19 5
9
19 0
9
20 5
0
20 0
0
20 5
1
20 0
1
20 5
2
20 0
2
20 5
3
20 0
3
20 5
4
20 0
4
20 5
50

A. Urban population
1 000

Source: Authors’ calculations based on UN DESA (2014).
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6. The implications of Africa’s urbanisation for structural transformation

The growth of towns and intermediary cities has strengthened the reciprocal linkages
between rural and urban development
While the debate on urbanisation often focuses on big cities, urbanisation has
actually been happening mostly in a rural-urban interface. A continuum of rural areas,villages, towns and cities of fewer than 500 000 inhabitants make up this interface.5
Figure 6.13 shows that the rural-urban interface remains important all over Africa,
particularly for the late urbanisers and agrarian countries where it has absorbed over
90% of total population growth.

Figure 6.13. Contribution to population growth by city size and rural-urban
interface by type of African country, 2000-10
Population growth from cities > 500 000 inhabitants, 2000-10
Population growth from urban areas < 500 000 inhabitants, 2000-10% of total population growth100

Population growth from rural areas, 2000-10

9

90

9
22

25

80

41

19

27

70
60

40

39

50

23

40

72

64

30
20

36

38

36

10

ur N ac e t urs- a l
ba
se
d
so
re

Ag

ra

ria

ns

rs
se
ni
ba
ur
te
La

ur
rly
Ea

Di

ve

ba

rs

ni

ifi

se

er

rs

s

0

Note: The countries in each group are listed in Annex 6.A1.
Source: Authors’ calculations based UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350645

Over 952 million Africans, 82% of Africa’s population, live at such a rural-urban
interface. Across the different regions, the share of the population living in settlements
smaller than 500 000 inhabitants is as follows: 91% in East Africa, 80% in West Africa,
77% in North Africa, 74% in Central Africa and 65% in Southern Africa. Looking at allof Africa’s urban areas, 55% have a population of fewer than 500 000 people. Africa’s
urbanisation has thus to a large extent taken the form of “urban villages”, diffusing urban
growth in smaller towns. In 2010, the growth of cities of fewer than 500 000 inhabitants
was second to that of the largest cities. The magnitude of this rural-urban interface
shows that most Africans retain a close relationship with rural areas.

Box 6.3. Settlement dynamics in West Africa
Urbanisation is the most spectacular manifestation of West African settlement dynamics
witnessed in past decades. Between 1950 and 2010, the region’s total population increased bya factor of four (from 72 to 320 million), while its urban population increased by a factor of
22 (from 6 to 133 million). West Africa now counts 1 950 urban agglomerations with more than
10 000 inhabitants. The average distance between cities has been reduced from 111 kilometresto 28 (OECD, 2016). In 2000, 94% of high-density rural areas were located in the urban catchment
area of towns with at least 50 000 inhabitants (OECD, 2013; see Map 6.1). Those rural areas, which
averaged more than 51 inhabitants per km2, accounted for 58% of the total rural population.

© AfDB, OECD, UNDP 2016

African Economic Outlook

159

6. The implications of Africa’s urbanisation for structural transformationBox 6.3. Settlement dynamics in West Africa (cont.)
Settlement dynamics in West African towns and intermediary cities show that urban and rural
populations are moving ever closer together, as documented in the Africapolis database updated
by the Sahel and West Africa Club. Rural areas that are well connected to urban markets havemore diversified local economies, with a higher share of off-farm employment and income from
non-agricultural activities. One-fourth of West Africa’s rural population is engaged in off-farmactivities. At current urbanisation levels, the economy-wide share of agricultural employment
is 50% at the regional level, down from 90% in 1950 (Moriconi-Ebrard, Harre and Heinrigs, 2016).

The traditional divides between rural and urban areas have increasingly blurred
Static categories of urban and rural no longer capture the hybrid nature of shifting
relations between cities and countryside (Agergaard, Fold and Gough, 2010; Berdegué
and Proctor, 2014). The phenomenon of “urbanisation of the countryside and ruralisationof the cities” observed in Tunisia by Miossec (1985) has become a general feature of thecontinent’s urbanisation trends.
Migratory practices have diversified. A gradual improvement in infrastructure,including the adoption of mobile phones, has led to a growing tendency towards
shorter and temporary migratory practices (Losch, Magrin and Imbernon, 2013). These
new patterns may comprise weeks or days but also daily commuting, where transportconditions allow. The degree of change in migratory practices often reflects the regional
density and quality of transportation, showing clear differences in networks. Circularmigration has increased since the 1980s. This refers to migration into a town followed
by a movement out of the town and back to a rural area, which could be a year or even
decades later (Potts, 2012). In South Africa, population trends show increasing circularmigration and the development of a rural-urban interface, leading to high formal
housing prices and to many informal settlements that are only temporarily occupied(OECD, 2008).
Increased mobility alters family structures and life styles. Different household
members may exert activities in different places – the village, the neighbouring villages,
the town, the capital or even abroad – thus diversifying their sources of income (GuétatBernard, 1998; Tacoli, 2003). Such practices generally do not disturb family cohesion.
They sometimes even create a kind of archipelago family economy (Losch, Fréguin-Greshand White, 2013). Living in multiple places produces functional spaces that often do notcorrespond to administrative boundaries (Cortes and Fayet, 2009; Ma Mung, 1999). This
mobility gradually results in a rural economy that is more diversified and often related
to some form of urban economy (Haggblade, Hazell and Reardon, 2007).
Many villagers become urbanised, while urban dwellers continue with some of theirprevious rural activities, notably urban farming. About 40% of African urban dwellers
are “engaged in some sort of agricultural activity” (FAO, 2012). According to Gallup data
for the period 2009-14, 85% of dwellers aged 15 or older in the towns of non-diversifier
African countries are involved in agriculture, while the share is 49% in big cities andsuburbs. In Africa’s diversifier countries, the ratio stands at 32% in towns and 16% in big
cities and suburbs (Figure 6.14).
These dynamics lead to new spaces appearing between rural and urban areas,
sometimes far from government supervision (Diop, 2010). Urbanisation happens along
a continuum of settlements without clear distinction between urban and rural. Next to160

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6. The implications of Africa’s urbanisation for structural transformation

the appearance of megacities, urban population growth and urban sprawl have also led
to urban corridors (see Chapter 7). Examples are Cairo-Alexandria, the 600-kilometre
Ibadan-Lagos-Cotonou-Accra urban corridor and Kenitra-Casablanca-El Jadida. Such
conurbations can also create urban regions or megalopolises, such as Greater Cairo, orGauteng which includes Johannesburg, Midrand and Pretoria. Peripheral urban growthis often a challenge for local governments that are unable to conduct censuses and toprovide services to those populations. For instance, the urban growth of Togo’s capital,
Lomé, happens mainly outside the city’s administrative borders: the city has no reliable
statistical data, recent urban planning document, or even a land-use inventory for thoseareas outside its remit. Thus, the municipality has virtually no latitude to increase its
receipts (Paulais, 2012: 11; 76; 132).

Diversifiers

Non-diversifiers

Figure 6.14. Urban farming in big cities and small towns among
African countries, 2009-14
Big city and suburbs

Small towns

Big city and suburbs

Small towns
0

10

20

30

40

50
60
70
80
90
Share of population aged 15 or older involved in farming

Note: Gallup provides the two categories “small towns” and “big city and suburbs” through self-identified
questions. Non-diversifiers include Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central
African Republic, Chad, Democratic Republic of the Congo, Gabon, Ghana, Guinea, Côte d’Ivoire, Kenya,
Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Senegal, Sierra Leone,
Tanzania, Togo, Uganda, Zambia and Zimbabwe. Diversifiers are Mauritius (1 000 respondents) and South Africa(4 984 respondents).6
Source: Authors’ calculations based on Gallup World Poll (2015).
12 http://dx.doi.org/10.1787/888933350650

Urbanisation has reversed or slowed down in some countries
Rural areas remain important also because Africa’s urbanisation has not beena linear process: over time, urbanisation trends have varied in direction and pace.
Since the 1980s, the Central African Republic, Côte d’Ivoire, Mali and Zambia haveexperienced periods of de-urbanisation according to their censuses. In Benin, Burkina
Faso, Mauritania, Mozambique, Niger, Senegal and Zimbabwe, the growth of large
and medium sized-towns has stagnated or increased slowly (Potts, 2009: 253). These
episodes of de-urbanisation or slow urbanisation were often related to economic crises
caused by the shortfall of commodity exports and the ensuing structural adjustmentthat cut subsidies to urban populations (Potts, 2012). Although de-urbanisation occurredin other parts of the world (for instance in China during the Maoist era, in Cambodia
during Polpot’s rule and in Thailand in the aftermath of the 1998 financial crisis), deurbanisation episodes have been more frequent in sub-Saharan Africa over the past
30 years (Bairoch, 1988; Clark, 2009).

© AfDB, OECD, UNDP 2016

African Economic Outlook161

6. The implications of Africa’s urbanisation for structural transformation

Table 6.2. Pace of urbanisation trends in selected African countries, 1980-2012
Counter-urbanisation(urban share falling)

Slow urbanisation(<2% between censuses)

Rapid
urbanisation

Côte d’Ivoire 1988-98
Central African Republic 1988-2003
Mali 1987-98
Zambia 1980-90, 1990-2000
Zimbabwe 2002-12

Benin 1992-2002
Ethiopia 1994-2007
Malawi 1998-2008
Mauritania 1988-2000
Niger 1988-2002
Sudan 1993-2008
Togo 1981-2010

Burkina Faso 1996-2006
Cameroon 1987-2005
Tanzania 1998-2002

Source: National census data, quoted by Potts, 2013: 11.

According to United Nations estimates, the rural population grew faster than theurban population between 1990 and 2010 in five African countries: Egypt, Liberia,
Mauritius, Swaziland and Zambia. In total, 11 African countries experienced negative
or slow urbanisation, increasing less than 2.2 percentage points in urbanisationlevels between 1990 and 2010: the Central African Republic, Chad, Comoros, Djibouti,
Egypt, Liberia, Libya, Mauritius, Niger, Swaziland and Zambia. It is projected that four
countries will experience slow urbanisation, increasing less than 2 percentage points inurbanisation levels between 2010 and 2030: Djibouti, Mauritius (which will continue toexperience negative urbanisation), Swaziland and Zimbabwe.

Urbanisation represents challenges for development and the environment
Rapid urbanisation with slow structural transformation creates a significant
obstacle to achieving the development objectives set by Agenda 2063 and the Sustainable
Development Goals. While African urbanisation patterns are diverse, up to now few may
be deemed sustainable economically, socially or environmentally, as confirmed by the
AEO 2016 experts’ survey (Figure 6.15). Without productive jobs in rural areas, mosteconomies have seen labour move from agriculture into urban, low-skilled and informal
service activities. Access to public goods remains highly unequal even within urban
areas, often putting the social fabric at risk. African cities are facing an unprecedented
combination of developmental challenges together with rising environmental risks suchas unsafe sanitation, climate change and air pollution.

Figure 6.15. Are urbanisation trends sustainable in your country?
Africans’ responses
YesNo

Are they ecologicallysustainable?

Are they sociallysustainable?

Are they economicallysustainable?

0

5

10

15

20

25

30

35

40
45
Number of respondents

Note: Survey responses by country economists of the AfDB and UNDP in 45 country offices in Africa about trends
in the country they monitor. Responses are weighted by one per country.
Source: AEO experts’ survey, 2016.
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Urban settlements hold informal workers in low value-added service sectors
The steady economic growth and rapid urbanisation of the last decade and a half
have not been matched by proportional formal employment creation. The proportionof the labour force in vulnerable employment dropped by only 2% between 2000 and2015, despite exceptionally robust GDP growth rates of over 5% a year fuelled by along commodity boom (Parnell, Pieterse and Haysom, 2016). Most male and female
workers thus stayed in the informal services sector, for instance as street vendors, withno perspective of moving to more productive activities and durably improving theirlivelihoods. The informal economy is estimated at 61% of urban employment and 93%
of all new jobs created (Kessides, 2005). For African women, the informal economy isestimated to represent 92% of all job opportunities outside of agriculture, overwhelmingly
as self-employment or own-account work, though up-to-date statistics are lacking(ILO, 2002, quoted by Kessides, 2005). Informality remains a hallmark of many Africancountries, though it remains widespread in many other developing countries at different
urbanisation levels (Figure 6.16).

Figure 6.16. Urbanisation levels and share of informal work in total employment
in six African countries and 26 non-African countries, 2010
African countries
Urbanisation level (%), 2010100

Uruguay90

Other countries

Argentina

Venezuela
Brazil80
Turkey70

Armenia60

FYR Macedonia

South Africa

MexicoDominican Republic
Costa Rica

EcuadorNicaragua

PanamaLiberia40

Namibia

Moldova

BoliviaParaguay

Philippines
ZambiaHonduras
Madagascar

Viet Nam

30

Lesotho20

Tanzania

Mali
India

Sri Lanka
Uganda100

Peru

El Salvador

Serbia50

Colombia

0

10

20

30

40

Source: ILO (2012) and UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350673

50

60

70
80
90
% of informal jobs in total employment

The drivers of informality are many. This informality is often an outcome ofaccommodating rapid population and economic growth in cities. It is also due to a lackof institutional capacity to protect property rights, enforce regulations and manage
planned urban expansion (Spence, Clark Annez and Buckley, 2009: 26-27).
The weak performances of the modern manufacturing and service sectors meanthat wage-paying jobs are rare, and most people are trapped in vulnerable employment
or are forced out of the labour force altogether. Based on an analysis of Gallup data,
Africa’s working-age population is more likely to have a wage-paying job in big cities
than in towns at 38% and 25% respectively (Figure 6.17). This gap in wage-paying fulltime jobs between cities and towns is wider in non-diversifier countries than in diversifiercountries, reflecting the deeper extent of structural transformation in smaller cities andtowns in the diversifier countries. In contrast, towns have a higher share of populations
in vulnerable employment and that are unemployed than big cities, and this share ismuch higher in towns among non-diversifiers. Thus, 84% of respondents are in vulnerable
employment and unemployed, in contrast with a combined 55% in big cities in diversifiercountries.

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.17. Type of work by size of African city and country typology (%), 2009-14
Unemployed

Part-time employment

Self-employment

Full-time waged job% of labour force
100
15

20

22

22

19

17

19

29

10

80
30

22

37

60
17

20

25

30

40

20

18

45

38

41
28

25
0

Big cityand suburbs

Small towns
Africa37

16
Big cityand suburbs

Small towns

Diversifiers

Big cityand suburbs

Small towns

Non-diversifiers

Note: Gallup provides the two categories “small towns” and “big city and suburbs” through self-identified
questions. The employment categories are also provided by Gallup. Diversifiers include Egypt, Morocco, South
Africa and Tunisia. Non-diversifiers include Algeria, Botswana, Burkina Faso, Burundi, Cameroon, Central African
Republic, Chad, Democratic Republic of the Congo, Ghana, Côte d’Ivoire, Kenya, Liberia, Libya, Malawi, Mali,
Mauritania, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Uganda, Zambia andZimbabwe (see Annex 6.A.1).
Source: Authors’ calculation based on Gallup World Poll (2015).
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Access to public goods remains unequal in most urban areas
Diversifiers have reduced urban poverty more rapidly than other countries
The incidence of urban poverty is much higher in Africa than on other continents:
62% of sub-Saharan Africa’s urban population live in slums (UN-Habitat, 2008).7 A slum
household is defined as deprived in at least one of the five following amenities: durable
housing, sufficient living area, access to improved water, improved sanitation or secure
tenure (UN-Habitat, 2006). Many African countries face a real risk of tripling their slum
population by 2050 (UN-Habitat, 2014).
The Multidimensional Poverty Index (MPI) shows that urban poverty is high in
Africa. The MPI is a composite measure of poverty headcount and deprivation intensity
faced by households. Africa’s urban MPI is 0.151, much higher than the average for the
sample of 54 non-African developing countries at 0.026 and twice the level of South Asia,
the next poorest region (Figure 6.18):• Within Africa, the group of diversifier countries has an urban MPI level of 0.009. Thisis considerably lower than the rest of the continent and even lower than all otherdeveloping regions except developing Europe and Central Asia.
• The natural resources-based countries face the highest level of multidimensional

poverty, followed by the agrarian countries, the late urbanisers and the early urbanisers.

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.18. Urban Multidimensional Poverty Index by world region
and AEO 2016 typology group
African countries by typology groups

Other world regions

Africa - Natural
resources-based
Africa - Agrarians
Africa - Late urbanisers
Africa - Early urbanisers
South Asia
Middle East
East Asia and the Pacific
Latin America
and the Carribean
Africa - Diversifiers
Europe and Central Asia
0

0.05

0.10

0.15

0.20
0.25
Multidimensional Poverty Index in urban areas

Note: The countries included in each group are Africa - natural-resources based: Chad, Congo, Democratic Republicof the Congo, Guinea, Mauritania, Nigeria, Somalia, South Sudan, Zambia, Zimbabwe; agrarians: Burkina Faso,
Burundi, Malawi, Mali, Niger, Uganda; late urbanisers: Central African Republic, Ethiopia, Kenya, Madagascar,
Mozambique, Rwanda, Sierra Leone, Sudan, Tanzania; early urbanisers: Benin, Cameroon, Côte d’Ivoire, Ghana,
Liberia, Senegal, Togo; South Asia: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan; Middle
East: Iraq, Jordan, Palestine, Syrian Arab Republic, Yemen; East Asia and the Pacific: Cambodia, China, Indonesia,
Lao, Mongolia, Philippines, Thailand, Timor-Leste, Vanuatu, Viet Nam; Latin America and Caribbean: Barbados,
Belize, Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, Guyana, Haiti, Honduras, Jamaica, Mexico,
Nicaragua, Peru, Saint Lucia, Suriname, Trinidad and Tobago; Africa diversifiers: Egypt, Morocco, South Africa,
Tunisia; Europe and Central Asia: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Georgia,
Kazakhstan, Kyrgyzstan, Former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia, Tajikistan,
Ukraine, Uzbekistan.
Source: Authors’ calculations based on data from Alkire and Robles (2015).
12 http://dx.doi.org/10.1787/888933350695

The urban poor in Africa face four main risks: i) health risks resulting from poor living
conditions, overcrowding and lack of basic services; ii) livelihood risks from vulnerable
employment, hazardous occupation and discrimination in labour markets; iii) external
shocks from natural disasters that disproportionately affect informal settlements; andiv) governance risks of not receiving adequate policy attention (Tacoli, McGranahan
and Satterthwaite, 2015). Other than the diversifiers’ group, African urban areas arecharacterised by higher poverty headcounts as well as more intense deprivations thanurban areas in other regions. Thirty-four per cent of Africa’s urban inhabitants living
outside the diversifier countries are deprived in at least three of the ten MPI dimensions,in contrast to 3% in the diversifier countries and 9% in other non-African developing
countries. Africa’s urban poor are most deprived in their living standards, followed byhealth care. Almost a third of Africa’s urban poor do not use clean cooking fuel. A quarterof the urban poor lack access to electricity and sanitation.
Poor living conditions affect well-being in urban areas
The past decade of robust economic growth has not improved subjective well-beingof Africa’s urban inhabitants. Thirty percent of urban respondents find their living
standard good and 5% very good, but the share of positive responses has remained
constant at only about 35% since 2002/03 (Figure 6.19). In contrast, the share of urban
respondents finding their economic conditions bad or very bad has always been higher
and increased from 41% to 45%. Nonetheless, urban residents generally think they are
better off than their rural counterparts, 50% of whom consider their living conditions
unfavourable.

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.19. Self-evaluation of current personal economic conditions
by African urban respondents
Very good

Fairly good

Neither good nor bad

Fairly bad

Very badA. Titre

2014-15
2011-13
2008-09
2005-06
2002-032014-15 (Rural)
0

10

20

30

40

50

60

70

80

90
100
% of respondents

Note: The country coverage gradually increases from 16 countries in 2002/03 to 34 countries in the latest wave
(2014/15).
Source: Extracted from Afrobarometer (2015).
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With high urban inequality, segregation is becoming an increasing risk for social
cohesion
Africa has some of the world’s most unequal cities. The distribution of income
among urban households as measured by the Gini coefficient8 stands at 0.539 for theurban areas in a sample of 12 countries (UN-Habitat, 2010a). Johannesburg has one of theworld’s highest Gini coefficients at 0.75 (UN-Habitat, 2010b). The social consequences ofurban inequality affect human development outcomes, limit access to opportunities andperpetuate inequity (UN-Habitat, 2008). Crime rates and insecurity are high and tend
to grow with city size, such as in Johannesburg and Lagos. A survey of 9 sub-SaharanAfrican countries shows that urban residents are much more concerned on average
about the problem of crime than rural residents, with differences ranging between 8 to
15 percentage points (Figure 6.20).
The spatial divide heightens social disparities across neighbouring urban areas.
Large gated communities heighten spatial segregation and hampers social cohesion.
One example is Eko Atlantic City on an artificial island five kilometres away from Lagos
that offers exclusive amenities for upper class and expatriate elites (Kester, 2014). In
particular for women, perceived or actual threats of violence have direct impacts on
their ability to freely move in public spaces. In Nairobi, over 700 gender-based physicalviolence in public spaces including bus stops and parks were reported in 2010-11 (McEvoy,2012). Results from a study in Kigali found that 42% of women were concerned about
sexual harassment when traveling to educational institutions during the day and 55%
after dark (UN Women, 2013).

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.20. Africans saying “Crime is a very big problem in our country”, 2015
Urban

Rural

% of respondents
100
90
80
70
60
50
40
30
20
10
0
Ethiopia

UgandaSouth Africa

SenegalGhana

Burkina Faso

Source: Pew Research Centre (2015).
12 http://dx.doi.org/10.1787/888933350713

Box 6.4. The flux of urban refugees to African cities
The flux of refugees to cities, or urban refugees, poses specific challenges for social
cohesion, urban economic productivity and the integration of refugees into society fora decent life. International migration within Africa has been linked to political crises,
wars and their economic fallout, increasing the number of refugees in urban areas(Naudé, 2008).
Nairobi, Kenya, has 46 000-100 000 refugees from 8 neighbouring countries. Refugee
camps such as Dadaab have become as large as towns, sheltering hundreds of thousands
refugees from Somalia since the early 1990s. The influx of refugees to Nairobi’s districtof Eastlands in the early 1990s led to an increase of over five-fold in rent prices for
single rooms pushing many Kenyan tenants out, while refugees often lived in squalid
conditions of over-crowding (Campbell, 2006; Lindley, 2007). But the consequences canalso be positive: the arrival of refugees created bustling business activity. The EastleighBusiness Community registered a total of 2 800 mainly Somali business people between
its founding, in 1999, and 2005 (RCK, 2006).
Other countries have also been affected:• Sudan’scapital, Khartoum, accommodates 1.5 million displaced persons(Paulais, 2012).

• In Egypt, Cairo hosts a million refugees from Sudan, in addition to thosefrom other countries. The situation is similar in Alexandria, Egypt’s second
largest city. Policies generally ignore urban refugees, though many face abuse(Paulais, 2012: 139).
• In South Africa, local governments have created helpdesks for migrants in thecities of Johannesburg, Matatiele, Musina and Tshwane. They attempted to respondto violent riots against foreigners in 2008 and 2015 (AfDB/OECD/UNDP, 2009).

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6. The implications of Africa’s urbanisation for structural transformation

High environmental risks compound the developmental challenges of Africa’s urbanisation
As it urbanises, the African continent faces a conjunction of important environmental
and developmental challenges, which other regions have not faced simultaneously withsuch magnitude. Those include the fast rising impact of air pollution on the healthand economy of African people as well as the multiple consequences of global climatechange affecting urban areas.
The costs of air pollution are abnormally highUrbanising Africa faces multiple environmental and developmental issues. Unlike
regions that urbanised earlier, Africa must deal with them simultaneously.
Environmental risks – air pollution, unsafe water and unsafe sanitation – require
attention. In 2013, ambient particulate matter pollution (APMP) caused at least
246 000 premature deaths. Deaths from household air pollution (HAP) have risen, withindoor air pollution being the number one cause of respiratory illness among womenand children in African informal settlements (UN-Habitat, 2008). By contrast, deaths
from other long-standing environmental risk factors such as unsafe water and unsafe
sanitation have fallen steadily (Table 6.3).

Table 6.3. Premature deaths from selected major risk factors in Africa,
1990-2010 (five-year intervals) and 2013
1990

1995

2000

2005

2010

2013

Unsafe water837 702780 095

751 892

644 136561 342542 855

Unsafe sanitation

615 540573 084

551 948468 815407 092

391 656

Childhood underweight474 819467 921420 606

309 945273 294

275 813

Household air pollution

396 094422 895

436 463429 199

450 969

466 079

Ambient PM pollution

181 291

190 933

200 854

213 429

227 428

246 403

Source: Roy (forthcoming).

As they face those new challenges, African cities cannot borrow from others’
experience. Other world regions have never exhibited such convergence of importantenvironmental and developmental challenges. By 1990, China’s childhood underweight
death toll was low enough for APMP deaths to dominate it at a ratio of 11:1. By 2013,
China’s childhood underweight death toll had been more or less eliminated, and APMP
deaths dominated it at a ratio of 671:1. Africa can hardly tackle the new risk factor of
APMP, with its approximately 250 000 deaths in 2013, together with the old problem ofchildhood underweight, with its 275 000 deaths. Environmental challenges such as APMP
are to a great extent caused by urbanisation and, more specifically, by motorisation.
While it can be viewed as a post-industrial risk, APMP is already relatively high in
Africa although the continent has reached only the early stages of industrialisation.
Developmental challenges like under nourishment also need attention. “Childhood
undernutrition” remains the leading risk factor for premature deaths in sub-SaharanAfrica.9 Being underweight is the third cause of premature deaths in Africa (Table 6.3).
Roy (forthcoming) translates premature deaths into economic costs. Using the valueof statistical life (VSL) method, measuring the cost of mortalities at the level of society
as a whole, he estimates that air pollution cost Africa USD 447 billion in 2013, a third of
its GDP (Table 6.4). For Africa, the estimated economic cost of premature deaths from all
four selected environmental risk factors, APMP, HAP, unsafe water and unsafe sanitation,exceeds USD 850 billion or almost two-thirds of GDP.

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6. The implications of Africa’s urbanisation for structural transformation

Table 6.4. Economic costs of premature deaths from selected major risk factors
in Africa (USD million), 2013

Total (of countries
with available data)

Ambient particulatematter pollution

Household air
pollution

Unsafe water

Unsafe sanitation

Childhoodunderweight215 212231 798

248 191

160 670

134 468

Note: All computations use the OECD base value of USD 3 million in 2005, which reflects an aggregation ofindividual values for small changes in risk of death, as found in the OECD countries (OECD, 2012b). This basevalue is adjusted for differences in per capita GDP and adjusted for post-2005 income growth and inflation.
Available data are insufficient to complete calculations for the following countries: Eritrea, Sierra Leone,
Somalia and Zimbabwe.
Source: Roy (forthcoming).

Climate change and urban growth will heighten environmental pressures on urban
areas
Although African countries contribute less than 4% to global gas emissions,climate change imposes increasingly high costs on the continent (FAO, 2008). Averagetemperatures in Africa are predicted to increase 1.5-3°C by 2050, magnifying the impactsof climate change that can already be witnessed (UNEP, 2007). Should climate change
continue unmitigated, the sole effect of rising temperatures could lead most Africancountries to be poorer in 2100 than today (Burke, Hsiang and Miguel, 2015). Strongurban demographic growth inevitably magnifies environmental pressures on urban
ecosystems. The poorest households, which are highly dependent on natural resources,
are the most affected by environmental degradation.
Climate change and environmental degradation caused by urban growth havedifferent impacts on various African cities and regions:• Flooding risks in low elevation coastal zones: 50% of African settlements with

1-5 million inhabitants lie at low elevation coastal zones (Kamal-Chaoui andRobert, 2009). Flooding increases in cities because they have more impervious
surfaces (Paulais, 2012). The populations and assets of port cities like Abidjan,
Douala or Tunis are vulnerable to sea level rise. Agricultural land may be lost as
well (Map 6.2). Egypt’s coastal zone contains 40% of the country’s total populationand is expected to experience a 6.4% decrease in GDP per meter of sea level rise
(Brown, Kebede and Nicholls, 2011). For Nigeria, estimates lay at a 0.3% GDP loss,
and for Senegal at 12-17%.
• Abrupt

weather changes: Several countries face changes in weather patterns,
varying in duration and intensity. East African countries tend to have heavier
rainfall. Southern Africa experiences dryness, drought and wildfires. In parts of
the Sahel, lower than average rainfall could lower corn production and endanger
access to food, for example in Nairobi as shown by the Agricultural Stress Index(FAO, 2014).

• Changing

rain patterns: An acceleration of the hydrologic cycle will increase
patterns of extreme rainfall (IPCC, 2007). Annual average adaptation costs in Africa
could amount to USD 18 billion between 2010 and 2050, mainly costs in the watersector and coastal protection. While the mean flow of water would increase, water
availability would drop in Ethiopia’s capital Addis Ababa by 73%, in Botswana andSouth Africa by 20%, and in Somalia by 42% (AfDB, 2011).

• Heat extremes: Heat extremes and urban heat islands have impacts on healthand vegetation and create further climate warming (Huang and Lu, 2015). Urban
heat islands are higher temperatures in the cities resulting from human activity
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6. The implications of Africa’s urbanisation for structural transformation

the atmosphere, and the covering of the soil surface. In North Africa, heat stresscurrently causes 2 000 fatalities per year but they are predicted to rise to 47 000 in
2080 (OECD, 2015). Regions close to the Sahel cities such as Ouagadougou will also
be affected. African countries could experience 907 000 deaths in 2080. In a city like
Johannesburg, the hottest vulnerable areas identified are suburbs where density ishigh and vegetation low (Hardy and Nel, 2015).
• Deforestation: Fuelwood supplies more than 80% of household fuel in Africa andaccounts for 90% of harvested wood. Map 6.3 shows that recent deforestation inCentral Africa clusters especially around major transport links and urban centres
such as Kinshasa.
• Desertification:

Land degradation and conflicting land-use patterns areconsequences of continuous land desertification, high population growth andexhaustive exploitation of resources. Desertification already affects two-thirds ofAfrica’s land and 65% of its population. It is responsible for large parts of ruralurban migration, for example to Ouagadougou, Burkina Faso (Pauleit, 2015). In the
Sahel and in the Horn of Africa, 60 million people are likely to migrate between
2016 and 2020 because of degraded areas.

Box 6.5. Climate change and rural-urban migration in sub-Saharan Africa
Climate change has led to rural-urban migration in sub-Saharan Africa. This is largely
because the area’s agriculture depends heavily on rainfall, more so than other world
regions (Barrios, Bertinelli and Strobl, 2006: 4).
• Declining rainfall has increased urbanisation rates in sub-Saharan Africa(ibid.: 18).
• The decline in moisture (measured by an index combining precipitation andpotential evapotranspiration) has affected agricultural productivity, pushingrural dwellers to urban areas (Henderson, Storeygard and Deichmann, 2014: 2).
• While rainfall trends have fallen steadily since the 1970s, a 1% fall in precipitation

is estimated to have increased sub-Saharan Africa’s urbanisation rate by 0.45%(Barrios, Bertinelli and Strobl, 2006: 18).
• Inefficient management of rural water and land resources has also contributed

to rural-urban migration by lowering agricultural productivity. Likewise,
inappropriate land tenure systems have deterred sustainable investment (Global
Centre for Food Systems Innovation 2014: 59).
It is unlikely that urbanisation driven by decreases in rainfall promotes Africa’s
structural transformation. By pushing the labour force out of rural areas, drier conditions
can increase urban productivity in cities endowed with an industrial base, particularly
those with an export sector not wholly dependent on local agriculture (Henderson,
Storeygard and Deichmann, 2014: 1; 22). However, few African cities have a sufficiently
industrialised export base to make productive use of additional rural migration(ibid.: 25).

Policies should focus on productive jobs and public goods for the growing
urban population
The history of Africa’s urbanisation is certainly singular but not fundamentallydifferent from urbanisation experiences in other world regions. This singularity owes
mainly to the continent urbanising at lower levels of income than others but also toa number of policy dysfunctions over the past decades (UN-Habitat, 2014). While170

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6. The implications of Africa’s urbanisation for structural transformation

dysfunctions are a part of any urbanisation process, rapid urban growth has compounded
their consequences, particularly in terms of urban overcrowding, lack of connectivity
and inefficiencies impeding the provision of public goods.

Investment in urban infrastructure must keep up with rapid urban growth
Among the policy-induced factors explaining why urban infrastructure has not kept
up with strong urban growth, three areas stand out: public and private actors have notsufficiently upgraded the urban infrastructure; steadily high fertility rates in urban
areas have contributed to overcrowding through fast urban growth; and dysfunctional
real estate markets have led to the explosion of informal housing.
Governments must upgrade the urban infrastructure
Urban planning and urban finance have greatly lagged all over Africa(UN-Habitat, 2014; 2008). Most African countries have urbanised later than otherworld regions. Many big cities are colonial legacies that were not planned to host large
populations. As such, several African capitals stemmed from a rent-based or extractive
vision of the economy that is not conducive to structural transformation (AfDB/OECD/
UNDP, 2015).
Some planned cities built soon after independence have faced unexpectedly highpopulation density leading to severe congestion. Mauritania’s capital, Nouakchott,
was built in 1958 as an administrative capital for an expected capacity of fewer than
15 000 inhabitants, but it has grown by more than 9% annually since 1950 to reach almost
1 million inhabitants in 2015 (AfDB/OECD/UNDP, 2015: 182). Similarly, booming urban
growth at 5.3% a year in Angola has overwhelmed the existing capacity of provincial
capitals where existing systems were originally designed for smaller populations. Twothirds of the population live in urban slums and peri-urban areas with limited access tobasic services. Outside Luanda, only four cities have sewerage collection systems, andthese serve only central urban areas covering 17% of the population (USAID, 2010).
Investment in urban infrastructure has not kept pace with rapid urban population
growth, decreasing the marginal utility that comes from economies of scale whenproviding services to a larger urban consumer base. On average in sub-Saharan Africancountries, gross domestic investment has remained constant at less than 22% of GDP
since 1960, whereas it has increased to 42% in the East Asian developing countries(World Bank, 2015). Large pockets of poverty and vulnerable employment have often
prevented public and private investment in urban infrastructures, magnifying urban
congestion effects.
One-third of developing countries’ total infrastructure needs concern urban
areas (UCGL, 2007). African cities’ investment needs have been estimated at around
USD 30 billion per year, of which USD 20 billion for sub-Saharan Africa (Paulais,
2012: 100). Depending on development levels, African countries would need to spend
5-7% of their GDP on public infrastructure, i.e. a minimum of USD 100 billion per year
(World Bank, 2005). Determining the local finance gap for specific cities depend on
specific needs, urban density and various methods of calculation.
Municipal governments of African cities do not have the resources to tackle thesechallenges by themselves. Cities’ expenses and receipts per inhabitant are very low(Figure 6.21). At around USD 40 per capita per year, the revenues of capital cities such as
Dakar and Nairobi fall very short of the financial needs induced by urban growth, andinfrastructure expenses cannot match demand (Figure 6.21). The financial situation ofintermediary cities is even weaker with less than USD 1 spent per capita per year on
average.

© AfDB, OECD, UNDP 2016

African Economic Outlook1716. The implications of Africa’s urbanisation for structural transformation

Figure 6.21. Operating revenue and capital expenditure per capita in selected
African capitals and intermediary cities
Operating revenue (USD per inhabitant)

Capital expenditure (USD per inhabitant)

USD per inhabitant
45

44.0
39.0

30

26.3
23.0

14.4
12.0

3.0
0.5

0.3

Capital cities

2.2

2.7
0.3

0.2 0.8 0.1

1.9

0.1

2.1

0

0.6 0

Mafia (Tanzania)

3.1

Boghe (Mauritania)

0.9

Majunga (Madagascar)

0.7

Matana (Burundi)N’djamena (Chad)

Kigali (Rwanda)

Banjul (Gambia)

Brazzaville (Congo)

Kampala (Uganda)

Dakar (Senegal)

0

3.9
1.2

Bouaké (Côte d'Ivoire)

2.0

Bamberi (Central African Republic)

5.5
2.1

Nairobi (Kenya)

11.4

7.1

Mombassa (Kenya)

7.6

8.6

Mbelwa (Malawi)

10.3

Saint-Louis (Senegal)

12.5

Bujumbura (Burundi)

14.0

Lomé (Togo)

15

Intermediary cities

Source: Yatta (2016) based on CGLUA (2014).
12 http://dx.doi.org/10.1787/888933350725

Gender blind infrastructure also contributes to urban dysfunctions by exacerbating
inequalities existing between women and men. Women are affected by urban
infrastructures unsuitable to their needs. Longer distances from the closest water source
contribute to women’s time poverty: on average, women in sub-Saharan Africa travel
over six kilometres every day for clean water, and women and girls are responsible for
71% of water collection in the region (UN et al, 2010). In Addis Ababa, exposure to violenceand sexual harassment in public places influences women’s employment choices(ActionAid, 2011). Gender blind infrastructure also affects girls’ education opportunities
and the unequal time women spend on unpaid care activities.
Policies should provide more affordable formal housing
Weak land rights can constrain urban economies, particularly formal housing
markets. Formal housing markets do not respond efficiently to the growing demandof urban housing. Important housing demand outstrips the formal market, causing a
housing shortage and contributing to high prices. As a result, formal housing is often
unaffordable for middle- or lower-income households, pushing them into the informal
housing market. In the East African Community, less than 10% of the population canafford a house on the formal market (CAHF, 2015: 220). Over 62% of sub-Saharan Africa’s
urban dwellers live in informal settlements.
By and large, Africa’s housing markets suffer from inadequate and unco-ordinatedhousing policies. Land rights and legal ownership are generally weak, except in thediversifier countries, which boast some successful examples of containing the expansion

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6. The implications of Africa’s urbanisation for structural transformationof informal urban housing (see Chapter 7). Land tenure systems in most sub-SaharanAfrican countries are inherited from customary law where land titles do not exist.
Land ownership is often unclear, and legalisations of settlement are disputed (Collier,
2013: 8). Land grabbing – the misallocation of public land to private actors with politicalconnections – occurs commonly at the expense of affordable housing. At the same time,
informal housing can be extremely expensive relative to residents’ income. In Kibera
and Mathare, Kenya’s largest slums, landlords investing in rental housing are able toreap return rates on their investments as high as 100% and 70%, respectively (Paulais,2012).
By contrast, diversifier countries show examples of improving the housing market
in urban areas. Slums in North Africa have diminished substantially, particularly in
Morocco and Tunisia (CAHF, 2015: 223). Rate of homeownership is high, for instanceat 89% in Mauritius. Comprehensive management of housing and land has contributed
significantly to turning Mauritius’ real estate sector into a driver of economic growth.
South Africa has a well-established property market and a world class cadastral system(ibid.: 136-181). Allocating clearly defined land rights is fundamental for investment inland or infrastructure development (King and Napier, 2015: 7).
More broadly, lack of financial support and inadequate structure of banks affect theconstruction industry and households. The few formal construction firms in sub-SaharanAfrica cater to high-end housing and housing for civil servants (Collier, 2013: 10). Lackof mortgage institutions and inadequate administrative structures of commercial banks
prevent firms from financing mass housing. Due to the lack of collateral and restrictive
lending policies, 85% of Africa’s urban population cannot secure formal housing loans(Mo Ibrahim Foundation, 2015: 22). In the Economic and Monetary Community of Central
Africa, only 5% of private-sector employees have access to mortgage finance fromcommercial banks (CAHF, 2015: 215).
Atypically high construction costs increase the price of formal housing. Materials
such as cement are around three times higher than world prices, which also accounts
for the low competitiveness of savings and loan agencies (Collier, 2013: 6).10 Government
initiatives to build residential districts have sometimes ended up erecting “ghost cities”
due to the high costs of apartments, such as the district of Nova Cidade de Kilamba,
built 30 kilometres outside Luanda and hosting only 10% of its capacity (Mo Ibrahim
Foundation, 2015: 22).

Lack of urban connectivity has offset economies of agglomeration
Urban connectivity helps to support economies of agglomeration, or use less material
infrastructure to support a larger population. Urban policies must better promote theconnectivity among workers and firms (labour markets), among firms themselves (input
markets), and among producers and consumers (local and international consumer
markets) (Collier, 2016). Urban sprawl spreads people further away from each other, while
weak transportation infrastructure increases the cost of connecting them together.
Most cities have expanded through urban sprawl
In many sub-Saharan African cities, urban expansion has been fragmented andsparse, with new development leapfrogging from the central cores (Angel et al, 2010a).
African cities thus suffer from the challenges of urban sprawl, decreasing the benefits ofconnectivity within urban areas.

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6. The implications of Africa’s urbanisation for structural transformation

African cities are expanding into rural areas, similar to the global trend(Angel et al., 2010a). The Atlas of Urban Expansion shows that 12 sub-Saharan African
cities have a low density at 81 inhabitants/km2, while 6 North African cities havedensities similar to Southeast Asian cities at 155 inhabitants/km2. The African cities
studied have built up rapidly; the lowest rate is 2.3% a year (Johannesburg). The rates
have often surpassed and even more than doubled that of population growth. Kigali
has expanded by 18% a year, tripling the size of its population in only 15 years. Several
cities, such as Kampala, have achieved rapid population growth at 4.3% with even fasterphysical expansion at 10.6% a year, reducing their density level (Figure 6.22).

Figure 6.22. African cities’ expansion of built-up areas and population growth,
1990-2000
Built-up area expands three times faster than the urban population

North Africa

Built-up area expands twice as fast as the urban population

Sub-Saharan Africa

Density remains constant

Other world regions

Annual expansion of built-up areas (%)
25

20
Kigali15

10KampalaAlgiers0

Accra
Ouagadougou
BamakoPort Sudan Casablanca
Marrakech Addis Ababa
Alexandria
Cairo
Aswan
Ibadan Johannesburg

Harare Tebessa

5

Ndola

-2

-1

0

1

2

3

4

BanjulPretoria

7
5
6
Annual population growth (%)

Source: Authors’ calculations based on Angel et al. (2010a).
12 http://dx.doi.org/10.1787/888933350732

Sub-Saharan Africa’s ratio of urban to arable land has changed quickly, though it
remains currently low at 1.5%. In Lagos, frontier residential development, replacing
forests and farmlands, already affects rural livelihoods at the urban fringe. This problem
is compounded by institutional factors such as the skewed distribution of private land,
the high costs of undeveloped land, and weak land-use planning regulations. Propoor land tenure and housing policy reforms can address such issues (Braimoh andOnishi, 2007).
At current rates of population growth and decreasing density, African urban areas
will continue to expand quickly. Sub-Saharan Africa’s urban areas will likely growat least four-fold between 2010 and 2050, even if the rate of land expansion remains
constant, since the urban population is expected to quadruple from 295 million
to 1.15 billion. However, if the consumption of land per capita increases at 1% or 2%
per annum, the land area of cities is likely to increase six- or eight-fold, respectively(Figure 6.23). By comparison, the density of urban areas in developing countries
decreased at nearly 2.5% per annum between 1990 and 2000. Between 2000 and 2010,
Accra’s density decreased at an average annual rate of nearly 2.5%, while Algiers’ density
has decreased by 4.3% per year (Angel et al., 2015). Such high rates of urban expansion
seem environmentally unsustainable as they reduce the supply of ecosystem services
such as arable land, freshwater and waste absorption. They may also affect hydrologic
cycles and vegetation cover (Grant, 2015).

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6. The implications of Africa’s urbanisation for structural transformation

Figure 6.23. Projections of urban land cover for Africa, 2000-50
Density decreases 2%/year

Density decreases 1%/year

Density remains constant

Urban land cover projections (km 2)
450 000
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
2000

2010

2020

2030

2040

2050
Years
Note: This figure is based on projections of urban population and average density level. The three scenarios
depend on the average urban density level decreasing by 1% or 2% per annum or not changing at all.
Source: Adapted from Angel et al. (2010b).
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Public mass transportation systems need improving
Policies should make formal and informal transportation safer and morecomprehensive, regular and accessible. Since mass transportation is a public good,states are normally involved in providing it. Today many of Africa’s transport systems
continue to rely on private solutions. Public transport has been recently developed andis inaccessible for a large part of the population. It takes an average of 25 minutes tocommute to work in Accra, compared with 45 minutes in Abuja and up to 60 minutes
in Monrovia (UN-Habitat, 2010b: 107-109). Developing mass transportation systems
is essential to cost-effectively connect people to jobs and thus increase a city’s
productivity. The minimum density for a viable public transport system is considered to
be 150 inhabitants per hectare.
Policies that favour investment in cost- and energy-efficient public transport
networks are needed to improve sustainability and mobility strategies (UN-Habitat,2008). Mass transportation systems are necessary for environmental sustainability andto avoid car dependency (Glaeser, 2012). They reduce dependence on oil and petroleum;
lower air pollution; encourage access and mobility; and increase social interactivity incities.
Income levels determine transport usage. In South Africa, workers in the lowestincome quintile rely foremost on walking, followed by taxis (25%) and buses (7%)(Statistics South Africa, 2013). The lowest-income households spend at least 20% of theirdisposable income on transport (South African Country Note). In other countries, over
50% of trips are made on foot (Foster and Briceno-Garmendia, 2010).
Higher income leads to higher access to private car ownership. In many African cities,
the use of private motorised transport is low: it varies from 1% of total transportationmeans used in Dakar and 7% in Dar es Salaam, to 10-20% in Harare and Kinshasa
and up to 45% in Ouagadougou where motorcycles are commonly used (Mo Ibrahim
Foundation, 2015). Countries with the highest car ownership per 1 000 people are Libya(297), the Seychelles (182), Mauritius (174), Botswana (168), and South Africa (165).

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Countries with the lowest are Ethiopia (3.1), Togo (2.3), Sao Tome and Principe (2.2) andthe Central African Republic (0.31) (World Bank, 2015).
As fares for urban public transport are too high for poorer populations, informalmeans of transport prevail. The average family can afford no more than one daily roundtrip on a public bus, while the poorest households are excluded. Minibuses are more
frequently used than large, official buses (Accra 52% vs. 10%, Bamako 10% vs. 1% andNairobi 29% vs. 7%) (Kumar and Barrett, 2008). Fares for minibuses vary and are often
lower than those for large buses (the cost of a trip with minibus compared to a large
bus is on average USD 0.25/0.31 per trip (World Bank, 2011). On average, lowest-income
quintile households spend 30-50% of their disposable income on daily commutes amonth, though commutes cost as much as 105% of their income in Lagos.
Structures of public transport systems have a disproportionate influence on women’stime use and well-being. Women are less likely to drive and more likely to make multiple
trips and use multiple forms of transport. In Bamako, for example, 87% of women walkfor almost all trips compared to 57% of men. Thus, bus timetables, costs of transport andtravel routes that do not take women’s specific travel needs into account can increase
the time and costs of travel and consequently women’s time poverty.
The availability of transport and services cause large differences of accessibility
between income groups. In low-income countries, one in five respondents to the
Afrobarometer survey has no access to transport services. In upper-middle-income
countries, over 80% of respondents live in areas with at least three infrastructureservices at their disposal (Leo, Morello and Ramachandran, 2015).

Urban planning and governance should focus on informal settlements
Human settlements in Africa have largely grown unplanned (UN-Habitat, 2014; 2008;
Grant, 2015). Master plans for African cities were conceived during the colonial period,
based on European experience of cities. Few of these plans were implemented as they
did not fit with Africa’s social, political or economic specificities. The rural bias in the
1970s also contributed to the policy makers’ difficulty in coherently planning cities. The
shortages of qualified and (active) planners and other built-environment professionals
have compounded inadequate planning systems, legal frameworks, and obsolete
building standards (Silva, 2015). Moreover, most countries suffer from insufficient funds
to carry out urban planning. Some must face challenges of poor governance, corruption
and wasted resources.
Urban planning should take account of informal settlements. Some governments
have viewed cities’ informal settlements, where most urban inhabitants work and live,
as leading to a waste of resources. Legislation has sometimes ensnared urban planning,
like in the eviction case of 700 000 informal settlers during operation Murambatsvina in
Zimbabwe in 2005 (Watson and Agbola, 2013). Urban planning has recently focused on
retrofitting central business districts or planning new satellite towns altogether. Certain
large-scale luxury projects and gated communities have created spatial segregation andbypassed the development of slums.
The share of public space for parks and roads in Africa’s urban land is about
15-20%. This is half of the world’s average of 30-40%. According to UN-Habitat (2013), thegenerally accepted minimum standard for public space in urban areas is 45%, broken
down into 30% for streets and sidewalks and 15% for green spaces. This standard aims
to achieve a minimum density of 150 inhabitants per hectare.

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6. The implications of Africa’s urbanisation for structural transformationBox 6.6. Cities for the next two billion urban dwellers
The current United Nations population projections suggest that the world will add over
2.3 billion new urban dwellers between 2015 and 2050. The total urban population at midcentury will exceed the entire global population in 2000. Urban form tends to last, andthe lock-in effects from urbanisation decisions endure, so the urbanisation decisions of
the next 30-60 years are likely to shape living conditions on earth for centuries to come.
Massive urban growth is both a challenge and an opportunity. It is a challenge because
mistakes will be costly to reverse. It is an opportunity for reforms of all types. Thus
urbanisation and structural transformation need to reinforce one another, especiallythrough the use of urbanisation policies. Urbanisation policies must address issues
such as human capital, entrepreneurship and industrialisation, as well as the coreurban concerns of infrastructure and urban form.
Environmentally, the stakes are high. The emergence of sprawling, car-dependent cities
for the next two or three billion urbanites would be a huge environmental setback. At
the same time, policies favouring transit-oriented development, green building designand sustainable land use could help make the current wave of urbanisation part ofthe solution to the world’s environmental challenges, rather than part of the problem(OECD, 2012c). However, time is running out: cities are growing fast and in much of theworld they are growing in ways that augur ill for the future when it comes to issues likeclimate change and air quality.
The experiences of OECD countries, where urbanisation is largely complete, point tosome important lessons for today’s fast-urbanising countries:• Governance matters. Successful cities require co-ordination across policy sectors

and jurisdictions. This is especially true of dynamic issues like resilience andsustainability. Governments must build them into institutions and policy
processes, rather than considering them as isolated objectives to be attained bythis or that policy intervention.
• Some mistakes are harder to rectify than others. For example, the failure to set

aside land for public infrastructure and amenities or to provide for an arterial gridof roads can be incredibly costly, or even impossible, to correct once development
has taken place and land prices have risen.
National urban policies are critical to all of this. Even where powers are devolved, senior
governments largely determine both what cities can do and what they have incentives
to do. National policy makers need to be attentive to the way sectoral policies may create
unexpected or unwelcome incentives and constraints for cities – as, for example, whenregulatory and property tax regimes favour extensive development, in contradiction topolicies aimed at curbing sprawl.
Source: OECD (2014; 2015).

Now is the time to prepare for Africa’s urban transition
Africa has the opportunity to promote sustainable urbanisation and accelerate structuraltransformation
Africa’s fast pace of urbanisation requires massive investment in infrastructure.
In order to accommodate African urbanites, governments and the private sector will
have to invest twice as much by 2050 as they have since the years of independence.
Investments in urban infrastructure have strong lock-in effects and can determine city

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6. The implications of Africa’s urbanisation for structural transformation

growth half a century after they have been made. Experience from OECD countries
shows that retrofitting infrastructure can prove much more costly than carrying out
early “no regret” policies (Brahmbhatt et al., forthcoming).
Policy makers are increasingly aware of urbanisation’s central place in the processof structural transformation (UN-Habitat and UNECA, 2015). Four-fifths of survey
respondents consider urbanisation as an opportunity for sustainable development(Figure 6.24). This departs from the post-independence approach which tended todismiss Africa’s urbanisation as too fast, unmanageable and needing to be constrained(Box 6.7 on urban bias). However, policies attempting to restrain urbanisation insteadof tapping its potential for structural transformation remain commonplace. According
to a United Nations survey, 80% of African countries continue to desire a “major change
in the spatial distribution of their population”, and a similar proportion (85%) have
implemented policies to limit rural-urban migration (UN, 2013: 109; 114).

Box 6.7. Economists’ “urban bias” in a rural Africa
The concept of the urban bias largely emerged after African countries’ independence.
This academic debate contending that cities are harmful to rural development has
pitted the rural against the urban and negatively influenced the perception of the rolecities can play in Africa’s development (Yatta, 2016). Development economists havedeveloped three main notions of the “urban bias”:• As a “price twist” leading to rural exploitation by the urban. Developed in the late1960 and 1970s, this model of price twists describes how prices of goods producedin cities are significantly higher than rural products, whereas agricultural
products are sold under value (Corbridge and Jones, 2005).
• As an investment monopoly parasitic to the national economy. Cities absorb alarge proportion of the national budget and become net consumers of credits
while rural areas provide supply (Schikele, 1968; Chandavarkar, 1985).
• As a waste of human resources by attracting the rural labour force into theunproductive urban informal sector and creating food scarcity (Dumont, 1966;
Balogh, 1966). The seminal Todaro Paradox showed that increasing urban working
opportunities would increase urban unemployment by attracting more ruralurban migration (Todaro, 1969).
International organisations have echoed this academic debate. The World Bank’s“Berg-Report” suggested that ruling regimes in sub-Saharan Africa imposed urbanbiased policies to muffle unrest in towns and cities and support their interest group(Berg, 1981).
By the 1990s, the stance of international organisations started changing. In 1991, theWorld Bank highlighted how urban economic activities could positively influence
economic growth (World Bank, 1991). Founded in 1999 at the Summit of Mayors, the joint
World Bank-UNDP initiative City Alliances’ “Cities Without Slums” started to address
urban poverty in developing countries. This more positive perspective was echoed in
the World Development Report 2009: Reshaping Economic Geography (World Bank, 2009).

The ongoing international debates on the roles of cities and human settlements
in advancing regional and global development agendas are therefore an important
opportunity to rethink policies. Those that have shaped current, unsatisfactory
outcomes can be made more conducive in the future to sustainable development andeffective sustainable transformation.

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Figure 6.24. Is urbanisation perceived as a risk or an opportunity in your country?

Risk
19%

81%
Opportunity

Note: Survey responses by country economists of the AfDB and UNDP in 48 country offices in Africa. Responseis weighted by one per country.
Source: AEO experts’ survey, 2016.
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International events highlight Africa’s urbanisation and structural transformation
Today, the political momentum is focusing on urbanisation and structuraltransformation at both pan-African and global levels (Table 6.5). The African Union
is developing its urbanisation agenda to support Africa Agenda 2063 in co-ordination
with global partners. UN-Habitat’s African Urban Agenda (AUA) is supported by Ghana
and Nigeria and strives for the buy-in of other African governments. This momentum
inspired the drafting of the Abuja Declaration in February 2016, with a view to feedinga Common African Position for the Third United Nations Conference on Housing andSustainable Urban Development (Habitat III) as “a people-centred and leadership-driven
process”. The continent aspires to speak with one voice in order for the New Urban
Agenda to reflect the pan-African vision of Agenda 2063.

Table 6.5. Pan-African and international events on sustainable urbanisation11
and structural transformation, 2014-18
2014

The African Union establishes a Specialized Technical Committee on Public Service, Local Government, Urban
Development and Decentralization, gathering African Ministers of Housing and Urban Development.

January 2014

The African Union’s African Common Position on the Post-2015 Agenda prioritises “Structural economictransformation and inclusive growth”.

March 2015

UN-Habitat and the Economic Commission for Africa hold a side event on the Role of Urbanisation in the Structural
Transformation of Africa at the Eighth Joint Annual Meeting of the African Union’s Specialized Technical Committee
on Finance, Monetary Affairs, Economic Planning and Integration/UNECA Conference of African Ministers ofFinance, Planning and Economic Development in Addis Ababa, Ethiopia.

April 2015

African Ministers of Housing and Urban Development initiate a process of drafting an Africa Common Position on
the Third UN Conference on Housing and Sustainable Urban Development (Habitat III).

June 2015

The First Ten Years Implementation Plan (2014-23) of the African Union’s Agenda 2063, which lays out the objectiveof increasing urban investment, is adopted at the 25th Summit of the African Union.

September 2015

The African Union announces it will develop an African Charter on Urban Development and Human Settlements.

December 2015

The 7th Africities Summit is held in Johannesburg, South Africa, co-organised by United Cities and Local
Governments of Africa.

March 2016

During the Africa Regional Conference on Habitat III in Abuja, Nigeria, African ministers and civil society
organisations adopt the Abuja Declaration opening the way to a Common African Position to Habitat III.

July 2016

African heads of states are scheduled to adopt a Common African Position to Habitat III.

October 2016

Habitat III will be held in Quito, Ecuador.

November 2016

The 22nd session of the Conference of the Parties (COP 22) to the UN Framework Convention on Climate Change willtake place in Marrakech, Morocco.

January 2018

UN-Habitat will host the 9th World Urban Forum in Kuala Lumpur, Malaysia.

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6. The implications of Africa’s urbanisation for structural transformation

The Sustainable Development Goal on cities gathers momentum
At the international level, sustainable cities and human settlements are at the heartof the Sustainable Development Goals (SDGs) adopted during the UN General Assemblyin September 2015, with SDG 11 aiming to “Make cities and human settlements inclusive,
safe, resilient and sustainable”. This new, stand-alone urban goal is path breaking because
it acknowledges that cities can be pathways to sustainable development (Parnell, 2015).
The Draft Africa Common Position on Habitat III undertakes “to ensure that goal 11, as
it stands now, needs to be considered together with goals 8, 9 and 10 on matters relating
to promoting economic growth as well as full and productive employment; building
infrastructure, industrialization and innovation, as well as reducing inequality within
and between countries” (AUHF, 2015).
The Third UN Conference on Housing and Sustainable Urban Development is an
opportunity to promote Africa’s position on the New Urban Agenda. The conference aims
to secure renewed political commitment for sustainable urban development, assess
accomplishments to date, address poverty, and identify new and emerging challenges.
Habitat III and the New Urban Agenda will propose a global strategy for urbanisation forthe 20 years until the next Habitat conference.

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6. The implications of Africa’s urbanisation for structural transformation

Annex 6.A1. Methodology for the cluster analysis on urbanisation andstructural transformation in African countries
This chapter clusters the 54 African countries into five groups to highlight thediversity of their structural transformation processes. The groups are diversifiers, earlyurbanisers, late urbanisers, agrarians and natural resources-based countries. This cluster
analysis identifies common characteristics of countries.
This methodology focuses on country characteristics at the national level. We haveclustered the African countries following the four processes of structural transformation
described by Timmer and Akkus (2008): i) a declining share of agriculture in GDP and
employment, ii) urbanisation, iii) a demographic transition from high rates of births anddeaths and iv) the rise of a modern industrial and service economy.
First, we filtered the 54 countries by dropping 12 that had a population of fewer than
2.5 million inhabitants in 2013. Such small countries tend to have a much higher share ofurban population than larger countries, and their urbanisation processes differ as well.
The primary city of larger countries often has more than 2.5 million inhabitants. Despite
their small size, we kept Botswana and Mauritius in the sample because both are widely
recognised as typical case studies of structural transformation in Africa.
Second, we identified the natural resources-based countries within the remaining 42. The
literature points out the structural differences of resource-based countries compared
to non-resource-based countries. Building on previous editions of the African Economic
Outlook, we defined natural resources-based countries as those where the productionof minerals, metals and hydrocarbons accounts for more than 30% of GDP in 2010
(AfDB/OECD/UNDP/UNECA, 2013: Table 6.3).
Third, we classified countries by their urbanisation levels as of 2015, using UN DESA
(2014). We defined countries as:• urbanised when at least 60% of the population resides in urban areas• having started the urbanisation process when they have an urbanisation level of atleast 40% and less than about 50%• predominantly rural countries when they have an urbanisation level of less than

20%. We kept Burkina Faso and Mali in this category because their agriculture
produces more than 35% of their GDP.
Fourth, we distinguished countries by their total fertility rate (TFR) where mostdata was available – between 2010 and 2015 – using UN DESA (2014). We based thedemographic typology on previous editions of the African Economic Outlook whichgrouped African countries by their TFR (AfDB/OECD/UNDP, 2015; see also Guengant andMay, 2013). We opted to use national TFRs, instead of urban TFRs (Jedwab, Christiaensen
and Gindelsky, 2015b), so as to reflect employment challenges at the national level andintegrate rural dynamics into the analysis of structural transformation. Using urban TFR
would not produce significant differences in the country clustering. This demographic
clustering produced the following categories:• Countries are classified as more advanced in their demographic transition when

the TFR falls below 3.5 children per woman, which corresponds approximately to
Egypt’s TFR.
• Countries having started the process of fertility transition are those with TFRs

between 3.5 and 5.5 children per woman.
• Countries with TFRs of 5.5 children or more are classified as not having started thefertility transition.

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6. The implications of Africa’s urbanisation for structural transformation

The economic dimensions used in the cluster analysis are discussed in greater detailthroughout Part II of this report.
Using this process, we have classified African countries as shown in Table 6.A1.1.

Table 6.A1.1. African countries clustered into groups according to their levelsof structural transformation
Non-resource-based countries
Diversifiers
Advanced in fertility
transition, urbanised
Egypt
Mauritius*
MoroccoSouth Africa
Tunisia

Early urbanisers
Started fertility
transition andurbanising
Benin
Cameroon
Côte d’Ivoire
Ghana
Liberia
SenegalTogo

Late urbanisers
Started fertility transition
but not yet urbanising
Eritrea
Ethiopia
Kenya
Madagascar
Mozambique
RwandaSudan
Tanzania

Agrarians
Have not started fertility
transition nor
urban transition
Burkina Faso
BurundiChadCentral African Republic**
Malawi
Mali
Niger
Sierra Leone**
UgandaResource-based
countries
Natural resources-based
countries
Algeria
AngolaBotswana*
Republic of the Congo
Democratic Republic of
the Congo
GuineaLibya
Mauritania
Nigeria
SomaliaSouth Sudan
ZambiaZimbabwe

Note: * Countries kept in the sample despite having less than 2.5 million inhabitants. ** Central African Republicand Sierra Leone have a total fertility rate of about 4.5 children per woman and an urbanisation level ofapproximately 40%. Yet their economies are overwhelmingly agrarian (58% of GDP and 56% of GDP respectively).

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Notes
1. United Nations estimates project that Africa will be 50% urbanised in 2037.
2. These countries are Botswana, Ethiopia, Ghana, Kenya, Mauritius, Malawi and Senegal.
3. Weeks (1994) argues that “special factors account in part for Africa’s rapid rates of urbanisationin the immediate postcolonial period. Colonial prohibitions on migration to cities in East Africa– and control of population movements more broadly – were deeply resented. A one-time stock
adjustment that may have had little to do with economic factors took place in the early years
to compensate”.
4. The UNDP Human Development Index measures countries’ achievements in key dimensionsof human development: health, education and standard of living (see Chapter 4). The healthdimension includes life expectancy at birth, the education dimension years of schooling for
adults aged 25 years and over and expected years of schooling for children of school-enteringage. The standard of living is measured by gross national income (GNI) per capita.
5. Many varying definitions of intermediary cities exist. For a working definition, see Annex 6.A3of the African Economic Outlook 2015 (AfDB/OECD/UNDP, 2015: 170).
6. Only two countries are in the diversifiers group because Gallup asked the question solely to subSaharan African countries.
7. UN-Habitat’s “State of World Cities 2008/2009” refers to data from 2005. This comprehensive
estimate has not yet been updated.
8. The Gini index measures the extent to which the distribution of income among individuals orhouseholds within an economy deviates from a perfectly equal distribution. A Gini index of 0
represents perfect equality, while an index of 100 implies total inequality.
9. “Childhood undernutrition” encompasses “childhood underweight”, “childhood wasting” and“childhood stunting”.
10. A saving and loan agency is a financial institution that offers banking and related financial
services, especially savings and mortgage lending. It is equivalent to the term “building society”
in the United Kingdom.
11. Sustainable urbanisation is the transition of societies from majority rural to majority urban ina sustainable way. Although it has many dimensions (Allen, 2009), this report focuses on its
economic, social and environmental ones.

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Chapter 7

How sustainable cities can contributeto Africa’s development
Urbanisation can be an important driver of Africa’s sustainable
development. As Chapter 6 shows, however, this requires new, more
effective urban development policies. This chapter identifies themain channels through which urbanisation can accelerate economic,
social and environmental development, as well as the policy
options to seize those opportunities for structural transformation.
Good practices in Africa highlight the need for place-based andparticipative policies to develop more sustainable cities.

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7. How sustainable cities can contribute to Africa’s development

In brief
Urbanisation is playing an essential role in improving sustainable development outcomesin Africa, although it also brings new challenges as Chapters 4 and 6 highlighted. This
chapter demonstrates in detail that urbanisation has been improving Africa’s prospects forstructural transformation through economic linkages and social innovations. New urban
development policies can better harness the potential of sustainable cities to foster three
types of development:• economic development, through higher agricultural productivity, industrialisation, moreproductive urban services and foreign direct investment (FDI) in urban corridors• social development, by providing cost-efficient transport systems, safer housing, social

safety nets, social businesses on a larger scale and safer cities• environmental development, by sustainably managing natural resources, notably byproviding better access to renewable energy, safe water and sanitation, and sustainablewaste collection. Managing urbanisation well will be essential to bridge the energy gap,
mitigate the rising cost of air pollution and preserve surrounding ecosystems such asurban wetlands.
An annex to the chapter explains the method used to map FDI flows to African cities.

Urbanisation improves the conditions for Africa’s economic development
Urbanisation can contribute to economic development and structural transformation
through four main channels:
1. higher agricultural productivity and rural development, by better connecting rural
economic activities, in particular food production chains, to large urban markets
2. industrialisation, by providing a favourable business environment where companies
realise economies of scale and share knowledge more easily
3. services-led growth, by encouraging innovation and developing the skills of theurban labour force, which will increase the supply of modern services for thegrowing urban middle class
4. more FDI in African cities, by attracting investment through better connectedurban corridors.

Urbanisation is changing the labour and food markets
Africa’s urbanisation could increase agricultural productivity and rural development
by changing the labour and food markets. Between 2000 and 2013, Africa’s agricultural
sector has maintained a real growth rate of 5.1% per year, well above the population
growth rate of 2.7%. Africa’s food system is fundamentally changing, and urbanisation
plays a central role in this process. Urbanisation i) creates upward demand for foodproduction in Africa; ii) increases efficiency in post-farm segments; and iii) transforms
the rural on-farm and non-farm economy (Reardon and Timmer, 2014). Different typesof cities play specific roles in realising these transformations.
Urbanisation increases the consumer base for African food producers
Urban markets have become the main destination of African food production.
Domestic and intra-Africa trade account for 95% of the sub-Saharan African foodmarket. The urban sector currently accounts for 40% of the total population, 50% of
total food consumption (including home production) and 60% of the food market

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7. How sustainable cities can contribute to Africa’s development(Reardon et al., 2013). Food imports from outside of Africa account for less than 5% of
the total food market, although large differences appear between countries.1 Figure
7.1 shows that urban food expenditure increased faster than urbanisation in six West
African countries between 1990 and 2010. Even if Nigeria’s urban households, forexample, spend a lower share of their expenditure on food (at 55%) than rural residents(at 72%), they still spend more in absolute terms thanks to their higher incomes.

Figure 7.1. Change in urbanisation levels and urban share of total foodexpenditures for major food groups in six West African countries, 1990-2009
Share of urban in total food expenditure (%)
60

Senegal, 2002

55

Ghana, 2006

Ghana, 1992

50

Côte d'Ivoire, 2008

Senegal, 1994
Mali, 2006

45

Côte d'Ivoire, 1993

40

Nigeria, 2010

Mali, 1989

35

Burkina Faso, 2009

30
25

Burkina Faso, 1994

Nigeria, 2004

20
15
10

10

15

20

25

30

35

40

45

50

55
60
Urbanisation level (%)

Note: Major food groups include cereals, roots and tubers, pulses, oils and oilseeds, fruits and vegetables, animal
products and fish, beverages, and other food products.
Source: Adapted from Table 6.3, AfDB/FAO (2015) and World Bank (2015a).
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The more diverse food diets of urban dwellers can raise productivity levels. Following
Bennett’s law, African consumers are changing their food preferences from starchy
staples towards higher-value processed and pre-prepared food as they become wealthier(De Haen et al., 2003; Popkin, 2001; see Box 7.1). While Asian exporters dominate Africa’s
grain markets such as wheat and rice, urban consumers increasingly consume locallyavailable meat and fresh fruits. The African urban middle class2 does not consume ahigher share of imported food out of its total consumption than the urban poor. Local
products also generate higher margins for farmers: selling meat and dairy products totowns and cities can increase farmers’ income 5 to 10 times per hectare compared tograins (Tschirley et al., 2015a).
In rural areas too, markets increasingly supply food. This is due to more diversified
rural economies, spreading urban products, changing lifestyles and farming methods,
and better transportation. Stronger rural-urban linkages are helping the rural supply
chain meet the demand of urban areas. Evidence abounds of farmers who haveincreased their production when connected to growing urban and regional markets(Reardon et al., 2013). This is the case of farmers growing teff in Ethiopia, vegetables in
Mali or Senegal, or potatoes in Rwanda or of dairy farmers in Kenya. They have invested
in soil conservation, added organic matter into their soils, used productivity-enhancing
seeds, breeds and fertiliser, as well as irrigation and machines.

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Box 7.1. Urbanisation and the emerging food economy
in West Africa
Urbanisation has led to more diversified diets in 17 West African countries. Fruits
and vegetables, meat and fish now account for 50% of urban households’ total foodexpenditure, while consumption of cereals and pulses is declining. All income groups
show higher demand for convenience, reflected in the expansion of street food andstronger demand for processed and pre-prepared foods. Processed foods represent
41% of food budgets for urban households, compared to 36% for rural households(Figure 7.2).
The West African food economy is estimated at USD 178 billion for 2010. This represents
36% of regional gross domestic product (GDP), making it the largest sector of theWest African economy. In many countries, the domestic food market is becoming
more attractive for farmers than traditional export cash crops. The non-agricultural
post-harvest activities of the food economy, such as processing, logistics and retail,are developing quickly. The Sahel and West Africa Club estimates that, today, these
activities account for 40% of the sector’s value added and will continue to expand withmore urbanisation (Allen, forthcoming).

Figure 7.2. Composition of the West African food basket
by food groups and area, 2010
A. Urban

Dairy
4%

Fruits andvegetables
31%

B. RuralBeverages
5%
Other
12%

Dairy
2%

Fruits andvegetables
27%

Other
13%

Meat
and fish
22%
Grains26%

Meat
and fish
16%
Grains37%

Beverages
4%

Beverages
5%

Processed
41%

Beverages
4%

Cereals
20%

Unprocessed
33%

Processed
36%

Cereals
34%

Unprocessed
26%

Note: The sample includes 17 West African countries: Benin, Burkina Faso, Cabo Verde, Chad, Côte d’Ivoire,
Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone
and Togo.
Sources: OECD (2013a).
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Urbanisation can benefit the post-farm food value chain
More densely populated places tend to support post-farm segments of food value
chains, i.e. activities beyond primary production. These include wholesaling, processing,logistics, distribution, retails and food stalls, which benefit from the economic effects
of more concentrated urban areas. The larger pool of urban customers enables firms
to avoid under-utilisation and other seasonal effects. Research and development andagricultural extension – training farmers in innovative practices and technologies –
benefit from linkages with universities and research institutions, nurturing thecross-sector fertilisation of ideas (Jacobs, 1969). Similar to Asia, a “Quiet Revolution”
is emerging in African supply chains whereby small and medium-sized enterprises
lead investments in post-farm activities such as trucking, wholesale, warehousing,cold storage, processing and retail (Reardon et al., 2013). In six African countries, urban
areas account for 42% of jobs in food marketing and transport and 24% in the food
manufacturing segment, even though urban dwellers represent only 22% of the total
population (Figure 7.3). Indeed, the efficiency of post-farm activities depends on basic
infrastructure available in urban areas and on the connectivity between farms and theirurban markets. Efficient transport and electricity are necessary to attract productivityenhancing investments in cold-chain and storage facilities.

Figure 7.3. Urban share of jobs in each post-farm food segment
in six African countries
Urbanisation level (22%)
Urban share of jobs in post-farm food segment (%)
60
52
50
42
40
30

24

20
10
0

Food manufacturing

Marketing and transport

Food preparation away from home

Note: These six African countries include Ethiopia, Malawi, Mozambique, Tanzania, Uganda and Zambia.
Source: Adapted and recalculated from Table VI in Tschirley et al. (2015b).
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These post-farm segments of food production offer strong potential to increase
the efficiency of the food value chains. In the six African countries mentioned above,
the post-farm food segments already account for a total of USD 31 billion, or 39% of
domestic food expenditure (Tschirley et al., 2015b). Agglomerations in secondary cities
create opportunities for further investment in cold-chain and storage facilities. Suchinvestments are key to enhancing productivity in particular by reducing food spoilage.
Total food spoilage could feed about 300 million people per year in sub-Saharan Africa(FAO, 2011). Secondary cities and towns also play an important role in enhancing theefficiency of wholesale markets and supply chains and in helping increase humancapital to meet the new skill demands of the food system.

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In some countries, the development of supermarkets contributes to modernisingfood production (Reardon and Timmer, 2014), but policies are needed to avoid harming
traditional small and medium producers and retailers. Demand from supermarkets canaccelerate the trend towards farms’ formalisation and commercialisation, by exposing
farms to modern technologies through demand for more efficient supply chains. Local
supermarkets can also cut intermediary costs by contracting directly with farmers.
However, this process of commercialisation can create barriers to entry for small andmedium producers and processors. These are typically family farms, which make up thelarge majority of actors in the food value chain. Ensuring that supermarket development
benefits the poor requires a sequenced approach, both fostering productivity, competition
and technological learning and applying safeguards for the poor through regulation.
Involving retail corporations, smallholders and local communities in adapting
regulations over FDI entrance, zoning and opening hours, sourcing requirements, foodwaste and environmental standards can help ensure proper design and implementation(Altenburg et al., 2016). Opportunities to develop alternative short supply chains should
be fostered to diversify food chains and retail options in the interest of both producers
and consumers.
Urbanisation can transform the rural non-farm economy
More productive rural non-farm jobs flourish in close proximity to cities and towns.
Farmers close to urban areas can also take advantage of employment opportunities inurban and peri-urban areas for seasonal work. The rural non-farm economy needs tosell goods and services in urban areas to function properly. The emergence of local foodindustries and processing facilities creates more productive employment opportunities
than the farming segment, where harvests take up on average three months of labour
per year. In Ethiopia, rural households are 30% more likely to start a non-farm enterprisewhen they are close to clusters of micro-enterprises, and 7% more likely when they areclose to clusters of big manufacturing firms in urban areas (Ali and Peerlings, 2012).
Labour productivity is highest in food manufacturing, followed by marketing andtransport and by food preparation away from home (Figure 7.4).

Figure 7.4. Labour productivity in different segments of the agri-food system
in six African countries
Food manufacturing

5.1

Jobs not in agri-food system

3.8

Marketing and transport

3.6

Food preparation awayfrom home

3.5

Farming, self-employment
and wage labour

0.7
0

1

2

3

4

6
5
Value added per job (USD thousand)Note: These six African countries include Ethiopia, Malawi, Mozambique, Tanzania, Uganda and Zambia.
Source: Authors’ adaptation from Table II of Tschirley et al. (2015b).
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7. How sustainable cities can contribute to Africa’s development

Non-farm activities supported by urbanisation can improve agricultural productivity
in four main ways:
1. Income from circular migration and rural non-farm employment is a major
purveyor of funds for farm investments.
2. Urbanisation facilitates the development of credit markets and other farm input
markets including fertiliser, other farm chemicals, water and machinery, and land
rental and purchase/sale markets.
3. Rural workers can buy services from local markets and specialise in their own
productions. Specialisation can improve annual labour input per agricultural
worker which is an important factor explaining the annual output gap between
agricultural and non-agricultural workers. In Ethiopia, Malawi, Tanzania andUganda, agricultural workers provide 700 working hours a year compared with 1
900 hours a year by non-agricultural workers (Resnick, 2015).
4. Relieving workers from farms increases the land-labour ratio and enables agriculture
to adopt modern technologies that are more capital-intensive. In many countries suchas the Democratic Republic of the Congo (DRC), Rwanda and Uganda, the availabilityof arable land is already very low at less than 0.2 hectare per rural worker.
Big and intermediary cities play different roles in the rural transformation
Cities and towns of different sizes play different roles in the transformation processthat builds on reciprocal rural-urban linkages. Reardon and Timmer (2014) classify humansettlements into three types of zones according to their stage in the transformation. The
first, “dynamic, commercial zones”, are the large and medium cities and the surrounding
areas within their eight- to ten-hour catchments. The second, “intermediate zones”,
facilitate the rural-urban food supply chains and provide economic pull for rural supply.
Their climate and ecological conditions offer medium to high potential for agriculturaldevelopment, however they have not fulfilled this potential yet. The third, “hinterland,
traditional, semi-subsistence zones”, are more remote and face much higher ecologicaland climatic challenges in developing agriculture.

Figure 7.5. Travel time and crop production in sub-Saharan Africa, 2000
Total crop production/potential
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0

0

5

10

15

20
25
30
Average travel time to nearest large city (hours)

Note: Each diamond represents travel time deciles based on estimated time to the nearest city with 100 000
or more inhabitants. The line represents an exponential fit of the ten average points. Total crop production/
potential measures the ratio of actual crop production (in value terms) to potential crop production (determinedby agro-ecology and agronomic characteristics of individual crops and regions).
Source: Dorosh et al. (2012).
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Tanzania offers examples of the first two types of zones. Its primary city, Dar es
Salaam, is more advanced in retail transformation than two of its secondary cities,
Arusha and Mwanza (Ijumba et al., 2015). Large supermarkets and new formats of retail
centres often start in Dar es Salaam before gradually expanding to intermediary cities.
Nonetheless, secondary cities connected to global markets can play a complementary role
to primary cities: Arusha is more advanced than Dar es Salaam in food processing, withmore complex product packaging and more companies having larger national coverage.
Productivity in farming, logistics and wholesales depends on their proximity to different
types of urban centres. Cities that emerge from rural-urban agricultural linkages, suchas the peanut basin in Kaolack, Senegal, have a stronger impact on the developmentof surrounding rural areas than cities growing as enclaves around extractive activities
such as mining (Reardon and Timmer, 2014). In addition, improving access to roadinfrastructure and urban markets could increasingly exploit agricultural potential in thelong term. Dorosh et al. (2012) estimate that reducing the travel time to the nearest cityof 100 000 inhabitants from 24 to 4 hours increases the ratio of actual to potential crop
production by 16 (Figure 7.5). Greater agricultural production also develops the rural
non-farm sector in countries at a lower stage of the post-farm food value chain, creatinga virtuous circle of agricultural and rural development.

Cities can provide enabling conditions for Africa’s industrialisation
Urbanisation can create a demand for industrial products, thereby contributing
to structural transformation. Rising incomes shift the household demand towards
industrial products, while the middle-class preference for diversity allows value-creation
through differentiation. Moreover, mending Africa’s infrastructure deficit and building
new cities, housing and commercial properties will generate tremendous demandfor construction materials and supporting industries. The infrastructure deficit for
sub-Saharan Africa alone stands at more than USD 93 billion a year (Foster and BriceñoGarmendia, 2010).
Cities also generate agglomeration economies, which can be classified into threefunctions: matching, sharing and learning (see Chapters 4 and 6; Kayizzi-Mugerwa,
Shimeles and Yaméogo, 2014). First, cities can help firms mix and match their uniquerequirements for labour, material inputs and premises. The concentrated pool of workers
and supply industries allows firms to specialise in their comparative advantage andoutsource uncompetitive activities. Subcontractors can take advantage of the group of
potential customers inside the clusters to scale up their operations.
Second, the larger scales of cities facilitate access to a wider range of shared services
and infrastructure. The concentration of users spreads the fixed cost of indivisible goods
and facilities such as public mass transportation, skill training centres, universities
and machineries. Investments in cities offer surrounding regions better connectivity
to national and global customers. Cities provide a diverse range of inputs that enable
increasing returns through product specialisation.
Third, cities enable knowledge sharing and the cross-fertilisation of ideas. Proximity
facilitates communication and sharing complex ideas among firms, research hubs andrelated actors through a process of comparing, competing and collaborating. Close
contact generates the trust and formation of formal and informal networks of innovation.
The innovation-generated productivity gains attract mobile capital and talent to enforce
a virtuous circle of endogenous growth.
A few empirical studies point to a positive relationship between agglomerations
and productivity in Africa. However, robust evidence is scarce because of the dearth ofquality data and the difficulty of disentangling agglomeration economies from othereconomic variables. Most studies find that there is a greater presence of localisation

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7. How sustainable cities can contribute to Africa’s development

economies from a concentration of firms in the same industry, than urbanisation
economies stemming from a concentration of firms in various industries:• Firm-level surveys from Arusha, Dar es Salaam, Mbeya (Tanzania) and Kampala(Uganda), show that increasing the number of firms in the same industry and areaby 10% would cut down costs for firms by 0.3-0.4% on average (Iimi, Humphrey andMelibaeva, 2015).
• Using an enterprise census in Ethiopia and controlling for endowment, Siba et al.

(2012) find that the entry of each new firm in a cluster increases by 0.91% the totalfactor productivity of its competing co-locators that produce the same products,
but not the total factor productivity of its co-locators producing different products.
• Also in Ethiopia, information sharing enables clustered horticulture farms toachieve a 91% higher sales revenue per worker, a 210% higher value added per worker
and a 273% higher gross profit per worker (Mano and Suzuki, 2013). Agglomerated
farms frequently share technological knowledge and market information that help
improve product quality, deal with diseases and insects, and make decisions basedon consumer demands.
Big cities can facilitate innovation and the adoption of new technologies, enabling
diversification into new industries and high-tech manufacturing. At a macro level, an
economic base with different industries is generally better at absorbing external market
risks, such as unpredictable global conditions and fluctuating commodity prices. Froma micro perspective, these diversified cities fulfil “nursery” roles by developing new
products and trying business processes borrowed from different activities (Durantonand Puga, 2001). This process of trial and error through deductive tinkering adds to thecountry’s know-how and complexity. This can be measured by the Economic Complexity
Index for each country through its export basket. For non-resource-based Africancountries, the size of the population living in cities of at least one million inhabitants
correlates with the country’s level of economic complexity (Figure 7.6). This pattern isalso present for the global sample yet not exhibited in the resources-based economies
among the five country groups presented in Chapter 6.

Figure 7.6. Population size of big cities and level of economic complexity, 2013
Non-resources-based African countries

Natural resources-based African countries

Other world regions

Non-African countries

Non-resources-based African countries

Natural resources-based African countries
Economic Complexity Index
3
2
1
0
-1
-2
-3
12

13

14

15
16
17
18
Total population living in cities of 1 million inhabitants or more, logarithmic scaleNote: The green solid line is the linear fit for non-resources-based African countries. The black solid line is thelinear fit for the group of natural resources-based African countries. The dotted line is the linear fit for non-Africancountries.
Source: Population data from UN DESA (2014) and Center for International Development at Harvard University(2016).
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By contrast, intermediary cities can specialise in and foster the developmentof mature industries. Once they have mastered the business processes leading to
specialisation, firms switch to mass production and relocate to specialised cities insearch of lower production costs. Labour-intensive industries such as textiles thrive in
the intermediary cities that offer cheaper labour, land and other inputs for firms andtheir suppliers.
Cities have supported industrialisation
Cities and urbanisation will play important roles in industrialising Africa. The
automobile industry in Durban (South Africa), Casablanca and, more recently, Tangier(Morocco) relies on the skilled-labour pools, available local know-how and interconnected
networks among various stakeholders such as universities, research institutions andbusiness associations that epitomise the power of cities. Mauritius’ success in textile
industries relied heavily on the shipping capacity of Port Louis and on connective
infrastructure between the export processing zone and raw cotton producers (Ramdoo,2014). Similarly, one-third of Tunisia’s firms are concentrated in two central business
districts – Tunis and Sfax – to take advantage of the close proximity to their consumer
base (Ayadi and Mattoussi, 2014). Exporting industries tend to agglomerate in specificprovinces, such as textile firms in Monastir, chemical firms in Ben Arous and agrofood firms in Sfax and Nabeul. In most African countries, despite some successes,
urbanisation has yet to support industrialisation on a larger scale. Examples abound of
cities developing their own manufacturing base, generally in the informal sector, which
can export intermediate and consumption goods to other African countries (Box 7.2).

Box 7.2. Intermediate cities can develop their manufacturing base
Several intermediate cities in Africa are developing a manufacturing sector based on
trade and the existing informal economy.
• Since the late 1990s, Nigeria’s Otigba cluster in Lagos has developed into a sub-regional hub for computer assembly and repairs and for the manufacturing andsales of computer parts.
• Similarly, Nnewi, a city of 750 000 inhabitants in Eastern Nigeria, upgradedfrom trading imported Japanese automobile spare parts in 1980s to being the
manufacturing base of Nigeria’s automobile sector. Today, 70% of automobile
components used in Nigeria are sourced domestically, mostly from Nnewi.
• In Ghana, the city of Kumasi houses Suame Magazine, a cluster of artisanal

workshops for metal engineering and vehicle repairs. As many as 200 000 people
work there with complementary skills such as smelting scrap metal, trading
automobile parts, fine-tuning truck engines, and retrofitting electronics. To
support common challenges faced by firms in the cluster, Suame Magazine
Industrial Development Organisation has been working to scale up training andlocal manufacturing.

Cities provide an entry point for industrialisation policies
Cities provide a possible entry point for efficient policies that can revive manufacturingindustries in Africa. The lack of input industries, weak trade logistics, limited accessto finance and to industrial land, as well as a dearth of technical and entrepreneurial
skills, are often binding constraints to Africa’s light manufacturing industries (Dinh etal., 2012). Policies that address them in a co-ordinated manner through “place-based
approaches” can exploit synergies, improve accountability and better link governmentswith the private sector. Cities also provide a testing ground for policy implementation
before multiplying to national scales.

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Supporting the clustering of firms can reduce the per-user cost of programmes suchas infrastructure development and allow for spill-overs among enterprises. In 11 Africancountries, clustering has an overall positive impact on firms’ performance (McCormickand Oyelaran-Oyeyinka, 2007). For example, 72% of the clustered firms surveyed feltthat clustering enhanced their exposure to different useful ideas and provided themwith opportunities to seek common solutions and strategies for shared problems.
Subcontracting within the clusters has helped Uganda’s fish processing firms to meet
European markets’ changing standards and trade terms. Firms in the Durban Automotive
Cluster co-operated in supplier development, human resource development, logistics
and benchmarking. In Tunisia’s garment industrial clusters, borrowing and lending tools
is common so as to avoid underutilisation of machinery.
In supporting industrial clusters, government action proves more successful whenplaying a facilitating role rather than a leading role. For example, special economic orexporting zones in Africa are often government-driven initiatives seeking to concentrate
investment in one region to jump start export-oriented industries such as automobiles,
food processing and textiles. However, notwithstanding the sustained success of
Mauritius’ early textile and clothing clusters, most have been hampered by various
factors, ranging from bad locations to heavy reliance on trade preferences (Farole, 2011).
Table 7.1 provides examples of instruments governments can use to support industrial
clusters indirectly.

Table 7.1. Examples of instruments for cluster policies in developing countries
Labour mobility

Recruitment of qualified recent graduates: job fairs, public relations initiatives for the clusters
Labour mobility among companies and research institutions: direct matching between employers andqualified job-seekers, secondment programmes
Apprenticeship inside clusters: job and internship information, scholarships for placements, direct
matching

Entrepreneurship

Spinoff formation: entrepreneurship or business plan competitions
Venture capital: allocation of venture capital, direct coaching for spinoffs, development of businessincubators out of technology centres

Inter-firm co-operation

Horizontal co-operation among companies: formation of industry associations or working groups,
financial incentive for intra-industry co-operation
Vertical co-operation among companies : management of co-operation projects, financial support forcollaboration, shared use of leading companies’ infrastructure, intra-cluster networking events,
formation of industry associations

Competition

Intensive local competition: public procurement, standardisation and certification, targeted subsidies forexporters
Competition in the local social hierarchy: entrepreneur awards, social media

Public-private engagement“Cafeteria effects”: establishment of technology centres, use of public research infrastructure byindustry
Social networks: field visits and networking events, exchanges or secondments of professionals,
collaboration in designing a strategy for a cluster competition

Source: Adapted from Benner (2013).

Infrastructure policies are essential to activating the comparative advantages of
all cities. Firms need supportive infrastructure, especially transport and energy, toavoid being spatially trapped inside crowded city centres. In Africa’s more diversified
economies, automobile sectors have started in primary cities such as Casablanca
and Johannesburg. A combination of environmental regulations, spatially targeted
investments in physical and soft infrastructure and business networks have enabledmature automobile sectors to shift to secondary cities such as Tangier and Durban. The
experience of Thailand has shown that appropriate place-based government intervention
can help develop heavy industries and add value to the extraction of natural resources.
The country developed petrochemical industries in the Eastern seaboard following thediscovery of gas fields in the Siam Gulf.

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China’s two-pronged strategy provides an example of leveraging the potential ofboth cities and towns in achieving industrialisation. During the reform period of 1978
to the late 1990s, township- and village-controlled enterprises drove industrialisationand diversification in rural areas, while special economic zones that were allowed toaccept foreign direct investment soon became central to China’s export-oriented andlabour-intensive manufacturing strategy.

African cities can drive service-led growth
Urbanisation creates new opportunities for developing more productive andcompetitive service hubs that support Africa’s structural transformation. First, Africa’s
service sector already accounts for one-third of total formal employment (ILO, 2014).
As shown in Chapter 6, services can absorb low-skilled labour while still enhancing
productivity. Second, the growth of service sectors such as tourism indirectly creates
jobs in supplier industries. For example, in South Africa, 25% of intermediate inputs into
services come from manufacturing (Tregenna, 2008).
Services also play an increasing role in helping manufacturing firms to access global
value chains. Goods and services are intertwined in global production networks. The
value created directly and indirectly by services as intermediate inputs represents
over 30% of the total value added in manufactured goods (AfDB/OECD/UNDP, 2014;
Figure 6.3). Services such as transport, logistics and warehousing, but also banking,insurance, business services, professional services and communication services, play animportant role at every stage of the production phase. These services facilitate efficient
movements of goods and intermediate inputs across borders to reduce the cost of tradein manufacturing.
African countries have experienced growth in the output share of modern
services, which are mostly based in urban areas, albeit at different paces and with
uneven job creation effects (Figure 7.7). The five groups of African countries below are
divided according to their stages in urbanisation, fertility transition and structuraltransformation, as explained in Chapter 6 (see Annex 6.A1):• Diversifier countries have the highest output share from modern services such as

business, transportation and communication. In 2010, business services accounted
for more than 10% of total output in Mauritius, Morocco and South Africa. Mauritius
and Egypt have expanded the output of transport, storage and communication
sectors to about 15% of the total. Cities such as Cairo and Alexandria (Egypt),Casablanca and Rabat (Morocco), Cape Town and Johannesburg (South Africa),
account for more than half the national value added in modern services. Countries
such as Mauritius and South Africa have significantly shifted their workers into
these highly capital- and skill-intensive sectors.
• Somenatural resources-based countries also made significant progress in these
sectors. Botswana and Nigeria, for example, have expanded their employment
share in business services. Surulere in Lagos State (Nigeria) fostered Nollywood,
the third biggest cinema cluster in the world.

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7. How sustainable cities can contribute to Africa’s development• In the remaining groups, progress is patchy. A late urbaniser, Kenya in particular has

significantly developed its services, with large urban centres playing a leading role:
Nairobi and Mombasa account for half of the value added in financial and businessservices and three-quarters of the value added in the transport and ICT sectors.
Some early urbanisers such as Ghana and Senegal have diversified so quickly intotransport and communication that these sectors now account for roughly 15% of
total output. However in many late urbaniser and most agrarian countries such as
Ethiopia, Malawi and Tanzania, modern service sectors are still nascent: neither
business nor transportation and communication account for more than 10% of
output or 3% of employment.

Figure 7.7. Change in employment and output of business services as a share of
the total economy of selected African countries, 2000-10
Share of total output (%)
20

ZAF

18

MOR

16
14
BWA

12
10
8

SEN

MWI

6

KEN
ETH

4

TZA

MUS

ZMB
EGY

GHA

NGA

2
0
0

2

4

6

8

10
12
Share of total employment (%)

Source: Authors’ calculations based on Timmer, de Vries and de Vries (2014).
12 http://dx.doi.org/10.1787/888933350821

In the longer term, modern, tradable services could significantly absorb more labour
without losses in relative productivity. Given the underdeveloped market for modern
services in most African countries, lower prices will not necessarily offset production
gains in modern service sectors. These sectors are increasingly tradable: global trade
in services tripled between 2000 and 2012 with transportation, tourism and businessservices expanding quickly (Figure 7.8). Africa has only captured 3% of the global trade
in services, mostly in the tourism and transportation sectors. It can harness moreof this global demand by developing more specialised services and training a skilled
labour force. Modern services such as finance and business are more integrated into
global value chains, particularly through the trade networks established in Southern
Africa with city hubs such as Johannesburg and Gaborone. Furthermore, services are
increasingly disaggregated and traded as separate tasks, allowing countries and cities tofurther specialise in particular segments of the service value chains. Several diversifiercountries, as well as Nigeria and Kenya, are looking to develop their business process
offshoring sub-sectors around established research centres in urban areas.

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7. How sustainable cities can contribute to Africa’s development

Figure 7.8. Service trade in Africa, 2000-12
Communication and ICT services

Construction

Financial services and insurance

Other services (personal, government, etc.)

Transportation

TravelOther business services

USD billion
120
100
80
60
40
20
0
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: Authors’ calculations based on data from AfDB/OECD/UNDP (2014).
12 http://dx.doi.org/10.1787/888933350837

In the short and medium terms however, the informal sector should be acknowledged
as a source of livelihood. Engaging informal firms through direct procurements or
through contracts with enterprises that provide waste, sanitation and water purification
services could offer a low-cost solution to improve community welfare. The concentrationof people reduces the cost of spatially-targeted investments in education, training andskill-matching; these facilitate the transition of workers into more productive activities.
A comprehensive reform package will be necessary to bring these workers under someform of legal protection, ensure minimum wages and non-wage safeguards, train themand match them with jobs for a gradual progression into higher-value, formal work.
Participatory approaches can help integrate informal firms into the urban fabric andfacilitate the development of an organised formal urban sector. Appropriate regulations
and targeted incentives can enable informal employers to move beyond merely subsisting
to saving for and investing in productivity growth. Formal businesses in Africa often
have strong links with informal firms to take advantage of their flexibility and market
concentration. A participatory approach considering local specificities can be more
efficient in engaging informal enterprises into formal processes and mechanisms (seeBox 7.3; see also Chapter 4). In Kenya, the second-largest retailer, Tusker Mattresses, isfranchising informal retail businesses to penetrate this market (Mulupi, 2016).

Box 7.3. How participatory local policies can tackle informal street trading
Informal street trading is often contained by repressive policies because it is generally
perceived as an illegal activity overcrowding Africa’s city centres. Police forces tend to
regularly evict informal street traders by force. However, repressive policies have shown
limited success in containing informal traders in the long term. Dakar and Monrovia
have used more effective participatory and consultative approaches.

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7. How sustainable cities can contribute to Africa’s development

Box 7.3. How participatory local policies can tackle informal street trading (cont.)
The city of Dakar is building a commercial centre for former street merchants. From
March to April 2011, a local census registered 4 980 street merchants who could
participate. They choose their own property developer via the merchants’ associations
and arrange the new commercial complex according to their needs. The project’s overall
cost is estimated at XOF 9 million.
Following negotiations between 2009 and 2011, the National Petty Traders Union of
Liberia and the Ministry of Commerce adopted a memorandum of agreement to definea limited trading space on the streets and give rights to petty traders. Petty traders
pay fees to the municipality to obtain identification cards and taxes to the ministry
to obtain these rights to trade in a designated street. Between the memorandum’s
adoption in 2011 and 2015, 500 street traders were registered, and conflicts with thepolice decreased.
Source: Authors’ interviews with municipal officers of Dakar and Monrovia, December 2015.

The emerging urban middle class could fuel services growth
The middle class is growing rapidly in Africa, but it has been concentrated indiversifier countries (see Figure 7.9).3 Using the AfDB (2011) definition of the middle classas those with a consumption of USD 4-20 a day in purchasing power parity, a third of thediversifier countries’ population belongs to the middle class with 11% firmly in the upper
middle class in 2008. Elsewhere the middle class is still small: 5% of the population in
the late urbanisers and agrarian countries and roughly 14% in early urbanisers and natural
resources-based countries. Lack of inclusiveness has limited the growth of the urban
middle class in natural resources-based countries such as Angola, Nigeria and Zambia
despite their higher income level.

Figure 7.9. Share of middle class by income in Africa (%), 2008
Upper middle class (USD 10-20/day)

Lower middle class (USD 4-10/day)

Share of total population (%)
35
30
25

11

20
15
10

20

5

8

0
Diversifiers

6

5

Early urbanisers

2

2

3

3

Late urbanisers

Agrarians

8Naturalresources-based

Note: Constant 2005 purchasing power parity USD. Numbers are simple averages, unweighted for population
size. Our definition does not include the “floating” middle class, those with consumption of USD 2-4 a day, since
this threshold is barely above the poverty line and this group is vulnerable to falling back into poverty.
Source: Authors’ calculations based on AfDB (2011).
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The growth of the urban middle class can boost both supply of and demand for thedomestic services sector in Africa.
• First, as they graduate from poverty, the middle class can pursue entrepreneurial

activities, creating employment and productivity growth (Acemoglu and Zilibotti,1997).
• Second, the middle class provides the workforce and resources necessary for

entrepreneurs as this group values human capital accumulation and savings(Doepke and Zilibotti, 2007).
• Third, the middle class generates renewed demand for consumer goods, especiallydurable ones. It has a stronger preference for product differentiation that leads
to value added in branding. Consumer spending in Africa could grow from about
USD 860 billion in 2008 to USD 1.4 trillion in 2020 (McKinsey Global Institute, 2010).
Growth driven by expansion of the middle class tends to be more sustainable than
“export-led” growth (Gill and Kharas, 2007). Our experts’ survey shows that this boost
in demand is perceived as the biggest opportunity associated with Africa’s middle class,followed by their potential as entrepreneurs (Figure 7.10).

Figure 7.10. Main opportunities associated with the middle classfor African countries
Greater demandfor domestic products
Entrepreneurship drive
Value added throughproduct differentiation
More capable labour force
Other (democracy, attracting
foreign direct investment, etc.)
0

5

10

15

20
25
30
35
Number of times featured in the top two opportunities

Note: Survey responses by country economists of the AfDB and UNDP in 45 country offices in Africa. Responses
are weighted by one per country.
Source: AEO experts’ survey, 2016.
12 http://dx.doi.org/10.1787/888933350850

The majority of Africa’s middle class resides in urban areas. In Ethiopia, Malawi,
Mozambique, Tanzania, Uganda and South Africa, 63% of the middle class with aconsumption of USD 4-20 a day resided in urban areas in 2010. Their urban middle class
totalled 11.9 million people, or 20% of the urban population, with an annual expenditureof USD 27 billion, or 43% of total urban expenditure (authors’ calculations based on
Tschirley et al., 2015: Table 4).
Realising the potential of the urban middle class as workers for skill-intensive service
sectors requires a continued push for education in urban areas. Overall, Africa’s big cities
have a higher share of people with tertiary degrees than towns: 18% of the population
aged 15 or over in big cities have tertiary degrees as compared to 11% in towns, according
to our analysis of the Gallup World Poll (2016). The gap in tertiary degree attainment ismore pronounced in non-diversifier countries than in diversifier countries (Figure 7.11).

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7. How sustainable cities can contribute to Africa’s development

Figure 7.11. Education level of the population aged 15 years or older in Africa,
2009-10
Tertiary degree

9 years of education/secondary education

1-8 years of education% of labour force
100
90

11

18

No education

12

17

10

21

80

60

29

33

70

39

39

37

35

50
31

40
30

36

23
26

28

31

20
10
0

26

17
Big cities
and suburbs

Small towns

Africa

26

18

25

13

Big cities
and suburbs

Small towns

Big cities
and suburbs

Diversifiers

Small towns

Non-diversifiers

Note: The non-diversifiers include Algeria, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic,
Chad, Democratic Republic of the Congo, Ghana, Côte d’Ivoire, Kenya, Liberia, Libya, Malawi, Mali, Mauritania,
Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe. The
diversifiers include Egypt, Morocco, South Africa and Tunisia.
Source: Authors’ calculations based on Gallup World Poll (2016) for surveys between 2009 and 2010.
12 http://dx.doi.org/10.1787/888933350869

African cities attract a growing share of foreign direct investment
Foreign direct investment to cities is strategic to develop the necessary urban base in
manufacturing and services that could drive Africa’s structural transformation. FDI in
African cities can be analysed by using data on greenfield FDI, which represents investments
where parent firms start entirely new projects and facilities in host countries (see Annex
7.A1). Although Africa has one of the highest regional growth rates of FDI at 2% a year
between 2003 and 2014, its volume share of FDI compared to other regions is small. Cairo,
Tunis, Tripoli and Algiers are Africa’s top global FDI destinations by volume, with Cairo
capturing USD 37 billion and Tunis USD 22 billion between 2003 and 2014. The top six cities are
Arabic-speaking cities in North Africa, while the Anglophone cities of sub-Saharan Africa
rank lower. Johannesburg and Cairo are Africa’s prime global cities, one anchoring thesouth of the continent to the world economy, the other the north. Johannesburg is thefirst source city of African FDI (71st globally), but ranks seventh as an FDI destination(104th globally). Cairo is second in terms of FDI source and first in terms of destination.
With regard to FDI from within Africa, the most popular destinations are Cairo (18%),
Luanda (11%), Lagos (10%), Tunis (6%) and Johannesburg (6%). Maps 7.1 and 7.2 show the
global FDI networks investing in the main African destination cities for manufacturing
and services, respectively (Wall, 2016; forthcoming).
African cities attract higher levels of greenfield foreign direct capital investment
than would be expected considering city GDP levels (World Bank, 2015b). Relative to GDP,
sub­-Saharan African cities featured in the top 10% attractors of greenfield FDI between
2002 and 2012, as often as cities in the East Asia and Pacific region. In Morocco,© AfDB, OECD, UNDP 2016

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7. How sustainable cities can contribute to Africa’s development

Tangiers has utilised national investment in a large new seaport facility and connective
infrastructure from the port to the surrounding hinterland to attract a European
automobile assembly line. City stakeholders collaborated with the national investment
promotion agency and helped set up a dedicated training centre to upgrade the local
labour force and address the skill shortage of the automotive sector.
Cities of various sizes can form economies of scale through clustering to attract
investors. Regional integration, complementarity and collaboration are essential to
improving a city’s competiveness. Africa has four major “FDI corridors”: i) a North African
corridor including Casablanca, Tunis and Tripoli; ii) a Nile corridor including cities like
Cairo; iii) a West African corridor including Lagos, Abuja, Abidjan and Accra; and iv) a
Gauteng-Maputo corridor which includes cities like Johannesburg, Midrand, Pretoria andemerging Maputo (Wall, 2016; forthcoming). These corridors attract FDI because they
are comprised of several primary cities at close proximity to each other and connected
through good networks of road, rail and port infrastructure. The West African corridor
sees a high concentration of big cities like Lagos, Abuja, Lomé, Accra and Abidjan, which
benefit from dense clusters of secondary and tertiary cities and complement each otherin a reinforcing urban hierarchy. Finally, each of the four powerful regions depends on
globally well-established cities like Johannesburg, Cairo, Casablanca and Lagos to anchor
them to the global economy but also on rising investment destinations like Maputo andKigali.
FDI into urban Africa is both “market seeking” and “resource seeking”. Econometricanalysis shows that the most significant determinants of FDI in Africa’s manufacturingsector are domestic market size and infrastructure (e.g. ports, rail and road) to accessnatural resources. These two factors explain 28% of variations in FDI attraction to
Africa. For comparison, technological readiness is the most powerful explanatory factor
of foreign investments in Asia, followed by infrastructure and market size. Hence, thetypes of technology-sensitive investments that dominate FDI in Asia are not yet present
in Africa. Expanding Africa’s base in advanced manufacturing may imply further
investment into a country’s technological absorption capacity, improve the ease of doing
business and implement efficient customs regulations.
Foreign investment in Africa’s high-tech sector is much more concentrated in
fewer highly urban areas than is the case of other sectors (Map 7.3). The quality of
infrastructure (road, rail, airports and ports) is the most determinant variable for the
production of high-tech goods and for their distribution. The map also shows strong
clusters around Nairobi, Johannesburg, Port Elizabeth, the West Africa corridor,
North Africa corridor and Cairo corridor (red regions on Map 7.3), and some emergent
high-tech clusters for instance between Zimbabwe and Zambia (yellow regions on
Map 7.3). Whereas Nairobi is not a hot-spot in terms of total FDI, it receives a significant
flow into high-tech industries. This shows that regional strengths can vary strongly
across investment sectors (Wall, 2016; forthcoming).
FDI usually brings knowledge and technology to a region, activates the developmentof local business, and leads to new urban projects, but it does not always directly
create many jobs. In 23 African countries, trade and growth are mutually-supportive(Seyoum, Wu and Lin, 2014). However, the growth-enhancing effect of FDI stems fromthe productivity spill-over to domestic firms rather than from direct employment by FDI
firms. The agglomeration economies from industries’ locating in a given area are higher
in sub-Saharan Africa when domestic firms locate close to foreign multinationals,
especially those coming from developing countries from the “Global South” (Sanflippo
and Seric, 2014). By contrast, in a sample of 750 cities all over the world, FDI only created208

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7. How sustainable cities can contribute to Africa’s development

1 400 jobs per city directly, or 0.1% of the employment base, among the FDI-recipient cities
in 2012 (Fikri and Zhu, 2015). Among all the jobs directly created by FDI in Africa between
2003 and 2014, 83% were located in cities. Over the same period, FDI in manufacturing
is estimated to have directly created over 646 000 jobs, or half the total of FDI-related
jobs; FDI in services 281 000 jobs; FDI in high-tech 159 000 jobs; while FDI in resources (ornon-urban FDI) created 220 000 jobs (Wall, 2016; forthcoming).
While the success of each investment strategy depends on specific characteristicsof the city and country, Zhu, Larrey and Santos (2015) point out a four-step method forcity governments: i) identify and communicate the city’s value proposition through selfassessment of the city in line with regional and national strategies; ii) build the city’s
brand and address any negative perceptions; iii) co-ordinate with different institutions
and government agencies to provide comparable, credible and timely information toinvestors, especially on entry requirements into the domestic market while nurturinglocal partners and networks; and iv) provide targeted incentives to those firms hesitating
to invest and foster positive relationships with existing investors.

Urbanisation can help accelerate social development
Urbanisation provides opportunities to accelerate social development in Africa
in different ways. First, urbanisation could support inclusive growth and improvematerial well-being through higher disposable incomes for food, shelter and investment
in human capital which enhances one’s potential for generating income. Second,
agglomeration enables economies of scale in delivering indivisible public goods suchas transportation and communication systems. Third, densification creates a webof interconnected community groups and stakeholders in cities which can moreeasily engage in governmental poverty alleviation programmes, or grassroots social
development initiatives. Realising these benefits requires co-ordinated and holistic
policies to make structural transformation more inclusive. This section highlights how
new urban development policies might do the following:• improve transportation infrastructure within and between cities to connect people,

resources and ideas across regions• improve housing conditions, income equality and gender equality• lift vulnerable groups out of urban poverty by providing new social safety nets andpublic employment programmes• expand social businesses to better tap the potential of the urban informal economy• curb urban insecurity.

Better transportation infrastructure within and between cities can connect people,
resources and ideas across regions
Transportation policies will have a significant impact on sustainable development.
Continuing to develop mass transportation systems, notably public transportation,
within cities will decrease congestion costs and contribute to more sustainable cities.
Better transportation networks between cities will strengthen regional linkages.
Mass intra-city transportation systems can foster more inclusive development
Good transportation increases the efficiency of doing business in the cities. It reduces
the costs of moving goods and people and enables “just-in-time” logistic development.
Experience from other regions of the world show that reducing the uncertainty of transit
time is as important for increasing business efficiency as reducing transportation time.

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7. How sustainable cities can contribute to Africa’s development

Better connective networks allow firms to expand their catchment areas and scale
up their operations thanks to a larger, more diversified pool of potential customers.
Improving connections between city centres and their surrounding areas enables firms
to move out of cities centres to scale up operations while reducing congestion costs(McCormick and Oyelaran-Oyeyinka, 2007).
Transportation policies play a major role in connecting the urban poor to jobs.
The urban poor usually face a spatial mismatch, such as those residing in the ghettosof Johannesburg’s outskirts, for example. Car-oriented transit disproportionately
hurts the poor who cannot afford their own vehicles and cannot find jobs within awalkable distance from their homes. An experiment in Addis Ababa showed that
reducing transportation costs could increase the intensity of one’s job search, decrease
participation in temporary and informal work, and increase the likelihood of permanent
employment by six percentage points (Franklin, 2015a). In Lagos where transportation
costs account for 20% of the urban poor’s income, the Bus Rapid Transit system started
in 2008 has provided 2 000 direct jobs and 500 000 indirect jobs. The system reduced thecost of public transportation by 30% and offered a more stable price even amid a fuelscarcity.
Transportation policies help curb pollution. A review of 27 African countries reveals
that the majority have adopted environment protection acts, and established vehicle
fuel parameters, emission standards and air quality controls (SEI, 2012). A substantial
improvement has been the phase-out of lead, which started in 2003, and is now
essentially completed. However, monitoring and enforcement remains limited: only
eight countries have operational routine monitoring systems for air quality. The annual
mean concentration of particulate matter smaller than ten microns in diameter (PM10)
is higher in many African cities than the average city at global level (Figure 7.12).

Figure 7.12. Annual mean concentration of particulate matter smaller than ten
microns in diameter (PM10) in selected African cities
PM10 concentration (microgram/m 3)
200

160

120

80

40

og
ric
or
Hi
a
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gh
Ta
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t w ldanor Pr iiak o
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an
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an

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0

Source: WHO (2014).
12 http://dx.doi.org/10.1787/888933350872

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7. How sustainable cities can contribute to Africa’s development

Given that the bulk of African transport infrastructure has yet to be built toaccommodate the 867 million Africans that will live in urban areas by 2050, African
cities can learn from past successes and mistakes. Africa has less than 3% of the world’s
motor vehicles but more than 11% of global road fatalities (SEI, 2012). Making roads
more friendly to non-motorised use can reduce the death and injury costs of traffic
accidents. The modernist ideal of car-centric urban planning in the early 20th century
has proved to be detrimental to the well-being of urban residents and environmentallyunsustainable (Frenchman, 2014; Glaeser, 2012). In OECD countries, the transportation
sector contributes to half of total air pollution. Many OECD countries are trying to
break the cycle of car dependency and reverse their consequences at great costs. The
experiences of Paris and London have shown that constructing more roads will not solve
the traffic congestion problem due to the additionally generated vehicle use. Compact
cities promoting non-motorised and public transportation can efficiently connect theurban flow of people, goods and ideas at a lower social cost per capita.
Some African cities are developing integrated public transport networks to breakthe cycle of car dependency and create better connectivity within cities. This model
reflects the pursuit of efficient and integrated public transport that improves mobility,
inclusivity and access in cities. Table 7.2 lists several initiatives identified in this report’s
country notes.

Table 7.2. Mass transportation systems in selected African cities
Project

Stakeholders

Development outcome of the projectPrice per trip

Addis Abeba Light
Rail, Ethiopia

Operated by Shenzen metro USD 475 million
group and constructed(financed 85% by China
by Ethiopian Railways
Railway Engineering
Cooperation.
Cooperation)

Capacity of 60 000 passengers per hour, total
length of 31.6 km for the two lines. The first17km of rail connect the industrial suburbs
south of Addis to the centre. Another east-westline is still under construction, and additionallines are planned.

ETB 2-6(USD 0.27-0.82)

Run by Lagos Metropolitan USD 1.7 million per km
Area Transport Authority.

Africa’s first Bus Rapid Transportation system
NGN 20serves 47 different routes, carries as many as(USD 0.23)
200 000 passengers per day who pay on average
30% less in fares and spend 40% less time
travelling.

2012-15
Lagos Bus Rapid
Transit (BRT-Lite),
Nigeria

Cost

Launched in 2008

The transport sector employs 2.5 million people(15% of the city’s population).
The system relieves congestion in the city andprovides more effective public transport at lower
cost.
Will be managed in Public
DART System (Bus
Rapid Transit), Dar es Private Partnership withtwo private bus operators.
Salaam/Tanzania
Phase 1: 2003-present
Phase 2: from 2017
Rea Vaya Bus Rapid
Transit (BRT),
Johannesburg,
South Africa

Financed by Public
Transport Infrastructureand Systems Grant (PTIS)
by central government.

USD 290 million forPhase 1 (funded by theWorld Bank) USD 159.32
million for Phase 2(funded by AfDB, AGTF
and the Government of
Tanzania)

Capacity of 495 000 passengers per day.
By using cleaner fuels and reducing the roadsideconcentration of greenhouse gas emissions, it isenvironmentally efficient.

USD 300 million overall

Used by 45 000 commuters per day. The
ZAR 3.5-9
Employment Framework Agreement (EFA) signed (USD 0.64-1.67)
between the city and the taxi industry whose
drivers received training was expected to create
700 permanent jobs in Phase 1A and 3 300
temporary jobs during the construction period.

Phase 1: 2007-09
Phase 2: 2009-12
Constantine
Tramway,
Algeria
2007-13Casablanca Citadis
Tramway, Morocco
Phase 1: 2009-12
Phase 2: 2016-18

TZS 500-900(USD 0.80-1.45)

Setram/Alstom (49%),
DZD 44 billion (line 1)
ETUSA (36%) and the(about USD 400 million)
Entreprise du métro d’Alger(15 %), with a second line
to be constructed by the
French RATP.

Capacity of 100 000 passengers per day over
8km for the first line. The extension will serve
the new city Ali Mendjeli and the airport.

DZD 40(USD 1.28)

Moroccan government,
local government Alstom,
CDG Capital, BanquePopulaire du Maroc andKing Hassan II Fund.

Provides service to 100 000 passengers a dayover 31 km.

MAD 6(USD 1.68)

MAD 6 billion(about USD 400 million)

Note: Prices are converted into international USD, 2014 prices.
Source: AEO experts’ survey, 2016; AEO Country Notes, 2016.

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7. How sustainable cities can contribute to Africa’s development

Transportation policies are more efficient when developed in tandem withland-use planning and along urban catchment areas. Angel et al. (2015) recommend thatcapacity-constrained governments first focus on predicting urban growth, in order to
set aside the public space for parklands and establish the arterial grid. An arterial gridof dirt roads allows allocating public space without spending much on infrastructure.
The eventual spending can occur later as the city expands and new residents needmore services. Involving the peri-urban population and identifying the functional
catchment areas of cities help establish more coherent governance structures beyond
administrative boundaries.
Better transportation networks between cities can improve regional linkages
Inter-city transportation holds the key to spatially inclusive urban development(AfDB/OECD/UNDP, 2015). In a study of 15 African countries whose primate city is aport, Storeygard (2013) finds that reducing transport costs by 1% can raise growth in
the hinterland city by 0.2%. The effects differ depending on the surface of roads: cities
connected to the port by paved roads are chiefly affected by transport costs to the port,
while cities connected to the port by unpaved roads are more affected by connections tosecondary centres. This suggests that firms in cities not connected to the port may rely
more on their rural hinterland and intermediate cities for trade.
Each group of African countries exhibits a different pattern of road networks
and connectivity. The accessibility of the road network can be characterised by the
distribution of average per-person travel time to the nearest settlement with more than
50 000 people and the skewness of this distribution (Figure 7.13).
• The diversifier countries have moderately aggregated populations where 90% of

the population live on 20-40% of the land surface. Their more developed networksof cities and good transportation leave a small proportion of the population in
inaccessible areas as shown by the low average travel time and high skewness
level.
• The transportation network in early urbaniser countries slightly lags behind thediversifiers as manifested by their lower average and more skewed distribution of
travel time to the closest towns of 50 000 inhabitants. They often have a more
uniform distribution of the population than countries in other groups. This resultsfrom a fairly even distribution of rain-fed areas and a more frequent expansionof agricultural land due to farming crops such as cacao and cotton which lead tospreading out the population.
urbanisers and agrarian countries have the least developed road networks.
Average travel times to the nearest towns and cities are high, at three hours or
more, and a large share of the population is located in remote, inaccessible areas.

• LateGovernments can increase connectivity between cities and deepen regional
integration through development corridors. Corridors link different cities and regional
markets through transport, fostering trade exchanges while providing positive
externalities to local populations. In a regional context, an urban corridor becomes aline of economic integration. Unlike the colonial import/export corridors connecting
landlocked countries to the coast which contribute relatively less to intra-regional andinter-cities trade, development corridors connect cities of different countries among
themselves and with regional trade markets, following coastal, trans-Sahelian ortrans-Saharan directions (see Table 7.3).

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7. How sustainable cities can contribute to Africa’s development

Figure 7.13. Average travel time to nearest urban areas and skewnessof the distribution in Africa, 2010
Early urbanisers

Diversifiers

Late urbanisers

Agrarians

Natural resources-based

Skewness of the travel time distribution
6
EGY

5

Diversifiers

COG

LBY
TUN

SEN

4

TGO
NGA
SLE

3

GAB

GIN MAR DZA ZAF

Early urbanisers
CIV

GHA

BEN

LBR

CMR
ZWE

KEN

UGA

2

AGO

SDN

NER
MLI
BFA

BWA
TZA

ERI
BDI RWA MWI

Agrarians

MOZ
MRT
COD
CAF
TCD
SSD

MDG

1
0

SOM

ZMB

ETH

Late urbanisers
0

1

2

3

8
4
5
6
7
Average travel time to the nearest city of 100 000 inhabitants or more (hours)

Note: The x-axis represents the average per-person travel time to the nearest settlement with more than
50 000 people and the Y-axis is the skewness (measuring the asymmetry of the probability distribution) of theaverage per-person travel time. A lower skewness level in this case implies a longer right tail of the distribution,
which means more people in the country reside in the remote, inaccessible areas.
Source: Linard et al. (2012).
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Table 7.3. Main corridors in Africa
Corridor

Passing by

LengthCairo-Dakar

Cairo – Tripoli – Tunis – Algiers – Rabat – Nouakchott – Dakar

Algiers-Lagos

Algiers – Tamanrasset – Agadez – Tamanrasset – Kano – Lagos

4 504 kmTripoli-Cape Town

Tripoli – N’Djamena – Kinshasa – Windhoek – Cape Town

10 808 km

Cairo-Cape Town

Cairo – Khartoum – Addis Ababa – Nairobi – Dodoma – Lusaka – Gaborone – Cape Town

10 228 km

Dakar-N’Djamena

Dakar – Bamako – Ouagadougou – Niamey – Kano – N’Djamena

4 496 km

N’Djamena -Djibouti

N’Djamena – Djibouti

4 219 km

Dakar-Lagos

Dakar – Banjul – Bissau – Conakry – Free Town – Monrovia – Abidjan – Accra – Lomé –Cotonou- Lagos

4 010 km

Lagos-Mombasa

Lagos – Yaoundé – Bangui – Kisangani – Kampala-Nairobi – Mombasa

6 259 km

Lobito-Beira

Lobito – Lubumbashi – Lusaka – Harare

3 523 km

8 636 kmBox 7.4. Urban corridors contribute to West Africa’s structural transformation
The case of the Abidjan Lagos Highway Corridor (ALHC) illustrates the contribution of urban
corridors to West Africa’s structural transformation. The ALHC links Abidjan (Côte d’Ivoire) to
Lagos (Nigeria), passing through Accra (Ghana), Lomé (Togo) and Cotonou (Benin), connecting
functional, urban economic areas and building on economic interdependency. This line
concentrates 70% of West Africa’s regional economy. It is designed to promote the integrationof these five national markets and help overcome the size limitations of several of them. Urban
corridors provide local populations with simultaneous access to several types of infrastructureand services, such as highways, electricity, water and ICT connections. Connecting the LagosAbidjan-Dakar and Tanger-Rabat corridors would open opportunities for accelerating economic
expansion from West Africa towards North Africa. Financing a highway between Senegal
and Mauritania will complete the South-South co-operation between the Arab Maghreb
Union countries and the Economic Community of West African States (ECOWAS). The African
Development Bank finances urban corridors such as the ALHC, reinforcing integration between
African cities.

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By reducing trade costs, cities specialise in niche functions and complementary
products. Improved transport and communication can expand the market catchment
for firms. Better transportation between cities reduces the transaction cost of sourcing
intermediate inputs from specialised cities within a chain. Network analysis of
non-resource FDI in African cities reveals that cities can, but do not necessarily, competewith other cities from the same region. More specialised cities tend to attract more FDI,
because foreign investors find it more difficult to substitute a specialised city withcompetitive advantages in a given sector by another investment destination. Reducing
trade costs can also strengthen certain cities’ positions as “broker gates” of investment
in other cities: Johannesburg is the primary broker of all flows into Africa, followed by
Nairobi, Lagos and Cairo. These cities offer stock exchanges and infrastructure that canfacilitate financial flows into the surrounding regions (Wall, 2016; forthcoming).

Facilitating safe housing is key for urban development
Cities can improve housing conditions, particularly in informal settlements orslums, to ensure more inclusive development (see Chapter 6).4 Numerous practices ofslum upgrading in Africa show that place-based and comprehensive packages of sectoral
reforms, financing, job creation, urban governance and empowerment of community
groups can overcome the interlinked challenges of informal settlements and vulnerable
jobs.
• South Africa’s free stand-alone housing programme has shown that access toaffordable housing can alleviate house chores for women, reduce household poverty
and increase female participation in the labour force (Franklin, 2015b). Increased
tenure security has positively increased housing investment in many countries.
• In Nairobi, improved tenure security and basic infrastructure at home creates an“enabling” environment for slum dwellers to pursue entrepreneurial activities
which can provide additional income and diversify household livelihoods (Gulyani
and Talukdar, 2008).
• On

the downside, certain slum upgrading programmes may also have often
excluded tenants, subtenants and newly-established occupants who tend to be themost vulnerable. In Nairobi, certain programmes targeting housing inside slums
have led to higher property values captured by structure owners rather than aiding
low-income tenants (Gulyani and Talukdar, 2008).

A participative and holistic approach can allow policies to be sufficiently flexible
and tailored to the needs and capacity of local populations. Local governments and city
authorities can play a key role in planning land use more effectively and in mobilisinglocal resources, while co-ordinating with regional and national authorities. Where rental
mode dominates the slum housing supply, the government can facilitate the negotiations
between tenants and owners and use infrastructure investment and tenure legitimisation
as incentives to explicitly enhance owner occupancy in slums (Gulyani and Talukdar,
2008). Participatory slum upgrading has produced impressive results in several cities, forinstance in Dar es Salaam since 2004 (Collin, Sandefur and Zeitlin, 2015).
Morocco’s Villes sans bidonvilles programme provides a good example of placebased and participatory slum improvements. Between 2000 and 2010, Morocco ranked
second globally in achieving 46% of the objectives in slum improvements under Target 11of the 7th Millennium Development Goal. By the end of March 2010, 154 000 households
benefited from a housing unit, including 62 000 households in the 40 centres alreadydeclared slum free. The success of the programme relied on the following:
1) actively involving local authorities and holding them accountable through specificcontractual frameworks (City Contracts)2) enabling the private sector to supply the majority of housing
3) increasing affordable housing stock with a goal of 100 000 social housing units andservice land plots annually.

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The Villes sans bidonvilles programme aimed to build a consensus among all
stakeholders in choosing between three types of interventions: on-site re-housing,relocation and in situ upgrading. Innovative financial business models attracted privatesector participation, while targeted subsidies alleviated access to finance constraints forthe majority of the poor. The programme was financed 40% through the general budget
and a tax of USD 12 per tonne of cement, 30% through beneficiary household contributions
and the rest through profits from housing sales to upper-income householders and frominternational donors.
Similarly, Tunisia’s slum upgrading policy decreased the prevalence of slums from
24% of the total housing stock in 1975 to 2% in 1994 (World Bank, 2003). The Agencede Réhabilitation et de Rénovation Urbaine (ARRU) introduced a significant amount offormal housing to the market, alongside construction improvements and an increased
rate of infrastructure connection. Between 2007 and 2009, ARRU’s rehabilitation
programme allocated 70% of its budget to infrastructure and public facilities and 30% tosmall and micro enterprises (UN-Habitat, 2008).

Social safety nets can lift vulnerable groups out of urban poverty
The recent development of social protection schemes in Africa can be extended tourban areas to also benefit the urban poor. Social protection schemes – be they public or
private, formal or informal – are intended to lift individuals out of poverty and protect
them from the risks of falling back into poverty. In 2015, 40 African countries provided
unconditional cash transfer schemes, twice the number in 2010. Social assistanceprogrammes support 15% of all households in extreme poverty, versus 25% in rural
areas. These programmes are evolving to respond better to the demands of the growing
urban poor, many of whom are extremely poor (Chapter 6).
Burkina Faso, the DRC, Ethiopia, Mali and Tanzania have recently started
implementing what the World Bank refers to as a “first generation” of urban social
protection programmes. Their common objective is to alleviate poverty and mitigate
inequality, while connecting individuals to services, enhancing human capital andpromoting economic activity. Achieving effective coverage remains a challenge,
however. General subsidy schemes are generally regressive, whereas the benefit levels
and targeting methods require adjusting to the higher cost of living in cities. Individuals’
high mobility in informal settlements and income fluctuations make it difficult totarget beneficiaries. Administrative fragmentation and poor information flows between
national and local entities also impede the effective implementation of social protection
schemes.

Box 7.5. South Africa’s Expanded Public Work ProgrammeSouth Africa’s Expanded Public Work Programme (EPWP) shows that social protection
programmes can support urban services and promote economic activity. The EPWP wasestablished principally to employ the large numbers of low-skilled workers structurally excluded
from the formal economy. They were initially hired to construct and maintain infrastructure
in informal urban settlements. The programme has expanded to include social services andenvironmental work. It creates more than 1 million short-term jobs per year, at a cost to governmentof approximately ZAR 30 billion (USD 1.8 billion, or 0.8% of GDP). The average duration of an EPWP
job is 70 days, and the daily wage is well below the minimum for formal sector employment but(pro rata) above the level of the most generous monthly social grant. The EPWP interacts withother social protection arrangements. Participants are covered by unemployment insurance andworkers’ compensation benefits. Although such coverage is globally low in South Africa, it ishigher in urban areas than in rural areas: 4.3% vs. 1.9%, respectively. Ensuring such coverage may
help sustain the gains in welfare that this first generation of urban social protection schemes
hopes to achieve. Social insurance mechanisms should also be consistent despite inevitably
irregular and small contributions by precarious workers.

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Box 7.5. South Africa’s Expanded Public Work Programme (cont.)
The EPWP has not made the impact on unemployment that had been expected, however. Its
decentralised model – whereby the national government incentivises local administrations toleverage their budgets and employ their own staff – has experienced major challenges in terms ofbuy-in, reporting and compliance with national guidelines. Moreover, the continuing structural
weakness of the formal labour market has caused a high proportion of participants to remain in
the programme rather than take up formal employment. However, the innovations piloted by the
EPWP, both in terms of programme design and institutional structure, are a benchmark for largescale programmes elsewhere in Africa and beyond.

Expanding social businesses can help tap the potential of the urban informal economy
African urban dwellers adopt and create new forms of social businesses adapted totheir urban realities. Social businesses have long existed in Africa, extending back to
traditional systems of mutual support. Unlike traditional businesses, social businesses
are not driven by profits but by the mission to provide solutions to social challenges.
Nowadays, mutual assistance groups or community enterprises (mainly co-operatives)
are widespread in urban areas (Fafchamps and La Ferrara, 2012). Co-operatives offer
financial services to underprivileged people. In Kenya, for example, Savings and Credit
Cooperative Societies provide alternative to banks for low-income earners. Moreover,the informal economy often relies on digital payment technology. The spread of digital
payment systems (e.g. mobile phone-based money transfers such as MPesa in Kenya andTanzania or Orange Money in Côte d’Ivoire) allows integrating more formal businesses
with informal micro-entrepreneurs by providing both greater financial flexibility(working capital, micro-credits, etc.) and more efficient monitoring of transactions. In
addition, using digital applications, informal entrepreneurs can manage operations evenbetter by working from a simple smartphone such as Sokotext and Kaymu, which canlink urban consumers in informal settlements to local fresh food producers, for instance.
Innovative business models joining formal businesses and informal microentrepreneurs are being developed. The Bel Group uses its digital platform Sharing
Cities to build on existing networks of street vendors to develop its distribution
strategies across Africa. The company partners with many stakeholders, public, private
or voluntary, to provide sellers benefits in the form of micro-insurance, micro-credits,
vocational training and administrative support to help them formalise their activities.
This initiative allows Bel Group to optimise its distribution network while improving the
livelihood of sellers and contributing to the gradual formalisation of their businesses(Ménascé, forthcoming).
Social businesses can offer manufacturing and affordable social services. In Agadir(Morocco), more than 7 000 women work in some 150 co‑operatives that produce beauty
products using oil from the region’s argan trees. The 60 women workers receive 100% of
the profits, and the co-operative carries out actions to improve living standards in ruraland urban Morocco. South Africa’s International Centre for Eyecare Education provides
eye care products at a price affordable for the poor.
Some African countries are already implementing concrete policies to support thedevelopment of social businesses. For example, in 2014, the Malian government adopted
the National Policy for the Promotion of the Social Economy and the Action Plan for

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7. How sustainable cities can contribute to Africa’s development

2014-2018. The policy includes simplification of the legislation, support to existing social
enterprises networks and better access to credit for social enterprises. South Africa’s
New Growth Path framework of 2011 explicitly recognised the role of the social economy
in creating sustainable jobs while the Preferential Procurement Regulations reaffirmedthat engagement with disadvantaged South Africans was a key criterion for winningpublic sector procurement (Littlewood and Holt, 2015). Common strategies to help
develop social businesses across Africa and on other continents include these:• promote appropriate legal frameworks that simplify the institutionalisation of

informal initiatives (e.g. allow co-operatives to operate in different sectors)• facilitate access to finance for social businesses• provide financial support directly to social businesses based on their needs• increase awareness about social entrepreneurship through training programmes,

research and communication strategies• support existing networks that promote social entrepreneurship and foster theirdevelopment.

Holistic and integrated strategies can promote urban security
The multi-faceted nature of violence and crime requires an integrated and holistic
strategy. The Lagos State Security Trust Fund launched in 2007 has managed to reduce
the levels of insecurity and perceptions of crime problems (UNODC, 2011: 19). The
initiative aims for broader community response by fostering effective and enduring
public-private partnerships at all stages. Its multi-faceted strategies have included job
creation, improved social services, redevelopment of public spaces and the building ofa culture of prevention rather than repression. Similarly, the Safer Cities Programme
by UN-Habitat combines crime prevention, the establishment of ward tribunals,
neighbourhood watch initiatives, employment creation and skills training for youth, andsafety audits for women.
Urban projects successfully providing public goods and safety highlight theimportance of community involvement. Municipal actors and local communities such asneighbourhood watch organisations, women’s associations and religious organisations
are influential in urban Africa (Kilcullen, Mills and Trott, 2015). Women’s safety audits
have been experimented in Durban, Dar es Salaam, Nairobi and Abidjan. They havepermitted women to identify safe spaces and make recommendations based on lighting,signage, isolation, movement predictors, maintenance and overall design. In Lagos,
the Makako floating school project relied on community involvement. The Lagos State
Ministry of Physical Planning and Urban Development is incorporating the school into aregeneration plan for the entire Makoko slum.
Tailored policies responding to the specificities of local contexts throughmulti-partnerships can prove efficient. In the Western Cape province, the Community
Safety Improvement Partnership programme has organised Policing Needs and Priorities
meetings in 150 police stations to define local priorities and needs. The Chrysalis Youth
Development Programme trained more than 1 450 young people in the safety andsecurity sectors between 2012 and 2015 (ISS, 2015). These programmes reveal extensive
interaction between the public and private sectors within the public security sphere(Abrahamsen and Williams, 2008: 547).

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Africa’s urbanisation can contribute to environmental development
Urban areas can facilitate the efficient use of environmental resources throughsharing land, other natural resources, goods and services. For example, cities
endowed with efficient mass transportation systems reduce per capita pollution more
substantially than less densely populated places that rely on individual motorised
transportation (Glaeser, 2012). Moreover, sustainable cities show potential for shiftingto greener methods of production, because they bring larger economies of scale: “urban
green growth is fostering economic growth and development through urban activities
that reduce environmental impact, for example low air pollution and CO2 emissions; lowconsumption of natural resources including water, energy and undeveloped land; andthe protection of ecological services” (OECD, 2013b: 9).
Tackling urban environmental challenges is strategic for Africa’s sustainable
development. The stakes may be even higher for Africa than for other world regions (seeChapters 4 and 6).
• Because it is still urbanising, Africa can reap huge benefits by leap-frogging toa green economy. For instance, two-thirds of urban investments are to be madebetween now and 2050. Making investments in “no regret” urban infrastructure
and planning urban development are necessary. Today’s technologies provide
additional momentum for a new ecological model of service delivery in African
urban areas, thus shaping more sustainable cities (Cartwright, 2015).
• The costs of environmental degradation are high in Africa given the continent’s

levels of human development (see Chapter 6; Roy, forthcoming). Ignoring the alreadyhigh costs of air pollution – in terms of both public health and economic cost – will
act as a binding constraint on sustainable development. The environmental impactof local urban development goes beyond administrative boundaries to reach periurban and rural areas. Further, Africa is more vulnerable to climate change thanother world regions, although it does not contribute much to this global challenge.
Urbanisation is an opportunity to address climate change more efficiently bydeveloping more sustainable cities. Urbanisation gives governments the chance to use
and manage natural resources more sustainably, to sustainably manage waste, to create
green jobs for the low-skilled population, to improve public health through better accessto safe water and sanitation, and to minimise the rising costs of air pollution.
Policy makers can play an important role in making structural transformation moresustainable. Table 7.4 presents some examples of activities in various urban sectors thatcan reduce their environmental impact.

Table 7.4. Urban activities that can reduce cities’ environmental impact
SectorActivities

Land-use planning

Zoning that allows for a mix of land uses so as to reduce travel distances between home, work and other activities
Tax reform to encourage the development of underused lands in urban cores and to discourage urbanisation ofunderdeveloped land on the urban fringe

Transport

Expansion of and/or improvements to public transport
Physical improvements to encourage walking and cycling
Fees for personal vehicle travel (e.g. congestion charges)

Buildings

Retrofitting of existing building stock to increase energy efficiency
Minimum energy efficiency standards for new buildings

EnergyInstallation of distributed renewable energy generation (e.g. solar panels)
District heating and cooling systems
Fees that discourage peak energy use

Waste

Recycling of household and industrial waste
Waste-to-energy and landfill methane-to-energy systems
Fees that discourage waste generation

Water

Fees that encourage water conservation
Governance mechanisms to improve efficiency of water delivery

Source: OECD (2013b).

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Where city-level data is scarce, material flow analysis and data scaling from national
to city levels can be used to identify different types of African cities according to theirenergy consumption, as depicted in Table 7.5. This approach can inform the growth ofcities and the management of resource consumption through better energy efficiency,
material cycling, waste management and more sustainable infrastructure in urban
systems. A sustainable urban metabolism can be defined as an urban system restoring
biodiversity, reducing carbon emissions to a minimum of two tonnes of CO2 per capita andimproving resources efficiency, so that on average city dwellers consume approximately
eight tonnes per capita (Swilling, 2015: 4). Resource consumption by cities is a result aswell as a driver of the urban economy. Accounting for urban consumption of resources,
identifying the mechanisms behind their mobilisation, and measuring the intensity andefficiency of urban consumption patterns can help better understand the potential for
urban resource efficiency and sustainability.

Table 7.5. Classification of African cities based on socio-metabolic transition
Group 1
Resource-poor cities

Low consumption of all materials except biomass and water. Kinshasa, Kigali, Antananarivo, Lagos,
This suggests limited industry and low income and that the Ouagadougou, Niamey, Port Harcourt,
city is growing fast.
Bujumbura, Bangui, N’Djamena and Addis
AbabaGroup 2
Cities in transition

Medium consumption of biomass, water, electricity,
construction materials and fossil fuels.

Pointe-Noire, Luanda, Kampala, Douala,
Libreville, Mombasa, Nairobi, Harare,
Lusaka, Maputo, Dar es Salaam, Abidjan,
Accra and Kumasi

Group 3Resource-sufficient cities

Medium or high consumption of biomass, electricity, fossil
fuels and construction materials.

Algiers, Constantine, Alexandria, Cairo,
Casablanca, Cape Town, Johannesburg,
Malabo, Tunis, Marrakesh and Durban

Source: Swilling (2015).

Renewable energy can help fill the energy gap
Investment in green energy can help solve Africa’s challenge of synchronising
economic and environmental development. It would relieve firms of their energy
constraints while avoiding repeating other regions’ experiences of rising household andambient air pollution.
Increasing access to electricity is a chance to invest in renewable resources
Tackling the energy challenge, especially in urban areas, can improve theperformance of African firms. Inadequate or unreliable access to electricity remains oneof the biggest binding constraints on economic development:• Power outages are considered one of the biggest obstacles faced by firms. In

sub-Saharan Africa, 49% of small and medium-sized enterprises consider
electricity as a major constraint. The manufacturing sector experiences power
outage 56 days per year on average. Investing in generators costs three times theprice of purchasing electricity from the public grid.
• Unreliable electricity is one of the main reasons preventing firms from growing

bigger. In the informal sector, power outages cause up to 16% loss of sales revenues
compared to 6% in the formal sector. Outages also discourage start-ups as they lackcapital to invest in generators.
• Lack of access to electricity also leads banks to decline loans because it increases

firms’ economic risks.
Bridging the energy gap is easier in urban areas than in rural ones. In its Africa Energy
Outlook, the International Energy Agency (IEA) has developed a “central scenario” tomeet Africa’s electricity demand. In that scenario, two-thirds of the population gaining
access would live in urban areas and be connected to a main grid. Figure 7.14 shows that
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power consumption in 2040, mainly through urban on-grid access. Currently, around
two-thirds of sub-Saharan Africa’s population, or 635 million people, do not have accessto electricity. Over a third of the area’s urban population lacks access to electricity,
compared to less than 5% in developing Asia or Latin America. Sub-Saharan Africa’s
electricity demand per capita averages 400 kWh, 75% below developing Asia and lessthan the electricity needed to power one 50-watt light bulb continuously for a year.

Figure 7.14. Projected electricity demand from the sub-Saharan African
population gaining access to electricity, 2020-40
On-grid

Mini-gridOff-grid

Terawatt-hours
150

120

90

60

30

0

Urban

Rural

2020

Urban

Rural

2025

Urban

Rural

2030

Urban

Rural

2035

Urban

Rural

2040

Note: These projections correspond to the “New Policies Scenario” of the IEA (2014).
Source: IEA (2014).
12 http://dx.doi.org/10.1787/888933350896

The IEA estimates that increasing the electrification rate in sub-Saharan Africa fromaround 30% today to 70% in 2040 would cost USD 205 billion in capital investment. Thissum is less than one-fifth of total power sector investment in the region. Achieving thislevel of investment requires steadily improving the investment conditions for electricity
access-related projects, while rapidly improving capacity and effective co-ordination
among the various actors involved. Clarity and consultation over the pace of grid
extension allows the stakeholders, including local communities, to make an informed
assessment of the best options for expanding access. Donor programmes likewise need
to be managed carefully, both to ensure that the beneficiaries are fully involved fromthe outset, not least to guarantee adequate and on-going maintenance, and to avoid
undercutting fledgling commercial energy providers.
Renewable energy sources in Africa are mainly wind and solar (IRENA, 2015), thoughhydropower and geothermal sources also show potential to supply sustainable cities
with renewable energy.
• Africa could potentially generate 460 petawatt hours (PWh) annually through windenergy. Wind energy is currently the lowest cost source of electricity available andgenerated a 2 462-megawatt (MW) capacity at the end of 2014. Installed wind power
capacity in Africa is likely to rise to 75-86 gigawatts (GW) by 2030 (GWEC, 2014).
Morocco has the largest wind network. South Africa’s Cookhouse wind farm is thecontinent’s largest, with 66 turbines generating 138 MW of clean power.

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7. How sustainable cities can contribute to Africa’s development• For solar energy, Africa has the potential to generate 1 130 PWh per year throughphotovoltaic and concentrated solar power technology. Africa’s cumulative
installed capacity in 2014 was 1 334 MW, with South Africa leading the growth. In
poorer countries such as Mali, more than 7 926 solar photovoltaic home systems
and 500 institutional systems have been built.
• Other sources of renewable energy also show great potential. Hydropower plant

projects with a combined new capacity of 17 GW are under construction on thecontinent. The Grand Inga project on the Congo River envisages the installation of
40 GW of hydro-generating capacity. Africa has installed 606 MW of geothermal
capacity, of which 579 MW in Kenya. For biofuel sources, the potential is substantial
especially in the countries along the Equator, yet their capacity will have to balancewith concerns of food security and demographic growth.
Each African country needs tailored policies for renewable energy that tap its
own potential. Countries can also benefit from connecting to regional power pools todiversify and share the generation capacity through deeper regional integration, betterinterconnection and information exchange. Table 7.6 shows illustrations of sustainableenergy projects in Cape Town.

Table 7.6. Sustainable energy projects in Cape Town, South Africa
Project, locationand timeframe

Stakeholders

Development outcome of the project

Western Cape Industrial
Symbiosis Programme,
launched in 2013

Funded by Western Cape Government
Department of Economic Development
and Tourism, delivered by GreenCape.

The Green Economy initiatives of the Western Cape Government
connect local industries using each other’s by-products. Impact
estimates (2013/14) show an additional ZAR 2.1 million insales, ZAR 100 000 in private investments, cost savings of
ZAR 1.5 million, 23 tonnes of landfill diversion and savings of
1 820 megawatt hours (MWh) per year in energy.

IShak, 1994-2010

Initial funding by the South African
government’s Green Fund providing
ZAR 17 million. Initiated by the
Sustainability Institute Innovation Lab.

This community-based infrastructure initiative around solar
electricity utility serves at least 1 500 end users. Residents livingin the Enkanini informal settlement (in Stellenbosch) are offered
electricity service on a commercial but subsidised basis. Revenues
from fees plus a free basic electricity subsidy cover long-term
running costs of the service.

Source: AEO experts’ survey, 2016; Cartwright (2015).

By combining policies that target renewable energy and small manufacturingfirms, African countries can stimulate private employment creation. Renewable energy
uses up to ten times the labour intensity of traditional energy (Cartwright, 2015). In
addition, smaller firms and particularly manufacturing ones show the highest annual
employment growth. Africa could use a wide range of technologies to avoid lock-in tounsustainable and inefficient types of energy. For example, mobile phone data can beused for electrification planning, allowing local governments to provide electricity toareas with scarce information on energy consumption.
Targeted policies can increase access to clean cooking, particularly in urban areas
Household air pollution, mostly stemming from the traditional use of solid
biomass for cooking, costs Africa USD 232 billion in premature death tolls in 2013 (Roy,forthcoming). Some 755 million people in sub-Saharan Africa, 200 million of whom livein urban areas, rely on fuelwood and charcoal for cooking, typically with inefficient
stoves in poorly ventilated spaces. Even when people have access to modern fuels incities, such as liquefied petroleum gas (LPG), natural gas, biogas or electricity, they may
also continue to use solid biomass, a phenomenon known as “fuel stacking”. Within
urban areas, charcoal is a popular fuel choice as it offers higher energy content perweight than wood, making it easier to transport, store and distribute. Policies andeffective regulation of the charcoal market will increase the share of more efficient kilns.
Figure 7.15 shows the urban and rural populations who rely on solid biomass for cooking.

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Figure 7.15. African populations relying on solid biomass for cooking, 2012
Rural

Urban

Rural

Urban

Rural

Urban

Rural

Urban

Million
120
100
80
60
40
20

West Africa

Central Africa

East Africa

MalawiMadagascar

Mozambique

Tanzania

Sudan

UgandaKenya

Ethiopia

Central African Rep.

Chad

Cameroon

Congo, Dem. Rep.

Côte d'Ivoire

Niger

Ghana

Nigeria0Southern Africa

Source: IEA (2014).
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In the Africa Energy Outlook’s “central scenario”, the investments for access to clean
cooking in sub-Saharan Africa will reach USD 9.5 billion over the period to 2040. These
investments are largely made in urban areas where households mainly switch to LPG.
Policies play a major role in households’ decisions to spend a portion of their incremental
income on cleaner cooking facilities, which they generally would not consider. Among
the regional initiatives in place, ECOWAS initiated a programme in 2012 called the West
African Clean Cooking Alliance. It aims to ensure that by 2030 the entire ECOWAS population
has access to modern cooking fuels and devices. Kenya has plans to eliminate kerosene
use in households by 2022 and has a relatively developed market for improved biomass
cook stoves in urban areas. In Senegal, incentives have supported LPG use, and less than
25% of the urban population now uses solid biomass.

Multisectoral and co-ordinated policies can mitigate the rising cost of air pollution
Removing coal and petroleum subsidies could create large welfare gains. Phasing out
energy subsidies would account for more than a 50% welfare gain in Africa and at least
a 50% reduction in deaths from air pollution (Coady et al., 2015: Figure 12). Furthermore,
Africa’s diversifier countries may consider implementing transport-related mitigation
measures already tested in OECD countries, such as road-user pricing or subsidies forcompany-car usage, and adapt them to the local context (Harding, 2014; Roy, 2014).
Low oil prices provide an opportunity for African countries to gradually phase out
costly fossil fuel subsidies. Fossil fuels cost African governments 5.5% of GDP in 2015,
including 1.8% of GDP to cover the difference between the final energy price and theactual cost of fossil fuels. However, a gradual approach may be desirable, given the sizeof the required price increases and uncertainty about the optimum level of taxes. A
slow increase would allow time for households and firms to adjust and for governments
to further refine estimates and implement measures to protect the poor. The funds

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released from phasing out the subsidies can be used for targeted social protection toensure the welfare of those most affected by a price hike.
The need to mitigate Africa’s main environmental risks is obvious. Household air
pollution (HAP) is Africa’s most significant environmental problem, followed by unsafe
water and unsafe sanitation. Opportunities lie in comprehensive programmes of public
investment in urban improvements, simultaneously tackling these problems, alongwith APMP as part of a comprehensive urban policy agenda. The cost for Africa of thesefour environmental risk factors was USD 850 billion in 2013 and is heading towards
USD 1 trillion in the near future. A cost-benefit analysis must be performed and peer-topeer learning applied in regard to “old-style” environmental problems, such as unsafe
water and household air pollution, which advanced and emerging economies havelargely eliminated. But new environmental risks, such as APMP, should not be ignored
because their costs are rising (see Chapter 6).
The world has an interest in helping Africa reduce its air pollution. “Local” airpollution is also a transnational and indeed a global problem that requires international
co-ordination. For example, black carbon is an important greenhouse pollutant; it is a
product of open wood fires and of “the exhaust pipes of unsophisticated diesel vehicles”(Roy, forthcoming). As Africa’s population will increase to approximately 40% of theworld’s population in 2100, its air pollution could significantly contribute to climatechange.

Better access to safe water and sanitation in urban areas significantly improves publichealth232 million more urban residents in Africa have access to improved water in 2014
than in 1990, and 128 million urban residents more have gained access to sanitation
over the same period. Countries that have made the most significant progress are thosestarting from a lower base such as Guinea-Bissau, Mali, and Niger where less than
two‑thirds of the urban population had access to water in 1990. By 2015, these countries
have increased the share by at least 40 percentage points. Other countries are catchingup albeit at slower pace. Angola, Cabo Verde, Central African Republic, Mauritania, andTanzania have successfully increased the rates of urban access to improved sanitation
by more than 20 percentage points during this period. In contrast, urban access to water,
sanitation and hygiene (WASH) services delivery has deteriorated in several countries
during the same period as in Algeria, the DRC and Sudan.

Figure 7.16. Access to improved water in urban areas
and urban population growth in Africa, 1990-2015
Annual increase in share of urban inhabitants with access to clean water (percentage points)
3
SOM
GNB

2

NER

MLI

AGO
TCD STP MRTUGALBR CMR
BEN MDGTGO
CPV MOZCAF
SWZ
GIN GHA ETH GMBGAB SEN MWI
EGY TUNERIZAFBWA
CIV
NAM
MAR
NGA
BDI
COD
COG LSO
SYC
KEN
ZWE
ZMB
COM
DZA
TZA

1

SLE

DJI

MUS

0

GNQ

BFA

RWA

-1
0

1

2

3

4

Source: WHO (2014); UN DESA (2014).
12 http://dx.doi.org/10.1787/888933350912© AfDB, OECD, UNDP 2016

5

6

7
8
9
Annual urban population growth (%)

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7. How sustainable cities can contribute to Africa’s development

Policies in several countries have successfully increased urban access to improved
water and sanitation despite strong urban population growth. In Mali, the share of
population with access to improved water has increased from 53% in 1990 to 97% in2015 even if the urban population has increased by 5% a year during the same period(Figure 7.16). The combination of decentralisation and public-private partnerships has
enabled the urban water service sector to operate more efficiently than other utilities
in West Africa (USAID, 2010a). Water service management is decentralised to about
700 administrative districts or communal councils, while a semi-private firm, Energie
du Mali SA, holds concessional contracts to provide service and expand coverage to
16 urban areas including Bamako.

Box 7.6. Decentralisation for improved water supply and sanitation
performance in Angola
In Angola, infrastructure investments in the water supply and sanitation sector aswell as decentralisation of service delivery have significantly transformed the sector.
Service delivery was decentralised to autonomous or commercial provincial water andsanitation utilities with technical assistance from the central government. As a result,between 1990 and 2015 urban access to an “improved water source” increased from
52% to 75%, and urban access to improved sanitation increased from 65% to 89%.
Source: USAID (2010b).

Good management of urban wetlands leads to flood control, storage and purification ofwater and preserves biodiversity
Urban expansion requires sustainable management of ecosystems surrounding
urban areas, and the case of wetlands shows their value is often ignored. The
International Water Management Institute estimates total value of wetland services inAfrica at USD 25 billion a year (McCartney et al., 2010). While significant, this is far
less than the USD 70 billion for Asia, showing potential for greater returns. Wetlands
and mangrove forests buffer coastlines against storms, ocean surges and sea-level rises,
serve as spawning grounds for fish, and allow for activities such as beekeeping, carbon
sequestration, fisheries, aquaculture, fuelwood harvesting, ecotourism, research andeducation.5 Table 7.7 shows a variety of ecosystem services from wetlands with Africancase studies.

Table 7.7. Typology of ecosystem services from wetlands
Services

Ecosystem service

ExampleSupporting

Nutrient cycling

The swamps of Kampala’s Lutembe Bay filter silt, sediment and excess nutrients fromsurface run-off, sewage and industrial waste.

Biodiversity

Zambia wetlands support over 400 bird species and 120 fish.

Primary production

Photosynthesis takes place in aquatic plants and wetland vegetation.

Recharging aquifers
Provisioning Capture of species

Standing wetlands are a key resource for water cycles.
Urban and peri-urban fishing includes fish from freshwaters. The African inland catchexceeds 2.5 million tonnes per year.

Collection of plant foods

Palm species are collected for food in the Okavango Delta.

Collection of materials

Papyrus is harvested to make mats and baskets in Uganda.

Livestock grazing

Over a million goats graze the Inner Delta of the Niger River.

Crop growing

Rich peat soils support productive agriculture.

Energy source

Papyrus is compacted into fuel briquettes in Rwanda.

Timber from wetland forests Fuelwood and building timber is also collected from mangroves and riparian forests.
Medicines
Regulating

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Freshwater plant species are used as medicine in Tanzania.

Freshwater resources

Many African cities draw their drinking water from nearby wetlands, rivers and lakes.

Flooding

Wetlands absorb floodwater.

Storm protection

Mangroves and coastal forests help to buffer cities against storms and ocean surges.

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7. How sustainable cities can contribute to Africa’s development

Table 7.7. Typology of ecosystem services from wetlands (cont.)
Services

Cultural

Ecosystem service

ExampleCarbon sequestration

Wetlands and particularly peatlands are major carbon stores.

Climate stabilisation

Evaporation from major lakes helps to reduce climatic extremes and stabilise
temperatures.

Water purification

Wetlands help to neutralise various pollutants entering the water system from cities andagriculture.

Recreational

Wetlands can be a tourist attraction. The Okavango Delta brings 120 000 tourists a year,
creating jobs for 600 guides.

Spiritual

Many wetlands have local sacred values; Lake Fundudzi in South Africa is believed to be
the home of ancestral spirits.

Source: Prepared by the WWF for this edition of the African Economic Outlook.

Unplanned urban expansion can endanger wetlands’ ecosystems. When wetlands
are degraded or destroyed, the associated ecosystem services are lost, for instance in
the Sierra Leone River estuary and Haramous-Loyada in Djibouti. Urban expansion
around Lagos, Nigeria, caused losses of wetlands in four local government areas of 38100% between 1986 and 2006 (Adelekan, 2009). Map 7.4 highlights the four cities which
are likely to see their urban expansion taking place on the watersheds that supply themwith fresh water, possibly reducing their water provisions.
But planned management can help to reverse losses. Fish catch from Lake Malawi
tripled after part of the lake was protected and stocks were allowed time to recover(Drill, 2008).

Waste management is an opportunity for sustainable development
Waste management can generate valuable resources and be a source of energy andjobs for more sustainable cities. Recycling can limit the demand for virgin material andproducts from extractive industries. Waste, methane collected from landfills and bio
digesters can produce heat, electricity and other sources of energy. Landfill gas projects
can reduce methane emissions from municipal solid waste landfills by capturing 6090% of carbon emissions (Agbelie, Bawakyillenuo and Lemaire, 2015). In Kampala, where
40% of the residents have their waste collected, community involvement in solid-waste
collection and recycling has prevented drain blockages, flooding and contamination of
Lake Victoria (Cartwright, 2015: 22). Table 7.8 provides illustrations of projects led bydifferent types of stakeholders in selected African countries.

Table 7.8. Sustainable waste management projects in Africa
Project, location and timeframe

Stakeholders

Development outcome

Recycling factories,
2008-present.
Viana (Luanda) and Lobito(Benguela), Angola

Moncartel/Neuerth Group

The Portuguese group Moncartel constructs recycling factories forglass, plastic and engine oils. Neuerth Group invested USD 20 million
in a scrap steel recycling plant with the capacity of producing
1 200 tonnes of aluminium bars per month.

Zabaleen Waste Collection,
Cairo, Egypt

Zabaleen Community

65 000 Zabaleen waste collectors pick up about 9 000 of Cairo’s
15 000 tonnes of daily household rubbish. Up to 80% is recycled.

Solid Waste Recycling,
Mauritius

Mauritius’ Solid Waste
Recycling Company Ltd.

The company produces 20 000 tonnes of compost per year out ofmunicipal solid waste; this has enhanced agricultural productivity
and replaced imports of chemical fertilisers for agriculture.

Reliance Compost,launched in 1998. Cape Town,
South Africa

Local municipalities

Reliance Compost removes green waste and turns it into organic
compost for sale to the agricultural sector. In Cape Town, thecompany employs 220 people and saves 180 000 tonnes worth of CO 2
emissions per year. In Western Cape, it has reduced 13 million cubic
meters of green waste in land fields since 1998.

AgriProtein, launched in 2014.
Cape Town, South Africa

Africa Enterprise Challenge
Fund, Stellenbosch
University, The Bill andMelinda Gates Foundation,
Biocycle initiative

This project consists of using municipal waste as a feedstock inbreeding fly larvae, which are sold to livestock and poultry farmers
to reduce dependence on fishmeal and scarce fish stocks. The
environmental savings from lower fossil fuel consumption, land
use and carbon emissions is USD 2 500 for every tonne of MagMeal
produced.

Source: AEO experts’ survey, 2016; AEO country notes 2016; Cartwright (2015); ILO (2014); Swilling (2015).

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Currently sub-Saharan Africa generates about 62 million tonnes of waste per year.
The urban lifestyle and urban sprawl increase the costs of waste disposal (Cartwright,2015). Bio-waste from vegetables and other biological products still make up the
majority of Africa’s waste, at 50-80% (Okot-Okumu, 2012). A global trend in the increasein electrical and electronic goods points towards a change in waste composition andmore plastic and e-waste in Africa’s cities. Africa has the lowest waste collection rate,
below 50% on average compared to OECD countries’ rates largely over 90% (World
Bank, 2012). In Egypt, collection rates lie at only 40% of total municipal solid waste,
recycling at 2.5%  and unsound disposal at 83.5% (D-Waste, 2016).
Reforming the waste collection system allows for financial savings. In Dar es Salaam,
the collection rate of solid waste production is only 37%, however the municipality’s
waste collection operating costs approach 50% of the overall municipal budget (World
Bank, 2012). While most African cities spend 20-50% of their annual budget on solid
waste management, only 20-80% of the waste is collected (MSO, 2013). The legislation
for different waste streams is often fragmented and low collection coverages suggest
inefficiency in waste management (UNECA, 2012).
In the long run, African sustainable cities can develop a zero waste approach adapted
to the local context. The zero waste approach could eventually achieve 100% recycling
through better waste management (Zero Waste Europe, 2014). In 2001, the Polokwane
Declaration on Waste Management developed a zero waste plan for South Africa by
2022 (Mohee and Simelane, 2015). A zero waste city requires combining social, political,
economic and technical interventions in targeted urban areas that complement one
another. Options for policy makers include user-pays waste charges, the demarcation of
space for recycling, bio-digesters, upcycling and composting.

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7. How sustainable cities can contribute to Africa’s development

Annex 7.A1. Methodology for mapping financial flows to African cities
Today highly dense global and regional networks of foreign direct investment (FDI) haveemerged, tying cities together worldwide (Wall et al., 2011; Wall and van der Knaap, 2011).
FDI concerns a firm in one country investing in a firm in another country, with the intent ofgaining control over its operations. It is made up of two parts: “mergers and acquisitions” and“greenfield investments”. Mergers consolidate particular firms into one, and acquisitions
take monetary possession of other firms. Greenfield investments represent investments
where parent firms start entirely new projects and facilities in host countries. Greenfield
investments relate more directly to the actual development of urban economic activities
and are therefore analysed in this chapter, notably for Maps 7.1, 7.2 and 7.3.
The data analysed in this study concern “cross-border” greenfield investments. The
data draws from the Financial Times’ database fDi Markets (2016), which is the mostcomplete set of data on international investments between cities and countries. The
data concerns global FDI flows to African cities.
• First, the fDi Markets data was verified by testing it against similar data used in the

UNCTAD 2015 report, which also partly made use of the same database. The results
show very high correlations across a similar panel for the same period (2003-14).
• Next, missing values of fDi Markets data were completed using the Orbis database(Bureau van Dijk, 2016) and online sources. The data was then geocoded with
Cartesian co-ordinates for all the origin and destination cities in the Africa dataset.
Based on this data, the three maps were generated by means of ArcGIS software.
• To derive the main variables determining FDI to African, Asian and European world

regions, we have used data on the volume (count) of greenfield investments andthe indicators from the Global Competitiveness Report 2014-2015 indicators (World
Economic Forum, 2015), creating a matching panel of nine years, i.e. 2006 to 2014.
• Out

of 24 sub-indicators, we created composite indices for the following
7 categories to calculate each country’s competitiveness index: goods market
efficiency, infrastructure, macroeconomic environment, labour market efficiency,
technological readiness, market size and health. Each index is adapted to thescale and nature of this study: we selected a set of dimensions and indicators
corresponding to factors that contribute to inward greenfield investments incountries. The selection of the indicators is based on theory and the P2 computation.
This computation uses a synthetic distance index that combines all indicators
into a single value. This allows comparisons between entities (both temporal andspatial) and is considered to be an exhaustive synthetic indicator because it is notbased on a reduction of information.

• To calculate the P2 distance (Pérez-Luque et al., 2015; Bonet-García et al., 2015), we

started with a matrix X of order (m, n) in which m is the number of spatial units(countries) and n, the number of variables. Each element of this matrix, xri, is thevalue of the variable i in the spatial entity r. The P2 distance indicator calculates
the distance of each spatial entity with regard to a theoretical spatial entity ofreference. Initially, a distance matrix D is calculated as:				Dri = |Xri-X*i|

where x ⁄i is the r-th element of the reference base vector X ⁄ = (x ⁄1, x ⁄2, . . ., x ⁄n).
For each variable a reference value must be defined to compare different spatial
entities.
• Next, all basic assumptions were tested on the data including multicollinearity,

heteroskedasticity, normality and outliers. Because the dependent variable isconsidered to be count data, we employed the negative binomial model, which is amember of the Poisson estimation family.
Source: Prepared by Ronald Wall and Dorcas Nthoki (2016), Institute for Housing and Urban Studies/Erasmus
University Rotterdam on assignment for UN-Habitat, Nairobi for this edition of the African Economic Outlook.

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7. How sustainable cities can contribute to Africa’s development

Notes
1. Food imports, at USD 86 billion per year on average between 2011 and 2013, represent only asmall share of the urban food market (authors’ calculations based on UNCTAD, 2014).
2. The middle class is defined here as those with an income of USD 4-20 a day in purchasing
power parity (AfDB, 2011).
3. There are multiple definitions of the middle class in developing countries. Some are
non-monetary definitions such as aspirations and lifestyle, or asset-based measures.
Most definitions set a monetary threshold based on per-person income or consumption
using monetary data. They reflect different ideologies, and each has its own limitations inmethodology.
4. A slum household is defined as deprived in at least one of the five following amenities: durable
housing, sufficient living area, access to improved water, improved sanitation or secure tenure(UN-Habitat, 2006).
5. In Viet Nam a USD 1.1 million investment in community restoration of mangroves saved an
estimated USD 7.3 million per year in sea dyke maintenance.

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7. How sustainable cities can contribute to Africa’s development

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Chapter 8

National urban strategies
for sustainable cities in Africa
While urbanisation does not in and of itself create structuraltransformation, it is a fundamental megatrend that will continue
to profoundly transform African societies and economies in the
coming decades (Chapter 6). More can and must be made of thismegatrend for advancing the agenda of sustainable development on
the continent (Chapter 7). Although policy priorities and sequencing
will depend on each country’s specific context, new and ambitious
national urban strategies will need to tackle three broad challenges:i) how to better manage the country’s economic and social spacesin the context of rapid urbanisation; ii) what governance structures
should frame the design and implementation of those strategies;
and iii) how to finance the necessary investment.

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In brief
This chapter proposes elements of a new policy agenda for improving the contributionof sustainable cities to Africa’s structural transformation. It explains how urbanisation may
be harnessed through deliberate policy and enabling services. Participative, multi-sectoraland place-based national urban strategies can catalyse citizen-led urban development toincrease well-being in cities and in their catchment areas. While strategies will necessarily becontext-specific, countries will likely have three overarching priorities: clarifying land rights;
accelerating and improving the provision of infrastructure and services; and managing the
growth of intermediary cities. Successfully implementing those new urban strategies requires
effective multi-level governance systems, brought about by context-specific decentralisation,
capacity building and increased transparency at all government levels. National and local
governments also can draw from a wide range of financial instruments to support urban
development. Mobilising all of those instruments will be necessary to bridge the financing
gap and fulfil the potential of Africa’s urbanisation.

New strategies can promote sustainable cities for Africa’s structuraltransformation
How can African governments put in place or improve their national urban strategies
successfully? The African Economic Outlook 2015 laid out seven main steps guiding thedesign and implementation of regional development strategies by governments and local
stakeholders, of which urban strategies may be considered as a sub-set (AfDB/OECD/
UNDP, 2015). The first section below considers the first two after a short introduction:
step one: collect as much reliable data as possible with local stakeholders; and step two:
identify integrated priorities that complement existing national development strategies.
The second section identifies core policy priorities that apply to most African countries
as a contribution to step three: define a strategy of multi-annual policies. The third
section focuses on phasing in the multi-level governance system necessary for steps
four to six: implement policies, monitor implementation and evaluate outcomes. The
last section reviews options for mobilising financial resources (step seven) in support ofnational urban strategies.
While Africa’s sturdy urbanisation trends have produced a number of positiveeffects, in most countries urban policies have yet to promote structural transformation
in a sustainable manner. As a result, “slum urbanism” is a reality for most of Africa’s
city dwellers. It is characterised by low productivity and exposure to multiple risks
and is void of conventional urban advantages (Pieterse, 2011). In many countries, thissituation compounds existing societal inequalities along ethnic, economic and genderdividing lines. In turn, pressing social problems produce short-term and reactive policies
which cannot solve the structural challenges nor seize the opportunities generated
by urbanisation. African countries can break this vicious circle of inadequate urban
policies and slum urbanism by adopting new, comprehensive, effective national urban
strategies, with a view to making African cities sustainable (Box 8.1).
The New Urban Agenda to be agreed on at the Habitat III Conference in October 2016
can give impetus to that process. Shaped by the Sustainable Development Goals, COP21
and a series of preparatory meetings and documents (Table 6.5), Habitat III focuses theattention of decision makers on the imperative of forging the policies, governance andfinancial arrangements necessary to benefit more from urbanisation.
In the context of this New Urban Agenda, and in line with the basic principles definedin the African Economic Outlook 2015 for promoting regional development, Africa’s new

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urban strategies should be multisectoral, participatory and place-based. They should
be designed and implemented as part of multisectoral development strategies, in orderto address in a coherent and effective manner the complex urbanisation challenges
documented in Chapters 6 and 7 of this report. They should be participatory so as todraw from the knowledge of the various actors involved and fit their needs. Finally theyshould be place-based, and especially consider the continuum of rural-urban linkages,
to ensure that the urbanisation dividend is reaped by urban and rural dwellers alike.

Box 8.1. What is a sustainable city?
Definition. This report applies the Brundtland Commission (1987) definition of sustainable
development as “meeting the needs of the present without compromising the ability of future
generations to meet their own needs” at the city level. It goes beyond a strictly ecologicaldefinition and is similar to the World Bank (2013) definition of “urban communities committed
to improving the well-being of their current and future residents, while integrating economic,
environmental, and social considerations”.
Measurement. Several indices measure the sustainability of cities, such as UN-Habitat’s City
Prosperity Index, The Economist Intelligence Unit’s Africa Green City Index, Arcadis’ Sustainable Cities
Index, AT Karney’s Global Cities Index, or Mastercard’s Global Destination Index. However, most arelimited by the lack of data at city level. New methods based on the concept of “urban metabolism”
can offer a solution (Currie et al., 2015): Resource Flow Mapping uses geographic information
systems to illustrate the distribution of urban and national resource flows and their volumes.
Maps 8.1 and 8.2 present the example of flows of water in Cairo and Egypt at local and national
scales. They show that 50% of the city’s water, entirely drawn from the Nile River, goes for refineduses and the other 50% for unrefined uses. Refined water is consumed mostly in residential
areas, followed by commercial areas, industry, government agencies and other. Cairo treats onlya small amount of wastewater: 17.8%. The untreated water is dumped in the Nile and the North
Lakes, polluting the country’s main water sources.
Remit. This report considers the sustainability of cities at local as well as national levels. Cities“import” resources such as energy, water, air and food and often store their waste far away.
Their resource consumption footprint therefore goes well beyond their immediate surroundings.
Labour and capital mobility also imply that their development has a profound impact on the entire
country. Finally, as the functional and built-up areas of a city often surpass its administrative
boundaries, managing it calls for more encompassing governance systems that take into accountits surrounding areas.

Progress in designing and implementing strategies is uneven across Africa
To date, 16 out of the 51 African countries reviewed by Yatta (2016) have adopted
national urbanisation strategies, i.e. less a third of African countries. Of the 35 whichhave no explicit urban strategy, 7 have considered formulating one, while 28 have yet
to. Table 8.1 reviews the strategies of those 16 countries, their priorities and extent of
implementation: most of them focus on infrastructure, social service delivery, financing
and land ownership. Urban poverty, spatial distribution and mobility are other recurrent
issues. Six countries (Algeria, Benin, Burkina Faso, Ethiopia, Mali and Niger) aim to foster
regional economic centres outside of the main urban agglomerations and provide basic
services balancing rural and urban regions. Ghana, Morocco, Senegal and Swaziland
are most advanced in formulating clear and pertinent urbanisation plans; the latter two
have embedded their urban strategy in national development plans.

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Table 8.1. Urbanisation strategies in 16 African countries
Country

Name of national strategy

Time frame

Strategies

Comments

Algeria

Stratégie de développement
des villes

2000-25-Balanced urban growth-Improved urban economy
and environment

Linked to national spatial strategy

Benin

Agenda spatial

Permanent-Specific economic functions plannedfor different regions-Territorial development

Insufficient means to implement

Burkina Faso

Programme de Développement Permanent
des Villes Moyennes-Balanced growth of big cities-Rural-urban linkages

Incomplete implementation
Insufficient financing

Côte d’Ivoire

Programme d’infrastructuresurbaines d’urgence

2008-15-Infrastructures

International Development Association
grant of USD 144 million for targetedinterventions in five sectors: drinking
water, urban sanitation, solid waste,urban roads and local authorities

Ethiopia

Urban local government
development project

2014-19-Municipal services and infrastructure

Connected to urban management
strategy

Gabon

Stratégie Nationale d’Habitat et Permanentde Développement Urbain-Housing-Infrastructure-Institutional development

Insufficient resources

Ghana

National Urban Policy

2012-30-Balanced urban growth-Rural-urban linkages-Improved urban environment-Infrastructure-Affordable housing

Implemented with international
agencies, weak links with national
development

MalawiMalawi City Development
Strategy and Slum Upgrading
Programme

2010-20-Urban management-Institutional development-Infrastructure

Insufficient resources andco-ordination among regional authorities

Mali

Politique Nationale de la ville

Permanent-Quality of livelihoods-Enhancing local economies-Infrastructures

Based on the strengthening of therole of intermediary cities and on theimportance of rural-urban linkages

MoroccoStratégie Nationale deDéveloppement Urbain

Permanent-Regional growth poles-Large-scale infrastructure-Promotion of middle-sized cities

Competitive cities, growth poles
favouring social cohesion and efficientuse of resources

Niger

Stratégie Nationale deDéveloppement Urbain

2010-30-Stronger urban networks-Urban management-Land rights-Infrastructure and services

Insufficient resources

RwandaStratégie nationale de miseen place des infrastructures
publiques et de renforcement
des capacités des institutions
administratives décentralisées

2000-20-Infrastructure and capacity building

Political commitment but insufficient
resources

SenegalProgramme d’Appui aux
Communes

2006-10-Capacity building-Legal tools-City contracts-Investment-Infrastructure

Implemented on a national scale through450 city projects and supported by the
Agence Française de Développement

South Africa

Integrated Urban Development
Framework

2014-present - Integrated package of spatial planning
In its formulation process(transport, housing, infrastructure,
land governance, local economic
development, community empowerment
and urban governance)

Swaziland

Local Government Project

2011-17-Institutional support-Infrastructure

In line with national development

UgandaNational Urban Policy

2013-30-Urban management-Institutional development-Infrastructure

Insufficient resources

Source: Yatta (2016) and République de Côte d’Ivoire (2016).

Having an urban strategy is not enough. It needs to be integrated into the long‑term
national development strategy, decided on and implemented coherently with theparticipation of local actors, and supported by adequate financing. Some countries
provide successful examples of meeting some of these challenges. Morocco in particular
has devoted considerable human, financial and technical resources to implement
its strategy: cities are considered engines for regional and national growth and part

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of a strategy to make the country more competitive. The government encouraged
investments in skills and connective infrastructures in the two port cities (Tanger
Med Project and Casablanca port), and fostered the development of new towns suchas Chrafate or Tamensourt. Ethiopia has also undertaken important reforms towards
political, fiscal and administrative decentralisation, laying emphasis on the process of
capacitating cities (Box 8.2). Participatory exercises building alternative future scenarios
help identify opportunities as Ethiopia urbanises. Developing special economic zones
or clusters is one of several policy options envisioned to unlock the potential of thecountry’s secondary urban growth centres. The Ethiopian Cities Prosperity Initiative andits index developed by Ethiopia’s government and UN-Habitat help monitor progress.

Box 8.2. Ethiopia’s integrated approach to urban
and socio-economic development
Two main policies underpin Ethiopia’s integrated approach. First, the Growth andTransformation Plan (GTP) has framed Ethiopia’s urban policies since 2010. The Ministryof Urban Development, Housing and Construction foresees three five-year episodes oflarge-scale industrial and structural development. Initiated at the national level, the GTP
emphasises participatory governance involving citizens and private actors. Second, the“Ethiopian Cities Resilient, Green Growth and Governance Program Package” focuseson multiple development pillars, including job creation, urban planning and capacity
building (Cheru, 2014).
In addition, substantial financial resources have been allocated. For instance, a loan of
ETB 4.8 billion by micro finance institutions helped create some 3 million jobs between
2005 and 2011. A total of 583 877 micro and small enterprises were granted credit forvarious business activities.

In other countries, however, most existing urban development strategies simultaneously
face several major challenges. They are not adequately co-ordinated with other key policy
frameworks, such as infrastructure investment programmes. Also, consulting the various
stakeholders of the urban system proves difficult, as closely intertwined formal andinformal economies make it hard to even recognise all of them; finally, limited capacityand finance impede effective implementation: several of the 16 countries are deemed tohave allocated insufficient resources to carry out their strategies.

Effective strategies start with reliable data and participation of civil society
Urban strategies are only as good as their evidence baseThe data collection and analytical component of national urban strategies helps grasp
a country’s demographic shifts and economic geography in its sub-regional and global
contexts. It identifies the binding constraints (e.g. infrastructure, energy, skilled workers,
information) holding back the specific potential of cities and regions. Policy makers canthen better understand the contribution of specific places to job creation and economic
output by sectors, and how different categories of the urban system relate to rural areas
and other cities. Optimising the connections between sectors or regions ultimately
enhances the aggregate productivity and performance of the national economy.
For example, Nairobi might be a crucial export node of freshly cut flowers for theEuropean market, but it depends on growing regions well beyond the capital city, and on
the connective infrastructure to quickly ship the flowers from the point of production
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how this value chain operates spatially and how effective cross-municipal bordermanagement can optimise the prospects of this sector for it to grow.
The resulting economic map should then be overlaid with demographic movement
and mobility analyses, which are key to managing national logistics and planninginvestment for the provision of essential services to populations. To assess the relative
strengths and weaknesses of a country’s functional urban areas, one may categorise
them by number of inhabitants. A territorial (place-based) analysis – rather than
traditional, national analysis by sectors – allows assessing multi-sectoral performanceand exploring both the formal and informal dimensions of the local economy.
Such analysis requires drawing from the unique knowledge of local actors, including
informal ones. While this is inevitably difficult, a number of successful examples exist.
Some from Dakar, Monrovia and Morocco’s Villes sans bidonvilles programme, among
others, are documented in Chapter 7 and others in Box 8.3. The coming 2020 census
round provides an opportunity to gather complementary data on informal settlements
by inserting a location identifier in the questionnaire (e.g. de jure population, housing
conditions, economic activities, infrastructure and services).

Box 8.3. Data collection by citizens’ initiatives
Several initiatives involve citizens collecting social and environmental data used for
proposing, driving and monitoring new education, housing, health and infrastructure
projects. “Citizen-experts” working at village and neighbourhood scales can collectinformation quickly and with local insight. For instance, the Map Kibera (2016) project
started in 2009 gave marginalised communities greater visibility, information and power
to change their living conditions. Similarly, the Spatial Collective works at grassroots
level doing demand-led community mapping that feeds geographic information
systems, which can be turned into powerful visualisation devices.

New technologies such as geographic information systems (GIS) can enable cheaper,
more accurate and faster data collection. The data can serve, for example, for spatial
analysis of populations vulnerable to climate change or for detecting growth hotspots
in a city (Table 8.2). In Kampala and Abidjan, mobile phone data analysis is providing
new information on economic and mobility patterns, although not yet from fully
representative samples.

Table 8.2. New technologies for urban governance and data collection
Project

Stakeholders

Development outcomes

Revenue collection information
Governments of Denmark and Tanzania, World Using satellite data and GIS to identify and registersystem (LGRCIS), 2014, Arusha, Bank
taxpayers and satellite photographs to register
Tanzania
houses. Increased tax revenues by 71% between
2014 and 2015.
City Dashboard, 2013, Fez,
MoroccoCity of Fez, AfDB, Microsoft

Monitoring service performance and 70 quantitativeand qualitative socio-economic, service-visibility,and quality-of-life indicators.

Know Your City Campaign

Slum/Shack Dwellers International working
with different African affiliates, e.g. the Ghana
Federation for the Urban Poor

Collecting “slum data” through mapping,house-to-house surveys or settlement profiling. Morethan 600 settlement profiles created since 2009. Also
serving policy negotiations with city authorities.

AfriLabs

Pan-African network of technology hubs

Serving some 40 tech hubs in 20 African countries
and providing business start-up incubators, coworking spaces, innovation labs, and communitybuilding and peer learning spaces.

Source: AEO experts’ surveys, 2016; AEO country notes, 2016; Cartwright, 2015; Swilling, 2015.

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Urban priorities must be integrated into long-term, national development strategies
National urban development strategies can succeed when a government identifies
the priorities that contribute the most to the country’s long-term development strategy.
Priorities must be few, to avoid scattering resources, and place-based so as to avoid thelack of co-ordination often induced by purely sectoral approaches (AfDB/OECD/UNDP,
2015). Alternative scenarios for a city’s future can help formulating the priorities more
effectively, by developing foresight studies involving formal and informal stakeholders.
The Ethiopian Urban Expansion Initiative is an example of how scenario building anddata collection can help plan for the country’s expected rapid urbanisation (Box 8.4).

Box 8.4. The Ethiopia Urban Expansion Initiative
The Ethiopia Urban Expansion Initiative (UXI) assists rapidly growing cities in preparing fortheir spatial expansion. It was established in 2013 by New York University Stern Urbanization
Project and Ethiopia’s Ministry of Urban Development, Housing, and Construction. The UXI relies
on a planning mechanism that prioritises securing land for a 1 km2 grid of arterial roads andenvironmentally sensitive public open spaces. It emphasises leadership by local planners andis tailored to match the capacity of the officials responsible for implementation. It aims for a
30-year planning horizon, with the understanding that more detailed area plans can be developed
as the city expands. The UXI has been incorporated into the national Growth and Transformation
Plan II, which forecasts urbanisation in mid-sized cities as a key part of Ethiopia’s plan to become
a middle-income country by 2025.
The UXI started by calculating future land area per person for four mid-sized, rapidly growing
Ethiopian cities: Bahir Dar, Hawassa, Adama and Mekele. This was combined with population
estimates to identify the amount of land for expansion that would be needed in 2040. These
cities then created small urban expansion teams led by a local senior administrator tasked with
developing and implementing the arterial grid plans. The cities initially worked with regional
governments to expand their municipal boundaries and then started a programme of surveys toestimate the total cost of compensation for the land for the arterial road network – no more than
5% of the total land in the 2040 expansion area. This was followed by the submission of budget
requests and a commitment of USD 8.9 million in 2014/15 and USD 24 million in 2015/16. The
cities have begun formal surveys and compensation payments and are constructing roads on theimmediate periphery. The four cities have paid compensation for many hundreds of kilometresof roads and have constructed 41.5 km.
In Hawassa, surveying and compensation of the entire network is nearly complete, and 16 km
of 30-metre wide arterial roads have been constructed on the urban periphery (see Map 8.3).
Municipal revenue from plot leasing in Hawassa has increased 2.2-fold since the start of the
programme, and spending on roads has increased 6-fold. In Bahir Dar and Mekele, 4 647 additional
residential plots have been made available for leasing, comprising an area of 77.6 hectares.

Priorities include land reform, infrastructure and urban networks
While urban development strategies must be highly context-specific, this reportsuggests that new urban strategies in most countries are likely to include three genericpriorities that cut across the sectoral priorities identified in Chapter 7:1) clarifying land rights and their enforcement
2) delivering better infrastructure and services3) improving the pivotal function of intermediary cities between rural areas andprimary cities.

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Urban land reform lies at the heart of new national urban strategies
Urban land is the primary building block of cities, and land policy lies at the heartof Africa’s sustainable urban transition and structural transformation. Who owns land
and how it is managed will determine the density of a city, the street layout, the zoning
scheme, building codes and tax regimes. Land-use management systems, formal andinformal, shape the dynamics of economic agglomerations, natural resource use, social
inclusion and political representation.
Land-use management systems often hinder sustainable urbanisation
African land-use management systems are not fit for increasing sustainable urban
development and absorbing the rapid population expansion of the next decades. Current
systems are not only complex, they are typically not well understood and are rarely
effectively recorded or formally codified. They typically draw from an eclectic, often
contradictory mix of old colonial planning norms; privatised settlement and company
towns; the ancient practices of royal, communal or tribal land; or ad hoc and unregulated
regimes that have emerged around informal settlements.
As a result, land regulation is often chaotic, hindering Africa’s economic growth,
creating environmental risks and entrenching social inequality. “In cities and rural
areas, insecure tenure and informal settlements combine with other factors […] toreduce public revenues, infrastructure investment, employment and economic growth”(UN-Habitat, 2008: 5). In addition, elites controlling the land are difficult to identify,
incentivise or control; yet their support is essential for improving how cities are run.
In the case of cities, the current mismatch between land and fiscal systems
prevents governments, especially local governments, from undertaking the large-scale
investments needed to shift urban development trajectories. The lack of transparency
over urban land markets impedes effective and sustainable personal and corporate
investment, creates opportunities for political power bases to flourish outside of
democratic structures, and makes land-based climate mitigation and adaptation
measures difficult to enforce. In most countries, urban land reform should thus be apriority in the context of national urban strategies.
Impetus for urban land reforms is growing across the continent
Africa is land rich and, until recently, the absence of large, complex urban settlements
and a disregard for the role of towns in the wider economy may have distracted from theurgency of urban land reforms. Rapid urban growth, the rise of land-based corruption
and the consolidation of unsustainable urban land management practices are now
raising awareness of those issues.
The nature and modalities of such reforms should, again, be context specific: there
is no single way to achieve sustainable authority over urban land. However, more secureland rights should be a key objective, as they are a prerequisite for long-term urban
investment anywhere. Furthermore, systems of urban land regulation are most effective
for preserving the environment and less prone to aggravate inequalities (e.g. against
women) when they are appropriate, legible, predictable and free of corruption. They
should also be complemented by formal affordable housing, property taxes and land
construction in order to harness the land value (see the last section of this chapter). The
scope of land reform extends beyond urban administrative boundaries to rural-urban
periphery, so as to mitigate potential conflicts on land use change.

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Land being much more than an economic asset, urban land reform implies much
more than a narrow technical, legal exercise. Urban land shapes the African identity,
because urban land regulation, finance, economy, inheritance law, culture, design andconstruction materials are inextricable parts of the urban fabric. Recent experiences
demonstrate that reforms can be successful when based on pragmatic approaches
adapted to local contexts. Chad is currently revising its land ownership and customarylaw, which dates back to 1967, so as to formalise customary practices. Public consultations
helped identify areas needing clarification, such as the legal processes of expropriationor land title registrations. Ethiopia led a land reform in 2003 aiming at better establishingland titles. It introduced a system of certification mainly relying on a locally elected
Land Administration Committee in order to register customary titles at low cost. In
three years, some 20 million land titles have been granted through a decentralised andparticipatory approach (OECD, 2016).
In Malawi, over 90% of land is governed by a customary regime, and even if
customary law guarantees usufruct rights, they are unregistered and not recognised
under statutory law, hindering access to land and agricultural development. In 2004, thegovernment instituted the Community-Based Rural Land Development Project, basedon voluntary acquisition, farm development and registration of redistributed land.
Selected family beneficiaries received a grant of USD 1 050 of which up to 30% was forland acquisition, and the rest for farm development and shelter. The project lasted until
2011 and cost about USD 27.3 million, partly funded by the World Bank, the government
and private donations.

Delivering better infrastructure and services is the primary catalyst for sustainableurban development
Investment in infrastructure shapes the nature of urbanisation and the locationand productivity of households, informal business and established firms of all sizes.
Affordable energy, sanitation, solid waste, transport and health care services provide
the means by which urban citizens become more productive. Where infrastructure
is insufficient, expensive and poorly maintained, it underpins the high cost of urban
services and reduces the potential of reaping an urbanisation dividend (Chapter 6).
This situation remains widespread. Although data is limited, an estimated
62% of urban people in sub-Saharan Africa live without at least one of the ingredients offormal urbanism: water, sanitation, housing and sufficient space under secure tenure.
On average, while urban dwellers have greater access to services than their ruralcounterparts, the backlog remains acute and the cost of services roughly double that indeveloping countries on other continents. Sixty percent of urban dwellers did not haveaccess to “improved sanitation” in 2015, 28% of urban dwellers had no access to electricity(down just 2.6% since 2011). Many urban dwellers with grid-access experienced daily
outages, and half the children under five had never visited a health care practitioner.
How can countries better manage urban infrastructure and service delivery so as tomove on from the prevalent “slum urbanism”? Our central argument is that improving
the provision of all urban services requires: i) tailoring infrastructure and service
systems around the needs of residents; ii) ensuring that prices are affordable to them;and iii) circumventing slow and costly central co-ordination. In particular, in orderto bring down costs and enhance efficiency, experience points to: i) planning for an
integrated delivery of soft and hard infrastructure; ii) engaging positively with informal
settlements; and iii) making full use of innovative technologies.

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Hard and soft infrastructures should come together
The strategic agenda of National Infrastructure Investment Strategies (NITS) is toaddress the needs for physical infrastructure together with the provision of services
and the crafting of adequate institutional frameworks. In particular, NITS recognise
the importance of soft infrastructure, including governance institutions, legislation,
public engagement capacity and fiscal accounting mechanisms, for the efficacy ofhard infrastructure (UCLG, 2014). NITS are multi-sectoral and sequenced with otherurban policies. They specify, locate and address the financing of the infrastructure todeliver the wide range of services listed below. The groups of African countries referred
to – diversifier, early urbaniser, late urbaniser, agrarian and natural resources-based – areclassified according to their stages in urbanisation, fertility transition and structuraltransformation (see Chapter 6).
• Economic infrastructure and services such as energy, transport, information andcommunication technology, and land-use management are critical in all countrygroups, though particularly in the diversifier and early urbaniser countries to increase
productivity and competitiveness.
• Social infrastructure and services, including education, health, housing, and carefor the elderly and children, leverage the innate human capital that aggregates incities.
• Basic infrastructure and services such as water and sanitation, waste collection

and management, transport, and energy are necessary everywhere, but mostcritical in late urbanisers, agrarian and natural resources-based countries. They increase
productivity and remove negative externalities such as indoor air pollution, watercontamination and congestion that coalesce in cities to constitute poverty traps.
• Quality-of-life services – public safety, urban planning, culture and entertainment,

sport, and accessible public spaces – provide the basis for inclusive cities andnew urban identities. The lack of attention to ecological capital from much of
Africa’s existing built environment results in costly engineered infrastructure,
the destruction of social safety nets provided by ecosystems and the inefficient
functioning of the built infrastructure stock as dams silt up, flood buffering capacityof wetlands is destroyed and places of cultural and recreational value are lost
(Chapter 6). Quality-of-life services also offer opportunities for labour absorption
and place making, particularly where low educational attainment precludes a
portion of the urban population from accessing skilled jobs (Chapter 7).
Engaging urban communities is key to improving infrastructure and service delivery
In the context of ”slum urbanism”, urban infrastructure development requires
understanding how the urban poor and rural migrants have begun to access services
where the state did not cater for them (Angelakis and Rose, 2014; Jaglin, 2014). Many
urban Africans have to invent their own service delivery systems outside of formal
governance. These institutions are not necessarily egalitarian or efficient and they do
not necessarily optimise productivity. They are, however, an entrenched fact of life in
how cities are organised and run. At their best these organisations reflect an organic
strength in urban systems that could be harnessed. And yet traditional infrastructureplans are not well equipped to support “informal” service provision efforts; in manycases, instead, these organisations are criminalised and victimised.
A more positive approach to engaging informal settlers may be considered to meet
Africa’s urban challenge, for at least two reasons. Firstly, Africa’s limited fiscal resources
offer little choice but to prioritise service delivery models that are rooted in local
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able to deepen both social and financial capital at the neighbourhood scale. Universal
access to services will require, at least partly, legitimising and incorporating thesecontingency forms of service delivery with formal state-supplied services.
Secondly, the participatory delivery of infrastructure can generate a sense ofplace, where the location and construction of infrastructure engages local needs andideas, and where the people who benefit from services are charged with infrastructure
monitoring and maintenance. Ecological infrastructure and ecosystem goods andservices are well suited to this purpose (wetland maintenance, greening of public spaces
and coastal zone rehabilitation), but there is equal potential to engage the urban labour
force in waste management, aspects of infrastructure maintenance, energy monitoring,non-motorised transport systems at community level, and community policing(Chapter 7). The forging of new urban identities through public work schemes and placemaking, is considered particularly valuable in the context of Africa’s circular migratory
patterns. Numerous successful examples exist of urban infrastructure strategies
engaging non-government actors in policy and service endeavours deliberately (Box 8.5).

Box 8.5. A participatory approach to transforming settlements of the poor in
Uganda’s intermediate cities
The Transforming the Settlements of the Urban Poor (TSUPU) programme was launched in 2010as a partnership initiative of the Government of Uganda and support partners (Shack/Slum
Dwellers International, co-ordinated by Cities Alliance). It aligns urban development efforts atthe national, local government and community levels in five intermediate cities: Mbale, Mbarara,
Jinja, Arua and Kabale. The programme aims to increase the capacity of actors at each level tomanage urban growth, improve access to services, and formulate and implement inclusive urban
development policies. It privileges community participation.
The programme organised slum communities by mobilising women-led savings groups andfederating these at the settlement, city and national levels. These groups were supported to profileand map all slums in each city producing data for planning. The programme institutionalised
spaces for dialogue between communities, academia, business and local government where urban
stakeholders reflect on the rich, community-gathered data. The TSUPU project then established
Community Upgrading Funds in each municipality so small projects in informal settlements
could implement local partners’ resolutions.
Community groups have completed close to 100 upgrading projects in each of the 5 secondary
cities in partnership with local authorities. These small projects have catalysed efforts in thecities to undertake settlement-wide upgrading and secure the tenure of thousands of informal
settlers. The efforts of informal settlers’ groups to convene forums have resulted in allocationsof municipal office space for community data centres in 10 urban councils. Since the first phaseof the programme officially ended in 2013, the slum dweller movement (National Slum Dwellers
Federation of Uganda, NSDFU), local and national government partners have expanded TSUPU toan additional 14 municipalities and Kampala’s five divisions.

New technology can reduce the costs of infrastructure and service delivery
Sustainable urban development could tap new service delivery opportunities
created by the use of new technologies in the water, sanitation and energy sectors more
efficiently. Providing enough electricity to only 70% of the 635 million Africans who do
not have grid access would require an estimated USD 205 billion in capital investment for
the next two decades in urban and rural areas (Chapter 7). This gap can be bridged, but itis huge considering the weak fiscal resources of cities. Yet, the 300 million urban Africans
without access to electricity spend up to 50 times more per kilowatt hour (as much as© AfDB, OECD, UNDP 2016

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USD 10/kWh) on charcoal, candles, batteries and kerosene; most urban companies rely
on expensive diesel powered generators as back-up (APP, 2015). Africa’s grid reticulated
electricity is twice as expensive as Latin America’s and three times Asia’s. It is often
unreliable: 19 sub-Saharan African countries experienced at least 10 electricity outages
per month between 2005-08, which cost firms an average of USD 307 per hour (Dinh etal., 2012; Lighting Africa, 2010).
Channelling this money into more efficient energy solutions would create new
business opportunities and improve energy security (see Chapter 7). However, their
institutional, technical and financial fit with the needs of urban energy users has driven
their uptake so far, rather than policies. Results from our AEO survey show that lessthan 20% of African countries have implemented strategies on sustainable energy use(Figure 8.1). To be relevant, infrastructure plans must resonate with commitments madeunder the Paris Agreement in the form of Intended Nationally Determined Contributions.

Figure 8.1. Prevalence of strategies on sustainable energy use in Africa, 2015
Adopted and implemented effectively

Adopted but not implemented effectively

Planned for the near future

Not planned

Integrating renewable energy
into the national grid

Increasing urban households'
and firms' energy efficiency

Setting environmental regulations
for urban industries

0

10

20

30

40

50

60

70

80

90
100
% of respondents
Note: Survey answered by country economists of the AfDB and UNDP in 45 country offices in Africa. Responseis weighted to one answer per country.
Source: AEO experts’ survey, 2016.
12 http://dx.doi.org/10.1787/888933350927

Planning the growth of intermediary cities contributes to national development
National urban strategies are not only about articulating a metropolitan agenda.
They are holistic approaches to linking cities and towns of different sizes and withdifferent, evolving functions.
Intermediary cities are essential to reaping the urbanisation dividend but need special
attention
Dealing with the conundrum of Africa’s towns and planning for the growth ofintermediary cities are essential elements of any national urban strategy. As shown in
Chapter 6, two-thirds of the growth in the urban population by 2030 is expected to takeplace in cities of less than 500 000 inhabitants. Intermediary cities and towns will thus
play an increasing role in sustaining the benefits of urbanisation in terms of poverty
alleviation and in fostering structural transformation at two main levels:

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1) Intermediary cities and towns help alleviate the congestion of megacities by
capturing a share of demographic growth and rural migration (AfDB/OECD/
UNDP, 2015). They can enhance the country’s overall governance capacity by
better mobilising the available capacity in provincial and national governments.
Intermediary cities and towns will assume a more active role as economic andsocial service hubs.
2) They spread the benefits of urbanisation nation-wide and across borders byenhancing productivity and promoting development in surrounding rural areas(as described in Chapter 7). Connections between smaller and intermediary cities
and the rural hinterland within the national and transnational economy are
therefore critical. Intermediary cities can leverage economies of scale to deliver
public services to surrounding areas and develop labour-intensive industries suchas textiles and agro-processing or services like tourism, especially those services
that do not require high knowledge spill-overs.
But whether those capacities and connections are there to ensure that growingintermediary cities and towns effectively play those roles will crucially depend on newinvestment and the quality of public policies, by national as well as local governments.
Indeed, most towns and intermediary cities suffer from rapid expansion, high poverty,
little investment and scant formal employment opportunities. Even in a diversifiercountry such as South Africa, most intermediate cities have a narrow single-sector
economic base that depends largely on old technologies vulnerable to external market
shocks. Unless their potential is actively developed, intermediary cities and towns run
the risk of a relatively rapid economic decline, expanding further the patterns of “slumurbanism”.
Tapping the specific assets of intermediary cities requires differentiated policies
In line with the new paradigm of regional policy making, mainstreaming thepromotion of intermediary cities into national urban strategies should aim to tap
their specific assets and unexploited potential rather than compensate them for theirdisadvantages, whether induced by size or location (see Chapter 8 in AfDB/OECD/
UNDP, 2015). This requires the following:• Base the allocation of resources on a thorough understanding of how the optimalorganisation of urban services in intermediary cities – e.g. markets, clinics,
schools, taxi ranks, post offices, and police and petrol stations – might complement
subsistence agriculture and serve the needs of residents.
• Improve connections both between urban cores and their immediate hinterland

and between intermediary cities and the regional and global economy, which canalso reduce peri-urban slums currently existing in most African cities.
• Focus on the development of functional urban areas rather than administrative

perimeters, including functional, transnational urban corridors. The West African
seaboard, along the coast of the Gulf of Guinea, which incorporates big cities as wellas smaller coastal hubs, is a pressing example of the imperative for cross-national
collaboration on such corridors, not least to ensure that the collective response tourban risks takes account of towns’ realities within larger regional plans.
• Differentiate the planning, finance and institutional support between towns andintermediary cities in a way that allows them to assume a distinct function in thenational urban network by tapping their specific locational or sectoral advantages.
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make more economic sense to locate certain administrative services in cities rather
than in towns where less of the population would benefit from them. Categorisingintermediary cities for targeted support needs to be flexible and multi-layered
and allow them to move up or down the hierarchy over time. The experience ofSouth Africa shows that too narrow a focus on the size criterion over functional
characteristics can lead to pressure from local leaders to reclassify intermediarycities as metropolitan regions without due consideration for changes in their actual
economic potential. The categorisation process may thus: i) include other aspects
such as local governance performance and international competitiveness; andii) ensure through adequate incentives that becoming a metropolitan municipality
is not the only development pathway for intermediate cities. Table 8.3 illustrates
possible urban functions of intermediary cities within the national urban network.

Table 8.3. Different urban functions of intermediary cities
Urban function

Description

Regional market

The city is the main area for production and exchange of goods and services in the local and regional economy.

Service centre

The city offers public and private services to the intermediate community and surrounding population.

Regional capital

The city hosts regional or national political and administrative institutions.

Tourist centre

The city promotes activities linked to domestic or international tourism.

Communication hub

The city acts as a platform for movement of people, goods and information.

Economic location

The city holds a strategic role in the national, regional and global economy thanks to its geographic location anddevelopment strategy (e.g. duty-free zone).

Source: Adapted from Song (2013).

Several African countries are promoting intermediary cities
Although they are still a minority, several African countries are already explicitly
targeting the promotion of intermediary cities as a vehicle for a more sustainableurbanisation:• Ethiopia has identified intermediary cities as key actors of its national economic

plan: 16 urban centres of less than 500 000 inhabitants now receive targeted
support to develop manufacturing and tourism while Diré Dawa has a special
administration status.
• Madagascar has adopted a multi-sectoral strategy for urban growth poles, investingin roads and water supply, as well as in vocational training, higher education,
service delivery and capacity building. This has created 13 000 new formal jobs,
mainly in the cities of Nosy Be and Tolanaro (Speakman and Koivisto, 2013: 97).
• Morocco has invested in intermediary cities like Tangier and Meknès by developing

tourism and the industrial sector. The government’s new regional plan (découpage
territorial) extends decentralisation and greater means for regional development tocities within Casablanca’s periphery, such as Sidi Slimane and Beni Mellal.
• Rwanda is investing in intermediary cities as a response to rapid population

growth. The plan focuses on the economic development and improved accessto public services in Huye, Muhanga, Musanze, Nyagatare, Rubavu and Rusizi.
Four provincial industrial zones which specialise in agro-processing and lowskill manufacturing (Bugesera, Huye, Nyabihu and Rusizi) aim to strengthenrural-urban economic linkages and increase economic opportunities in rural areas.
• South Africa has been aiming to streamline the role of intermediary cities byimplementing a differentiated approach to municipal financing, planning andsupport for these cities.

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Multi-level governance can promote urban development strategies
To effectively implement national urban strategies depends on three major actionsin the area of governance: i) empowering local levels of policy making; ii) attracting andgrowing the necessary capacity for local governments to function; and iii) enhancing
transparency at all levels of government. A cross-cutting challenge to multi-levelgovernance and service delivery is to stitch together the initiatives of local communities,
often developed in the absence of formal state involvement, with the financing and rollout of formal services.

African urban policy makers at different levels of government need empowering
Central governments are neither equipped, nor well-placed to design and implement
national urban strategies on their own. Urban policies, unlike the wider regional
development policies, require “a more sophisticated participatory multi-level government
approach, involving national, regional and local governments plus other stakeholders,with the central government playing a convener role” (AfDB/OECD/UNDP, 2015). Whilethe notion is widely accepted at pan-African level, effective implementation has beenslow and difficult as would be expected in policy areas where political stakes are high.
A number of key principles, however, can guide reforms towards effective multi-levelgovernance.
Countries recognise the need to empower local governments but have yet to promote
effective decentralisation
African countries largely agree on the need for pursuing more comprehensive
decentralisation to achieve the vision spelled out in Agenda 2063. In June 2014, the African
Union (AU) adopted the African Charter on Values and Principles of Decentralisation,
Local Governance and Local Development (AU, 2014). This has brought the pan-African
policy environment in line with global norms.1 At the same AU conference, heads ofstate and government approved the creation of the High Council of Local Governments
as an AU institution. Its purpose is to reflect the voice of local governments in the
deliberations of the African Union. The African Charter and the High Council provide
a new impetus for decentralisation and a strong basis for driving reform across thecontinent. At the time of writing, however, only Chad, Republic of the Congo (Congo),
Guinea Bissau, Mauritania and Mali have signed the Charter, and Mali is the only
country to have ratified it (Elong-Mbassi, 2016). Furthermore, in many countries the lackof progress in fiscal decentralisation has greatly hampered progress in administrativeand political decentralisation (AfDB/OECD/UNDP, 2015).
Delayed multi-level governance stands in the way of crucial infrastructuralinvestment decisions based on thorough spatial analysis. As shown in the African
Economic Outlook 2015, much existing infrastructure and development planning has
been done while ignoring the spatial dimension, i.e. their systemic economic, socialand environmental implications at local level and in the wider regional context. This
often produces suboptimal investment decisions, made without understanding how
the advantages brought about by urbanisation can best be seized to meet the goals of
structural transformation, social inclusion and greater environmental sustainability. As
a result, dysfunctional urban development further prevails.
Although local governments and stakeholders detain unique knowledge on such
systemic implications, without decision-making powers they are deprived of thecapacity to carry out more effective projects at the city level. Weak decentralisation
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government, and this can discourage local initiatives. Where central states concentrate
the responsibilities of defining and achieving national sustainable development
policies, decisions are likely to remain ill-suited to solving African cities’ economic,
social and environmental challenges. These challenges – while global in nature – aredeeply anchored and intertwined in local contexts. Sustainable policies can therefore
only be effective in the long run if aligned with local needs and owned by local people(Pinel, 2013).
The pace and extent of multi-level governance reforms depend on local contexts
The main reasons for the mismatch between discourse and implementation in themulti-level governance reform agenda are to be found in the specific context of eachcountry’s specific political environment, including social hierarchies, status of landownership (see above) or the vested interests of key decision makers. Every country andsubnational area can therefore only put international commitments into action gradually
through trial and error, as part of their own, individual process of political reforms.
Conflict, competition and risks of embezzlement will arise during the reallocation of
authority, power and resources. Effective multi-level governance reforms thus requirecommitted political leadership in order for negotiations to produce practical decisions
about the form, pace and focus of decentralisation. Examples from Africa across thefive groups classified according to their levels of urbanisation and fertility rates (seeChapter 6) illustrate the importance of history, the socio-political context and the designof reform processes for successful implementation.
Angola (natural resources-based): Since Angola’s civil war almost wiped out capacity
at communal and municipal levels, the central government has been managing Luanda
directly, securing the flow of foreign direct investment into infrastructure and real estate.
When Luanda annexed the two adjacent municipalities Icolo e Bengo and Quiçama, andpart of Cacuaco in 2011, an “administrative committee” was directly appointed to govern
the new city and is therefore not a reflection of direct citizen control or democraticelection. This may explain why investments purveying to the needs of elites have been
financed, while issues of large-scale urban poverty, ill-health and lack of basic services
continued to prevail (Lawanson, 2015).
Ethiopia (late urbaniser): The country’s governance structure has three main tiers:
federal, regional and local. The 1995 constitution recognises and assigns powers, functions
and revenues between the federal government and the nine regional states and partly
treats two cities – Addis Ababa and Dire Dawa – like state-level governments. The regions
establish local governments according to their own constitutions. The most prevalent
structures – woredas in rural areas and urban local governments – provide education,
health, justice, security and “municipal” services (roads, drainage, etc.). However, most
local governments are unable to cope with rapid economic and demographic growth
due to lack of authority, fiscal resources and skilled personnel. While local governments
can collect revenue to cover the costs of basic services, user charges are insufficient.
While bigger cities depend on unsustainable land-lease revenues, many of the others
lack control over the terms or rate of the lease. Intergovernmental transfers barely coverrecurrent expenditure, let alone capital requirements (World Bank, 2015a).
Nigeria (natural resources-based): The government comprises three distinct
administrative levels: national, state and local. The 1999, post-military rule constitution
lodged responsibility for basic services with both state and local governments withouta clear delineation of their respective roles. State governments have their own revenue
sources and receive intergovernmental transfers, while local governments are merely
administrative extensions of the state. Thus in a megacity state such as Lagos, the state
government is clearly the dominant actor, creating a large democratic distance between
local communities and institutions making decisions about regional infrastructure andservice delivery (Lawanson, 2015).

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Senegal (early urbaniser): In 2013, the parliament passed a law increasing
decentralisation and reforming the Code des Collectivités locales (Local Government
Code). It did not grant local authorities the power to collect taxes but clarified which
tax revenues local councils are entitled to. It granted greater fiscal autonomy to local
authorities and gave taxpayers the right to ask about local fiscal decisions (Républiquedu Sénégal, 2013).
South Africa (diversifier): The South African 1996 constitution provides one of themost empowering approaches to democratic decentralisation. Instead of delineating
responsibilities between the three government levels, it extends the notion of autonomous“spheres” to local government, charging it with an explicit developmental mandate. A
schedule of functions is set out in the constitution for each sphere. Many functions areconcurrent between the three spheres of government, but even in those cases, local
government may still come to a different decision to other spheres of government.
This autonomy is underpinned by significant powers to raise local revenues. In fact,provincial governments rely more on transfers from national government. Two years
after the constitution was adopted, a White Paper on Local Government was publishedwhich sets the basis for rolling legal reform to entrench the constitutional vision.
Key principles can help advance effective multi-level governance
National urban and regional development strategies must have explicit multilevel governance arrangements to enable more sustainable and inclusive patterns ofurbanisation. An underlying dilemma is that African countries with a weak national
government capacity tend to have even weaker local government institutions. Efforts
to improve their urban planning capacity are essential in the medium term (seenext section), but an immediate challenge is to identify the multi-level governancearchitecture that builds on the local context. Since no blueprint can be applied across all
African countries, a number of guiding principles may help define adequate multi-levelgovernance systems in a pragmatic way.
First, the basis for decentralisation is recognising that local actors are best placed
to calibrate housing and public transport investment with land-use management
regulations. Infrastructure is inherently spatial, and certain public functions shapethe built environment more than others. For example, energy, transport, housing andland-use management are essential to foster denser, mixed-use and inclusive urban
forms. Combining them in strategic locations within a spatially coherent framework can
improve economic opportunities and influence urban form but is not easily co-ordinatedat the national scale. The information asymmetries that prevail between national andlocal actors are part of the rationale for promoting the active participation of local
stakeholders (AfDB/OECD/UNDP, 2015: xxvi). It is impossible for national or provincial
authorities, acting without local stakeholders, to understand enough the nuances andcomplexity of local areas. It falls to local actors to ensure that strategic investment
decisions, inputs and the complex array of interests are mutually reinforcing.
Second, certain functions that address the overall efficiency of the territorial
system are best co-ordinated and financed at national and regional scales. This includes
managing water basins and addressing inter-regional logistics imperatives (long distanceroads, freight, airports, ports) and the cross border migration of the labour force.
Dedicated structures such as metropolitan authorities can enable the governments ofcities, surrounding communes and peri-urban areas to work together across functional
areas for better metropolitan transport or water governance. However, such functions
must speak to the local management of the built environment, which highlights theimportance of legislated co-ordination forums. South Africa’s Inter-governmental
Relations Framework Act (IGR Act no. 13 of 2005) provides one such example. The
Act provides for regular and systemic policy discussions between different levels ofgovernment on all matters of intergovernmental concern. It outlines mechanisms for© AfDB, OECD, UNDP 2016

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settling intergovernmental disputes and for collaboration on strategic initiatives thatspan domestic boundaries. In each province of South Africa, the involved government
actors can determine the scope and focus of the inter-governmental forum. This createsa mechanism for context-specific dialogue, co-ordination and joint effort without losing
the national perspective. The president also convenes his own national, provincial andmetropolitan political forum.
Third, any effective intergovernmental system must be designed to allow local
empowerment of the majority of urban dwellers who are effectively building their own
communities, towns and cities in the absence of effective state provision (see previous
section). Over time, urban management has to evolve to stitch together the “top-down”
policy agenda of the state and the “bottom-up” efforts of the citizens. There is wide
scope to improve the efficacy and impact of both of these. This will undoubtedly findexpression over time in the emergence of various types of partnerships.

Box 8.6. Small steps to guide multi-level governance reform
For post-conflict and fragile states, “muddling through” may be a strategy for
implementing certain governance reforms. The approach focuses on building
institutions through a series of small, incremental steps, especially when these involve
positive deviations from extant realities. Andrews, Prichett and Woolcock (2012)
propose a Problem-Driven Iterative Adaptation (PDIA), based on four core principles:1) PDIA focuses on solving locally nominated and defined problems in performance.
2) It seeks to create an authorising environment for decision-making that encourages
experimentation, as opposed to requiring agents to implement projects exactly as
pre-designed.
3) It embeds this experimentation in short-time feedback that facilitates rapid
experimental learning, as opposed to enduring long lag times in learning from ex
post “evaluation”.
4) It actively engages broad sets of agents to ensure that reforms are applicable,
legitimate and relevant, as opposed to a narrow set of external experts promoting
the top-down diffusion of innovation.
China’s “crossing the river by feeling the stones” approach to reforms illustrates theseprinciples.

Building public-sector capacity is a pillar of national urban strategies
Effective multi-level governance requires new sets of skills, managerial approaches
and institutional culture across all levels and dimensions of the public sector that
implement or contribute to urban policies. In many African countries, inadequate local
capacity is compounded by the lack of incentives for qualified professionals to embrace
a career in local government. Moreover, many governments lack building professionals
such as engineers, planners, urban finance experts, project managers, local economic
development practitioners, environmental and building regulation inspectors, transport
planners, engineers, and land-use lawyers. Thirty-six African countries do not have anurban planning school. Among those that do, Nigeria has 10 times less registered urban
planners than the United Kingdom despite having 20 million more urban inhabitants.
Africa needs tens of thousands of professionals to manage its cities and towns. It also
needs a new breed of professionals that can cope with the complexities of the urban
environment shaped by informal actors as well as global information networks.

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Filling this gap requires systematic capacity-building programmes. Governments
need the leadership and skills to produce, implement, monitor and evaluate urban
strategies and action plans. Civil society organisations and businesses involved in
the urban agenda can also benefit from the same learning environment. New African
institutions and networks are forming to plug this capacity gap, but these initiatives
need to be scaled up and adapted to local contexts. Here are three successful examples:• SouthAfrica’s eThekwini Municipality established the Municipal Institute of
Learning (MILE) to build capacity for local government. Since 2009, MILE has
trained 3 600 local government practitioners in strategic planning, water andsanitation, solid waste management, and revenue management. The programme
has provided technical support to municipalities neighbouring Durban, as wellas in Malawi, Mozambique, Namibia and Zimbabwe. It fosters collaboration andlearning partnerships and networks with local and international universities,
research institutes in Africa and international development agencies.

• The Association of African Planning Schools is a network of 54 university-based

city and regional planning schools across the continent. It trains urban planners
in Africa to address issues such as informality, land, participation, governance,
climate change, spatial planning and infrastructure. Moreover the network initiatedan African planning law reform process.
• The Ethiopian Civil Service University and Ministry of Urban Development andHousing scaled up their graduate-level training in urban management to about
350 Master students per year between 2008 and 2015, representing a 12-fold increasesince 2006.
To be successful, a national capacity building programme must involve many
stakeholders. It should include the senior nodal point in the government, ideallywith the president; the national department responsible for territorial planning anddevelopment; the department responsible for regional and local government; and thenational departments charged with infrastructure and economic development. This
cluster must work with the respective national association of local governments to refine
the capacity-building agenda and develop a coherent programme bringing together
the various stakeholders. Once the coalition for capacity-building and the right career
incentives for young professionals are in place, it is possible to leverage the resourcesand offerings of various international agencies, according to the local priorities anddemands.
Finally, incentives such as funded bursaries tied to in-service professionals can help
ensure that adequate skills are available in more remote centres, as experimented in
Ethiopia and Zambia. International experiences of in-service training in various sectors,
such as the deployment of doctors to rural hospitals, could be adapted for building
professions. Innovative approaches could also be explored.

Transparency is a key to the success of multi-level governance reforms
Embedding transparency in the seven steps set out at the beginning of this chapter
for the formulation of urban development strategies can help attract finance, increase
the efficiency of projects and improve fiscal legitimacy.
As the next section shows in more detail, accessing new finance for urban
development requires providing potential financiers with information on opportunities
and risks, as well as accountability systems documenting infrastructure inventories,
rates and levy collection, cost recovery and debt-asset ratios. Beyond financial actors,© AfDB, OECD, UNDP 2016

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however, local actors, close to the point of expenditure, service delivery and citizen
experience, should be among the main beneficiaries of enhanced transparency andaccountability. Open data is one of several instruments for redefining the relationships
between urban actors. By turning data into widely available resources, it can generatesocio-economic innovations, pave the way for new entrepreneurial ambitions or be thesource of new jobs. However, access to national data alone is not enough to enable civic
participation: citizens need to believe in the quality of the information and government
responsiveness. Several countries have developed open data initiatives:• In Cameroon, the Association Internationale des Maires Francophones (AIMF)

is encouraging the full participation of citizens in the budget cycle. A local
government budget management system based on a software called SIM_ba helps
inform decisions and foster accountability and data availability. As it rolls it out
to different communes, AIMF claims that the use of open data might increase theshare of administrative and public accounts deposited before the Audit Bench of
the Supreme Court from 10% today to at least 50%. The software is being usedin other countries including Burkina Faso, Chad, Comoros, Congo, Guinea, Mali,
Madagascar, Niger and Togo.
• The Kenya Open Data Initiative (KODI) was launched in 2011 to give free access togovernment datasets and promote more transparent and effective governance. It
stalled in 2013, as the dataset was not updated, but was re-launched in July 2015
with an improved online portal bringing more timely and diverse data. Today,
31 ministries contribute data, alongside increasing efforts of local governments.
Journalists and civil society are being trained to use it. More than 94 million visitors
have been able to consult 830 data sets, 92 maps and 301 charts. KODI remains
a top-down initiative but plans to adopt more participatory means of generating
data by working with grassroots open data and crowd-sourcing movements. It has
generated interest from Ghana, Rwanda and Tunisia.
Finally, participatory budgets featuring a specific type of open data on the collection
and use of local taxes can improve tax legitimacy. They promote fiscal decentralisation,
making local authorities more inclusive, autonomous and accountable. The YTAX system
set up by Enda Tiers-monde shows how new technology can facilitate participatory
budgets by integrating all actors who manage local taxes: the collector, the inspector,
the controller and the mayor. Each actor has an account within the system and is thus
accountable to the others.

African governments can use various sources to finance national urban
strategies
Step seven of the urban development framework outlined at the outset of this chapter
is to mobilise financial resources in support of national urban strategies and the newurban agenda for Africa’s structural transformation. As explained above, the financing
gap is huge, and bridging it requires context-specific solutions that tap the opportunities
available in different countries, by:1) empowering local authorities and making them accountable as part of themulti-level governance reforms outlined above2) raising new financial resources through innovative finance mechanisms
3) harnessing the international community’s financial resources and opportunities
for knowledge exchange.
Massive investment in a wide range of infrastructure is necessary for promoting
vibrant and inclusive African cities (Box 8.7). How to mobilise the necessary financing
is addressed here.

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Box 8.7. The size of sub-Saharan Africa’s urban infrastructure gap
Sub-Saharan Africa needs to invest around USD 90 billion per year in infrastructure, of which
USD 60 billion in new infrastructure and USD 30 billion in maintenance. This estimation is basedon the Africa Infrastructure Country Diagnostic (AICD), which assesses infrastructure needs
globally using a sample of 24 countries. The AICD approach divides infrastructure into three
categories:• productive infrastructure at the national level (for example energy generation andtransmission, telecommunication networks, highways, railways, airports and ports) which
represent 34% of total needs (about USD 31 billion)• public utilities and services in urban areas (for example roads, electricity, water andtelecommunications) which represent 32% of total needs (about USD 29 billion)• public utilities and services in rural areas (for example roads, electricity, water, drainage

and irrigation) which represent 34% of total needs (about USD 31 billion).
The base-cost approach, which looks more specifically into needs for urban investment, estimatesthat sub-Saharan Africa requires between USD 12.5 billion and USD 35 billion per year dependingon urban extension and population densities. This estimate does not include the cost of land andsuperstructure facilities (Paulais, 2012: 96-102).

Fiscal decentralisation comes with capable and accountable local authorities
The lack of financial resources of local authorities in Africa is striking. To ensure thatmomentum for policy reform is established and maintained, attention to the financial
dimensions of the urban reform agenda is essential. According to preliminary estimatesby the Global Observatory of Local Finances, 9.5% of national revenues are granted to local
authorities in 19 African states (Figure 8.2), compared with 26% in the European Union.

Figure 8.2. Local authorities’ revenues and spending as shareof African national budgets, 2013
Spending by local government

Revenue from local government% of national budgets
30
25
20
15
10
5

yp
Z
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Note: Preliminary data. The collection of data and checking is ongoing, and the first results have yet to be fully
validated. The panel does not include federal states. Data is for the year 2013 except Angola (2012); Burkina Faso
(2012); Cabo Verde (2011); Egypt (2010); Gabon (2007); Mauritania (2008); South Africa (2012); Togo (spending2006); Tunisia (2012); Zimbabwe (2012).
Source: UCLG (forthcoming).
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Cities cannot address the infrastructure challenge without sufficient empowerment.
The difficult task of providing social assistance to the poor, which is so important in
African cities, can be best managed at the local level. Further, local budget decisions are
more likely to result in well-located infrastructure, aligned to local needs that will crowd
in local resources. However, fiscal decentralisation has proven the most controversial
aspect of multi-level governance reforms due to low capacity and weak accountability.
Local authorities must prove they are accountable, transparent institutions able todeliver basic services.
The financing tools cities can use depend greatly on the local context (Figure 8.3).
According to the AEO survey, central government transfers and local taxes are ranked ashaving the greatest potential for revenue mobilisation, both in terms of magnitude andstability of funding. However, central government transfer is rated more important insecondary than in primary cities. In about 40% of the countries, funding from external
donors, land value capture mechanisms and public private partnerships (PPPs) feature
as other important sources of revenue for local governments. Engaging in PPPs seems
more common in primary cities. Globalisation has brought opportunities for innovative
finance, but not all cities can use these new tools equally. Co-operation between local
governments can also rationalise resource mobilisation efforts.

Figure 8.3. Experts’ ratings of local government revenue sources, by revenue
potential and stability in primary and secondary cities
Secondary city

Primary city

A. Highest potential for generating revenue
A. Titre

National transfers
Local taxes
External donors
Land value capture
and property taxes
Public private partnerships
Other
0

10

20

30

40

50

60

70

80

90
100
% of respondents

30

40

50

60

70

80

90
100
% of respondents

B. Highest degree of stability
National transfers
Local taxes
Land value capture
and property taxes
External donors
Public private partnerships
Other
0

10

20

Note: “Other” includes local government bonds, remittances, and loans from local development banks and fromprivate financial institutions. Survey answered by country economists of the AfDB and UNDP in 45 country
offices in Africa. Response is weighted to one answer per country.
Source: AEO experts’ survey, 2016.
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8. National urban strategies for sustainable cities in Africa

Enhanced local finance and effective multi-level governance are two sides of the same coin
Provided local governments are transparent and accountable, fiscal decentralisation
can allow them to finance urban infrastructure through three main channels:• national transfers, which remain the core of cities’ revenue in many countries• local taxes and complementary instruments such as land value capture mechanisms• private finance.

National financial transfers and specialised financial institutions can boost cities’
resources
Mechanisms of equalisation and modalities of transfers vary greatly across Africancountries, depending on the extent of the fiscal disequilibrium, the institutional
context of decentralisation or their history. For example, Nigeria automatically transfers
13% of oil revenue to the states hosting production, 60% of which is granted directly to
local authorities. In South Africa, a formula determines the revenue support grant byusing costs estimates. In Uganda, fiscal transfers to local authorities are conditional anddetermined on an ad hoc basis. For an analysis of political, administrative and fiscal
decentralisation in Africa, see also AfDB/OECD/UNDP (2015: 189-193).
A dozen countries have set up specialised financial institutions (SFIs) to expand
local authorities’ financial capacity, because most local authorities can hardly access
commercial credits and private capital markets. The status and mandates of SFIs dependon diverse administrative contexts, levels of economic development and willingnessof the central government to delegate financing mechanisms. SFIs must also respect
macro-prudential guidance. In Tunisia, SFIs have led to over-indebtedness of local
governments (UCLG, 2010: 53). Table 8.4 sketches a typology of SFIs.

Table 8.4. Specialised financial institutions in African countries
Characteristics

Country

Financing institution Donor loan

Capital market

Own resourcesState-owned or
private-sector
SFI

Morocco

FEC

√

√

√

Nigeria

UDBN

√

√

Activemunicipal
creditmechanisms

South Africa

DBSA/INCA√√√

Tunisia

CPSCL

√

√

√

Investment fundBurkina Faso FICOM/ FPCL
Cameroon

Limited or nonexistent municipal
credit mechanism Kenya

Taxation√Centralgovernment√√

FEICOM
LGLA

√

Mali

ANICT

√

Senegal

ADM

√

√

√

√

√

Note: FEC = Fonds d’Équipement Communal, DBSA = Development Bank of Southern Africa, INCA = Infrastructure
Finance Corporation Limited; CPSCL = Caisse de Prêts et de Soutien des Collectivités Locales; FEICOM = Fonds
Spécial d’Équipement et d’Intervention Intercommunale; LGLA = Local Government Loans Authority;
ANICT = Agence Nationale d’Investissement des Collectivités Territoriales; FICOM = Fonds d’Investissement
pour les Collectivités Décentralisées; UDBN = Urban Development Bank of Nigeria.
Source: Paulais (2012).

Local governments can use local tax and land value capture mechanisms more effectively
Cities can also increase their revenues by expanding the fiscal base to local property
and economic activities. Strengthening local fiscal capacities is indispensable for all
African countries: it can build the capacity of local governments but also increase fiscal
legitimacy in general, including among agents in the informal sector. However, local tax
collection is estimated to be about 1% of national income in most countries (AfDB/OECD/© AfDB, OECD, UNDP 2016

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8. National urban strategies for sustainable cities in Africa

UNDP/UNECA, 2010: 114). Yatta (2016: 19) estimates that local taxation is extremely low
in seven Central and West African countries according to three indicators:• Local governments taxed an estimated 0.7% of local households’ revenues.
• Tax on local property is close to 0%.
• The local collection rate was estimated at 0.20-0.58% of the “gross local product”:

when a city generates USD 100 its return is less than USD 0.60.
Evidence suggests similar situations in other countries. Out of 42 African countries,
at least 5 do not levy any local tax (AEO experts’ survey, 2015).
Comparing the revenues of some African cities to some in Colombia and thePhilippines reveals the difficulties African cities face in generating local resources(Figure 8.4). A dearth of local revenues results in African cities’ strong dependence onnational transfers. Transfers make up over 85% of the revenues of cities such as Banha,
Egypt, or Nyagatare and Rubavu, Rwanda. Having too few locally generated resources
contributes to African cities’ financing gap.

Figure 8.4. Revenues from transfers and locally generated resources, selected
cities in Africa, Colombia and the Philippines
From intergovernmental transfers

From city revenues

City expenditure in USD per capita
300
250
200
150
100
50

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a)

0

Note: USD in purchasing power parity, 2013.
Source: UN-Habitat (2015a).
12 http://dx.doi.org/10.1787/888933350956

Developing efficient and fair local fiscal systems can require difficult, profound andcontext-specific reforms. For instance, most local taxes are direct taxes, although direct
taxes tend to be more subject to tax evasion when fiscal legitimacy is low. In addition,
local taxes can be more difficult to collect than indirect taxes, in particular where tax
collection is not within local governments’ capacity. Local economic accounts in Central
and West Africa show that the urban informal sector is sometimes taxed at 0.30%,
against 0.10% for the formal sector. In some cases, the informal sector may effectively
pay value-added tax on much of their input already purchased as final goods, while theformal sector may benefit from certain tax exemptions, for instance those enticing newinvestments (Yatta, 2016: 19). Expanding the local tax base, however, especially property
tax, is politically sensitive. The right tax mix largely depends on the national and local
context.

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The capture of land value can complement local revenue collection, although it should
not replace local taxes because they are legitimate fiscal instruments. In a context of
rapid urban expansion, land could give national or local authorities a powerful tool for
structuring and financing urbanisation. Land value capture can usefully internalise thefluctuation of land prices that come with the urbanisation dividend. Usually, it requiresa three-step process:• Regulatory decisions (change in land use, infrastructure investment, etc.) trigger

an increase in land values.
• The government then institutes a process to capture part or all of the gains in land

valuations.
• The captured land value finances infrastructure investments to offset the negative

effects that come with higher land prices, such as densification and gentrification.
For instance, the government can use these funds to provide affordable housing(Suzuki et al., 2015).
One example is the tiers associé (associated third party) initiative started in 2007 in
the context of Morocco’s National Slum Removal Policy. To relocate informal settlements,
households were collectively granted a plot of land with rights to build up to three orfour floors. Two households may form an association with a third party who finances theconstruction in exchange for parts of the new building, and the households receive twoapartments. This mechanism allowed the rapid creation of formal housing, commercial
real estate and free land for urban development (Toutain, 2015). Table 8.5 shows someexamples of land-based financing initiatives.

Table 8.5. Land-based financing initiatives in Africa
Mechanisms

ExamplesDescription

Formal urban extension
through voluntary private
land readjustment

Land readjustment in thesecondary city of Huango,
AngolaLand readjustment operations on a 312-hectare (3.12 km2) rural areain the Fatima district have generated 255 lots for housing. A 35% land
surface and a land title were given to original owners, 30% to public
utilities and the 35% remaining sold to finance the project. USD 800 000
were collected from land sale and financed small infrastructure
upgrades.

Property tax and land titling

Registre Foncier Urbain(RFU), Benin

By clarifing land titles, the RFU intended to increase property taxes andlocal fiscal revenues. These dramatically increased in the early 1990’s
but decreased towards the end of the decade, mainly for two reasons:1) the central administration retains the power to collect taxes, and local
taxes are not a priority; and 2) local policy makers hesitate to promote a
tax that is unpopular among voters.

Public land sale

Sale of public land in Addis
Ababa, Ethiopia

In Addis Ababa, 94% of land is sold by the communes at a price set
by administrative rules. For 2014, the revenue from the sale of landdevelopment rights represented 6% of the city’s total budget of USD 900
million and
9% of its total investment spending.

Source: UN-Habitat (2013) and UCLG (n.d.).

Land value capture opens perspectives for the future. However, it remains incipient
partly due to Africa’s structural weaknesses related to difficult land registry and titlingprocedures (see above), dysfunctional real estate and financial markets, and weakplanning policies. Land value capture mechanisms are often ad hoc and difficult toreplicate due to a lack of institutionalisation. Rampant corruption and favouritism canlead to powerful elites pocketing the increase in land value, as observed in Bamako, Mali
(Durand-Lasserve et al., 2015). Land value capture mechanisms are often the productof negotiations between various public bodies, owners, users and real estate agencies,
which implies reaching a consensus on the value and on sharing the benefits (Suzuki etal., 2015). Securing land rights and institutionalising a system for giving formal approval
to land development projects remain a prerequisite.

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Fiscal decentralisation allows local governments to raise private financeWithin strict macro-prudential regulations, the third dimension of fiscal
decentralisation consists in enabling local governments to use financing mechanisms
from the private sector, such as local debt instruments. With a better tax base, local
governments can borrow from financial markets, provided they respect national
guidance for macroeconomic stability:• Johannesburg gained access to capital markets in 2004 and has successfully emitted

six municipal bonds, the last one valued at ZAR 90 million in December 2015.
• In Cabo Verde, local governments can borrow from commercial banks within certain

limits to avoid over-indebtedness. Credits are mostly limited to five years and haverelatively costly interest rates of 13-14%. To reduce risks, the central government has
to approve every loan. Cabo Verde’s average local government budget is relatively
high: in 2007, it represented EUR 276 per inhabitant, against EUR 7 in Senegal.
• Federal states in Nigeria are allowed to borrow on domestic capital markets withthe permission of the central government. Lagos State generates 60% of its own
resources. Through the emission of bonds and public private partnerships, Lagos
has managed to mobilise additional resources and improve local infrastructuresince 2008 (Paulais, 2012: 321-51; quoted in AfDB/OECD/UNDP, 2015).
Nonetheless, Nigeria’s bond-emission model cannot be a universal solution. It
is mainly appropriate for large entities and local governments with high growth
perspectives. Besides, local governments may not necessarily obtain the approval ofnational authorities, who may object for financial, administrative or political reasons.
Another instrument consists in attracting foreign direct investment (FDI) into urban
infrastructure. Globally, some USD 50 trillion in savings and pensions are available(CCFLA, 2015). Some of it could finance the development of Africa’s urban infrastructure,
but the continent receives insufficient investment finance (AfDB, 2012). USD 328 billion
was spent on African infrastructure between 2009 and 2014, but FDI inflows to Africa
have contracted as a result of the decline in commodity prices (Chapters 1 and 2). Cities
in diversifier and early urbaniser countries (Accra, Casablanca, Cairo, Tunis, Johannesburg
and Lagos) are showing some resilience to the downturn. Initiatives such as Africa50
infrastructure fund and the Private Infrastructure Development Group provide African
governments with technical expertise and a pipeline of standardised projects that
reduce transaction costs for external investors. To alleviate risk for investors, African
governments can use hedging mechanisms such as risk insurance and commitment
devices offered by international organisations such as the Multilateral Investment
Guarantee Agency, the insurance arm of the World Bank.

Innovative finance offers new ways of raising and allocating resources
Innovative finance mechanisms can offer new ways to deliver services andavoid the obstacles of financing service infrastructure through conventional “userpay” arrangements. Providing partial access to state-owned utilities and facilities
could encourage investment, if well-structured and transparent. In Ethiopia, Kenya,
South Africa and Tunisia, private-sector involvement in state-owned energy, waste
management and water utilities has attracted investment and improved accountability.
While private-sector involvement presents the risk of corruption of public entities, awell-structured process can reduce financing constraints. Examples of how public assets
can be leveraged to attract private finance for services include the extraction of valuable
material from state land-fills, such as at Lagos’ Olusosun landfill, and others that convert
landfill gas into energy (such as Durban’s Bisaser Road) and municipal green waste into
compost (e.g. Cape Town’s Reliance Compost). New gas reserves present opportunities
to apply this approach, which could lead the way to a less onerous, more stable andinclusive energy sector in Africa.

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Co-production of infrastructure investment can lead to virtuous cycles of services,
work and reduced risk. While low per-capita income is a general finance problem inAfrica, the potential of mobilising local financial resources from across the socioeconomic spectrum remains untapped. This is most likely when local authorities andcommunity-based organisations are not excluded. For example, the excessive household
expenditure on batteries and paraffin directed companies to privately financed models
of household energy. Household resources can be added to international finance toproduce affordable services. This is shown by energy service companies Off-Grid Electricand M-KOPA Solar in East Africa and by the sanitation “bio-centres” in the informal
settlement of Kibera, Nairobi. Bills can be paid by mobile phone technology, which is
growing rapidly. In the process, local authorities can generate greater financial leverage
from their available balance sheets and enhance them with private resources.
Green funds and climate finance can offer new sources of investment, if they
address structural challenges in attracting investment and use these funds efficiently.
All but two African countries made Nationally Determined Mitigation Commitments, at
COP21 in Paris. Adopting renewable energy technologies will have to catalyse financial
innovation. The Green Climate Fund of the United Nations Framework Convention on
Climate Change will provide new funding options for low-carbon projects. The greater
hope is that African countries will use the fund’s USD 16 trillion investment in renewableenergy and clean technology to comply with the Paris Agreement and the 2°C warming
limit (Mathres, 2016). Climate funding for African cities can modernise the mannerin which infrastructure is financed. It can also replace centrally co-ordinated megainfrastructure projects with alternatives, such as locating energy sources closer to thepoint of demand. However, the multinational agencies dispensing these funds need toalign with local needs and initiatives.
Finding ways to value ecological capital offers potential for service provision. In theabsence of formal services, many urban residents rely disproportionately on goods andservices provided by the natural environment for potable water, flood buffering andrecreation (see Chapters 6 and 7). Though vulnerable, ecosystem goods and services
can be fiscally efficient. This is the logic behind the Upper Tana-Nairobi Water Fund(Box 8.8). Finance recognising the role of ecological capital can create jobs for low-skilled
unemployed urban youth.
Other innovative finance mechanisms for Africa’s urban development are available.
These include funding from emerging countries, sovereign wealth funds, remittancesand diaspora bonds (AfDB/OECD/UNDP, 2015: 219).

Box 8.8. The Upper Tana-Nairobi Water FundT he planned Upper Tana-Nairobi Water Fund, which focuses on the watershed that supplies
Nairobi with 95% of its water, would be the first of its kind in Africa. A water fund supports bothwater and soil conservation. It funds “green infrastructure” using natural systems and is cheaper
than “grey infrastructure” such as reservoirs, multiple dams and water treatment plants. Water
funds have been implemented in cities such as Quito or Rio de Janeiro.
For a budget of USD 10 million over ten years, key investments include management of riparian
areas (the interface between river and land), agroforestry, terracing, reforestation, grass strips
and road mitigation. Local farmers are expected to benefit from reductions in soil erosion andrelated damages to production and to water quality and supply. The area would therefore enjoy
increased agricultural productivity (TNC, 2015).

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Phasing out fossil fuel subsidies could free up investment in renewable energy
A hypothetical scenario modelled for this report shows how phasing out
fossil-fuel subsidies could free up investment in renewable energy. Globally, investment inrenewable energy systems has undergone an unprecedented boom: from USD 39 billion in2004 to USD 329 billion in 2011. In sub-Saharan Africa, coal-fuelled electricity generation
is projected to drop from 56% of total energy in 2012 to 27% by 2040. By the same year,
renewable energy sources are estimated to provide 41% of total electricity, over half ofwhich from hydropower. Investing in off-grid renewable energy is an attractive option
in sub-Saharan Africa where 50% of the urban population live without grid connection.
Off-grid solar energy, in particular, can enable users to access lighting and in some cases
afford mini renewable-based electricity generators.
According to analysis by the ReCalc programme of World Wildlife Fund for Nature(WWF) on a sample of 24 African cities, re-allocating fossil-fuel subsidies could free up some
USD 16 billion for investment in renewable energy between 2017 and 2025 (Table 8.6). These
investments could increase the cities’ installed electricity capacity by 6 600 megawatts
and generate 16 million megawatt hours annually. At current consumption levels, theadded capacity would meet the demand of 55 million more people. Replacing fossil fuel by
renewable sources for electricity could reduce lifetime greenhouse gas emissions by 590
million tonnes of carbon dioxide and directly save 20 million litres of water.

Table 8.6. ReCalc scenario replacing fossil-fuel subsidies with investments
in renewable energy for 24 African cities
City

National pre-tax Net investment
fossil-fuelsin renewablesubsidiesenergy(2015)(2017-25)

Capacity
added(2017-25)

People whose
annual electricity
consumption
would be covered(annually)

Greenhousegas emissions
averted(2017-74)

Water
consumption
averted(2017-74)

Million tonnes
CO2 equivalentMillion litres

Jobs created(2017-74)

USD billion

USD billion

Megawatts

Abidjan

0.99

1.7

692

7 563 47055

1 723 013

42 012

Accra

0.10

0.1

26

194 3482

63 816

1 555

Antananarivo

0.11

0.1

42

188 2664

132 418

2 497

Cape Town

2.51

1.3

523

203 47135

1 224 320

31 382

Dar es Salaam

0.75

0.6

256

5 890 53324

801 073

15 107

Douala

0.77

0.6

309

3 837 944

31

1 026 728

17 052

Durban

2.51

0.8

406

157 81727

949 708

24 34044 249Harare

2.70

1.9

751

3 037 570

71

2 346 154

Jos

0.92

0.0

14

215 978

1

39 806823

Kampala

0.32

0.1

52

290 2456

197 304

2 931

Kigali

0.03

0.0

10

58 2101

39 529588

Kinshasa

0.68

0.8

320

9 921 751

33

1 063 633

17 663

Kumasi

0.10

0.1

33

247 1373

81 176

1 980

Libreville

0.10

0.3

120

358 66112

400 853

6 655

Luanda

0.96

1.8

706

7 291 37666

2 203 822

41 562

Lusaka

2.06

2.4

948

3 774 481

89

2 960 824

55 838Maputo

1.05

0.3

133

679 46212

414 552

7 818

Marrakech

0.25

0.1

28

77 5292

77 988

1 652

Matola

1.05

0.3

117

600 01311

366 016

6 903

Mombasa

0.16

0.0

13

224 6421

47 736709

Nairobi

0.16

0.1

45

812 7825

172 662

2 565

Ouagadougou

0.14

0.2

78

396 3136

192 601

4 707

Pointe-Noire

0.69

1.1

441

7 896 555

45

1 467 183

24 363

Tunis

1.04

1.4

560

962 15146

1 560 855

33 038

TOTAL

16.3

16.1

6 621

54 880 707

590

19 553 772

387 992

Note: The International Monetary Fund does not provide data for Gabon or Ghana, and subsidies’ estimates from theInternational Energy Agency have therefore been used. Based on electricity consumption per capita (World Bank, 2015b),
sub-Saharan average has been used for four countries lacking data (Burkina Faso, Madagascar, Rwanda, Uganda).
Source: Prepared by the WWF for this edition of the African Economic Outlook. More information on the tool is available at
http://recalc.wwf.no/.

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8. National urban strategies for sustainable cities in Africa

International co-operation can support national urban strategies
International co-operation can provide funding and technical know-how to
support integrated urban strategies. Since 2000, the African Development Bank has
invested over USD 3.2 billion in urban water supply and sanitation and is setting up
a sub-national financing policy and a municipality trust fund. The Agence Française
de Développement (AFD) has recently adopted an integrated urban strategy based on aregional approach, mobilising local actors and promoting decentralised co-operation.
AFD also accommodates the financing to the level of maturity of urban plans: directloans to local authorities, and credit facility or loans to states for on-lending to local
authorities. The AFD has made loans to the cities of Johannesburg and Ouagadougou,
but few other donors have yet made loans to local governments.
Other donor agencies have often helped urban governance through: i) enhancing
co-ordination with clear jurisdictional boundaries between the central government
and local authorities; ii) granting greater financial autonomy to the local authorities
mainly by improving their fiscal base; and iii) establishing equalisation mechanisms
between local authorities. Box 8.9 shows how co-operation between local, national andinternational actors can help monitor the achievement of Sustainable Development
Goal 11 on sustainable cities.
Growing South-South co-operation can diffuse trial-and-tested experience among
countries facing common challenges. For example, the Bus Rapid Transit (BRT), a modelof public transport originally implemented in Curitiba (Brazil) in 1974, has been adopted
by many cities in the Southern Hemisphere, including Lagos in 2008. The standards
and priorities required by the BRT system, relative to the more complex solutions in
the North, prove more appropriate for African cities facing uncontrolled urban growthand “slumisation” without adequate capacity. Similarly the successful Chamanculo
slum upgrading initiative in Salvador (Brazil) characterised by strong community
participation, inspired similar experimentation in Maputo (Mozambique).

Box 8.9. Measuring progress towards Sustainable Development Goal 11
New methods and processes of data collection allow city governments to monitor their progress
towards SDG 11, urbanisation and their own agendas. UN-Habitat has adapted the City Prosperity
Initiative (CPI) to the global monitoring framework of the SDGs, including SDG 11, and the future
New Urban Agenda. By adopting the CPI, a municipal government can monitor progress by using
a single platform for multi-scale decision making between different levels of government. The
CPI is already being implemented in more than 200 cities in Egypt and Ethiopia. The governmentof Addis Ababa has been using a contextualised CPI to monitor the implementation of Ethiopia’s
Structural Transformation Plan. After an initial assessment, local authorities are organisingpublic consultations to understand critical problems and to propose action plans to address them.
However, many indicators proposed to monitor progress in the SDG 11 prove challenging for cities
to measure. The Mistra Urban Futures centre found that the draft targets and indicators for SDG
11 pose significant challenges for all five local governments it works with (Bangalore (Bengaluru),
India; Cape Town, South Africa; Gothenburg, Sweden; Greater Manchester, United Kingdom;
and Kisumu, Kenya). The issues of data availability, ease of access or collection, and perceived
relevance pose difficulties for the African, European and Asian cities. Even indicators like theavailability and accessibility of transport services reveal important disparities. The diversity ofurban contexts also hinders the application of universal measures. For example, the European
definition of sub-standard housing, based on tenure types and security, proves inappropriate
to classify two-thirds of Kisumu’s residents. Similarly, informal and semi-regulated transport
services would be included in most African and Asian cities yet excluded from cities in otherworld regions (Simon et al., 2015).

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8. National urban strategies for sustainable cities in Africa

Box 8.9. Measuring progress towards Sustainable Development Goal 11 (cont.)
Figure 8.5. Examples of the City Prosperity Index for six African cities
Dar es Salaam

HarareLagos

KampalaGovernance

Productivity
70
60
50
40
30
20
10

Sustainability

Social inclusion

LusakaNairobi

Infrastructure

Governance

Quality of life

Sustainability

Productivity
70
60
50
40
30
20
10

Infrastructure

Quality of life

Social inclusion

Note: Each dimension has a scale of 0 to 100, with a higher score representing a better outcome in therespective dimension.
Source: UN Habitat (2015b).
12 http://dx.doi.org/10.1787/888933350960

Note
1. The UN-Habitat Governing Council, a subsidiary body of the United Nations General Assembly,
adopted Guidelines on decentralisation and strengthening of local authorities in 2007. The
Guidelines are the only non-binding international declaration supporting decentralisation as a
strategy for development, the only other comparable document being the European Charter of
local self-government, which only applies to the members of the Council of Europe.

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8. National urban strategies for sustainable cities in Africa

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PART IIICountrynotes

﻿
COUNTRYNOTESAlgeria•

Growth reached an estimated 3.9% in 2015, mostly driven by agriculture and arebound in oil and gas activity.

•

With approximately 49% of government revenues and 96% of exports depending on
the oil sector, the drop in oil prices has reduced budgetary and external savings,
underscoring the need to diversify the sources of public finance.

•

A process of urban transition begun in 1987-88 has led to 70% of the population’s
40 million people living in urban areas by 2015.

Real gross domestic product (GDP) growth in 2015 was 3.9%, against 3.8% in 2014, driven
mostly by agriculture, especially vegetable production, and by a noticeable rebound in oil andgas activity in Q4 of 2015. Against a background of falling global oil prices since June 2014, thisrebound followed nine consecutive years of decline. This should be an opportunity to speed up
reforms aimed at diversifying the economy and its structural transformation. Real GDP growth
should reach 3.4% and 3.0% in 2016 and 2017 respectively.
Rising prices of food and manufactured goods pushed up inflation, which had declined fortwo consecutive years, to 4.8% in 2015. The price hikes were due to problems in the distribution
channels, especially for fresh agricultural produce and industrial foodstuffs.
The economic situation is mostly dominated by the drastic fall in oil prices and its effects on
the country’s external position, as well as on public accounts. For the first time in 16 years, in 2015
the trade balance was negative (-9% of GDP) because imports (31% of GDP) were not covered byexports (21% of GDP), resulting in lower official foreign-exchange reserves.
Public accounts have been affected by erosion in the resources of the revenue-stabilisation
fund (Fonds de regulation des recettes) from the notable fall in oil-taxation receipts, down from 20%
to 13% of GDP between 2014 and 2015. With total revenues falling (27% of GDP in 2015 versus 33%
in 2014) and fiscal expenditure still high (43% of GDP in 2015 and 2014), the overall deficit grew to
16% of GDP in 2015 from 8.3% in 2014.
Regional planning has systematically included “urban” and “sustainability” as concepts in
the regulations and development plans for the three major zones: Littoral, High Plateaux and
Sahara. In 2015, more than 70% of the country’s population of 40 million lived in urban areas.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.8

3.9

3.4

2017(p)3.0

Real GDP per capita growth

1.8

2.1

1.6

1.2

CPI inflation

2.9

4.8

4.3

4.0

Budget balance % GDP

-8.3

-16.0

-15.4

-14.7

Current account % GDP

-4.4

-15.6

-17.1

-15.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESANGOLA•

Angola’s economy grew by 3.8% in 2015, and GDP growth will remain subdued, at
3.3% in 2016 and 3.5% in 2017, due to lower crude oil prices.

•

Policies to accelerate economic diversification and strengthen human development
and equitable growth are needed to reduce vulnerability to external shocks.

•

Investment in economic and social infrastructure is needed to enhance thesustainability of the country’s urbanisation process.

Angola’s natural resource wealth helped attract foreign direct investment and ensured
strong economic growth over the past decade. But the economy has recently undergone a major
structural shock due to lower crude oil prices, and forecasts for the coming years remain filledwith uncertainty about the evolution of the country’s oil exports and international commodity
prices. Growth of gross domestic product (GDP) is projected to remain subdued, at 3.3% in 2016
and 3.5% in 2017, down from 3.8% in 2015. Growth of the oil sector will average 4%, while thenon-oil sector is expected to show a small improvement, growing by 3.4%, driven mainly by astrong recovery in agriculture.
In January 2016, the government adopted a strategy for mitigation of the oil crisis aimed at
finding substitutes for oil as a major source of revenue. Agriculture is expected to play a key rolein boosting the country’s exports and generating foreign currency earnings. The strategy also
envisages investments in infrastructure, gradual reduction of imports, deepening of financial
sector reforms, skills development and improvement of the business environment. The main
initiatives for enhancing the ease of doing business involve reducing bureaucracy and facilitating
credit. Notwithstanding these reforms, the legal framework still needs adjustment to ease thebusiness environment. Income inequality, unemployment and poverty remain a challenge in
Angola. Regional economic imbalances also persist. Transformative investments are required
to decongest large cities and reconnect them with major economic growth poles, particularly inrural areas.
Although Angola is perceived as highly urbanised, with 62.3% of the population living inurban areas, the country needs to broaden human development opportunities for the population.
Under its National Development Plan 2013-2017, the government is contemplating a territorial
development strategy to create a network of development poles. The country has a National
Urbanisation and Housing Programme, a 2015-2030 Metropolitan Plan for Luanda and several
ongoing urbanisation projects in other areas. Rural to urban migration has been a major driverof urbanisation, especially during the 27 years of armed conflict that followed independence
in 1975. The country counts 18 provinces divided into municipalities, communes, villages andtowns. Depending on the setting, the government recognises different criteria for classifying
urban areas. There is a need to integrate informal housing progressively into city planning andmanagement and to strengthen national institutional capacities for managing urbanisation andurban and rural development.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.8

3.8

3.3

2017(p)3.5

Real GDP per capita growth

1.5

0.5

0.1

0.3
14.8

CPI inflation

7.3

10.2

14.1

Budget balance % GDP

-5.6

-4.1

-5.5

-5.6

Current account % GDP

-2.5

-7.2

-5.4

-5.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

benin
•

Growth, estimated at 5.2% in 2015 against 6.5% in 2014, dipped slightly due to a
decline in cotton production and disruptions in the electricity supply.

•

Projected growth rates of 5.5% in 2016 and 5.7% in 2017 will depend on political andsocial developments, marked by the March 2016 presidential election.

•

With Benin’s cities expanding, sustainable urbanisation through regional development
hubs will require new funding, notably from private sources.

Growth, estimated at 5.2 % in 2015, down from 6.5 % in 2014, slowed for three main reasons:disruptions in electricity supply, less favourable rainfall and the slowdown in economic
activity in neighbouring Nigeria. Inflation remained low due to the drop in oil and food prices.
The government deficit widened, however, with an increase in public investment and current
expenditure, leading to greater recourse to government securities.
Growth is forecast to reach 5.5% in 2016 and 5.7% in 2017 thanks to support for the agriculture
sector and investment in infrastructure. Economic policy in 2016 and 2017 should work towards
the Sustainable Development Goals for 2030. The political and social environment will be decisivein a context marked by the presidential election of March 2016. The vote threatened to raise
tensions among political parties, although the risk of a political crisis or instability remained low.
The challenge of urbanisation must be addressed in order to ensure balanced development
and reduce poverty. Urban growth, which has accelerated in recent years, creates challenges interms of transit and pollution, as well as housing and land management. The authorities intend
to promote sustainable urbanisation through the emergence of several regional development
hubs that will require greater private-sector investment. Mechanisms to support public-private
partnerships (PPPs) and access to banking for local communities therefore need to be promoted.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.5

5.2

5.5

2017(p)5.7

Real GDP per capita growth

2.7

2.7

2.6

2.6

CPI inflation

-1.1

0.4

2.3

2.4

Budget balance % GDP

-1.9

-4.3

-3.6

-3.7

Current account % GDP

-7.2

-7.1

-7.1

-7.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

Botswana•

The pace of economic growth has slowed reflecting weak demand for mineral exports
and a gloomy outlook for the global economy.

•

Growth prospects look promising, but the weak pickup in global growth, subdued
commodity prices and persistent electricity supply problems pose substantial
downside risks.

•

The country has experienced a rapid pace of urbanisation which has been associatedwith some environmental harm and is straining urban areas’ capacity to provide jobs,
infrastructure and other essential amenities.

The Botswana economy rebounded in the last five years after a significant setback following
the 2008 global economic downturn. However, the country’s pace of economic activity moderated
in 2014, reflecting modest growth in mining and persistent electricity and water supply problems.
Real gross domestic product (GDP) growth is estimated to have weakened further in 2015 mainly
due to subdued demand for mineral exports on account of the gloomy global economy.
Despite this, Botswana’s growth prospects look promising, with real GDP growth projected
to pick up slightly in 2016-17. The improvement in growth over the medium term is predicatedon the government’s Economic Stimulus Programme (ESP), a gradual recovery in the global
diamond market, and increased energy availability following the completion of remedial
measures at Morupule B Power Station. The favourable outlook is also underpinned by expected
growth in manufacturing following the commission, in 2015, of a steel manufacturing plant anda horticultural processing plant. Downside risks persist from the weak pickup in global economic
growth and subdued commodity prices.
In keeping with the government’s fiscal stance targeting a balanced budget, fiscal operations
resulted in a budget surplus in FY 2014/15 for the third successive financial year. The government
also projected a budget surplus for FY 2015/16. However, government operations during the firsthalf of FY 2015/16 resulted in a fiscal deficit. The deteriorating fiscal situation is on account of adecline in mineral exports receipts. Therefore, Botswana is expected to record a fiscal deficit in
FY 2015/16 for the first time in four years.
Inflation continued to fall and breached the lower end of the Bank of Botswana’s mediumterm target range in February, March, September and November 2015. Annual average inflation
ended the year in 2015 much lower than in 2014, reflecting lower fuel prices and the government’s
commitment to prudent monetary policy.
Botswana has experienced a high rate of urbanisation, with nearly two-thirds of thecountry’s total population now living in urban areas. Although rural-urban migration and natural
population increase have played a role in urban population increase, the positive trend is mainly
due to the reclassification of some villages to urban settlements.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.4

2.5

3.2

2017(p)3.5

Real GDP per capita growth

2.4

0.6

1.4

1.7

CPI inflation

4.4

3.1

4.5

4.3

Budget balance % GDP

5.6

3.6

-2.8

-2.3

Current account % GDP

15.7

16.0

5.6

5.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

Burkina Faso•

Economic growth is expected to reach at least 5% in 2016 and 5.9% in 2017 due to therecovery of mining and the return to democratic institutions.

•

Strengthening security to combat jihadist threats is still a major challenge to economic
revival, especially after the January 2016 terrorist attack.

•Urban growth has speeded up in the past decade and the urban population could reach
35% of the total by 2026, but towns and cities are still poorly equipped to sustainably
manage this growth.

Economic prospects for 2016 are good, with overall growth forecast at 5.0% (slightly up from
4.8% in 2015) thanks to the return of democratic institutions after the 2015 elections and theresumption of mineral production. Inflation should remain modest (about 2% in 2016 and 2017)
due to a good harvest and low world oil prices.
This growth rate is still far from the robust 2010-13 period, when it was well above an annual
6%. The economy has been damaged since 2014 by the political transition following the October
2014 popular uprising and two factors that are likely to persist in 2016: a drop in gold and cotton
prices and higher defence spending in the final quarter of 2015.
Economic prospects also still depend on the new democratically elected government’s
ability to foster political peace to ensure institutional stability. Stronger security measures totackle jihadist threats remain a major challenge too, especially after the January 2016 terrorist
attack. Although the poverty rate fell to 40.1% in 2014 (from 46.7% in 2009), the social situation
remains worrying, with vast inequalities, so poverty is a source of future uncertainty, along with
unemployment and under-employment among urban youth and women.
Burkina Faso is one of the world’s least urbanised countries, but its towns and cities havegrown more quickly in the last decade. Urban-dwellers were 22.7% of the population in 2014 andcould reach 35% in 2026. Weak urban governance has produced slums, and the country faces
economic, ecological and infrastructural challenges. The dual land management system may
seriously threaten national development policy. Large towns and cities are poorly equipped forsustainable development, and the economies of second-category urban areas are dominatedby raw materials production, which is an obstacle to real efforts to turn them into centres ofsustainable development.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.0

4.8

5.0

2017(p)5.9

Real GDP per capita growth

2.1

1.8

2.1

3.0

CPI inflation

-0.3

0.8

2.0

1.9

Budget balance % GDP

-1.8

-2.5

-3.1

-3.7

Current account % GDP

-6.1

-4.5

-5.3

-6.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

Burundi•Burundi achieved average annual growth of 4% between 2010 and 2014, but due to thesocial and political environment in 2015, the growth rate fell and GDP is estimated tohave dropped by 4.1%.

•

The deterioration in public finances led to large-scale recourse to advances from thecentral bank (Banque de la République du Burundi) to finance the budget deficit in 2015.

•

Continuation of the current socio-political climate and the accompanying fall insupport from donors could do serious damage to the country’s remarkable advances
in development and poverty reduction since 2005.

The socio-political strains from which Burundi has suffered since April 2015 have createdmajor difficulties for economic activity, which has slowed markedly, interrupting the growth
dynamic of the start of this century. Latest estimates suggest that growth of real gross domestic
product (GDP) was negative, at around -4.1% in 2015 as against 4.7% in 2014 and 4.5% in 2013.
This contraction was chiefly the consequence of a drop in activity in the secondary sector, inparticular in industry and construction. Inflation remained steady at an average 5.5% in 2015,
compared with 4.4% in 2014, thanks to the relative stability of the exchange rate, good harvests
and the continuing drop in international oil prices. In respect of the budget, Burundi continues
to suffer from a weak mobilisation of internal resources (11.7% of GDP in 2015 compared with
12.9% in 2014 and 13.1% in 2013) and from a substantial fall in foreign aid (-33% in 2015), according
to the Finance Ministry. The budget deficit rose from 1.2% of GDP in 2014 to 5.7% in 2015. The
deterioration in the public finances was strongly reflected in the accounts of the central bank
(BRB), in particular with a steep fall in the official reserves (less than two months of import coverin 2015, compared with four months in 2014), mainly because of broad government recourse to
BRB advances to finance the deficit. This financing, which amounts to an injection of liquidity
into the economy, resulted in a greater demand for foreign exchange. The current account deficit,
transfers included, is estimated at 4.5% of GDP in 2015 compared with 9.5% of GDP in 2014.
The implementation of the second-generation strategic framework for growth and poverty
reduction, adopted in February 2012, brought significant progress in human development. The
present political context, however, could call into question much of what has been achieved. The
prolonged absence of support from technical and financial partners has negative consequences
for the country and risks endangering the progress that has been made, particularly in social
dimensions. Renewed engagement by these participants is largely dependent on a politicalsolution to political tensions, which would make it possible to avoid an even more serious
deterioration in the socio-economic situation. The whole international community is worried by
the persistent tensions in the country, which also carry risks for the entire sub-region. Several
Western countries have already announced the suspension of support to Burundi. Furthermore,
the problems observed in 2015 surrounding the implementation of reforms supported by theextended credit facility (ECF) could also have a negative impact on the budget in the short andmedium term.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.7

-4.1

3.3

2017(p)4.4

Real GDP per capita growth

1.4

-7.4

0.0

1.0

CPI inflation

4.4

5.5

7.5

6.7

Budget balance % GDP

-1.2

-5.7

-2.2

-2.1

Current account % GDP

-9.5

-4.5

-6.0

-6.6

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

© AfDB, OECD, UNDP 2016

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COUNTRY NOTESCABO VERDE•

Cabo Verde’s real GDP growth increased to 3.6% in 2015 from 1.8% in 2014 and 0.8%
in 2013 as tourism receipts increased, domestic demand improved and energy prices
remained low. However, the economy is still underperforming due to deflation andhigh unemployment.

•

While government deficit has narrowed from previously high levels, fiscal consolidation
remains a priority to reduce the risk of debt distress, reassure investors and safeguard
macroeconomic stability.

•

Despite Cabo Verde’s insularity and unequal distribution of the population acrossislands, its urban renewal can drive structural transformation by providing informal
and micro-entrepreneurs opportunities to upgrade and expand their market reach.

Cabo Verde’s economic recovery remains feeble due to the weak global economy and domestic
vulnerability. Tourism and tourism-related foreign investment, including construction, continue
to be the main engines of growth. In fact, economic growth recovered to around 3.6% in 2015
(from 1.8% in 2014 and 0.8% in 2013) due to the return of foreign direct investment (FDI) – whichgrew by 13% in 2014 – especially in tourism. However, economic activity is still catching up with
its potential. In addition to public sector efficiency, Cabo Verde’s long-term growth depends on
bolstering productivity. In 2016 and 2017, growth is expected to recover to an average rate of 4%,
below the rate of the boom years before the global financial crisis.
The fiscal situation improved slightly in 2015 due to public investment programme (PIP)phase-out, yet it remains vulnerable. The overall central government deficit is expected to fallin 2015 to 4.5% (from 7.4% in 2014), and again in 2016 to 4%. Challenges also remain to find theappropriate policy path given debt sustainability requirements and a need to improve economic
growth. Public debt is expected to reach 118% of GDP in 2015 from 94.7% in 2013. While external
public debt is high (76.2% of total public debt in 2015), it remains overwhelmingly concessional,
and debt service indicators show that the country shall remain comfortable in servicing its future
debt obligations.
Cabo Verde’s urban population accounts for about 65% of the country’s 514 000 population.
The high rate of urbanisation is due mostly to rural-urban migration. Although the increase in
the rate of urbanisation is a source of social problems, it also presents an opportunity for informal
and micro-entrepreneurs to upgrade and expand their market reach. With a remarkable literacy
rate exceeding 85%, Cabo Verde has the foundation for an economic lift-off driven by a robust
urban population with skills for a competitive private sector. The country’s urban renewal cantherefore be an important driver of structural transformation in the years ahead.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

1.8

3.6

4.0

2017(p)4.0

Real GDP per capita growth

0.5

2.4

2.8

2.7

CPI inflation

-0.2

0.0

1.6

2.7

Budget balance % GDP

-7.4

-4.5

-4.0

-3.8

Current account % GDP

-8.0

-9.0

-9.8

-10.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESCAMEROON•

Cameroon’s economy grew by a brisk 5.7% in 2015, led mainly by the secondary
sector.

•In the current context of declining oil prices, the country must rationalise public
investment and improve the effectiveness of its expenditure.

•

Urbanisation has had a positive impact on poverty reduction, but more proactive
policies are needed to diminish inequalities and imbalances.

In 2015, Cameroon’s economy, the engine of the Central African Economic and Monetary
Community (CAEMC), continued to prove resilient despite an unfavourable global economic
context (stagnation in the Organisation for Economic Co-operation and Development [OECD]member countries, slowdown of growth in China and in several emerging countries, and a fallin oil prices and in the country’s export earnings). The region is facing persistent pockets ofinsecurity at its northern and eastern borders because of the threat of Boko Haram and the crisisin the Central African Republic. Cameroon’s growth in 2015 has been estimated at a solid 5.7%,
led mainly by the secondary sector, which grew by 8.4%. The tertiary sector grew by 5% and theprimary sector by 4.9%. Oil production, which makes the country a net oil exporter, rose by an
exceptional 28.3% as new fields began production. The construction sector also grew, by 7.3%.
Fiscal policy remained moderately expansionary, in line with the furtherance of major
infrastructure projects. The 2015 budget, like those of 2013 and 2014, was developed andimplemented under the programme-budgeting method. Monetary policy was aimed at stabilising
prices and the real effective exchange rate by preventing public expenditure from crowding out
private investment. Inflation increased in 2015 by 0.8 of a percentage point to 2.7% because of therising price of fuel at the pump, itself due to a 40% cut in subsidies to oil products in July 2014, but
remained under the 3% CEMAC convergence criterion.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.9

5.7

5.3

2017(p)5.1

Real GDP per capita growth

3.4

3.2

2.8

2.6

CPI inflation

1.9

2.7

2.2

2.1

Budget balance % GDP

-3.9

-5.3

-5.7

-4.9

Current account % GDP

-15.2

-14.0

-14.6

-15.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

© AfDB, OECD, UNDP 2016

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COUNTRY NOTEScENTRAL AFRICAN REPUBLIC•

The economic upturn that began in 2014 continued in 2015, but was then interrupted
by the resurgence of the security and political crisis, resulting in economic growth of
4.1% of real GDP compared with an initial forecast of 5.5%.

•

The political transition was completed when presidential and legislative elections
were held, with former Prime Minister Faustin-Archange Touadéra being electedpresident in the second round of voting.

•

The huge movement of people that followed the March 2013 crisis has exacerbatedthe challenges linked to urban planning and development of the territory.

The upturn in economic activity that began in 2014 was confirmed during the first nine monthsof 2015, but its dynamism was interrupted by the resurgence of cross-community violence at theend of September. The worsening security environment held back growth of real gross domestic
product (GDP) to an estimated 4.1% in 2015, compared with an initial target of 5.5%. Even so, theeconomy grew faster than in 2014, when growth of 1.0% was recorded. Most sectors accelerated in2014, even though the export sector continued to suffer from the country’s suspension from theKimberley Process. This measure effectively means that there is a ban on the export of diamonds,
although the restrictions were partly lifted in July 2015. In spite of this difficult climate, there
was a significant improvement in the management of public finances thanks in particular tothe substantial efforts undertaken by the transition authorities and the support of the technicaland financial partners (TFP). Most of the quantitative targets of the budget were achieved, witha progressive return to the normal procedure for public expenditure and greater transparency inthe management of public resources.
Presidential and legislative elections were important events in 2015, with Faustin-Archange
Touadéra being elected president. Touadéra previously served as prime minister during François
Bozizé’s presidency. The vote was organised in an unpredictable security environment anduncertain political climate, but brought an end to the transition process that began three years
earlier. These elections followed the Bangui Forum in June 2015, which was concluded by thesigning of the Republican Pact for Peace, National Reconciliation and Reconstruction of theCentral African Republic (CAR) and by the adoption of a new constitution in November 2015.
Overall conditions in the social and humanitarian areas were relatively stable for part of 2015, but
deteriorated amid fresh outbreaks of cross-community violence, which claimed many victims
and swelled the number of people displaced both inside and outside the country.
The state of affairs in the country’s urban areas was greatly affected by the political andsecurity crisis, which particularly damaged prospects for the development of towns and cities.
A study is underway to redesign urban development and planning in Bangui, with the aim ofbringing structure to its breakneck urbanisation and establishing a healthy housing environment.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

1.0

4.1

5.2

2017(p)6.0

Real GDP per capita growth

-1.0

2.1

3.2

4.0

CPI inflation

11.6

5.6

4.7

4.0

Budget balance % GDP

3.2

-3.2

-2.8

-2.3

Current account % GDP

-6.1

-11.5

-5.1

-4.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESCHAD•

Economic growth reached an estimated 4.1% in 2015, possibly falling to only 2.6%
in 2016 due to the collapse in oil prices and a steep fall in export revenues.

•

The need to maintain internal and external balances in 2016 makes budgetaryconsolidation indispensable in the face of numerous financial, social, security andhumanitarian challenges.

•

Among other things, work towards structural transformation of the economy isdriven by an integrated development strategy in the urban centres, especially throughplanning, promoting decent housing and equitable access to social services.

The Chadian economy, which is particularly dependent on the oil industry, is likely toexperience a serious slowdown in 2016. After reaching 6.3% in 2014, GDP growth could fall to 4.1%
in 2015 and then to 2.6 % in 2016, mainly due to the collapse in oil prices on international markets.
This sharp decline could result in a significant reduction in the level of public investment,
particularly in the extractive sector, and lead to a fall in domestic demand in 2016 and 2017.
Agriculture’s poor performance is likely to worsen the unfavourable economic situation. This
important sector of the economy suffered from a lack of rainfall in 2015, resulting in a sharp
decline in cereal production of around 12% according to government estimates. The Chadianstate’s capacity to implement the public investment programmes in its economic policy is being
severely challenged. The significant expenditure in 2015 on meeting the threats and violenceof the terrorist sect Boko Haram and jihadist movements also affected the country’s economy.
In 2015, the inflation rate could rise from the 1.7% recorded in 2014 to reach 4.0%, breaching
the community standard of 3.0% for the Central African Economic and Monetary Community(CEMAC), before falling to 2.6% in 2016. The main causes are disturbances to the country’s supply
chains and exports related to the security situation. Preserving the country’s economic gains,
especially the benefits of achieving the Heavily Indebted Poor Countries (HIPC) target in late
April 2015, makes prudent debt management essential now, given the current highly volatile oil
prices.
The structural transformation of the country’s emerging economy – which remains one of
the government’s major objectives – faces many obstacles, including the inefficient organisationof urban spaces. Better spatial inclusion would enable them to become effective centres of
production and thereby contribute to job creation, strengthening the country’s social cohesion
and the resilience of its economy.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.3

4.1

2.6

2017(p)4.9

Real GDP per capita growth

2.9

0.8

-0.6

1.7

CPI inflation

1.7

4.0

2.7

4.0

Budget balance % GDP

-4.7

-6.4

-7.0

-7.4

Current account % GDP

-8.9

-9.9

-8.6

-8.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

© AfDB, OECD, UNDP 2016

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COUNTRY NOTES

Comoros•

The energy crisis restrained economic growth to under 1.1% in 2015.

•

Saudi Arabian budget support and the resumption of electricity generation should
push growth to 4.1% in 2016 and 2017.

•

As a small-island developing state, rapid urbanisation is a threat to peace in the
Comoros, where there are few job opportunities for young people.

Since reaching its completion point under the Heavily Indebted Poor Countries (HIPC)
Initiative in December 2012, the Comoros has returned to economic growth. Nevertheless,the archipelago still faces major obstacles, including a poorly diversified economy, electricity
shortages and vulnerability to external shocks. The power generation crisis penalises tax-paying
sectors such as importers of frozen goods and large retail outlets, which have accumulated salaryarrears. Despite these constraints, the Comorian economy has rebounded, with positive growth
rates since 2012. Growth in 2016 will depend largely on two factors: the political climate, withpresidential elections taking place in April, and the solutions adopted in response to the energy
crisis. The International Monetary Fund (IMF) initially projected growth of 2.2% in 2016, butthat was before the Comoros received huge budget support from Saudi Arabia on 31 December
and Chinese technical assistance for the energy sector to the tune of EUR 4 million. Forecasters
are now projecting 4.1% growth in 2016 and 2017 thanks to the gradual recovery of electricity
generation, and more importantly, the impact of Saudi Arabian budget support on household
consumption.
The political situation is still marked by the electoral process that began in February 2015,
when a general election, municipal elections, and island council elections were held. This processconcluded with the second round of presidential elections on 18 April 2016 on all the islands.
The first round took place on 21 February only on Grande Comore, which will hold the rotatingpresidency until 2021. The latest rulings by the Constitutional Court on the eligibility of candidates
confirmed that democracy is established.
The Comoros moved up five places to 154th out of 189 countries in the 2016 edition of theWorld Bank’s annual Doing Business report. Some 45% of the population live below the poverty line,
and the Comoros is ranked 159th out of 187 countries in the United Nations Human Development
Index, falling well short of achieving the Millennium Development Goals (MDGs).

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

0.6

1.1

4.1

2017(p)4.1

Real GDP per capita growth

-1.8

-1.3

1.7

1.8

CPI inflation

2.9

2.1

2.2

2.6

Budget balance % GDP

-0.7

-1.2

-2.2

-1.7

Current account % GDP

-6.1

-7.4

-6.9

-7.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

CONGO
•

After rebounding to about 6% in 2014, growth fell back to 1.2% in 2015 but shouldreach 4.2% in 2016, though prospects could be affected by persistent low prices for oil.

•

The speed and range of structural reform and of the diversification of the economy
are still not enough to improve significantly the country’s social indicators and toachieve the Millennium Development Goals.

•

Despite great potential, urban areas are not yet driving economic structuraltransformation and the national urban strategy still has to be developed to tackle theproblems of rapid urban growth.

Growth slipped to 1.2% in 2015 (from 6% in 2014) because of a sharp fall in the world price ofoil (60% of the country’s gross domestic product [GDP]) and slower expansion of the non-oil sector
caused by less government investment. Inflation was stable at around 0.9%. Budget policy wastighter because of lower government revenue but the primary deficit still reached 9.3% of GDP in
2015. The current account deficit widened (with lower oil prices) from 2.6% of GDP in 2014 to 14.5%
in 2015. Overall growth should be 4.2% in 2016 and 4.7% in 2017, driven by greater oil production
from new wells and by robust transport and agriculture sectors. But fluctuating oil prices could
upset these predictions.
Congo’s score on the UN Human Development Index improved slightly from 0.564 in 2013 to0.591 in 2014, but the country’s social indicators remain below those of African states with similar
income levels. Poverty fell from 50.7% of the population in 2005 to 40.9% in 2011 but is still higher
than average for middle-income countries. Unemployment is high, affecting in particular 30%
of young people between the ages of 15 and 29, because of the capital-intensive nature of the oil
sector and the weakness of the non-oil private sector. Significantly improving social indicators isa major challenge and requires stronger and more inclusive growth, along with faster structuralreform and economic diversification. This is urgent, especially because of rapid urban growth.
Congo is one of Africa’s most urban countries, with more than two-thirds of the population
living in towns and cities. The chief motor for urban growth is the concentration of public
services and economic activity in the two big cities, Brazzaville and Pointe-Noire. The urban
economy supplies 80% of GDP, mainly from oil production at Pointe-Noire and administrationand services based in Brazzaville. Urban areas have great economic potential but have notdeveloped to drive the economy because of inadequate access to basic social services for a
growing population; inadequate infrastructure that reduces urban mobility; unplanned urban
spread; high unemployment (16%); and insufficient funding. The government aims to tackle
these problems with the 2012-16 national development plan (PND) and has increased funding of
the towns and cities (through its programme of “accelerated municipalisation”) which aims tobuild major social and administrative infrastructure there. But much remains to be done and thegovernment needs to take on the challenges represented by towns and cities by coming up witha national urban development strategy that remains to be drawn up and complete town planning
blueprints being drafted.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.0

1.2

4.2

2017(p)4.7

Real GDP per capita growth

3.5

-1.4

1.6

2.1

CPI inflation

3.0

0.9

1.5

1.0

Budget balance % GDP

-4.8

-9.6

-1.8

1.3

Current account % GDP

-2.6

-14.5

-12.4

-9.6

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESCONGO, dem. rep.
•

The growth of the Congolese economy slowed in 2015, falling to 7.7% from 9.2% in 2014,a trend set to continue in 2016 (7%), with a recovery expected to start in 2017 (8%).

•

Poverty remains widespread, although the country has made significant progress in
implementing the Millennium Development Goals (MDGs), moving up 11 spots in the2014 world ranking of the Human Development Index (HDI).

•

The country faces significant challenges in the planning and financing of urban
development in order to improve quality of life and to capitalise on the opportunities
provided by urbanisation.

In 2015, economic growth was 7.7%, down from 9.2% in 2014, and below the 10.3% growth initiallyprojected. The growth was supported by the extractive and manufacturing industries, transport,
and telecommunications. Inflation was held at 0.8% and the exchange rate of the Congolese franc(CDF) to the United States dollar (USD) remained stable, fluctuating by 0.2%. Despite the drastic fallin the price of raw materials,1 macroeconomic stability was preserved due to a tightening of tax
revenue, international reserves and an increase in the current account deficit. Economic activity is
expected to slow slightly to 7.0% in 2016 before climbing to 8.0% in 2017, due to a recovery of mining
prices, expected from 2017, and the positive effects of structural reforms and the rebuilding of
infrastructure. To strengthen the economy’s stability and resilience to shocks, in January 2016 thegovernment adopted 28 urgent measures, and as part of the strategic national plan for development(PNSD) currently being drawn up, it decided to diversify the country’s economy and to broaden thevalue creation chain.
On social issues, although the Democratic Republic of the Congo (DRC) did not achieve theMillennium Development Goals (MDGs) by the end of 2015, it did make significant progress,
although considerable challenges still remain. Despite the fragile political and security context,
the incidence of poverty fell from 80% in 1990 to 63.4% in 2012. The continual increase in thenational budget allocated to social sectors led to an increase in the enrolment, literacy and primaryschool-completion rates; a significant reduction in infant and maternal mortality; and improved
electricity provision and access to water, sanitation and housing. This progress led to the country
improving on the Human Development Index (HDI), moving from 0.329 in 2000 to 0.439 in 2014, thus
climbing 11 spots in the 2014 world ranking. The holding of free, democratic elections planned for
2016, within the constitutional deadline, is the country’s main political challenge to consolidate theachievements of the democratic process that began in 2006.
Although urbanisation is viewed as an opportunity by the Congolese authorities, it faces a real
challenge in terms of the planning and financing of urban development. Urban areas dominate
the national economy and offer better living conditions than rural areas. However, there are risks
associated with current urbanisation trends in the DRC: an increase in unplanned and informalneighbourhoods, poor quality of urban transport and congestion in cities, and limited access tosocial infrastructure. The country does not have a national urbanisation strategy, although it does
have some measures and ongoing national initiatives which could directly or indirectly contributeto urban development, especially the land-use planning reform, construction projects for special
economic zones and agro-industrial parks.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

9.2

7.7

7.0

2017(p)8.0

Real GDP per capita growth

6.0

4.5

3.8

4.9

CPI inflation

1.0

0.8

2.1

2.5

Budget balance % GDP

0.5

-0.5

-0.7

1.0

Current account % GDP

-9.2

-8.7

-10.8

-13.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.
1. The price of copper traded on the London Metal Exchange (LME) lost 28% of its value between December 2014 andDecember 2015. Oil, cobalt and gold lost respectively 38.26%, 28.35% and 10.70% of their value over the same period.

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COUNTRY NOTESCÔTE D’IVOIRE•

The economy grew strongly for the fourth straight year in 2015, with booming
agriculture, a better business climate, returning investors, but also international
uncertainty; these trends should continue in 2016 and 2017.

•

The incumbent president was re-elected in October 2015 in a peaceful vote that was a
big step in consolidating peace and economic confidence in the country.

•

Towns and cities have emerged because of the physical expansion of exported
raw-material areas, but these urban centres are not very attractive because of poor
electricity supply, inadequate logistics and fragmented regional policies.

Economic growth remained strong despite international uncertainty, estimated at 8.8% in
2015, close to previous years (8.7% in 2013 and 7.9% in 2014) according to the African Development
Bank (AfDB). It was driven by agriculture, investment, services and an improved business climate.
This performance is projected to continue in 2016 (at 8.6%) and 2017 (at 8.3%). The government
intends to continue its efforts, after the success of the 2012-15 national development plan (PND),
to make Côte d’Ivoire an emerging country by 2020 and see that growth is more inclusive.
Budget policy focused on increased investment as well as funding other post-conflict
development needs. The primary account was nearly balanced in 2014 and 2015, while the overall
deficit was around 3% of gross domestic product (GDP). Inflation was 1.5% in 2015, loans to theprivate sector increased, and foreign reserves remained strong. The current account deficit was
expected to widen from 2.5% of GDP in 2015 to 3% in 2016 due to more investment in exports andinfrastructure.
The improved business and macroeconomic environment boosted investment with more firms
set up, a greater flow of foreign direct investment (FDI) and growth of public-private partnerships(PPP), which need to be better implemented for a fairer distribution of risks. Problems remain intaxation and in access to land titles and funding.
The October 2015 presidential election was a landmark in the consolidation of political peace,with incumbent President Alassane Ouattara re-elected in the first round with 83.7% of the vote.
The main challenges of his new five-year term will be to ensure social cohesion, strengthen civil
peace and improve the justice system. Access to healthcare and education has increased.
The 2014 census showed that 49.7% of Ivorians lived in towns and cities, including 19.4%
in Abidjan where most economic activity is. Except for Abidjan, most urban areas are not very
attractive for want of formal planning. Three ongoing projects may change this: investment todouble electricity output by 2020, an urban plan for the Abidjan district and upgrading the roadbetween Bamako and San Pédro.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

7.9

8.8

8.6

2017(p)8.3

Real GDP per capita growth

5.4

6.3

6.2

5.9

CPI inflation

0.4

1.5

1.8

1.9

Budget balance % GDP

-2.3

-3.5

-3.4

-3.8

Current account % GDP

-2.3

-2.5

-3.0

-3.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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Djibouti•

Growth of about 7.4% is forecast for 2016, compared to 6.7% in 2015 and 6% in 2014,
an improvement which has not prevented widespread poverty or unemployment.

•

The budgetary deficit improved in 2015, but the country’s level of debt remains critical,
with a service economy centred on transport.

•

Activities and jobs are largely concentrated in the capital, which has led the government
to contemplate the development of economic hubs in the country’s interior.

Djibouti has a dual economy. On the one hand, it has a modern sector, based on rental
revenue from the ports and military bases rented by foreigners. On the other hand, it still has
a large informal sector. The economy is focused on services, in particular transport and related
services, due to the country’s geostrategic position on the Gulf of Aden, at the intersection ofmaritime corridors important to the transport of goods and oil. The construction, hotel andtelecommunication sectors are growing but are not yet significant. The Chinese investment of
the past three years could change the economy’s structure, given the development of special
economic zones (SEZs) to attract processing industries as part of global value chains.
Djibouti is developing its infrastructure, particularly its ports, to promote rapid growth andreduce poverty. Led by major investment projects, the growth of recent years (6.7% in 2015 and
6% in 2014) will continue, with rates of 7.4% and 7.1% forecast for 2016 and 2017. Despite thisupturn, extreme poverty and unemployment remain endemic. Critically, Djibouti’s debt was
65.8% of GDP in 2015 and is expected to reach 75.8% in 2016 before reaching the 79% threshold in
2017, placing the country at high risk of over-indebtedness.
To face these challenges, since March 2014 a new strategic framework, Djibouti Vision 2035,
is aimed at the country’s economic emergence by that date. Its first medium-term product is afive-year strategy for rapid growth and job creation (Stratégie de croissance accélérée et depromotion de l’emploi, Scape), launched in August 2015.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.0

6.7

7.4

7.1

Real GDP per capita growth

4.7

5.4

6.1

5.8

CPI inflation

2017(p)

3.0

3.1

3.3

3.4

Budget balance % GDP

-10.5

-6.7

-5.8

-5.8

Current account % GDP

-25.6

-16.0

-14.0

-12.8

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

EGYPT
•

Economic outlook for Egypt in 2016 remains cautiously optimistic, partly based on thegovernment’s ability to deliver on expectations, as well as effective implementation of
the Sustainable Development Strategy and ongoing macroeconomic reforms.

•

Growth is expected to accelerate, conditional on improved investor confidence,
although global economic headwinds present challenges to the outlook.

•

Overall, success will be demonstrated by effectively addressing long-standing
domestic challenges of low and non-inclusive growth, and the implications of highpopulation on the sustainability of urban growth.

There has been a lengthy political transition following President Mubarak’s removal fromoffice in 2011. The formal “political roadmap” has now been completed. A fragile security
situation, however, reflects the fight against radical Islamists. Meanwhile, growth has beensteadily picking up, driven by the gas, manufacturing and real estate sectors, alongside anincrease in foreign direct investment (FDI). But tourism performance weakened following thebombing of a Russian tourist aircraft at the end of October 2015, and import-dependent industries
faced foreign exchange shortages, resulting in reduced activity. The cautiously optimistic 2016
economic outlook is largely based on the government’s ability to deliver on its policy reforms andgrowth strategy.
Throughout 2015 the authorities faced continuing policy pressures. Recent sluggish economic
growth and an expansionary fiscal policy led to the fiscal deficit remaining large. In response, thegovernment’s fiscal consolidation exercise aims to increase revenues and rationalise expenditures,with savings directed towards social safety nets. To finance the deficit, the government borrowedheavily, which pushed domestic debt up significantly, crowding out the private sector. Faced withthese strains, the Central Bank of Egypt (CBE) laboured with some success to strike a balance
between curbing inflationary pressures and boosting growth while keeping the exchange rate
steady. The CBE may decide to ease monetary policy in the rest of 2016 to prevent growth fromslowing. However, a tight stance will be needed to support the Egyptian pound (EGP), given the
sharp fall in foreign exchange reserves.
On the assumption that the government continues to implement its economic reform
programme, the prospects for 2016 and beyond suggest a steady recovery. Success in stabilising
the economy and boosting growth will be demonstrated by lowering the fiscal deficit while at thesame time increasing pro-poor spending; managing price stability in a context of exchange rate
uncertainty; increasing meaningful employment (especially among the young); enhancing thebusiness environment; and improving security and strengthening social justice.
Egypt continues to work towards achieving sustainable cities and structural transformation.
However, strains are evident, such as Egypt’s high population growth that has major implications
for the sustainability of urban growth. As job-seekers move to urban areas, city populations will
rise, adding more strains on urban infrastructure. Moreover, urbanisation has a direct impact
on Egypt’s food security, given urban sprawl has overrun crop-growing areas. The governmentof Egypt has financed several new projects in response to urban growth. These include those inUpper Egypt, northwest coast and along the new Suez Canal.

Macroeconomic indicators
2013/14 (e)2014/15(p)2015/16(p)Real GDP growth

2.2

4.2

4.3

2016/17(p)4.5Real GDP per capita growth

0.0

2.0

2.2

2.4
10.2

CPI inflation

10.8

11.2

8.8

Budget balance % GDP

-12.2

-11.5

-9.6

-8.7

Current account % GDP

-0.9

-3.7

-1.1

-1.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

© AfDB, OECD, UNDP 2016

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COUNTRY NOTES

Equatorial Guinea•

GDP fell by 10.2% in 2015 due to the drop in oil prices, and according to the latest
forecasts it will contract by 8% in 2016.

•

The government, aware of financial imbalances, took major steps in May 2015 toreduce public investment by half and make drastic cuts in government operating
costs.

•

Equatorial Guinea’s strong dependence on petroleum has enabled it to use oil revenues
to carry out structural changes over the last 15 years and implement a housing policy
for new homes and better access to water and electricity.

The drop in oil prices since July 2014 has caused a recession. Oil and gas production fell by
10%, compared to 2014, to around 165 000 barrels a day in 2015. The non-oil economy, although in
relative growth with respect to the rest of the economy, is nonetheless in decline. The recession,corresponding to a drop of 10.2% of GDP in 2015, is likely to continue until 2020 because ofunfavourable forecasts for crude oil prices. While difficult to quantify, domestic government
arrears and lower public investment tend to reduce fiscal space and constrict growth in the nonoil economy.
The importance of oil and gas (90% of GDP, 87% of fiscal revenues and 89% of exports) in theeconomy meant that the drop in oil prices had a spillover effect on public investment spending,which, at XAF 1 951 billion (CFA francs) in 2015, accounted for 86% of all public expenditure andis the engine of growth. The Amending Finance Law of May 2015 was based on an oil price of
USD 40 per barrel, but further falls to close to USD 30 per barrel in January 2016 risk exacerbating
budgetary pressures. Major steps have been announced for optimising revenues through fiscal
reform and a reduction in tax exemptions. At the same time, spending is being reduced throughcontrols on government operating costs. Moreover, the authorities have expressed their desire
to return to balanced budgets in the coming years, in accordance with the second phase of the
National Programme for Economic and Social Development (PNDES) 2013-17, which calls for lesspublic investment.
The country’s proactive policy on urbanisation and housing improvement is ambitious.
The new city of Djibloho, in the centre of mainland Equatorial Guinea, will be created under
the framework of the policy of regrouping the populations of the main cities – Malabo, Bata,
Mongomo, Ebebiyin, Evinayong and Luba. A complementary approach was taken in drafting themaster plans for roads, housing and social infrastructure in order to improve the quality of urbanlife through economies of scale. Implementation of these plans will need to take account of thedrop in oil revenues.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

2.3

-10.2

-8.0

2017(p)-3.4

Real GDP per capita growth

-0.7

-13.2

-10.9

-6.3

CPI inflation

4.3

3.6

2.6

2.3

Budget balance % GDP

-6.8

-6.9

-7.3

-9.0

Current account % GDP

-10.0

-7.1

-2.3

-1.8

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESERITREA•

Growth is projected at 0.3% in 2015, from 1.7% in 2014 and 1.3% in 2013, reflecting
challenges in the business and investment environment, and a poor global economic
environment.

•

The government’s commitment to strengthening public financial management andnatural-resource management through the African Development Bank’s technicalassistance has helped to create favourable medium-term prospects.

•

Eritrea has been promoting urbanisation but this is limited by financial capacity anda shortage of urban housing.

In the 22 years since independence in 1993, the Government of the State of Eritrea (GoSE)
has prioritised investments in infrastructure (communication networks, energy, and water
facilities); agriculture (mainly for food security); marine resources; social and other services;and manufacturing. In 2016, GoSE priorities are human-resource development; investment inmachinery and equipment; transport and communication facilities; water supply; energy; andessential social services. The government is also creating an attractive environment for theactive participation of local and foreign private investors. However, these efforts are being
severely curtailed by unresolved border issues, the government’s relatively substantial spending
on security, the UN sanctions and macroeconomic instability. Real gross domestic product(GDP) growth is projected to slow from 1.7% in 2014 to 0.3% in 2015 because of slower economic
activity and increasing challenges in the global market. However growth should recover in 2016
to 2.2%. Over the medium term, the government sees further prospects in improved trade with
Middle-Eastern and Asian countries, additional mining activities, growth in the food sector, andthe development of tourism. The GDP is heavily based on services (59.2%), with a very small
manufacturing sector (6%). Agriculture, hunting, forestry and fisheries constitute 17.2% of GDP.
The budget deficit declined slightly to 10.3% of GDP in FY 2015/16 from 10.7% in 2014/15, andthis trend will continue to 9.9% in 2016/17 as a result of increasing revenue from mining projects,
access to more grant resources, and a reduction in unproductive expenditures. Inflation remained
at 12.5% in 2015 mainly because of food-supply shocks and high foreign exchange demand. Foodcrop production in 2015 was only about 50% of its 2014 level. Lower international food and oil
prices in 2015 and 2016 should contain 2015/16 inflation below 12.5%.
Exports are expected to have grown in 2014-15 due to the start of mineral production at the
Asmara project and gold extraction by the Zara Mining Share Company. The current accountdeficit is forecast to increase to 3.4% of GDP in 2015 from 2.4% of GDP in 2014 and this trend willcontinue in 2016 despite rising levels of both remittances and the “development and recovery tax”
(a 2% tax levied on the Eritrean Diaspora). Eritrea has continued to benefit from the IMF’s capacitybuilding institute, the East African Regional Technical Assistance Centre (E-Afritac), located in
Tanzania. Moreover, Eritrea will be able to access the resources of the AfDB’s Transition Support
Facility (TSF), a component of the Bank’s Pillar I grants window, which will further strengthen
natural-resource governance, public-finance management, and data collection and analysis.
In addition to capacity-building support, the AfDB will help to strengthen institutional
governance, especially in the Ministries of Finance and National Development because of theircritical roles in ensuring macroeconomic stability and growth. Two projects are in preparation to
support reform within the Ministry of Finance to improve public-finance management and tax
and customs administration. The Drought Resilience Livelihood Support Program (DRLSP) II aims
at integrating private-sector involvement into Bank projects and at developing the private sector© AfDB, OECD, UNDP 2016

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COUNTRY NOTES

in a decentralised environment as key components in skills development and the promotion of
employment and entrepreneurship.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

1.7

0.3

2.2

2017(p)3.4

Real GDP per capita growth

-0.5

-2.0

-0.2

1.0
11.7

CPI inflation

12.3

12.5

12.0

Budget balance % GDP

-14.6

-10.7

-10.3

-9.9

Current account % GDP

-2.4

-3.4

-4.1

-4.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESETHIOPIA•

The strong growth of Ethiopia’s economy in 2014/15, estimated at 10.2%, is expected tocontinue in 2016 and 2017, while public investment is expected to ease infrastructure
bottlenecks and bolster economic structural transformation.

•

Ethiopia faced severe drought in 2015 requiring emergency food and aid in 2016 andcausing inflationary pressure, while the risk of public-debt distress increased due torising non-concessional borrowing and export underperformance in 2014/15.

•

The urban population, growing at 3.8% per annum, is expected to reach 42.3 million
by 2037, which could pose significant development challenges if not addressed.

Ethiopia has experienced double-digit economic growth, averaging 10.8% since 2005, which
has mainly been underpinned by public-sector-led development. Real gross domestic product(GDP) is estimated to have grown by 10.2% in fiscal year 2014/15. The agriculture, services andindustry sectors accounted for 38.8%, 46.6% and 15.2% of real GDP, respectively. Public investments
are expected to continue driving growth in the short and medium term with huge investments
in infrastructure and the development of industrial parks, prioritised to ease bottlenecks to
structural transformation, which will still have to take shape with industry playing a significant
role in the economy.
Fiscal policy has remained prudent, focused mainly on increasing spending on propoor and growth-enhancing sectors, and on boosting efforts in tax-revenue collection. The
monetary-policy stance has been geared to ensure a stable exchange rate and single-digit
inflation targets. Despite this, inflation has tended to rise from single digits and reached 10.1%
in December 2015. Although Ethiopia has been pursuing a sound debt-management policy, debtburden indicators signalled a rise in debt distress from low to moderate in 2015, as indicated by
the World Bank/International Monetary Fund (IMF) debt-sustainability analysis. Moreover, poor
performance and volatility in export earnings, and ever-increasing demand for imports have led
to a deterioration of the balance of trade deficit.
In 2015, Ethiopia faced one of the worst droughts in 30 years caused by the El Niño climate
conditions, leading to failed harvests and shortages of livestock forage. Some 10.2 million persons
have been affected by the drought and will need emergency food and non-food aid into 2016.
Ethiopia, the second most populated country in Africa after Nigeria, is also the least urbanised,with urbanisation at only 19%, significantly below the sub-Saharan average of 37%. The urban
population has grown at an average 3.8% per annum since 2005 and is expected to triple from
15.2 million in 2012 to 42.3 million by 2037. This could pose a significant development challenge
if not addressed. Since 2004/05, the government has focused more on developing housing,upgrading slums, providing infrastructure and promoting small urban enterprises.

Macroeconomic indicators
2013/142014/15(e)2015/16(p)Real GDP growth

10.3

10.2

8.1

2016/17(p)7.7Real GDP per capita growth

7.7

7.7

5.6

5.2

CPI inflation

8.1

7.7

7.4

8.9

Budget balance % GDP

-2.6

-2.0

-1.3

-0.8

Current account % GDP

-10.9

-14.6

-8.4

-9.3

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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GABON
•

Estimated at 4.2%, growth remained vigorous in 2015 despite falling hydrocarbon
prices, which reduced the country’s tax revenue.

•

In 2015 Gabon continued to adopt reforms intended, among others, to streamline themanagement of performance-related bonuses in public administration.

•

The great majority of Gabon’s population (at 1.8 million) is urban; efforts to upgrade
housing have been undertaken, as well as measures to stimulate rural areas.

Despite the impact of the fall in hydrocarbon prices, growth remained relatively strong in2014 at 4.4% and has been estimated at 4.2% in 2015 and projected at 4.5% in 2016. It is projected
to continue at a rate higher than 5% until 2020. The economy remains dominated by hydrocarbon
production, though manganese production and wood processing still play a major part in it. Gabon
needs to diversify its economy, and recent outlooks and projections show non-oil activities on astronger growth path than hydrocarbons thanks to public policy devised in this direction. Tax
revenue fell sharply in 2015 as a result of declining oil prices and a slight drop in oil production.
The economic situation has pushed the authorities to accelerate ongoing reform programmes,
in particular those intended to streamline performance-related bonuses paid to civil servants,
with a view to having greater control over the wage bill and to improve public services. In terms of
its operating expenditures, the government has also made important budgetary decisions to keep
public investment at 22% of revenue under its “emerging Gabon” strategy plan (Plan stratégique
Gabon émergent, PSGE) while maintaining a proactive social policy. The authorities also aim toraise tax revenue by broadening the tax base and modernising procedures for filing and paying
taxes.
Gabon is highly urbanised, and its urbanisation level is growing. In 2015, 86% of the population
lived in the country’s four big cities: Libreville, Port-Gentil, Franceville and Oyem. The capital,
Libreville, has a population of nearly 800 000, or half the total population of Gabon. Outside ofurban areas, however, the population density is lower than 2 people per km², which is similar
to that of Sahelian desert countries. Housing policies are designed to fight against precarious
housing and simplify legislation, while improving the housing stock and sanitation conditionsin urban areas. Otherwise, the ambitious ongoing agricultural-development programme,
Gabonaise des réalisations agricoles et des initiatives des nationaux engagés (GRAINE), includes
developing 3 000 km of tracks leading to plantations, integrating about 1 600 villages into thebasic-infrastructure development plan and involving 30 000 families in the formation ofagricultural co-operatives. The programme aims to fight against rural-urban migration, promote
youth employment, create 15 000 to 20 000 jobs and triple agricultural production. It should havea strong impact on rural housing, because it encourages participants to settle on a reserved
farmland area.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.4

4.2

4.5

2017(p)5.1

Real GDP per capita growth

2.1

2.0

2.3

2.9

CPI inflation

3.2

1.2

2.4

2.4

Budget balance % GDP

2.7

-2.7

-4.6

-2.3

Current account % GDP

8.3

-6.1

-9.6

-4.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESGAMBIA•

Growth rebounded to an estimated 4.7% in 2015 from its low level of 0.9% in 2014, andcould exceed 5% in 2016 if the government implements appropriate policy reforms.

•

The fiscal balance deteriorated further in 2015 and international reserves came underpressure, while the outlook is clouded by policy slippages related to financing anotherlarge programmed deficit of 9.3% of GDP in 2016.

•

With almost half of the population residing in urban areas and rapid unplanned
urbanisation, Gambia is facing significant socio-economic and environmental
challenges.

Gambia’s economic performance has been affected by a series of external shocks. The impactof the regional Ebola outbreak on tourism and delayed summer rains in 2014, together with weakeconomic policy implementation, led to a contraction in real gross domestic product (GDP) growth
to 0.9% in 2014, sharply down from an initial estimate of 7%. Growth is projected to rebound to
4.7% in 2015 and to 5.5% in 2016 due to a recovery in tourism and agriculture.
The country has experienced large fiscal imbalances, caused by persistent policy slippages
in recent years and financial difficulties in public enterprises. Higher than budgeted levels ofspending pushed the overall fiscal deficit from 4.4% of GDP in 2012 to 11% in 2014 and around
9.6% in 2015. The fiscal deficit is largely financed from domestic borrowing due to difficulties
in mobilising external resources. This has led to an increase of ten percentage points since
mid-2013 in the government’s one-year treasuries borrowing interest rate, which reached 21.9%
in November 2015. The stock of public debt rose from just below 70% of GDP at end-2010 to108% by end-2015. Consequently, interest payments on public sector debt increased to absorb
40% of government revenues in 2015, up from 25% in 2013. The outlook for 2016 is clouded bypolicy slippages related to financing another large programmed deficit of 9.3% of GDP. Associatedwith the fiscal deficit, Gambia experienced a significant balance of payments crisis, which led
to a decrease in its official reserves from six months of import cover at end-2012 to less than
three months in early 2016. Inflation hovered at around 6.5% at the end of 2015, up from around
5.3% in 2013.
Despite the enormous opportunities that urbanisation offers in Gambia, it has been perceived
as a risk in recent decades. This is largely due to rapid and unplanned urbanisation that has
resulted in large-scale flooding and other environmental hazards, as well as pressure on social
services. Almost 50% of Gambia’s population live in urban areas. To date, urbanisation has notbeen guided by a comprehensive policy or strategy despite the fact that urban areas generate alarge share of the economy and employment opportunities. Urbanisation is largely driven by highrural-urban migration and high population growth. The lack of adequate policy frameworks andthe weakness of institutions have significantly undermined the potential of urbanisation and the
management of its associated risks.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

0.9

4.7

5.5

5.6

Real GDP per capita growth

-2.4

1.5

2.3

2.4

CPI inflation

2017(p)

6.3

6.5

5.5

5.5

Budget balance % GDP

-11.0

-9.6

-9.3

-6.1

Current account % GDP

-17.7

-20.0

-15.0

-10.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

GHANA
•

Ghana’s economic growth, which had slowed from 4.0% in 2014 to 3.7% in 2015,
is expected to recover to 5.8% in 2016 and 8.7% in 2017, following consolidation ofmacroeconomic stability and implementation of measures to resolve the crippling
power crisis.

•

Monetary and fiscal policies were tightened in 2015 and are expected to remain so in2016 in line with the fiscal and monetary policy consolidation reforms underway as
Ghana prepares for national elections in late 2016.

•

Ghana continues to experience rapid urbanisation, which has led to a numberof sustainable development challenges, particularly regarding sanitation andtransportation infrastructure.

In 2015, the Ghanaian economy grew at an estimated 3.7%, down from 4% in 2014. The
2015 slowdown resulted from a number of economic challenges, most of which were in play in2014. These include a 3-year power crisis, rising fiscal deficit and public debt levels, a significant
external sector deficit and unpredictably low world market prices for the country’s oil and gold
exports. The services sector was the main driver of growth. The industrial sector also posted
a positive growth rate of 9.1%. Over the medium term the country should see a recovery witha projected GDP growth of 5.8% in 2016 and 8.7% in 2017. The forecasted recovery in economic
growth in 2016/17 depends on fiscal consolidation measures remaining on track, quick resolutionof the power crisis, two new oil wells coming on-stream, and improved cocoa harvest and gold
production.
Ghana maintained a tight monetary and fiscal policy in 2015. The government’s fiscal
consolidation programme aimed to address demand pressures exacerbated mostly by the wage
bill and by public debt services, which account for most un-earmarked revenues. Monetary
policy in 2015 continued to be tightened with measures to contain rising inflation and thedepreciation of the domestic currency. To address these challenges, government entered into a
3-year Extended Credit Facility (ECF) agreement with the International Monetary Fund (IMF) in
April 2015, successfully undertaking two reviews under the programme. The fiscal consolidation
stance is expected to meet the conditions of the reviews in 2016 as well. Ghana will hold its
national election in late 2016; peaceful and credible elections will be key for policy continuity
and for solidifying the country’s democratic dividend, especially after the closely contested 2012
elections and the judicial adjudication of the presidential elections.
By 2010 over half of Ghana’s population lived in urban areas (localities with a population of
5 000 or more), as compared to 30% at independence in 1957. The urbanisation rate is projected
to increase to 72% by 2035. While rural-urban disparities are still significant, there are signs
that Ghana’s cities are facing considerable challenges with land use, infrastructure and services
provision (particularly with regard to housing, sanitation and transportation), and the absenceof gainful and productive employment opportunities, especially for the youth. The critical policy
challenge has been to ensure orderly and sustainable spatial development, co-ordination andplanning, and measures to enable metropolitan and municipal authorities to secure adequate
financing for infrastructure and services.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.0

3.7

5.8

2017(p)8.7

Real GDP per capita growth

1.6

1.4

3.5

6.4

CPI inflation

17.0

17.2

10.2

7.9

Budget balance % GDP

-6.4

-5.7

-5.0

-3.9

Current account % GDP

-9.5

-8.2

-7.7

-6.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESGUINEA•The Ebola epidemic ended in December 2015, but left the country in a state ofdevastation, with near-zero growth, a budget deficit of more than 7% of GDP and major
constraints on its capacity to accelerate essential reforms to relaunch development
and transform the economy structurally.

•

Progress has been slow to materialise in the social sectors, with poverty on theincrease, made worse by the negative impact of Ebola on income-generating activities
and by spending on presidential elections.

•

Rapid, poorly controlled urbanisation is adding to social pressures, and implementationof the national housing policy (Vision Habitat 2021) is a national priority that should
place young people at the centre of challenges and issues that lie ahead.

Guinea recorded a major economic slowdown for the third year running in 2015, with growthestimated at 0.1% of gross domestic product (GDP) in real terms (equal to a 2.7% decline in percapita GDP), compared with 1.1% growth in 2014 and 2.3% in 2013. The culprit was the Ebola
epidemic that struck the sub-region, especially Guinea, Sierra Leone and Liberia, between
December 2013 and December 2015. Other contributing factors included a wait-and-see approachto governance in the run-up to the 11 October 2015 presidential election, and the adverse
international economic outlook, which hurt the prices of export goods.
In addition to this drastic fall in growth, the government relaxed its fiscal discipline, mainly
through increased capital outlays on infrastructure (roads, energy, etc.). This downturn in growth,
combined with low domestic and foreign revenue, increased the budget deficit from 4.1% of GDP
in 2014 to 7.5% in 2015 and reduced external assets in foreign currency from four months’ worthof imports in 2013 to two months in 2015. Despite good performances since 2011 in implementing
the International Monetary Fund’s (IMF) Extended Credit Facility (ECF), most performance criteria
and indicative targets were not achieved.
Growth prospects are expected to improve in 2016 thanks to a more peaceful political climate
and the end of the Ebola epidemic, with Guinea officially declared Ebola-free on 29 December
2015. Furthermore, the government’s commitment to redress the macroeconomic situation andvast improvements to the electricity supply thanks to the new Kaleta hydroelectric dam will
improve the business environment. Economic growth is therefore expected to accelerate again,
reaching 4.0% in real terms in 2016 and 4.8% in 2017.
Like many other developing countries, Guinea is facing major challenges as a result ofurbanisation. In 2014, urban areas were estimated to be home to 3.7 million people, or 34.7% of the
population, up from 30.6% in 1996. Guinea’s urban growth is the result of its natural population
growth, the rural exodus and the transformation of the outskirts of the country’s towns andcities. Imbalances in the urban structure of towns and cities have increased, confirming thepredominant role of the capital, which had 1 667 864 residents in 2014 (15.7% of the national
population). The main challenges for the country are youth unemployment, worsening urban
poverty (incidence increased from 23.5% in 2002/03 to 30.5% in 2007 and 35.4% in 2012) and theshortage of basic public services, including education, health care, security and decent housing.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

1.1

0.1

4.0

2017(p)4.8

Real GDP per capita growth

-1.6

-2.7

1.3

2.1

CPI inflation

9.7

8.0

8.5

8.8

Budget balance % GDP

-4.1

-7.5

-5.0

-4.6

Current account % GDP

-26.1

-23.6

-28.4

-25.6

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

Guinea-Bissau•

Despite 4.8% growth estimated for 2015, and 5.7% projected for 2016 and 6.2% for2017, the outlook remains fragile because the economy is highly dependent on thesocial and political climate, the performance of the cashew-nut subsector and on
continuation of reforms.

•

There has been significant progress in reforms thanks to better consideration of thecountry’s development priorities, but the state’s capacity to continue and reinforce its
management of public finances will be critical for recovery in the medium term.

•

The city of Bissau is the country’s main economic magnet, but for inclusive growth,
public policies must energise secondary towns as well as work for the economic andsocial development of rural areas.

Guinea-Bissau’s return to constitutional order in 2014 allowed the country to improve its
socio-economic situation and return to growth. After three years of stagnation due to the 2012
coup, Guinea-Bissau’s economy has returned to significant growth – estimated at 4.8% in 2015,
up from only 0.8% in 2013 and 2.7% in 2014. The growth is because of a good year of cashew-nut
sales and a sharp increase in subsistence food crops, as well as the private sector’s increased
confidence, public-sector reforms (budgetary consolidation in particular) having been resumed
and the return of donors, as illustrated by the success of the partners’ round table held in Brussels
in March 2015. There was also some political mayhem in 2015, which could jeopardise theprojected growth and the viability of reforms. The major challenges to growth in the short term
are the political situation and climate hazards that could affect the primary sector. Assumingthat political tensions are resolved, rainfall is similar to 2015 and reforms are continued, growthis projected at 5.7% in 2016 and 6.2% in 2017.
Compared to previous years, 2015 was marked by a considerable rise in revenues andexpenditure. During the transition period, the country’s management of public finances hadtaken a turn for the worse. During 2015, the authorities were able to improve tax management
and administration by setting up treasury committees and bolstering customs-related posts andfunctions. Even though much remains to be done to secure and develop the progress made since
the end of the transition period, these improvements have allowed the state to function better(wages paid on time, auditing of wage arrears, etc.). Thus, the tax burden rose from 8.7% in 2014
to 10.5% in 2015, while the overall balance stood at -2.2% of gross domestic product (GDP) and theprimary balance at -1.6%. Measured by the Harmonised Index of Consumer Prices, inflation has
been estimated at 1.5% in 2015 in a context of demand recovery.
Compared to 2014, there was very little improvement in the social situation and in humandevelopment. Although the consolidation of public finances and support from the country’s
technical and financial partners improved education and health coverage, the overall situation
remains disturbing. The country holds one of the lowest ranks in the Human Development
Index, and data from the latest multiple-indicator cluster survey (MICS IV) has highlighted major
human-development deficiencies, particularly in relation to women and the rural populations.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

2.7

4.8

5.7

2017(p)6.2

Real GDP per capita growth

0.2

2.4

3.4

3.8

CPI inflation

1.9

1.5

2.1

1.8

Budget balance % GDP

-2.1

-2.2

-2.7

-3.1

Current account % GDP

-1.3

1.5

-2.4

-2.6

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

KENYA
•

Real GDP growth was 5.3% in 2014, while the 2015 estimate and the 2016 and 2017
projections show economic expansion of 5.5%, 6.0%, and 6.4% respectively.

•

In 2014 and 2015, the economy experienced a stable macroeconomic environment,with single-digit inflation despite a 10.0% currency depreciation in 2015. At the sametime, calls to amend the constitution to increase finances to the 47 county governments
dominated the political scene.

•

Kenya is set to experience rapid urbanisation in the foreseeable future.

GDP growth remained robust in 2014 at 5.3%. The expansion of construction, manufacturing,finance and insurance, information, communications and technology, and wholesale andretail trade buoyed GDP. The economy slowed in the first half of 2015, but growth is estimatedto have reached 5.5% by year-end. As shown in the table below, overall GDP growth prospects
are 6.0% and 6.4% for the years 2016 and 2017 respectively. Consumer Price Index (CPI) inflation
projections remain at around 6.0% over the same period. The short- to medium-term positive
growth projections are based on the assumptions of increased rainfall and enhanced agricultural
production, a stable macroeconomic environment, continued low international oil prices,
the stability of the Kenya shilling (KES), improved security boosting tourism and reforms ingovernance and justice.
Political activity in 2015 continued to centre on two areas: a call by the opposition party,
Coalition for Reforms and Democracy (CORD), to amend the constitution and county governments
seeking to raise national government financial transfers from 15% to 45%.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.3

5.5

6.0

2017(p)6.4

Real GDP per capita growth

2.6

2.9

3.4

3.8

CPI inflation

6.9

6.0

6.0

5.2

Budget balance % GDP

-5.7

-8.8

-8.2

-6.3

Current account % GDP

-10.0

-7.9

-6.3

-6.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESLESOTHO•

After four years of robust growth averaging 4.3% annually, growth dropped to an
estimated 3.4% in 2015, largely due to weakness in the construction and manufacturingsectors and it is expected to remain subdued in 2016 and 2017.

•

Unemployment, poverty and inequality have remained pervasive in the face of
non-inclusive growth.

•

The high rate of urbanisation has outpaced the ability of the authorities to provide
necessary services, and the sustainability of living conditions for much of the urban
population remains a critical challenge.

Economic growth in Lesotho slowed to an estimated rate of 3.4% in 2015, down from 3.6%
in 2014. Growth is projected to remain subdued at 2.6% in 2016 and 2.9% in 2017. Growth in2015 was significantly affected by low implementation of the public investment budget, whichweighed heavily on the construction sector and other inter-related sectors highly dependent
on government spending. Slow growth in manufacturing and spillovers from slower growth inSouth African economy were a further brake on growth.
Despite the country’s solid economic performance in recent years (2010-14), growth
remained non-inclusive. Consequently, a large population is still languishing in extreme poverty.
Unemployment remains high at 24%, and the country’s Gini coefficient of 0.5 means that inequality
is still a problem. Based on the poverty headcount ratio at USD 1.25 a day, 56.2% of the populationis still trapped in extreme poverty. Efforts to promote inclusive growth are constrained by thepressure of high HIV prevalence (22.9% of the total population) and the volatility of receipts fromthe Southern African Customs Union (SACU), which finance 50% of the budget.
A massive influx of the population from rural to urban centres has led to rapid urbanisation.
This has been triggered by a multitude of factors, the most important being climate change, which
has led to low agricultural productivity, and spatial differences in the provision of services andthe location of opportunities, often in favour of urban areas. With urban dwellers estimated at
22.8% of the overall population and the urban population growing at a rate of 37% every ten years,
sustainability remains a critical challenge. The urban population has outpaced the ability of theauthorities to provide commensurate social services. This in turn has often resulted in otherchallenges, such as poor waste disposal, pollution of water bodies, poor housing and inadequate
social and economic infrastructure. For urbanisation to remain sustainable, innovative policies
are required, along with commitment towards their effective implementation. The government
plans to link urban growth poles to the rural economy, and its commitment to implement climatechange adaptation initiatives are highly commendable.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.6

3.4

2.6

2017(p)2.9

Real GDP per capita growth

2.4

2.2

1.4

1.7

CPI inflation

5.3

3.8

3.9

4.0

Budget balance % GDP

-2.5

0.6

-3.1

-5.5

Current account % GDP

-10.6

-8.4

-6.5

-15.7

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESLIBERIA•The drop in commodity prices and after effects of the Ebola outbreak cut Liberia’s
economic growth in 2015 to 0.4%. However, gold production and the resumption of
public infrastructure projects will support a modest pickup in growth in 2016 to 2.8%.

•

Lower revenue growth, tighter borrowing limits, and a large wage bill increase theneed to align expenditure and borrowing with development priorities in the lead up
to the 2017 presidential elections.

•

The rapidly increasing population in Monrovia requires stronger urban policies
to reduce congestion and improve the quality of life in informal settlements andcontinued effort to increase economic opportunities in rural areas.

Liberia is facing headwinds to growth following two major shocks over the past year. The
country is recovering from the effects of the Ebola Virus Disease (EVD) outbreak combinedwith the drop in international export prices for Liberia’s traditional engines of growth – ironore and rubber – to slow economic growth in 2015 to 0.4%. Public infrastructure projects andthe commencement of gold production will support estimated GDP growth of 2.8% in 2016, but
the drawdown of the United Nations peacekeeping force will reduce demand for services while
requiring the government to assume full responsibility for the security sector and its costs.
Liberia is facing lower revenue growth and tighter borrowing limits, calling for increased
efforts to contain the wage bill and align expenditure and borrowing with development
priorities in the lead up to the 2017 presidential elections. Energy production will gradually
increase through 2018, but improved management of the sector will be necessary to maximise
considerable investments and sustain service delivery. While gradually improving infrastructure
will be a crucial support for economic growth, increased focus on improving the businessenvironment will be necessary to diversify the economy and enable inclusive growth. Task forceson agriculture and manufacturing are prioritising interventions to improve the environment forbusiness growth, to increase value-added and to attract investment in non-extractive sectors.
With urbanisation increasing rapidly in Monrovia, increased efforts on urban governanceissues will be needed to sustain growth and improve the quality of life. Inadequate infrastructure
and weak planning have led to a build-up of informal settlements, a lack of access to basic services,and traffic congestion. The urban road network and the water supply is expanding, but from avery low base. Increasing economic opportunities outside of Monrovia will help reduce urban
migration. There is growing momentum to de-concentrate services and expand infrastructure inrural areas, but the process will take several years.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

0.7

0.4

2.8

2017(p)4.4

Real GDP per capita growth

-1.7

-2.0

0.3

1.9

CPI inflation

9.9

7.7

7.0

7.5

Budget balance % GDP

-2.9

-9.9

-5.6

-5.7

Current account % GDP

-24.1

-36.9

-32.0

-29.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

LIBYA
•

GDP contracted by 6.0% in 2015 but in the event of a resolution to conflict and a rapid
resumption of oil production, economic growth could recover quickly.

•

Prospects for a unity government have improved, although the coastal cities of Sirte
and Derna remain controlled by the Islamic State.

•

The urban policies adopted in the 1970s have had positive effects on structuraltransformation, in particular with the impulse of the industrial dynamism of cities
like Tobruk, Misrata, Zawya, Al Bayda and Derna.

Following months of delay, Libya’s House of Representatives (HoR) was elected in June 2014,
replacing the General National Congress (GNC), which had acted as Libya’s legislative body since
July 2012. The election of HoR was disputed by the Islamist factions who subsequently reconvened
the GNC in Tripoli in August. Consequently, there are currently two rival governments in Libya:
one linked to the HoR, the internationally recognised government, the other to the GNC, indicating
the depth of administrative and bureaucratic chaos in the country.
The United Nations and humanitarian partners estimate that 4.35 million people, almost
half the population, have been affected by the armed conflict. Political divisions and the intensefighting between rival militias since August 2014 have cost hundreds lives, and displaced over
435 000 people. Most of the displaced are living in urban centres within host communities, withjust over 100 000 living in collective centres in the open or in makeshift buildings such as schools
and empty warehouses. The largest number of displaced are located in Benghazi, Al Jabal Al
GhaRbi, Al Zawiya, Tripoli and Misrata. The conflict has also caused serious damage in terms ofprovision of and access to basic goods and services, especially health care, food, shelter, cleanwater and sanitation and education in Tripoli and across the country.
The poor political and security situation has had serious consequences for the economy, publicfinance and official reserves in 2015. The continuing clashes between tribal and militia associatedwith different political factions around the oil sites have steadily reduced oil production andexports by almost two-thirds, compared to pre-crisis levels. An average of 400 000 barrels perday (bpd) were produced in 2015 and 1.8 million bpd in 2010. As a result, GDP contracted by an
estimated 6.0% in 2015, against a contraction of 23.5% in 2014, and is projected to show a declineof 0.8% in 2016 if the security situation does not improve.
After several attempts, international efforts to forge a consensual roadmap succeeded in
December 2015 when the factions agreed on a national unity government deal at an UN-facilitatedmeeting in Tunisia. A Government of National Accord (GNA) was announced on 19 January 2016,
and 32 ministers were proposed. However, the HoR parliament rejected the UN-backed unity
government because it included too many ministers and asked the Tunis-based Presidential
Council to propose a new, shorter list of ministers within 10 days. A revised and shorter list waspresented on 15 February but, by the end of the month, agreement had still not been reached.
The economic situation in 2016 will largely depend on the implementation of the Governmentof National Accord and the extent of security stabilisation. In this context, the economic recovery
will proceed slowly, especially in the oil sector. In 2017, the implementation of an importantreforms programme could release substantial growth potential and significant improvements
in both the budget and current balances. This would stabilise Libya’s official reserves and help
create a climate of trust and confidence for potential investors.

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COUNTRY NOTESMacroeconomic indicators
2014

2015(e)2016(p)2017(p)Real GDP growth

-23.5

-6.0

-0.8

3.9

Real GDP per capita growth

-23.4

-6.3

-1.6

3.1

2.4

8.6

9.7

5.8

Budget balance % GDP

CPI inflation

-43.5

-58.9

-60.7

-56.8

Current account % GDP

-30.1

-51.0

-44.5

-33.3

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMADAGASCAR•

Economic growth in Madagascar is estimated to have plateaued at 3.2% in 2015, but
is projected to accelerate to 4.0% in 2016 and 4.5% in 2017.

•

In 2015, the International Monetary Fund approved a second disbursement under the
Rapid Credit Facility, while technical and financial partners provided support for the
National Development Plan.

•

Sustainable growth requires rational territorial management and controlled
urbanisation.

In 2015, Madagascar consolidated the institutions set up the previous year, adopted adecentralisation policy, held elections for local councils and for the senate, convened talks onnational reconciliation attended by former presidents, launched a national consultation on
public-security reform, and swore in the second government since the transition. Despite thisprogress, stability still seems to be fragile due to the rise in poverty and unemployment, and toongoing tensions between the executive branch and parliament.
Economic growth is estimated to have stagnated in 2015 at 3.2%, falling short of the minimum
5% target set in the National Development Plan to reduce poverty. This poor performance was theresult of political uncertainties, limited progress in terms of governance, low investment in thesocial sectors and in infrastructure, energy shortages, a 40-day summer strike at Air Madagascar
and an overall deterioration of the business environment. These factors were compounded byexogenous shocks, including drought in the south, floods in the north, lower mineral prices andweak growth in the country’s European partner.
Economic growth is still driven by the secondary sector (export processing zones,
agro-industry, and the metal and wood industries) and the services sector (banking, tourism,
insurance and construction). As a whole, the primary sector recorded poor growth in 2015
(0.7%, down from 3.3% in 2014) due to floods in the north and drought in the south. Inflation was
kept below 10%. The budget deficit widened to an estimated 4.6% of GDP in 2015, from 2.3% in
2014, and the current-account deficit deteriorated from 0.2% to 2.3% of GDP, so macroeconomic
stability remains fragile and food insecurity is still a concern. Consequently, Madagascar still has
a poor Human Development Index of 0.510, ranking the economy as 154th in the United Nations
Development Programme’s 2015 Human Development Report. The country has become less resilient
to external shocks.
In terms of the outlook for the future, a calmer political environment with better governanceand the recovery of public and private investment should allow economic growth to reach
4.0% in 2016 and 4.5% in 2017, driven by agriculture, production in export processing zones,
new information and communications technology, transport, tourism and construction. Thiseconomic growth should alleviate poverty and unemployment.
Sustainable development will require a structural transformation of the economy, withresources reallocated to the more productive sectors, rural and urban areas that are better
integrated into the economy, and public policies to support efficient land management and better
control of the rapid urbanisation taking place.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.3

3.2

4.0

2017(p)4.5

Real GDP per capita growth

0.5

0.4

1.2

1.7

CPI inflation

6.0

7.9

7.4

7.8

Budget balance % GDP

-2.3

-4.6

-3.1

-3.6

Current account % GDP

-0.2

-2.3

-1.7

-2.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMALAWI•

Malawi’s economic growth decelerated to 2.9% in 2015 (down from 5.7% in 2014), duelargely to external and internal shocks to the economy, but it may pick up to 4% in
2016.

•

High inflation in 2015 continued to undermine Malawi’s prospects for economic
growth and poverty reduction, necessitating a further tightening of monetary andfiscal policy.

•

Key challenges to Malawi’s urbanisation process stem from the lack of capacity tomeet the basic social and economic needs of a growing urban population.

In 2015, buffeted by weather and policy shocks, Malawi’s real GDP growth was estimated at
2.9%, down from 5.7% in 2014. Floods and dry spells reduced maize production by 30%, resulting
in a 2.3% slowdown in agriculture sector growth. This caused food insecurity for an estimated
2.8 million people (16% of the population). The contraction in agricultural production and reduced
demand affected the wholesale, retail and manufacturing sectors. The services sector, particularly
information and communication, proved more resilient, registering 9% growth. This was partly
driven by rapid expansion in mobile phone services. In 2016, economic growth is projected torebound to 4%, possibly reaching 4.9% in 2017, with agriculture as the main driver. The growth
outlook is premised on favourable weather conditions, macroeconomic stability, consistency inpolicy implementation and renewed private-sector confidence. Population growth of 2.8% a year
will require consistent economic growth to reduce poverty and improve progress towards theSustainable Development Goals.
Fiscal pressures intensified in the 2014/15 fiscal year because of shortfalls in externalfinancing due to the continued suspension of budgetary support, lower domestic revenue, andexpenditure overruns, particularly on wages and salaries and on interest payments. Restoring
confidence will require deeper public financial management reforms to improve accountability
and transparency in the management of public funds. Inadequate fiscal adjustments widened
the fiscal deficit beyond forecasts, driving up net domestic borrowing, inflation and interest rates.
Inflation surged to 24.9 % in December 2015 as food supplies ran low and the Malawi kwacha(MWK) depreciated more than expected. Monetary policy was further tightened to containinflation and achieve exchange rate stability. Inflation is projected to decline to 18.1% in 2016,
remaining above the government’s initial 12% target. The sharp decline in the local currency
has been driven by foreign-exchange demand pressures and persistent current account deficits,
estimated at 6.0% of GDP in 2015 and expected to remain within the 6-7% range in 2016 and 2017,reflecting the narrow export base and strong dependence on imports and external aid.
Urbanisation in Malawi poses both challenges and opportunities for transformation. The
country is one of the least urbanised in the region, but the 3.8% urban growth rate is higher
than the overall population growth rate of 2.8%. The major challenge is to meet demand for
housing and other basic services, despite limited resources. However, urbanisation presents anopportunity if its potential to transform the economy can be harnessed.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.7

2.9

4.0

2017(p)4.9

Real GDP per capita growth

2.6

-0.2

0.9

1.8
16.0

CPI inflation

23.8

21.2

18.1

Budget balance % GDP

-5.9

-5.7

-3.3

-3.1

Current account % GDP

-8.2

-6.0

-6.1

-6.7

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMALI•The country’s peace and reconciliation agreement, signed on 15 May and 20 June
2015, has stabilised political life, but the security situation is still fragile.

•

Growth slowed in 2015 to an estimated 5.2%, down from 5.8% in 2014, but theeconomic recovery since the 2012 crisis has reduced poverty slightly, to 46.9% in 2014
(from 47.1% in 2013).

•

Population growth (3.6%) remains high but the government has pledged, through its
national urban policy, to improve the life of urban dwellers, boost local economies,
tackle under-unemployment and poverty, support socio-cultural diversity andstrengthen local civic rights.

Economic activity slowed in 2015, with real gross domestic product (GDP) increasing an
estimated 5.2% (5.8% in 2014), due to poor agricultural sector performance (growth of only 3.9%,
down from 14.8% in 2014). The secondary sector fared badly too, with growth of 2.6% (9.2% in 2014).
In agro-industry, overwhelmingly plant-oil mills, growth fell to 18% (down from 35% in 2014)
because of poor agricultural output, especially cotton. However, growth strengthened in thetertiary (services) sector, at 6.9% (up from 3.6% in 2014). The current account deficit (including
grants) improved to 3.6% of GDP (from 5.7% in 2014) due to lower oil prices and more volume exportsof gold, improving the terms of trade to 15.2% (from 5.3% in 2014). The current account deficit isexpected to be entirely funded by foreign direct investment (FDI) in gold and telecommunications
and by foreign loans.
Medium-term macroeconomic prospects are good, with overall growth forecast as 5.2% in2016 and 5.0% in 2017, driven partly by more public investment and foreign aid and by the
agricultural and service sectors. But the current account (including grants) deficit is expected towiden to 4.1% of GDP in 2016 and 5.2% in 2017 due to lower gold production and poorer terms oftrade. The deficit should again be funded by FDI in gold and telecommunications and by foreignloans. The good prospects could be undermined by continuing risks such as the security situation,
unpredictable gold and cotton prices and bad rainfall.
Mali has made progress in recent years towards the Millennium Development Goals (MDG)
of universal primary education (Goal 2), combating HIV/AIDS (Goal 6) and access to safe drinking
water (Goal 7, target 10). The security crisis has set back this progress but it should be strengthened
with implementation of the 2015-30 UN Sustainable Development Goals that the country has also
signed up to.
The humanitarian situation remains a worry in the north, especially for 2.5 million people
dependent on humanitarian aid, internally displaced people (62 000) and refugees (140 000).
These difficult conditions did not stop 423 427 refugees and displaced people returning to theregion. Humanitarian groups have drafted a USD 354 million (US dollars) plan for 2016 to help themost vulnerable.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.8

5.2

5.2

2017(p)5.0

Real GDP per capita growth

2.9

2.2

2.1

2.0

CPI inflation

0.9

2.0

2.7

1.8

Budget balance % GDP

-3.5

-3.7

-3.5

-3.6

Current account % GDP

-5.7

-3.6

-4.1

-5.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMAURITANIA•

Mauritania’s economy grew an estimated 3.1% in 2015, down from 6.6% in 2014,
primarily because of the drop in the price of iron ore, the country’s main export.

•

The economic outlook remains promising in the short term, due particularly to newmining development at the Guelb II deposit, the recovery of manufacturing activity
and the intensification of structural reforms.

•

Transformation of Mauritanian cities into engines of growth is slow because of
unplanned and unmanaged urbanisation, which has had a negative impact on local
development.

The ongoing drop in world iron prices has derailed the Mauritanian economy from its
high-growth track. Its gross domestic product (GDP) grew at an estimated 3.1% in 2015, downfrom 6.6% in 2014. In 2015, there was a significant drop in the mining industry’s share of GDP to
7.4%, from 12.8% in 2014. The slowdown in growth is also due to a decline in gross investment.
The economic outlook remains promising in the short term, however, due particularly to thenew mining development of the Guelb II deposit, the recovery of manufacturing activity and theintensification of structural reforms.
The country’s macroeconomic achievements were sustained in 2015. Inflation (3.5% in 2014)
was contained at 1.5%, thanks in particular to a fall in international food prices. The fiscal stanceremains viable, with a manageable overall balance deficit equal to 2.9% of GDP (3.7% in 2014). By
the end of 2015, official foreign-exchange reserves had remained comfortable at an estimated
US dollar (USD) 809 million, or 6.8% of non-extractive imports (5.5 months of imports), against
USD 639.1 million in 2014, or 4.7 months of imports. The tertiary sector’s share of GDP continued
growing to reach 44.8%, its highest ever. The current account deficit maintained its gradual
recovery, expected to continue until 2017, falling to 22.2% of GDP in 2015 from 30% in 2014.
The encouraging results of the 2014 survey on household living conditions (EPCVM) publishedin 2015 show significant progress in poverty reduction, falling to 31% from 42% in 2008. In the2015 United Nations Development Programme (UNDP) Human Development Index (HDI) rankings
Mauritania was placed 156th with a score of 0.506, 5 places higher than in 2014. While other social
indicators have improved, the country’s social performance remains mixed, and Mauritania is
still categorised as a low HDI country. The first Millennium Development Goal (MDG), which was
to reduce the poverty rate to 28% by the end of 2015, was not reached. Despite the relatively low
unemployment rate (12.8% in 2014), the labour market remains highly precarious and informal,
with a vulnerable-employment rate of 54.62%.
Significant among the country’s major development challenges are: managing urbanisation,
as strong urban-population growth has brought the urban share of the total population to
48.3%; the persistence of districts with precarious housing; improving land management;
better application of taxation; and reducing vulnerability to climate change. In this context, awell-structured and clearly-focused urbanisation process is essential to local development.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.6

3.1

3.5

2017(p)4.5

Real GDP per capita growth

4.1

0.7

1.0

2.2

CPI inflation

3.5

1.5

6.7

6.1

Budget balance % GDP

-3.7

-2.9

-2.4

-2.2

Current account % GDP

-30.0

-22.2

-20.3

-19.3

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMAURITIUS•

The Mauritian economy grew by 3.7% in 2015 – slightly more than the 3.6% recorded
in 2014 – and is projected to grow by 3.8% in 2016 and 4.0% in 2017 on the back ofstronger domestic and external demand.

•

Mauritius was rated as the best performing economy in Africa and was ranked
46th out of 140 economies in the latest edition of the World Economic Forum Global
Competitiveness Report.

•

The government introduced an innovative urban development approach, consistingof 8 “Smart Cities” and 5 techno-parks, in an effort to boost sustainable economic
growth and enhance the competitiveness of Mauritius.

The Mauritian economy recorded real growth of 3.7% in 2015, up from the 3.6% recorded in
2014. Economic growth in 2015 was driven by the information and communications technology
and by the financial and insurance sectors, which grew by 6.3% and 5.6%, respectively. Thesegains were partially offset by the poor performance of the construction sector, which contracted
by 5.4% over the same period. The government’s fiscal stance in 2015 remained expansionary,with the budget deficit increasing to 4.4% of GDP, compared with 3.2% at the end of 2014. The
Bank of Mauritius (BoM) lowered the key repo rate to 4.4%, from 4.65%, taking into account theslow pace of growth and subdued inflation levels. Inflationary pressures in the domestic economy
were generally low on account of subdued food prices and declining international commodity
prices. Inflation stood at 1.3% in December 2015, and is expected to remain within the 2.5-3.0%
range in the short term. Mauritius’ current account deficit fell to 4.9% in 2015, compared with
5.9% in 2014, largely due to the impact of weak oil prices on merchandise imports and a booming
tourist sector on service exports.
Evidence from the first year in office for the Alliance Lepep (AL), led by Sir Anerood Jugnauth,supports the view that the policy proposals of the new government will focus on promoting
inclusive growth and investment in the economy, with fiscal consolidation a secondary concern
in the short term. The government’s main announcements to date have been its Economic
Mission Statement (Achieving the Second Economic Miracle and Vision 2030 – delivered in August 2015)
and its first budget (Mauritius at the Crossroad – delivered in March 2015), which had a distinctly
expansionary flavour (e.g. higher social spending), but was also largely aimed at drawing in private
investment through tax incentives and major infrastructure projects. The budget also included a
proposal to improve fiscal transparency by abolishing special funds and boosting sustainability
with the creation of a “Legacy Sovereign Fund”. The 2015-19 government programme also places
special emphasis on infrastructure development and promoting the “Blue Economy” while at thesame time enhancing human capital development as the country looks to reduce the stubbornly
high levels of unemployment which remain in the 8.5-9% range.
During the delivery of its 2015/16 national budget, the Government of Mauritius announced
the set-up of the “Smart City Scheme” to provide an enabling framework and a package ofattractive fiscal and non-fiscal incentives to investors for the development of smart cities acrossthe island. The smart-city concept is about providing investors, nationals and foreigners, with
options for living in sustainable, convenient and enjoyable urban surroundings. These new cities
will be built around the “work-live-play” lifestyle in a vibrant environment with technology andinnovation at their core.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.6

3.7

3.8

2017(p)3.7

Real GDP per capita growth

3.2

3.3

3.4

3.3

CPI inflation

3.2

1.3

2.8

2.5

Budget balance % GDP

-3.2

-4.4

-3.9

-3.8

Current account % GDP

-5.9

-4.9

-4.7

-4.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

morocco•Morocco is posting more balanced macroeconomic results with a budget deficit of
4.3% of GDP in 2015 and a clear improvement in foreign exchange reserves to about
seven months of imports at the end of the year.

•

The government is continuing its reforms and major investments (Nador West Med
port, TGV high-speed train, Noor solar complex, Kenitra Atlantique port) to improvethe business climate and attract foreign investors as drivers of innovation andvalue-added.

•

Territorial reform and successful regional and local elections held in 2015 bode wellfor the introduction of a new dynamic in governance and local development, allowing
towns and cities to be developed in a more sustainable way.

Morocco continued making significant efforts to balance its macroeconomic results in 2015.
The budget deficit stood at 4.3% of gross domestic product (GDP), thanks in particular to theeconomy’s strong performance (growth of 4.5%) and a reduction in government subsidies. Foreignexchange reserves increased to about seven months of imports at the end of 2015 due to a strong
export sector and a reduction in imports following the drop in oil prices. These results also
reflect the country’s proactive policy of improving the business climate to help to transform its
economic model. On the one hand, major steps were taken in the legal and fiscal domains and in
exchange regulations. On the other, major public investments are moving forward: the financingof the Nador West Med port has been completed, a call for tenders for the Kenitra Atlantiqueport was issued in January 2016, and work on the TGV high-speed rail line has continued. These
initiatives are bearing fruit, with the automobile sector becoming the country’s chief exporter in2015. The developments are occurring in parallel with a search for new partners, with Moroccocontinuing to position itself as a platform for access to African markets. Nonetheless, efforts
must be pursued to make growth less volatile through lower dependency on the low-intensity
agricultural sector. In 2016, low rainfall is expected to have a strong effect on this sector, withknock-on effects for GDP growth, projected at 1.8%.
Other challenges endure. Morocco must tackle deep inequalities (in terms of gender, geography,
education and access to basic services) that can undermine the inclusive nature of its growth.
With this in mind, Morocco kept up its strong reform momentum in 2015 to put its regulatory
and institutional framework in line with the requirements of its 2011 constitution. First, thedecentralisation process took a major step forward with territorial reform and regional and local
elections, which are leading to the progressive transfer of power from the central government
to local authorities. Second, the government is seeking to improve access to basic social benefits(medical coverage has been extended to the 260 000 students in public higher education andaccess to Tayssir cash subsidies for keeping primary pupils in school has become widespread).
Third, the government remained committed to improving public services and making themmore accessible (public services charter, e-government, anti-corruption measures). Finally, thegovernment continued to promote gender equality by implementing quotas for female politiciansin the 2015 elections.
Morocco is seeking to develop its economic model in a sustainable way. This approach is
being promoted as part of the national sustainable development strategy, but also through the
adoption of new legislation like the water law. Morocco, which will host COP22 in 2016, wasthe second African country to commit to reducing greenhouse gas emissions. However, these
initiatives need to be better decentralised, notably to the municipal level. Numerous challenges
remain concerning the sustainable development of urban zones, in particular due to the rapid
expansion of suburbs.

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COUNTRY NOTESMacroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

2.4

4.5

1.8

2017(p)3.5

Real GDP per capita growth

1.0

3.2

0.5

2.3

CPI inflation

0.4

1.8

1.4

1.6

Budget balance % GDP

-4.9

-4.3

-3.5

-3.0

Current account % GDP

-5.7

-2.7

-0.7

-0.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESMOZAMBIQUE•

Mozambique’s GDP growth declined in 2015 to 6.3% because of lower export earnings
and public expenditure but is expected to expand to 6.5% in 2016.

•

Amid government-opposition political tensions, improved financial management andpublic expenditure are needed to counter growing inequalities.

•

The number of Mozambicans in cities will rise from 31% now to 40% by 2040 and they
will need better transport and facilities.

After a decade of average annual economic growth above 7%, Mozambique saw a slowdown
to 6.3% in 2015 as the country faces defining economic and political challenges. The slower
gross domestic product (GDP) growth was due to lower than expected exports and a decreasein public expenditure and foreign direct investment. A reduced influx of hard currency assisted
the devaluation of the metical (MZN) against the US dollar and pressured the balance of
payments. This was halted only by a USD 282.9 million standby credit facility agreement with theInternational Monetary Fund in December 2015. The budget deficit was reduced from 6.6% in 2014
to 5.4% in 2015. The main short-term challenge is to regain growth momentum while ensuring
fiscal and debt sustainability. Predicted GDP growth of 6.5% in 2016 and 7.5% in 2017 hinges on theadvancement of gas and coal production projects and attracting foreign investment.
President Filipe Nyusi’s government faces many challenges. Negotiations between theauthorities and liquefied natural gas (LNG) operators on new projects have taken longer than
expected. This has held up final investment decisions now expected in late 2016. Lower oil and gas
prices are a further concern for the development of the projects. The political situation remains
uncertain with renewed low intensity conflict between the government and RENAMO opposition
party, which refuses to recognise the result of the 2014 presidential election. The governmentis struggling to repay a bond issued for the Empresa Mocambicana de Atum (EMATUM) state
tuna company. This will require some kind of restructuring. Finally, the currency’s devaluation is
expected to spike up inflation, affecting living conditions for the wider population.
Data has revealed rising household expenditure since 2009, but Mozambique’s ranking
dropped in the United Nations Development Programme’s 2015 Human Development Index. It
showed rising disparities between regions and stressed the underdevelopment of rural areas.
The urban population is growing strongly but still represents less than a third of the total
population. Rural population growth is bigger in absolute terms. Urban unemployment is higher
than in rural areas and a large part of the city population is not reaching its full economic potential.
Public policy in general considers urbanisation as a challenge, rather than an opportunity,
focusing on rural development. Nonetheless, progressively more recognition is being given to
structured urbanisation. The first post-independence new city developments are being designed
and implemented.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

7.2

6.3

6.5

2017(p)7.5

Real GDP per capita growth

4.4

3.5

3.7

4.7

CPI inflation

2.3

2.0

5.7

5.2

Budget balance % GDP

-6.6

-5.4

-3.7

-2.4

Current account % GDP

-41.6

-44.0

-46.1

-47.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

namibia•

Growth moderated to 4.4% in 2015 on the back of low global commodity prices andshould remain subdued in 2016 as fragile external demand dims the outlook.

•

Political stability and sound macroeconomic management are promoting investor
confidence but education and skills must improve to achieve a more competitive andinclusive economy.

•

The public housing programme will need to be complemented with accelerated urban
infrastructure development and further strengthening of rural growth centres tocreate more rural jobs and contain rapid rural to urban migration.

Gross domestic product (GDP) growth moderated to 4.4% in 2015 from 6.4% in 2014 on the backof weak commodity prices and prevailing drought conditions. Growth at 4.2% in 2016 is expected
to remain subdued due to weak external demand but should rebound in 2017 as new mines start
producing and exporting. Falling Southern Africa Customs Union (SACU) revenues due to a fragile
South African economy, inadequate international reserves and a rapid rise in house prices are
key risk factors going forward. Tight monetary policy to contain rising credit linked to luxury
imports and low global oil prices has reduced inflation, year-on-year, from 5.3% in 2014 to 3.5%
in 2015. The repo rate was increased twice in 2015 to reach the current 6.5%. However, further
depreciation of the local currency and higher anticipated food prices due to drought are expected
to counter the benefits from lower international oil prices and should push inflation to breach theupper end of the South African Reserve Bank (SARB) target range of 3-6%.
Political stability and sound macroeconomic management are promoting investments andsustaining Namibia’s high growth rates. Benefiting from its strong links to South Africa, Namibia
attracts more investment than average sub-Saharan countries. However, to accelerate convergencewith high-income countries in line with its current National Development Plan, the authorities
need to address remaining structural bottlenecks. Having passed a new Public Procurement Law
in 2015, work on Public Finance Management law must be speeded up to reinforce economic
governance. Fiscal consolidation, including current expenditure prioritisation and public sector
wage bill containment, should complement revenue mobilisation measures to improve fiscal
and current account balances. Efforts to improve the quality and relevance of education must be
stepped up and anti-corruption efforts redoubled to recapture public confidence and strengthen
the country’s strong governance record.
Namibia’s rate of urbanisation has accelerated. Growing at 4.5% per year, the urban population
as a share of total population increased from 28% in 1991 to 43% in 2011. The rate of urbanisation
has been higher than the population growth rate of 3.5%. This has led to mushrooming of informal
settlements in the major towns and urban centres. This has largely resulted from low access toserviced land and low incomes among unskilled and semi-skilled immigrants. About 74% of the
Namibian households cannot afford conventional housing and only 57% of urban households
have access to sanitation facilities, which has serious environmental and health implications.
The government’s ongoing public housing programme will need to be completed with better
urban infrastructure development programmes and further strengthening of rural growth points
to create more rural jobs.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.4

4.4

4.2

2017(p)6.0

Real GDP per capita growth

4.0

2.1

1.9

3.8

CPI inflation

5.3

3.5

3.9

5.5

Budget balance % GDP

-4.3

-3.8

-3.1

-3.7

Current account % GDP

-10.4

-8.1

-11.3

-11.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

NIGER
•

Economic growth slowed to 3.6% in 2015 (down from 7.0% in 2014) because of weather
problems and the steady fall in world prices of uranium and oil, but is forecast to pickup again in 2016 (projected at 5.0%) and 2017 (at 5.5%).

•

The Boko Haram rebels, their effect on trade and managing the flow of refugees
continue to be a major economic, security, social and budgetary challenge.

•

Only 16.2% of the population is urban, but this group is growing fast (at an average
4% a year) and faces poor housing, water and electricity supplies and other services
for businesses and households.

Niger’s economic growth eased to 3.6% in 2015 from 7.0% in 2014 due to weather problems,
less activity in the Diffa area (affected by the fight against the Boko Haram rebels) and the drop
in uranium prices. Agriculture continues to drive the economy, and as it is mostly rain-fed, it isvery much at the mercy of climate-related shocks. Economic prospects are quite good, mainly
because of the expected expansion of extractive industries and more investment in agriculture
and transport. Growth is projected to improve to 5.0% in 2016 and 5.5% in 2017.
Security and humanitarian problems due to increased attacks by Boko Haram rebels
undermined budget execution and could slow planned reforms and major development under the
2012-15 economic and social development programme (PDES) and its successor. The sharp rise in
spending on national security increased current expenditure in the budget. Continued spending
on infrastructure for development in remote areas is important to reduce the vulnerability that
feeds extremism there.
Niger is a vast landlocked country of 1 267 000 km² with only 16.2% of the population living in
towns and cities in 2012, slightly up from 15.2% in 1988. The urban population’s average annual
growth rate of 4% means the number of urban dwellers will double over the next 15 years, but
this growth has not been matched by expansion of infrastructure (housing, water, electricity andother services to business and households) and has led to great inequality in towns and cities.
The main risk of current urban growth is the rise of unplanned neighbourhoods in urban andperi-urban areas. The government set up an institutional and legal framework for urban
development (SNDU) in 2004 and gave it various means to operate, but these have been little used.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

7.0

3.6

5.0

2017(p)5.5

Real GDP per capita growth

2.9

-0.5

0.9

1.4

CPI inflation

-0.9

1.0

1.3

0.9

Budget balance % GDP

-5.5

-7.1

-6.7

-4.4

Current account % GDP

-20.9

-21.2

-21.9

-17.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESNIGERIA•

Nigeria has had sluggish economic growth since the end of 2015 with the rate
dropping to an estimated 3.0% in December 2015, leading the authorities to adopt an
expansionary 2016 budget that aims to stimulate the economy.

•

Security, fighting corruption, and improving the social welfare of Nigerians are at theheart of the development policy of the new administration that was inaugurated on
29 May 2015.

•

Nigeria has been rapidly urbanising and fast-growing cities such as Lagos and Kano
face increasing unemployment and income inequality because of poor urban planningand weak links between structural transformation and urbanisation.

The Nigerian economy has been adversely affected by external shocks, in particular a fall in
the global price of crude oil. Growth slowed sharply from 6.2% in 2014 to an estimated 3.0% in
2015. Inflation increased from 7.8% to an estimated 9.0%. The sluggish growth is mainly attributed
to a slowdown in economic activity which has been adversely impacted by the inadequate supplyof foreign exchange and aggravated by the foreign exchange restrictions targeted at a list of
41 imports, some of which are inputs for manufacturing and agro-industry. This has resulted in
cuts in production and shedding of labour in some sectors. However, with the increasing policy
concern over the decline in growth, the central bank has moved to reduce the cost of borrowing
for government and the private sector to stimulate the economy.
The 2016 outlook is for slow economic recovery as some of the reforms begin to take effect andmeasures to boost the economy, such as increased spending on infrastructure, are implemented.
Some specific reforms pursued by the new administration to lay a foundation for renewed growth
are commendable. The key reforms include the rationalisation of the public sector in order to cut
the cost of governance; enforcement of the single treasury account to block financial leakages;
renewed efforts at enforcement of tax compliance; preparation for zero-budgeting startingin 2016; and increasing the ratio of capital to recurrent expenditure to 30:70.
Security remains a major challenge, in the northeast in particular. While the military has
stepped up the fight against the Boko Haram insurgency the humanitarian situation has continued
to deteriorate. The number of internally displaced persons is estimated at over 2 million, locatedmainly in the cities where conditions are safer. Both the government and development partners
continue to explore additional ways of improving the situation.
Sustainable cities can only be driven by structural transformation if there is an integrated
approach to urban planning. It is expected that the Federal Ministry of Power, Works and Housing
will review the urban development policy and work with other line ministries to improve service
delivery and chart a way forward for tapping into the opportunities provided by the growth of cities
in Nigeria. Lagos is one of the seven mega-cities in Africa and has a high potential for innovationand job creation opportunities in sectors such as construction, information communications andtechnology (ICT) and retail trade.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

6.2

3.0

3.8

2017(p)5.0

Real GDP per capita growth

3.5

0.3

1.1

2.3

CPI inflation

7.8

9.0

10.1

9.4

Budget balance % GDP

1.0

-2.3

-3.4

-3.1

Current account % GDP

0.2

-3.5

-3.2

-2.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

rwanda•Real GDP grew by an average of 6.9% during the first three quarters of 2015, in linewith the 7.0% target for 2015. It is projected to decrease to 6.8% this year before goingback up to 7.2% in 2017.

•

The indicators for rule of law, political rights and civil liberties, participation andinclusiveness, and safety and security have all improved.

•

With urbanisation an emerging priority, measures are being implemented to position
Kigali as a centre for investment and business growth. There is also a focus onpromoting balanced and transformative urbanisation through the development of
secondary cities.

Real GDP grew by an average of 6.9% in the first three quarters of 2015, lower than the
7.2% average recorded during the same period in 2014. However, the 6.9% rate is in line withthe 7.0% target for 2015. The services and industry sectors led the expansion during thisperiod. Growth in the agriculture sector, however, was moderate in part due to fluctuations inweather conditions. For 2016 and 2017, sustained investments to address energy and transport
infrastructure constraints, continued progression in industry and a recovery in services are
expected to lead growth. Agriculture is projected to grow at a moderate rate.
Headline inflation is projected to remain below the central bank’s medium-term target in2016 and 2017. Inflationary pressures are expected to remain subdued due to low fuel and foodprices. Strong demand for capital, intermediate goods and fuel products is projected to persist
in the short to medium term in line with the public investment programme. Current accountdeficits are expected to remain high in the near term as export receipts continue to account for
only 25% of imports.
Rwanda’s urban population accounted for 28.0% of its total population in 2014, which islower than the sub-Saharan Africa (SSA) and global averages of 37.0% and 53.0% respectively.
However, the 5.9% annual urbanisation rate exceeds the averages of 4.2% and 2.1% for SSA
and the world respectively. This calls for an integrated urban/rural development approachto ensure sustainability and to link urban development objectives with other goals, notablysocio-economic transformation. Implementation of the Urbanization and Rural Settlement Strategy(2013-18) is underway. This strategy focuses on two objectives. The first objective is to enhance
Kigali’s development and provide urban planning and management support to the districts. The
second objective relates to the creation of balanced urbanisation for economic inclusion andtransformation. In this regard, six secondary cities are at various levels of development, the goal
being to transform budding trade and transport centres into regional growth poles. Achieving
these objectives is expected to increase the urbanisation rate to 35.0% by 2020.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

7.0

7.1

6.8

2017(p)7.2

Real GDP per capita growth

4.6

4.7

4.5

4.9

CPI inflation

2.4

2.5

3.0

3.0

Budget balance % GDP

-4.0

-5.0

-4.9

-5.6

Current account % GDP

-11.8

-12.3

-11.9

-11.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESSAO TOME AND PRINCIPE•

The Sao Tome and Principe economy grew by 5.3% in 2015, up from 4.5% in 2014, butshould drop back to 5% in the next two years•

Sao Tome and Principe was the top Central African performer for overall governancein the 2015 Ibrahim index with key improvements in economic opportunity, humanrights and rule of law.

•

The rural move into the city has made a national urbanisation strategy imperative in
the absence of any national planning.

The Sao Tome and Principe economy grew by 5.3% in 2015, up from 4.5% in 2014. Economic
growth is expected to remain above 5% in 2016 and 5.4% in 2017. Increased foreign direct investment
in construction, agriculture, tourism and new projects funded by donors should lead and boost
future growth. Inflation will decline to about 4.6% in 2016 and 4.7% in 2017, from 5.3% in 2015,
backed by the fixed exchange rate regime. Structural reforms for sustainable economic growthand job creation are central to the government’s economic reform agenda. The reforms include
improving the taxpayer registry and expanding the tax base by registering new taxpayers. The
government has also revised its investment code, prepared financial sector and private sector
development strategies and is implementing an automatic price adjustment mechanism forpetroleum products. Effective implementation of the reforms and strategies will improve public
administration efficiency and social services for the population.
The credibility, accountability and transparency of the SAFE financial administration systemremain critical for the government. The system was started as a pilot project in four ministries
dealing with decentralisation and was used to prepare the 2010, 2011, and 2012 financial accounts.
The government is also finalising the establishment of an electronic financial control department
to assist with financial accounts reporting.
The capital, Sao Tome, is the only urban agglomeration. Its 131 000 people in 2015 represented
68% of the total population. The city and its surrounding area is subject to increased urbanisation.
The island of Principe (7 450 inhabitants in 2015) has no urban agglomeration. Although migration
to the city seems to be slowing, the average annual urbanisation growth rate is estimated at
1.87% for 2013 to 2018.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.5

5.3

5.0

2017(p)5.4

Real GDP per capita growth

2.3

3.1

2.9

3.3

CPI inflation

6.7

5.3

4.6

4.7

Budget balance % GDP

-5.5

-6.1

-3.9

-4.0

Current account % GDP

-24.2

-14.0

-13.8

-13.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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senegal•Growth of gross domestic product (GDP) in Senegal in 2015 is estimated to have been
5.1% in 2015 and is predicted to reach 6.0% in 2016 and 6.5% in 2017.

•

The establishment of a precautionary reserve in 2015 and its continuation in
the 2016 budget are examples of results-based management in line with the directivesof the West African Economic and Monetary Union (WAEMU) relating to publicfinances.

•

Urban development provides opportunities linked to economic sector diversification,
but the inflow of people from the countryside raises the issue of sustainable urban
management.

The growth rate is on the rise and should have reached 5.1% in 2015, as against 4.3% in 2014,
driven by the vigour of the agricultural sector, the continuing recovery of the vegetable oil and sugar
industries, the dynamic cement industry, building and public works, energy, telecommunications
and financial services. Nevertheless growth was slightly lower than the authorities’ predictionsof 5.4% and is forecast to be 6% and 6.5% in 2016 and 2017 respectively.
The implementation of the flagship projects in the Emerging Senegal Plan (Plan Sénégalémergent [PSE]) entered its second year in 2015, along with the major reforms which should speed
up their completion. Of the 17 flagship projects launched so far (out of a total of 27) 10 are being
implemented, one is operational and six are in the study phase. One of the PSE flagship projects
is the development of integrated industrial platforms, and work began in 2015 on the special
economic zone of Diamniadio, which will be a multifunctional urban platform. The authorities
must ensure the sustained implementation of the major reforms, in particular in the fields ofenergy, property rights, logistics and infrastructure, as well as information and communication
technologies and the business environment.
Urbanisation is constantly increasing in Senegal, where the urban population rose from
38% in 1988 to 45.2% in 2013 due mainly to the exodus from the countryside. Urban development
provides opportunities linked to economic sector diversification and to transport infrastructuredevelopment between the country’s different regions. The promotion of urban hubs in regions withstrong economic potential is achieved through a policy of major equipment and infrastructure
projects with significant economic and social impacts. However the inflow of people fromrural areas brings with it a substantial demand for socio-economic infrastructure and leads toenvironmental damage, thereby raising the issue of sustainable urban management.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.3

5.1

6.0

2017(p)6.5

Real GDP per capita growth

1.1

2.0

3.0

3.4

CPI inflation

-0.5

0.0

-0.4

1.2

Budget balance % GDP

-5.2

-4.6

-4.1

-3.2

Current account % GDP

-9.0

-8.1

-6.0

-4.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

seychelles•

In July 2015 Seychelles reached high-income status, reflecting the government’s
sound macroeconomic policies and comprehensive structural reforms in recent years
that have supported robust economic growth, averaging 5.3% during 2011-15.

•

Seychelles’ medium-term growth outlook is moderate, with GDP projected to grow at
3.1% in 2016 and 3.7% in 2017 while the traditional tourism and fisheries sectors are
expected to remain the main drivers.

•

With potential increases in economic activities in non-traditional sectors, such as
high-value added manufacturing and growth of population, changing consumption
patterns and the limited land available, rapid urbanisation represents a major
challenge for the towns of Seychelles and, indeed, all small island developing states.

In July 2015 Seychelles reached high-income status, after average gross national income (GNI)
per capita reached USD 13 710 in 2013-14. The government has implemented sound macroeconomic
policies and comprehensive structural reforms in recent years, which have supported robust
economic growth, averaging 5.3% during 2011-15, driven primarily by tourism and informationand communication technology (ICT). Growth rates nonetheless registered an overall downward
trend from about 7.9% in 2011 to an estimated 4.6% in 2015, mainly because of decelerating growthin construction, as several large projects ended in those years. Seychelles’ medium-term growth
outlook is moderate, with gross domestic product (GDP) projected to grow at 3.1% in 2016 and 3.7%
in 2017. The traditional tourism and fisheries sectors are expected to remain the main drivers ofgrowth. Prudent fiscal and monetary policies have helped consolidate macroeconomic stability,
and inflation is expected to remain below 3% in 2016 and 2017.
Seychelles continues to face a number of challenges. The country suffers from insufficienteconomic diversification and vulnerability to external shocks, given the dependence of its
economy on tourism and fisheries. The development of the private sector is therefore paramountin achieving a more diversified economy, reducing vulnerability and shielding the country fromshocks. However, the private sector requires a more enabling environment to exploit its potential
fully and expand into new business areas. Furthermore, growth needs to be made greener toprotect Seychelles’ fragile natural environment better against the adverse impacts of climatechange.
To promote the socio-economic development of the country, the government adopted the
National Development Strategy (NDS) 2015-19 in November 2015, with the concept of the “Blue
Economy” as its centrepiece. The concept emphasises the economic potential of Seychelles’ vast
Exclusive Economic Zone (EEZ), a marine area of 1 374 000 km2 (the second largest in Africa), for
inclusive growth. This innovative concept integrates conservation and sustainable use of ocean
resources, oil and mineral wealth extraction, bio-prospecting, sustainable energy production andmarine transport, as well as branding Seychelles a “blue” tourism destination. The NDS 2015-19
focuses on four “key results areas”: governance, economic development, social development, andenvironment and energy.
Seychelles is a small island developing state (SIDS), with high income inequality: the 2006/07
household survey measured the Gini coefficient of income inequality at 65.8. Poverty levels are,however, very low with only 0.25% of the population living on USD 1.25 or less per day in 2007.
Around 90% of the 94 000 inhabitants live on Mahé, one of three main islands. However, with its
limited land space and high population density, the country needs to observe a delicate balance inaddressing land use, conservation and economic development. The country has begun to design
policies and plans to address these issues holistically.

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COUNTRY NOTESMacroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.7

4.6

3.1

2017(p)3.7

Real GDP per capita growth

3.0

4.0

2.5

3.1

CPI inflation

1.4

4.4

2.6

2.7

Budget balance % GDP

2.2

1.9

1.4

1.0

Current account % GDP

-21.3

-14.2

-15.4

-15.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

sierra leone•

Sierra Leone is currently grappling with the after-effects of the Ebola crisis and thesustained decline in iron ore prices. Accordingly, GDP for 2015 is estimated to havecontracted by more than one-fifth.

•

Remedial actions and policies are needed to improve the indicators that may havebeen reversed by the Ebola Virus Disease (EVD) crisis, following positive strides in
improved economic and political governance.

•

Sierra Leone, with approximately 40% urban population is experiencing its
urbanisation without industrialisation (manufacturing), which does not promote
appropriate structural linkages and sustained transformation of the economy.

Sierra Leone is on the path to recovery following the effects of an 18-month Ebola
outbreak and the sustained decline of iron ore prices. The Ebola outbreak affected thesocio-economic livelihoods of the country, disrupting normal health care and education services,
agricultural production and trade. The iron ore price decline affected macro-financial stability
and reversed the country’s remarkable positive growth trajectory as economic growth declined
from a buoyant 20.1% in 2013 to 4.6% in 2014 and thereafter contracted by 21.5% in 2015 according
to the latest estimates. GDP in 2016 is expected to remain relatively unchanged and to risemoderately in 2017. Inflation, which was moderate in the first quarter of 2015, is now estimatedat 9.9% for 2015 and is expected to hover around 10% in 2016 and 2017. The Bank of Sierra Leone(BSL) needs to be vigilant as regards second-round inflationary pressures resulting from thedepreciation of the Leone and the bottoming out of crude oil prices. Fiscal space in Sierra Leone isvery limited due to the historically low revenue to GDP ratio and higher government expenditure.
There have been significant gains in the Human Development Index (HDI) from 0.344 in2005 to 0.413 in 2014 (an improvement of more than 20%), and this will most likely be reversed
due to the impact of the EVD on health (i.e. life expectancy at birth), education (years ofschooling) and standard of living (gross national income per capita). Having failed to achieve
most Millennium Development Goals (MDGs) by 2015, government authorities and development
partners on the ground are now aware of the pertinence and inseparability of the 17 Sustainable
Development Goals (SDGs) which essentially means that development work should be across all
sectors. Government needs to do more on poverty reduction using the new poverty-related dataand information which will be generated by the population and housing census conducted in
December 2015.
Sierra Leone has a population of about 6.3 million with approximately 39.1% living in urban
areas (Freetown, Bo, Kenema, Makeni and other urban areas) in 2015 and the urbanisation rate is
projected to reach 43.8% in 2030. Manufacturing is the “missing link” in Sierra Leone’s structuraltransformation as labour migrates from low productivity agricultural activities in the rural areas
directly to low productivity services (informal jobs in the urban areas) without a transformative
industrial sector.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.6

-21.5

0.2

2017(p)3.7

Real GDP per capita growth

2.4

-23.7

-1.9

1.6
10.1

CPI inflation

7.1

9.9

10.0

Budget balance % GDP

-3.0

-3.7

-6.0

-6.0

Current account % GDP

-16.4

-11.3

-8.4

-8.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

somalia•

The country’s economic base continues to be narrow with the majority of people
depending on livestock and fisheries.

•

The small tax base and weak public financial management continue to cause serious
constraints on the government budget, thus leaving the country almost totallydependent on foreign assistance and remittances.

•

While the main obstacles to commerce, investment, and government revenue
collection continue to be a lack of peace and security, the Somali National Army (SNA)
has had success in recovering many areas that were under Al-Shabaab’s control.

Somalia’s economy remains fragile, as recovery continues to be hampered by the challenging
security environment, poor infrastructure and limited financial resources. The country’s
dependence on agriculture and livestock in particular (which is a vital export commodity) reflects
its narrow economic base and vulnerability to adverse external and environmental shocks. This
also constrains the Federal Government of Somalia’s (FGS) capacity to generate sufficient revenue
to support its economic reconstruction and development agenda and stabilise the macroeconomic
environment.
The IMF estimated real GDP to be 2.7% in 2015, driven by growth in agriculture, financial
services, construction and telecommunications. Assuming gradual progress on the security
front and absence of droughts, medium-term annual real GDP growth is projected at about 5%.
Nevertheless, growth will remain inadequate to address the widespread poverty in the country.
Creating jobs for the youth, providing social services such as education and health, and building
sustainable livelihoods continue to be Somalia’s key development challenges.
In a bid to attract investment, the FGS is taking steps in a few strategic areas. These include:i) trying to ease the flow of imports and exports; ii) creating more financial stability and legitimacy
in the country; iii) facilitating the continued flow of remittances; and iv) rebuilding and developing
basic infrastructure.
In June 2015, the Ministry of Planning and International Co-operation initiated the processof developing a National Development Plan (NDP) that will be the post-2016 planning framework
for Somalia. The NDP framework will define the country’s development priorities over a five-year
period. The plan will also outline internal and external financing needs and major sources offunding and will guide the allocation of resources and prioritisation of government actions andinternational development support. The NPD will also serve as the Interim Poverty Reduction
Strategy Paper (IPRSP), until a full-fledged official one is developed, and will include a vision anddirection for Somalia’s socio-economic development and poverty reduction.
The FGS has also set up a unit within the Prime Minister’s office to develop a frameworkfor public sector capacity building. This process is ongoing and will slowly start to enhance theFederal government capabilities and responsiveness. However, the current tight fiscal space, withextremely limited revenue raising capacity, combined with the challenging security situation,
makes it difficult to attract skilled professionals into the public sector, thereby limiting thegovernment’s capacity to deliver services.

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COUNTRY NOTES

south africa•

GDP growth declined from 1.5% in 2014 to 1.3% in 2015, and is expected to weaken
further to 0.7% in 2016. Electricity shortages, low commodity prices and low consumer
and business confidence continue to restrain the growth of economic activity.

•

Slow progress in delivering economic and social services in townships and rural areas
remains one of the major challenges to government.

•

South African cities are dynamic poles of socio-economic activity facing highinequality and environmental risks.

Economic performance remained challenging in 2015, with GDP growth of only 1.3%. Thissluggish growth was primarily due to depressed commodity demand from China, low global
commodity prices, low investment, erratic capital flows and low consumer and business
confidence. Real GDP growth is forecast to continue its downward trend in 2016, with an estimatedrate of just 0.7%. The public sector wage bill has been expanding while economic growth has beenvery slow. Persistent shortages in electricity have had a knock-on effect on the economy, while
the worst drought in two decades continues to devastate agriculture whose real proportion of
GDP has been reduced by 16.2%.
The Rand (ZAR) depreciated by more than 30% between December 2014 and December 2015.
Consumer price index (CPI) inflation remained in 2015 within the target range of 3% to 6% yearon-year but, owing to the continued currency depreciation and the ongoing drought, pressureson the CPI will persist in 2016. Limited electricity supply has also weighed down manufacturing,mining and service-sector activity.
National government revenue increased by 8.4% to reach ZAR 955 billion (24.8% of GDP)boosted by higher personal income tax, taxes on property and value added taxes, while
national-government expenditure increased by 8% to reach ZAR 1.13 trillion (29.4% of GDP).
Monetary policy has been tightened with the repurchase rate reaching 6.75% to respond to therising inflation risk. Despite the increased rate, demand for credit by the private sector rose by
8.6% in August 2015 compared to 8% in June.
Unemployment remains stubbornly high at 25.3%, and is particularly pervasive among theyouth, at 52.5% in 2015. High unemployment, especially among black South Africans, is the maincause of the widening income inequality, as shown by a Gini Coefficient of 0.69, which is one of
the highest in the world. To resolve these challenges, the government unveiled a nine-point plan
to kick-start economic growth, increase investment and create jobs.
Socio-economic inequalities continue to threaten long-term stability. The legacies ofapartheid, poor service delivery and widespread poverty have characterised socio-political
discourse throughout 2015. Protests against service delivery were widespread in various parts ofthe country.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

1.5

1.3

0.7

2017(p)1.8

Real GDP per capita growth

0.5

0.3

-0.2

0.9

CPI inflation

6.1

4.6

6.8

7.0

Budget balance % GDP

-3.6

-3.9

-3.3

-3.1

Current account % GDP

-5.4

-4.3

-4.1

-4.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

south sudan•

The drop in oil revenues is having a significant negative impact on the South Sudan’s
economy; the level of GDP is estimated to have fallen by more than 5% in 2015, andthe government net oil-revenue forecast for the 2015/16 fiscal year was only 17% of
the previous year.

•

The parties to the South Sudan civil conflict signed a Peace Agreement in August,although significant progress in its implementation has been slow.

•

The humanitarian situation continues to deteriorate, with over 2.2 million people
displaced by the continuing civil conflict as of November 2015.

Since independence in 2011, the political landscape in South Sudan has continued to
be dominated by both internal and external threats to sustainable peace and stability. In
December 2013, the country descended into protracted strife which has heightened uncertainty
in the country. The parties to the conflict finally signed a peace agreement in August 2015
but timely implementation is a significant challenge. For instance, the time for the parties toform a transitional government expired. The conflict comes at a huge humanitarian cost. As of
November 2015, over 2.2 million people, an increase of 200 000 since the beginning of 2015, havebeen displaced. Over 1.6 million people have been displaced internally while over 616 000 people
have fled to neighbouring states. Severe food insecurity is expected to affect 4.6 million people
this year, compared to 3.8 million last year, at the height of the lean season. The incidence ofpoverty has worsened from 44.7% in 2011 to more than 57% in 2015.
The challenges of the civil conflict are compounded by enormous economic and fiscal
problems. The government budget is facing a huge shortfall caused by the sharp decline in oilrevenues. South Sudan is one of the most oil-dependent countries in the world, with oil accounting
for almost the totality of exports, around 60% of gross domestic product (GDP), and over 95% of
the government revenues in previous fiscal years. Oil production in 2014-15 was 40% lower thanprojected in November 2013. In addition to the sharp fall in production, there has been a collapseof international oil prices, declining from close to 110 United States dollars (USD) per barrel inJuly 2014 to less than USD 35 per barrel in January 2016. The drop in oil revenues has led to a
sharp reduction in the government’s revenues, preventing investment in development activities.
Government net oil-revenue forecast for the 2015/16 fiscal year is only 17% of the previous year.
In the last few years, GDP growth has been very erratic, driven by conflict and fluctuations inoil prices. By the African Development Bank estimates, after experiencing a 15.9% increase in2014, growth is expected to experience a decline of -5.3% in 2015. The predictions are a small
recovery in 2016 with 0.7% growth rate, and a revival in 2017 with 8.8% growth rate. However, therealisation of the forecast will depend on the recovery of oil prices and the implementation of thepeace agreement.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

15.9

-5.3

0.7

8.8

Real GDP per capita growth

13.3

-7.9

-1.8

6.3

CPI inflation

2017(p)

1.7

41.1

14.7

25.0

Budget balance % GDP

-10.9

-21.3

-22.0

-18.1

Current account % GDP

4.0

-2.5

0.9

2.8

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

sudan
•

Sudan’s economic growth rose to above 5% in 2015 and is expected to increase further
to above 6% in 2016 and 2017, mainly driven by agriculture and extractive industries
and supported by improved macroeconomic policies.

•

Challenges continue to be sustaining economic policy reforms, economic stability,
civil war, and meeting the country’s Millennium Development Goals (MDGs); but apositive outcome of the national dialogue is hoped to lead to an end of the civil war
and improvement in economic stability.

•

A coherent urban-development strategy is needed to better cope with population
growth, the internal displacements of people due to the continuing civil war and thecurrently weak urban-rural linkages.

Inflation declined to 16.9% in 2015, while real GDP growth remained buoyant at 5.3%, supportedby agriculture, minerals, services, oil-transit fees and foreign direct investment (FDI). Growth isexpected to strengthen to 6.2% in 2016 and 6% in 2017, despite the fall in oil prices, reduced goldpurchases by the Central Bank and the unstable security situation. The forecast is based on theassumption of strong agricultural revival, a gradual recovery of global oil prices, political stability
in South Sudan, sustained inflows of FDI and a positive outcome from the national dialogue toend the civil war and conflicts.
Fiscal and monetary consolidation, together with low global food prices and a significant
increase in FDI by 37%, have boosted economic growth and helped to reduce inflation from 36.9%
in 2014 to 16.9%. Nonetheless, the challenges of diversification and social development, including
high unemployment, poverty and unequal distribution of wealth, in the context of the civil war
still remain. Spending on social development in 2015 is unlikely to be higher than it was in 2014
(0.3% of GDP) and is not expected to rise in 2016. Challenges of the external-debt problem andnormalisation of relations with creditors also continue to persist. The government has yet toagree on a new IMF-Staff Monitored Programme (SMP) as a prelude for reaching a decision on the
Heavily Indebted Poor Countries (HIPCs) Initiative. In 2015, Sudan was removed from the “blacklist” of the Financial Action Task Force, an international financial-fraud monitoring body locatedat the OECD. However, the continued difficulties of processing international banking transactions
may fuel informal transfers, contribute to exchange-rate distortion, and reduce fiscal revenues.
Sudan‘s cities contributed an estimated 60% of GDP in 2014, with a skills base 62% higher thanin rural areas. In urban areas, job creation is above average and the poverty rate is less than halfof the national average. By 2030, the urban population will represent 48.6% of the total, reflecting acontinuing contraction in the share of the rural population. However, since 1990 urban growth has
been propelled by rural-urban migration, internally displaced people (IDPs) due to the civil war
and conflict, climate-change impacts on the environment, and population growth. This has led
to serious strains on urban services and disrupted the urban-rural market links that are of key
importance for agriculture-based structural transformation. Policies adopted to upgrade slums
have resulted in low-density, auto-dependent sprawl, further adding to urban services delivery
inefficiencies. The adoption of an urban-development strategy aiming to improve infrastructure,
land governance, and involve the private sector more in urban development is, therefore,
inevitable if Sudan is to harness the potential benefits of its rapidly growing urban sector.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.6

5.3

6.2

2017(p)6.0

Real GDP per capita growth

1.4

3.1

3.9

3.7
11.2

CPI inflation

36.9

16.9

13.1

Budget balance % GDP

-1.0

-1.5

-1.4

-1.0

Current account % GDP

-9.0

-6.5

-6.4

-6.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESSWAZILAND•

Economic growth slowed down in 2015 to 1.7%, mainly because of severe drought,with prospects in 2016 and 2017 remaining poor.

•

The political scene has remained relatively calm since the September 2013 elections,but the ranking in participation and human rights remains low.

•

Increased urbanisation has resulted in development tensions and challenges thatthe government remains committed to address so as to ensure maximum economic
benefit and sustainability.

Real gross domestic product (GDP) growth slowed from 2.5% in 2014 to 1.7% in 2015. The major
factors include a drought that hurt agricultural production, a weaker mining sector and subdued
prospects in South Africa, the major trading partner. Growth in the tertiary sector also slowed
down, but the overall impact was cushioned by an increase in investment in government capital
investment programmes. Short-term prospects in 2016 and 2017 remain muted, with economic
growth expectations remaining below 2% per annum. Growth prospects are predicated on improved
weather conditions and enhanced policy efforts to address critical challenges in areas such as thebusiness climate and export diversification. This is particularly important in view of the country’s
loss of eligibility under the African Growth and Opportunity Act (AGOA) in January 2015 and its
high dependence on volatile revenues from the Southern African Customs Union (SACU).
Major social challenges include the high rate of HIV/AIDS and an uneven distribution of
resources. Despite its classification as a low middle-income country, the incidence of poverty
is high, with 63% of the population living below the poverty line. Other problems include a highunemployment rate of 28.1%, and a low Human Development Index (HDI) ranking of 150 out of
187 countries; Swaziland’s HDI score of 0.531 is mainly due to the high maternal mortality rate,
underdeveloped labour markets and mistrust in national government. There has been some
progress over the past three decades in the fight against HIV/AIDS and the incidence rate has
declined trend from 3.1% in 2010 to 2.23% in 2013, to 1.94% in 2015, but the HIV prevalence of 26%
among 15-49 year olds is among the highest in the world. This has translated into increased healthspending and high numbers of orphaned and vulnerable children requiring social protection.
Swaziland is among the smallest countries in Africa in both size and population of whom
78% live in rural areas and 22% in urban areas. It is projected that the share of the population
living in towns and cities will rise to 26.5% by 2030. The main urban centres are Mbabane, theadministrative capital, and Manzini, the commercial hub. The two cities and the corridor between
them support approximately 75% of the country’s urban population. Growth in both Manzini andMbabane has been largely informal and about 60% of urban Swazi households live in unplanned
and/or un-serviced informal settlements. The central location of the Manzini-Mbabane corridor
makes it a prime area for transportation networks linking to other areas in the country, withconsequent overcrowding as a result of internal migration. Other challenges arising from increased
urbanisation include providing adequate access to sanitation and power, and dealing with air andwater pollution, inadequate waste management and increased crime rates. Local governments are
hard pressed to raise adequate financial resources to address these challenges and mainly rely ontransfers from the central government. The government remains committed to prioritising urban
development, through initiatives such as the Urban Development Programme, so as to harness
fully the inherent potential from this key segment of the economy while ensuring its sustainability.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

2.5

1.7

0.8

2017(p)1.7

Real GDP per capita growth

1.0

0.3

-0.5

0.4

CPI inflation

5.7

5.6

6.0

6.7

Budget balance % GDP

0.7

-1.4

-1.8

-2.1

Current account % GDP

2.9

0.9

1.6

1.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTES

tanzania•

The economy grew by 7% in 2014 and estimates suggest the same growth rate in2015, mainly driven by the services, industry, construction, and information andcommunication sectors. The fiscal position was healthy with an overall deficit of
3.4% of GDP in 2013/14. Similar prospects are expected over the medium term.

•

Successful and peaceful general elections in October 2015 transferred power to a newpresident who has committed to prudent resource management, fighting corruption
and pursuing inclusive growth.

•

There is a growing rate of urbanisation with associated unemployment, pressure on
infrastructure and overstretched government capacity to manage urban development.

Economic performance has remained stable and strong over the past decade. There was
7% growth in 2014 and preliminary estimates indicate the same growth rate in 2015, driven
mainly by the services, industry, construction, and information and communication sectors,
each of which grew in double digits. For the medium term, growth is projected to outperform therecords of 2014 and 2015, increasing to 7.2%. While other sectors are expected to at least perform
at their recent levels, higher growth performance is expected largely from increased industrial
activities and investment in infrastructure. The inflation rate in 2014 was 6.1%, and is expected tofurther reduce to 5.6% in 2015 due to favourable weather conditions that led to a sustained level ofagricultural output and prudent fiscal and monetary policy management. The government’s total
debt is sustainable at 30.2% of GDP in 2014/15.
On social and human development, there has been an improvement in Tanzania’s Human
Development Index value from 0.371 to 0.521 between 1985 and 2014. Between 1980 and 2014, life
expectancy at birth increased by 14.5 years, expected years of schooling increased by 3.3 years andinfant mortality declined from 68 deaths per 1 000 live births in 2005 to 41 in 2012/13. However,a major area of weakness is poverty reduction where, due to the structure of the Tanzanian
economy, high economic growth has not been reflected in a proportional reduction in poverty
levels. While the average growth rate has been about 7%, the agriculture sector that employs about
70% of workers has been growing at less than 4%. The latest household budget survey (2011/12)
revealed that 28.2% of Tanzanians are poor, with a higher incidence of poverty in rural areas.
The general election of October 2015 led to the emergence of Dr. John Magufuli as the presidentof the United Republic of Tanzania, with a five-year mandate. The president has unveiled acomprehensive five-year work plan that focuses on addressing land ownership, water, healthservices, education, agriculture, electricity and justice delivery issues. The plan also focuseson government effectiveness and efficiency, increasing government revenue and combating
corruption. Faithful implementation of policies and programmes in these areas outlined by thepresident will be crucial in addressing Tanzania’s poverty problem in the medium term.
Urbanisation has become a major development challenge in Tanzania. In the city ofDar-es-Salaam and other major cities, unemployment is higher than in the rural areas, basic
infrastructure (roads, electricity, water, bus transit, etc.) have become highly insufficient to meetthe demands of users and there is inadequate provision of recreational facilities, sewage systems,
water drainage channels and environmental protection. Planned residential areas are rare,
although land itself is in abundance. Intra-city transportation presents a serious challenge tocommuters due to poor road networks and the absence of intra-city mass rail transport systems.
A comprehensive and co-ordinated “Urban Development and Management Policy” is underpreparation and success in finalising and implementing the policy will be a big achievement for
the new government.

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COUNTRY NOTESMacroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

7.0

7.0

7.2

2017(p)7.2

Real GDP per capita growth

3.8

3.9

4.0

4.0

CPI inflation

6.1

5.6

5.9

6.0

Budget balance % GDP

-3.4

-3.9

-4.4

-5.4

Current account % GDP

-10.3

-9.4

-8.2

-7.0

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESTOGO•The economy expanded 5.5% in 2015, but funding of infrastructure increased
government debt to 62.5% of GDP in 2015, up from 46.0% in 2012.

•

The time needed to legally set up a business fell from 38 days in 2012 to 19 in 2013,
and 10 in 2014 and 2015.

•

The country’s land tenure system has not adjusted to the growth of urban areas andtrade and an average 288 days are needed for property transactions, making themthe slowest in Africa.

Major infrastructure investment begun in 2010 continued more slowly in 2015. Erratic
rainfall undermined buoyant agriculture and the economy grew a more modest 5.5%, downfrom 5.9% in 2014. Agriculture was the main source of economic expansion in 2014, contributing
3.7 percentage points of GDP growth, though this fell by 0.7 points in 2015. Phosphates, clinker andcotton production should improve in 2016, and the Scanmines limestone and cement company is
expected to do well. Continuing government reforms to increase competition in hotels, electricity,
banks and telecommunications, along with support for agriculture and extractive industries,
should drive growth, forecast at 5.9% in 2016 and 6.0% in 2017.
Funding of public investment over the past five years has contributed to growth but also
increased public debt, from 46.0% of GDP in 2012 à 62.5% in 2015. Interest on internal debt in2015 was put at XOF 26 billion (CFA francs), at least three times more than on external debt,
and the International Monetary Fund (IMF) says Togo risks further accumulation of public debt.
Government revenue has grown significantly in the past two years due to better collection by
the new national tax office (OTR). Revenue increased 13.6% in 2014 and 4.8% in 2015 to reachXOF 480.4 billion (20.2% of GDP). Due to the creation of a body to fight corruption and related
crimes (la Haute autorité de prévention et de lutte contre la corruption et les infractions assimilées) was set
up in 2015. As a result, Transparency International’s Corruption Perceptions Index ranked Togo
19 places higher than in 2014: 107 out of 168 countries.
Some 2.8 million people live in Togo’s towns and cities, a 160.0% increase between 1990 and2014, representing 39.5% of the total population in 2014. This is up from 28.6% in 1990 and is
expected to reach 50.0% by 2030. The steady decline of the share of industries and services in
GDP over the past 30 years reflects the meagre structural transformation of the economy. The
country’s land tenure system requires 288 days for property transactions, making it the slowest
in Africa (the sub-Saharan average is 58 days). The cost of energy and communications since the1990s, as well as market weakness and limited access to funding, are serious obstacles to thegrowth of towns and cities and to the country’s structural transformation. These constraints,
which must be removed, stem mostly from a land tenure system that has failed to adapt over the
past half-century to the growth of urban areas and market demands.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.9

5.5

5.9

2017(p)6.0

Real GDP per capita growth

3.2

2.8

3.2

3.4

CPI inflation

0.2

1.9

2.1

2.2

Budget balance % GDP

-3.4

-5.3

-4.7

-4.4

Current account % GDP

-13.2

-11.9

-11.0

-10.5

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESTUNISIA•The new government that took office in February 2015 has continued the economic
recovery plan launched in 2011, with a striking 21.6% increase in investment in 2015.

•

The worsening security situation after the terrorist attacks in Sousse and Tunis andrising social unrest affected growth, which is not expected to exceed 0.5% in 2015, as
the country entered a recession in the second quarter of the year.

•

The start of decentralisation in 2015 and municipal elections in 2016 should boost local
democracy, a key to successful and sustainable urban policy that involves citizens.

Growth for the year was anticipated as 3% in the 2015 budget but it was no more than 0.5%
in the end (down from 2.3% in 2014), due to the contraction of non-manufacturing industries
in the first quarter, notably oil production and an almost complete halt in phosphate mining
in the centre of the country because of strikes. This was partly offset by growth in agriculture,
non-commercial services and manufacturing. Tourism (7% of gross domestic product), thetraditional source of foreign currency and jobs (400 000 direct and indirect), took a sharp dive,with revenue 35% down on 2014.
Domestic consumption is expected to continue as the chief engine of the economy in 2016 and2017. Investment was 18.5% of GDP in 2015 (down from 21.9% in 2014) despite a slight recovery of
foreign direct investment (FDI) in the second quarter after the elections went well. Government
capital investment increased 21.6%.
The weak 2015 performance, along with macroeconomic imbalances, prevent the country
from dealing with its main problems, such as unemployment, which remains high (15% in 2015)
despite much more hiring in the public sector since 2011. Joblessness is greater among women(21.1%) than men (12.5%) and especially hits college graduates (31.4%).
Regional disparities persist because of meagre government investment and inefficient local
authorities. The country is administratively centralised and economically polarised, with activity
concentrated in the expanding towns and cities of the coastal regions, so the gap between
these and smaller urban areas in the interior is widening. To a lesser extent, overall disparity is
growing between urban and rural areas, notably in three of the country’s six regions (Nord-Ouest,
Centre-Ouest and Sud).
The last census (2014) showed that facilities, roads, health care and leisure services in thegovernorates of Kasserine, Sidi Bouzid, Gafsa, Jendouba, Kebili and Kairouan were lagging behindthe national average and also behind the average in coastal governorates and even regions of theinterior.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

2.3

0.5

2.0

2017(p)2.4

Real GDP per capita growth

1.1

-0.6

0.9

1.3

CPI inflation

5.5

5.0

4.0

3.5

Budget balance % GDP

-4.4

-4.2

-3.9

-3.7

Current account % GDP

-9.0

-7.6

-5.9

-5.8

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESUGANDA•

Uganda’s economy continued to improve in 2015, despite external shocks, with real
GDP growth projected to reach 5.1% in 2016, and 5.8% in 2017, driven by industry,
services and public infrastructure investment.

•

Uganda’s economic stance remains focused on containing inflationary pressures andon enabling growth by ensuring exchange rate stability and maximising domestic
resources mobilisation.

•

Uganda has made progress in reducing poverty and in enhancing gender equality andwomen’s empowerment.

Uganda’s economic outlook is positive, with real GDP growth expected to reach 5.1%
in 2016, compared to 5.3% in 2015, and 4.7% for 2014. This assumes that the government will
maintain macroeconomic stability and tackle corruption. Growth will mainly be driven bystrong performances in the industry and services sectors, and also by public infrastructure
investment and other investments in priority sectors. Large infrastructure projects will boost
manufacturing, as well as services, notably tourism. Rising private consumption will also drive
growth. Credit expansion, which increased by 16% in February 2015, more than double last year’s
growth rate, will boost consumption, as will higher government consumption in the run-up toelections. Investment in the energy sector will also boost growth, although the pace of growth
has slowed in the past year as oil prices have fallen sharply. The issue of new licences for further
oil exploration in the greater Albertan region will boost much-needed foreign direct investment.
Uganda’s Human Development Index (HDI) improved slightly to 0.483 in 2014, from 0.478 in
2013. This still falls below the 0.502 average for the world’s least developed countries (LDCs),
and the 0.518 average for sub-Saharan Africa. Moreover, earlier progress towards Millennium
Development Goals (MDGs) for health and education has stalled, with outcomes underperforming
the goals due to insufficient funding. Nonetheless, there has been significant progress inincreasing access to anti-retroviral treatment, in preventing mother-to-child HIV transmission,and in reducing the prevalence of malaria, which fell from 43% in 2009 to 19% in 2014. Poverty
fell in all regions except the Eastern region, where it increased between 2009/10 and 2012/13.
Although the Northern region has witnessed a significant reduction in poverty – from 60.7% in
2005/06 to 43.7% in 2012/13 – this still remains more than twice the national average. Uganda has
steadily improved its performance in gender equality and women’s empowerment. Nonetheless,women continue to face discrimination, particularly in their access to economic opportunities
and ownership of assets.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

4.7

5.3

5.1

2017(p)5.8

Real GDP per capita growth

1.4

2.0

1.8

2.5

CPI inflation

4.3

4.5

5.2

5.3

Budget balance % GDP

-4.1

-4.5

-6.0

-5.5

Current account % GDP

-9.6

-9.1

-9.1

-9.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESZAMBIA•

Zambia is facing its worst economic crisis in more than ten years, with falling
copper prices, pressure on the government’s operating and investment budget, andelectricity-supply shortages affecting the real economy.

•

For Zambia’s national elections in 2016, the Constitutional Amendment Act has set
the date at 11 August and introduced a 50% +1 requirement for winning the election,
as well as a presidential running mate.

•

In 2015, urban growth continued at an estimated rate of 42% as people moved totowns in search of jobs and opportunities.

In 2015, the Zambian economy faced economic headwinds initially due to fast risingexpenditures and a fiscal deficit that more than doubled in 2013. Slowing demand from China
had reduced copper prices to their lowest level in more than seven years. The situation was
exacerbated by low agriculture output and a growing electricity crisis. Real economic growth fell
to its lowest in 15 years, with gross domestic product (GDP) growth estimated to have slowed to
3.7% from 5.0% in 2014. Maize output declined by 22% due to poor rains. Copper prices declinedby 28% while mining output remained roughly the same as in 2014. Slow economic growth isprojected for the medium term as the electricity-supply deficit continues and Zambia continues
to import electricity from neighbouring countries. The 2016 agricultural season is expected toslow following El Niño weather effects. In addition, elections planned for 2016 will add pressure
to public spending. Copper prices are expected to remain flat as world copper supply is sufficient
to meet global demand.
The electricity-supply deficit, which began in June 2015, has affected manufacturing andother businesses. It is estimated at 40-50% of baseload, necessitating considerable daily load
shedding. This has increased operating costs as firms have had to invest in diesel generators, andthe increase in costs has been passed on to consumers. Combined with waning confidence in theeconomy, the Zambia kwacha (ZMW) depreciated by 42% against the United States dollar (USD),
raising end-of-year inflation to 21%. The slowdown in the economy led to more than 9 000 job
losses in the formal private sector.
In 2010, 60% of Zambians were living in rural areas. Official projections show that urbanisation
will have risen to 45% by 2025. The greatest contributors to the country’s domestic product are
the capital city, Lusaka, and other major mining towns. Urbanisation is both a result of natural
population growth and rural-to-urban migration.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

5.0

3.7

3.6

2017(p)4.9

Real GDP per capita growth

2.5

0.6

0.5

1.8

CPI inflation

7.8

10.1

10.8

8.9

Budget balance % GDP

-5.9

-8.2

-6.6

-6.2

Current account % GDP

2.2

-3.0

-1.1

1.3

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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COUNTRY NOTESZIMBABWE•

Economic growth slowed from 3.8% in 2014 to an estimated 1.5% in 2015 as a resultof weak domestic demand, high public debt, tight liquidity conditions, drought, poor
infrastructure, institutional weaknesses and an overvalued exchange rate withprojected negative inflation in 2016 and 2017.

•

The business environment improved according to the World Bank report, Doing
Business 2016, with the country moving up 16 places to 155 out of 189 countries.

•

Zimbabwe has experienced reverse urbanisation in recent years as an economic
slowdown hampered opportunities in cities.

GDP growth declined from 3.8% in 2014 to an estimated 1.5% in 2015 but is projected to slightly
increase to 1.6% in 2016. This improvement is due to an anticipated expansion in the tourism,
construction and financial sectors. The poor performance of government revenue against thebackground of high recurrent expenditures continues to constrain the fiscal space.
The depreciation of the South African rand against the US dollar (USD) has resulted in a
decline in prices of imports from South Africa. This trend, along with weak domestic demand,tight liquidity conditions and declines in crude oil and global food prices, resulted in negative
inflation. Annual average inflation declined from -0.2% in 2014 to -2% in 2015. Inflation is projected
to remain negative in 2016 and 2017.
The country remains in debt distress, exacerbated by the lack of a diversified export baseand declining terms of trade that make it difficult for the country to adjust to changing world
demand for tradable goods. These structural weaknesses have constrained the country’s ability
to generate high and sustainable growth that is necessary to mitigate the debt distress. Moreover,the external position is projected to remain under severe pressure in the medium term on accountof poor export and import performance on the back of an appreciating US dollar. The Public Debt
Management Act, passed into law in September 2015, is expected to strengthen the legal andinstitutional framework for debt management.
The fiscal space remains constrained due to underperformance of domestic revenues,
increase in public expenditures, depressed exports, limited foreign direct investment (FDI) andother capital inflows into the country. This has undermined development expenditure and social
services provision in both urban and rural areas, exacerbating the incidence of poverty. Financing
for urban development, both housing and transport, has been negatively affected.

Macroeconomic indicators
2014

2015(e)2016(p)Real GDP growth

3.8

1.5

1.6

2017(p)3.1

Real GDP per capita growth

1.5

-0.9

-0.4

0.8

CPI inflation

-0.2

-2.0

-1.3

-0.7

Budget balance % GDP

-1.9

-1.6

-1.5

-1.2

Current account % GDP

-23.2

-21.4

-19.8

-18.7

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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Methodology
The aggregate figure for Africa, when reported, does not include countries whose
data are unavailable.
Table 4. Public finances (percentage of GDP)
Where indicated, the figures are reported on a fiscal-year basis. Figures for Egypt,
Eritrea, Ethiopia, Kenya, Liberia, Malawi, Rwanda, South Sudan, Tanzania, and Uganda
are from July to June in the reference year. For Botswana, Lesotho, Namibia, andSwaziland, the fiscal year 2014 is from April 2013 to March 2014. For South Africa, thefiscal year 2014 is from April 2014 to March 2015.
Table 7. Exports
The table is based on exports disaggregated at six-digit level (following theHarmonised System, rev. 2).
Table 8. Diversification and competitivenessThe diversification indicator measures the extent to which exports are diversified. It
is constructed as the inverse of a Herfindahl index, using disaggregated exports at four
digits (following the Harmonised System, rev. 2). A higher index indicates more export
diversification.
The competitiveness indicator has two aspects: the sectoral effect and the global
competitivity effect. In order to compute both competitiveness indicators, we decompose
the growth of exports into three components: the growth rate of total international
trade over the reference period (2010-14) (not reported); the contribution to a country’s
export growth of the dynamics of the sectoral markets where the country sells its
products, assuming that its sectoral market shares are constant (a weighted average ofthe differences between the sectoral export growth rates – measured at the world level –and total international trade growth, the weights being the shares of the corresponding
products in the country’s total exports); the competitiveness effect, or the balance(export growth minus world growth and sector effect), measuring the contribution ofchanges in sectoral market shares to a country’s export growth.
Table 10. Foreign direct investment
The UNCTAD Inward Potential Index is based on 12 economic and structuralvariables measured by their respective scores on a range of 0-1 (raw data are availableat www.unctad.org/wir). It is the unweighted average of scores of the following: GDP per
capita, the rate of growth of GDP, the share of exports in GDP, telecom infrastructure (theaverage number of telephone lines per 1 000 inhabitants and number of mobile phones
per 1 000 inhabitants), commercial energy use per capita, share of R&D expenditures ingross national income, share of tertiary students in the population, country risk, exportsof natural resources as a percentage of the world total, imports of parts and componentsof electronics and automobiles as a percentage of the world total, and inward FDI stock
as a percentage of the world total.
Table 11. Aid flows
The DAC countries are Australia, Austria, Belgium, Canada, the Czech Republic,
Denmark, the European Union, Finland, France, Germany, Greece, Iceland, Ireland, Italy,
Japan, Korea, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal,
the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, the United Kingdom, and theUnited States.

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Table 13. Demographic indicators
Infant mortality rate: the number of child deaths under the age of one per live birth
per year.
Total fertility rate: the average number of children per woman.
Mortality under age five: the probability that a new-born infant will die before theage of five.
Table 14. Poverty and income distribution indicators
National poverty line: the poverty line corresponding to the value of consumption
necessary to satisfy minimum subsistence needs. It is set at two-thirds of average
consumption.
International poverty line: the absolute poverty line corresponding to a level ofincome or consumption of USD 1.90 or USD 3.10 a day.
Gini index: an index measuring the intensity of inequality in income or consumption
expenditure distribution. Perfect equality leads to a Gini index of zero and maximum
inequality to a Gini index of 100.
Share of consumption: the share of total consumption for a decile of the population
ranked by level of consumption.
Table 15. Access to services
Sanitation coverage: the percentage of the population with access to improved
sanitation technologies (connection to a public sewer, connection to a septic system,
pour-flush latrine, simple pit latrine or ventilated improved pit latrine).
Water supply coverage: the percentage of the population with access to improved
water supply (household connection, public standpipe, borehole, protected dug well andprotected spring or rainwater collection).
Table 16. Basic health indicators
Life expectancy at birth: the average number of years a new-born infant would live
under the hypothesis that, during his or her life, the conditions of mortality remain thesame as observed at birth.
Life expectancy at birth with AIDS: the estimated average number of years a newborn infant would live under the hypothesis that, during his or her life, the conditions ofmortality remain the same as observed at birth, and that in particular, the current effectof AIDS on mortality are taken into account.
Life expectancy at birth in the no-AIDS scenario: the estimated number of years a
new-born infant would live under the hypothesis that he/she does not contract AIDS
during his/her life.
Undernourishment prevalence: the proportion of the population that is suffering
insufficient food intake to meet dietary energy requirements continuously.
Food availability: the available nutritious food for human consumption expressed inkilo-calories per person per day (note that the recommended daily caloric intake for an
active healthy life is 2 100 calories).
Public share of total health expenditure: calculated by defining public healthexpenditure as current and capital outlays of government, compulsory social security

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STATISTICAL ANNEX

schemes, extra-budgetary funds dedicated to health services delivery or financing, andgrants and loans provided by international agencies, other national authorities andcommercial banks.
Private share of total health expenditure: calculated by defining private expenditure
as private insurance schemes and prepaid medical care plans, services delivered or
financed by enterprises, outlays by non-governmental organisations and non-profit
institutions serving mainly households, out-of-pocket payments, and other privately
funded schemes not elsewhere classified, including investment outlays.
Table 17. Major diseases
Healthy life expectancy at birth: the average equivalent number of years in full
health a newborn infant would live under the hypothesis that, during his/her life, theconditions of mortality and ill-health remain the same as observed at his/her birth.
People living with HIV/AIDS: estimated whether or not the people have developed
symptoms of AIDS. HIV/AIDS adult prevalence is the estimate of the adult population(age 15-49) living with HIV/AIDS.
Malaria: cases of malaria reported from the different local case detection andreporting systems. These figures should be considered with caution because of thediversity of sources and probable underestimation.
Measles incidence: the number of new cases of measles reported during the reference
year.
DTP3: Third dose of diphtheria, tetanus toxoids and pertussis vaccine.
Table 19. School enrolment
Gross enrolment ratio: the population enrolled in a specific level of education,
regardless of age, expressed as a percentage of the official school-age pupils enrolled inthat level.
Net enrolment ratio: the official school-age population enrolled in a specific level of
education expressed as a percentage of the total population enrolled in that level.
Table 20. Employment and remittances
Participation rate: the measure of the proportion of a country’s working-age
population that engages actively in the labour market, either by working or looking forwork. It provides an indication of the relative size of the supply of labour available toengage in the production of goods and services.
Total unemployment: the proportion of the labour force that does not have a job andis actively looking for work.
Inactivity rate: percentage of the population that is neither working nor seeking
work (that is, not in the labour force).
Table 21. Corruption Perceptions Index
The Corruption Perceptions Index (CPI): a composite indicator based on surveys ofbusiness people and assessments of country analysts. A background paper presenting
the methodology and validity of the CPI is available on the Transparency International
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Tables 22 to 24. Political indicators
The political indicators presented in Tables 22 to 24 and discussed in Chapter 5 ofthis report measure public protests, violence by non-state actors and political hardening
in African countries. The indicators have been assembled on the basis of a detailed
monitoring of daily press briefs verified by the AFP, Reuters and Marchés Tropicaux etMéditerranéens news agencies, aiming to take into account the daily events and decisions
that make up the reality of political life and government attitudes in African countries.
The methodology was first proposed by Dessus et al. (1998).1 All three indicators
are composites combining 4-value variables (with a scale of 0 to 3: 0: non-occurrence,
1: occurrence but weak intensity, 2: medium intensity and 3: strong intensity) and/or binary variables with values 0 and 1, with 0 being the non-occurrence of the event
and 1 its occurrence. The detailed contents of each indicator are listed below.
These indices have been assembled since 1996 for 30 African countries,2 and haveprogressively covered all 54 countries of the continent. The calculations are based onnews verified by the press agencies, thereby capturing much more news than via one
single newspaper. AFP’s and Reuters’ daily press briefs have been the source for theindicators since 2006. Before that, Marchés Tropicaux et Méditerranéens (MTM) served as
the source for the indicators. This change in the source introduced a break in the series.
Comparing both sources for 52 countries in two consecutive years (2006 and 2007), we
found that the number of reported relevant events was higher in AFP, which reports
daily, than in the weekly reporting by MTM. A slight upward adjustment of past data toensure comparability has been done, using country-specific coefficients estimated foreach time series. The indicators presented in the tables have been adjusted accordingly
for the years 1996-2005 (the average coefficients were 1.10 for public protests, 1.04 forpublic violence and 1.46 for political hardening).
In AEO reports prior to 2010 the public protest and violence by non-state actors
indicators were combined in a civil tensions indicator. This series has been split up into
its components in the reports starting from 2011 onwards to allow for a separate analysisof these two time series. The indicators for 2015 can also be found on the AEO website:www.africaneconomicoutlook.org.
Further improvements to the methodology have been implemented since 2010. The
motivations behind public protests and civil violence across the entire content havebeen collected and analysed since 2006, allowing for a better understanding of the publicdemands and aspirations as well as governance issues (see Chapter 5). Historic revisions
and backwards projections have been undertaken to expand and complete the series.
Weighting methods
We assign an appropriate weight to each variable of the composite index for the“Political hardening” indicator. First, we take into account the intensity level of eachvariable. By construction, a “dead” victim gets attributed a higher weight than an“injured” victim: intensity value 1 corresponds to between 1 and 9 dead victims,
compared to between 1 and 49 injured victims. Second, a principal component analysis
was performed to assign each variable the following weights: each intensity value ofpolice violence is multiplied by 0.261 (if dead), 0.423 (if injured) and 0.402 (if arrested). For
dichotomous variables, the weights are: state of emergency (0.631), additional resources
for the police (0.603), extrajudicial prosecution (0.583), prohibition of strikes (0.383),
prohibition of the press (0.292), hardening of the political climate (0.253) and closure ofschools (0.092).

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STATISTICAL ANNEX

Table 22: Public protest• Strikes

0 = non-occurrence
1 = 1 strike or 1-999 strikers
2 = 2 strikes or 1 000-5 000 strikers
3 = 3 strikes or 5 000 or more strikers• Demonstrations

0 = non-occurrence
1 = 1 demonstration or 1-4 999 protesters
2 = 2 demonstrations or 5 000-9 999 protesters
3 = 3 demonstrations or 10 000 or more protesters
Table 23: Violence by non-state actors• Unrest and violence: number of dead and injured

0 = none
1 = 1-9 dead or 1-49 injured
2 = 10-99 dead or 50-499 injured
3 = 100 or more dead or 500 or more injured
Table 24: Political hardening• State of emergency (0 or 1)• Arrests and incarcerations of opponents (protesters, journalists, opposition actors)

or for other political reasons
0 = non-occurrence
1 = between 1 and 9
2 = between 10 and 99
3 = 100 or more
• Additional

means for police repression, judicial harassment, death threats,
propaganda or censorship (0 or 1)• Toughening of the political environment, e.g. dissolution of political parties, newlaw against democracy, expulsions, dismissals, curfew (0 or 1)• Violence perpetuated by the police: number of dead and injured

0 = none
1 = 1-9 dead or 1-49 injured
2 = 10-99 dead or 50-499 injured
3 = 100 or more dead or 500 or more injured• Extrajudicial prosecutions and executions (0 or 1)• Bans on strikes and demonstrations (0 or 1)• Bans on press or public debates (0 or 1)• Closing of schools for political reasons (0 or 1)

Table 25. Demographic projections
The demographic trends are projected using the medium variant fertility scenario.
Activity ratio: the ratio between working age population (15-64 years old) anddependent age population (less than 15 or at least 65 years old). It is the inverse of thedependent ratio.
Yearly cohort of new labour entrants: the size of the population entering working
age (15 years old) each year. It is estimated by taking the population aged 15-24 anddividing by ten.

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STATISTICAL ANNEX

Total entrance inflow: the number of new entrants into the working-age population.
This refers to the population that was below 15 at the beginning of the period, andbetween 15 and 64 at the end of the period.
Active population: the population of people that furnish the supply of labour for the
production of goods and services during a given period.
Table 26. Gender indicators
The African Development Bank’s Gender Equality Index (AfDB GEI) reflects thestatus of women in Africa along three dimensions of equality: economic opportunity(business and employment), human development (education and health), and law andinstitutions. Each dimension draws on a series of indicators, measuring equality inbusiness and employment, education, health, political representation, and legal andhousehold rights. Countries are scored on a scale from 0 to 100, where 100 indicates
perfect gender equality. For more details on computation see the technical note available
atwww.afdb.org/fileadmin/uploads/afdb/Documents/Publications/African_Gender_
Equality_Index_2015-EN.pdf.
The OECD Development Centre’s Social Institutions and Gender Index (SIGI)
measures discriminatory social institutions, i.e formal and informal laws, social norms
and practices that restrict or exclude women and consequently curtail their access torights, justice, resources and empowerment opportunities. The SIGI scores 108 countries
on 14 indicators grouped into five sub-indices: discriminatory family code, restricted
physical integrity, son bias, restricted resources and assets, and restricted civil liberties.
The SIGI is an unweighted average of a non-linear function of its five sub-indices. The
SIGI and its sub-indices values are between 0 and 1, with 0 indicating very low levels of
inequality and 1 indicating very high levels of inequality. For more details on computation
see the technical note available at www.genderindex.org.
The United Nations Development Programme’s Gender Development Index(GDI) measures gender gaps in human development achievements by accounting for
disparities between women and men in three basic dimensions of human development– health, knowledge and living standards – using the same component indicators as
in the Human Development Index (HDI). The GDI is the ratio of the HDIs calculated
separately for women and men showing the female HDI as a percentage of the male HDI.
For more details on computation see the technical note available at hdr.undp.org/sites/
default/files/hdr2015_technical_notes.pdf.
The United Nations Development Programme’s Gender Inequality Index (GII)measures gender inequalities in three important aspects of human development:
reproductive health, measured by maternal mortality ratio and adolescent birth rates;
empowerment, measured by the proportion of parliamentary seats occupied by females
and the proportion of adult females and males aged 25 years and older with at least somesecondary education; and economic status, expressed as labour market participationand measured by the labour force participation rate of female and male populations
aged 15 years and older. The higher the GII value the more disparities there are between
females and males. For more details on computation see the technical note available at
hdr.undp.org/sites/default/files/hdr2015_technical_notes.pdf.

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Notes
1. Dessus, S., D. Lafay and C. Morrisson (1998), “A Politico-economic Model for Stabilisation in
Africa”, Journal of African Economies.
2. The following countries are included in this sample: Algeria, Benin, Botswana, Burkina Faso,
Cabo Verde, Cameroon, Chad, Côte d’Ivoire, Egypt, Equatorial Guinea, Ethiopia, Gabon, Ghana,
Kenya, Libya, Malawi, Mali, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Senegal, South
Africa, Tanzania, Togo, Tunisia, Uganda, Zambia and Zimbabwe.

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African Economic Outlook335

Egypt*5 228

118

17 21517 6004 068
1 273
34 378Mali

Mauritania

Mauritius

Morocco© AfDB, OECD, UNDP 201624 235

6 278

Libya

Malawi

4 503

Liberia

Madagascar

2 135

Lesotho

1 844
46 050246

12 609GuineaGuinea-Bissau

Kenya

239

27 410

Ghana

447

2

1 031

1 240

118

587

1 760

111

30

580

36

11

268

1 725
1 991

1 104

Gambia99 391

28

1 001

845

91 508Gabon

Ethiopia*

EritreaEquatorial Guinea

23

322

2 345

342

2

1 284

623

475

4

28

274

888

22 702

Djibouti

77 267

Congo, Dem. Rep.

4 620

Côte d’Ivoire

Congo

788

14 037

Chad

Comoros

4 900

Central African Republic

23 34411 179BurundiCameroon18 106Burkina Faso
521

2 262

Cabo Verde115

10 880Benin

Botswana

582

1 247

2 382

39 66725 022Land area(thousands of km 2)

AngolaPopulation(thousands)

77

624

4

14

145

41

4

40

70

79

51

51

115

176

6

90

44

30

91

38

70

33

14

424

11

8

49

129

402

66

4

95

20

17

Population density(pop. / km 2)

Table 1. Basic indicators, 2015

Algeria

STATISTICAL ANNEX

274 526

24 50916 42729 15120 55835 55692 875

3 781

5 777

143 051

2 676

15 276113 349

3 269

34 409159 2247 939

25 944995 969

3 093

78 33563 26628 9191 214

32 0033 052

72 109

3 479

7 882

31 18437 16021 156

185 246570 638

GDP based on PPP
valuation(USD million)

7 986

19 250

4 039

1 656

1 194

1 467

14 793

840

2 706

3 106

1 451

1 212

4 135

1 642

19 944

1 602

1 519

30 701

10 884

3 484

3 451

819

6 259

1 539

2 280

623

3 089

6 684

705

1 722

16 424

1 945

7 403

14 386GDP per capita(PPP valuation,
USD)

4.1

4.0

3.7

3.9

5.6

2.6

0.2

6.3

4.7

5.1

3.3

2.2

6.7

3.7

4.5

10.5

1.9

6.8

4.1

5.2

4.6

6.9

4.4

1.7

5.0

-1.4

4.1

3.0

3.4

5.9

4.7

4.5

6.2

3.1

African Economic Outlook

Annual real
GDP growth(average over 2007-15)

336

182 202
11 610

Nigeria

Rwanda15 603

Zimbabwe
30 066

391

753

242

164

57

947

17

1 879

644

1 219

638

72

0.460

197

1

26

924

1 267

824

799

Land area(thousands of km 2)

39

40

22

162

69

129

56

74

21

19

45

17

90

210

77

198

441

197

16

3

35

Population density(pop. / km 2)

5 768 932

27 91664 64779 753

127 213

10 816

138 304

10 869167 421

22 461

724 010

…

9 832

2 533

36 300664

20 321

1 105 343

18 96024 83933 726GDP based on PPP
valuation(USD million)

Table 1. Basic indicators, 2015 (cont.)© AfDB, OECD, UNDP 2016

Note: * For Egypt and Ethiopia, fiscal year July (n-1)/June (n).
Sources: United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects, The 2015 Revision.
AfDB Statistics Department, various domestic authorities and AfDB estimates.

1 184 501

16 212

Zambia

AFRICA

11 25439 032

Uganda

7 305

Tunisia

53 470

Tanzania

Sudan

Togo

South Sudan
1 287

12 34040 235South Africa

Swaziland

10 78754 490Somalia

6 453

96

15 129Sierra Leone

Seychelles

Senegal190

19 899Niger

Sao Tome and Principe

2 459

27 978Population(thousands)

Namibia

Mozambique

STATISTICAL ANNEX

3.1
4.6

4870

7.0

6.5

2.7

4.1

6.7

1.9

4.0

9.0

2.3

…

5.1

4.7

3.8

4.8

7.5

6.0

5.6

4.6

7.0

African Economic Outlook

Annual real
GDP growth(average over 2007-15)

1 789

3 988

2 043

11 304

1 481

2 587

8 446

4 161

1 820

13 287…

1 524

26 259

2 399

3 488

1 750

6 067

953

10 102

1 205

GDP per capita(PPP valuation,
USD)

337

6.5

5.5

4.3

2.8

5.4

3.5

Madagascar

MalawiMali

Mauritania

Mauritius

Morocco© AfDB, OECD, UNDP 2016

6.4

Ethiopia*

Libya

1.4

11.5

Eritrea

13.0

24.8

Equatorial Guinea

Liberia7.1

Egypt*

4.7

5.1

Djibouti

Lesotho

1.6

Côte d’Ivoire

6.9

6.3

Congo, Dem. Rep.

3.2

-1.6

Congo

Kenya

0.8

Comoros

Guinea-Bissau

3.1

Chad

1.8

4.6

Central African Republic

Guinea3.3

Cameroon

6.5

8.6

Cabo Verde

Ghana

3.5

Burundi

3.6

4.1

Burkina Faso

Gambia8.3

Botswana

4.8

4.6

Benin

Gabon

3.4

14.0

Angola2007

Algeria

STATISTICAL ANNEX

5.9

5.5

1.1

5.0

8.6

7.2

2.7

6.2

5.7

0.2

3.2

4.9

8.4

5.7

5.3

10.8

-9.8

20.8

7.2

5.8

2.3

6.2

5.9

0.6

2.5

2.1

2.9

6.7

4.9

5.8

6.2

5.0

11.2

2.4

2008

4.2
3.8

4.2

4.8

5.8

9.5

0.1

4.3

6.3

7.9

8.4

4.4

1.9

3.4

6.5

6.9

12.4

2.2

-0.8

4.8

3.5

2.4

7.2

8.7

2.2

13.6

3.0

3.3

1.5

5.1

8.4

8.6

2.6

3.4

3.6

2010

3.1

-1.0

4.5

7.6

-3.5

-0.8

5.4

3.4

3.3

3.3

-0.3

4.0

6.4

-2.7

8.8

3.9

19.0

4.9

5.0

3.8

2.8

7.5

1.1

2.8

1.7

1.9

-1.3

3.8

2.9

-7.7

2.7

2.4

1.6

2009

5.2

3.9

4.4

2.7

3.8

1.5

-61.4

7.9

4.0

6.1

9.4

3.9

14.0

-4.3

7.0

11.2

8.7

7.7

1.8

4.5

-4.7

6.9

3.4

2.5

0.1

3.3

4.1

4.0

4.0

6.6

6.0

3.3

3.9

2.8

2011

3.0

3.2

6.0

0.0

1.9

2.5

92.1

8.3

5.0

4.6

-1.8

3.9

9.3

5.3

5.3

8.6

7.0

9.5

2.2

4.8

10.7

7.2

3.8

3.0

8.9

4.1

4.6

1.1

4.4

9.0

4.8

5.4

5.2

3.3

2012

4.7

3.2

5.5

1.7

5.2

2.4

-12.3

8.7

4.5

5.7

0.8

2.3

7.3

4.3

5.6

10.6

1.3

-12.1

2.1

5.0

8.7

8.5

4.9

3.5

3.9

-36.1

5.6

0.8

4.5

6.6

9.3

5.6

6.8

2.8

2013

Table 2. Real GDP growth rates, 2007-17

2.4

3.6

6.6

5.8

5.7

3.3

-23.5

0.7

3.6

5.3

2.7

1.1

4.0

0.9

4.4

10.3

1.7

2.3

2.2

6.0

7.9

9.2

6.0

0.6

6.3

1.0

5.9

1.8

4.7

5.0

4.4

6.5

4.8

3.8

2014

4.5

3.7

3.1

5.2

2.9

3.2

-6.0

0.4

3.4

5.5

4.8

0.1

3.7

4.7

4.2

10.2

0.3

-10.2

4.2

6.7

8.8

7.7

1.2

1.1

4.1

4.1

5.7

3.6

-4.1

4.8

2.5

5.2

3.8

3.9

2015 (e)

1.8

3.8

3.5

5.2

4.0

4.0

-0.8

2.8

2.6

6.0

5.7

4.0

5.8

5.5

4.5

8.1

2.2

-8.0

4.3

7.4

8.6

7.0

4.2

4.1

2.6

5.2

5.3

4.0

3.3

5.0

3.2

5.5

3.3

3.4

2016 (p)African Economic Outlook

3.5

3.7

4.5

5.0

4.9

4.5

3.9

4.4

2.9

6.4

6.2

4.8

8.7

5.6

5.1

7.7

3.4

-3.4

4.5

7.1

8.3

8.0

4.7

4.1

4.9

6.0

5.1

4.0

4.4

5.9

3.5

5.7

3.5

3.0

2017 (p)

338

7.6

2.0

5.0

10.4

8.0

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

3.5

8.5

2.1

6.3

8.1

8.4

-3.7

6.1

Sudan

Swaziland

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

Africa
5.3

-17.7

7.8

10.4

4.5

2.4

5.6

2.4

3.8

...

3.2

...

5.2

-2.1

3.7

9.1

11.2

6.0

9.6

2.6

6.8

2008

3.5

5.3

9.2

8.1

3.1

3.4

5.4

1.3

4.5

...

-1.5

...

3.2

-1.1

2.4

4.0

6.3

7.0

-0.7

0.3

6.5

2009

5.8

11.4

10.3

7.7

3.0

4.0

6.4

1.9

6.5

...

3.0

...

5.3

5.9

4.2

4.5

7.3

10.6

8.4

6.0

7.1

2010

2.9

11.9

6.4

6.8

-1.9

4.8

7.9

-0.6

0.9

...

3.2

...

6.0

7.9

1.8

4.9

7.9

4.9

2.3

5.1

7.4

2011

6.4

10.6

6.8

2.6

3.9

4.8

5.1

1.9

1.4

...

2.2

...

15.2

6.0

4.4

4.6

8.8

4.3

11.8

5.1

7.1

2012

© AfDB, OECD, UNDP 2016

3.9

4.5

6.7

4.4

2.4

4.0

7.3

3.0

4.4

29.3

2.2

...

20.1

6.6

3.5

4.2

4.7

5.4

5.3

5.7

7.4

2013

Table 2. Real GDP growth rates, 2007-17 (cont.)

Note: * For Egypt and Ethiopia, fiscal year July (n-1)/June (n).
Sources: AfDB Statistics Department, various domestic authorities and AfDB (e) estimates and (p) projections.

...

5.8

South Sudan

5.4

6.4

NigeriaSouth Africa

3.1

Niger

...

5.4

Namibia

Somalia

7.3

2007

Mozambique

STATISTICAL ANNEX

3.7

3.8

5.0

4.7

2.3

5.9

7.0

2.5

3.6

15.9

1.5

...

4.6

3.7

4.3

4.5

7.0

6.2

7.0

6.4

7.2

2014

3.6

1.5

3.7

5.3

0.5

5.5

7.0

1.7

5.3

-5.3

1.3

...

-21.5

4.6

5.1

5.3

7.1

3.0

3.6

4.4

6.3

2015 (e)

3.7

1.6

3.6

5.1

2.0

5.9

7.2

0.8

6.2

0.7

0.7

...

0.2

3.1

6.0

5.0

6.8

3.8

5.0

4.2

6.5

2016 (p)African Economic Outlook

4.5

3.1

4.9

5.8

2.4

6.0

7.2

1.7

6.0

8.8

1.8

...

3.7

3.7

6.5

5.4

7.2

5.0

5.5

6.0

7.5

2017 (p)

339

86.1

79.1

59.0

76.9

106.5

Burkina Faso

BurundiCabo Verde

Cameroon

Central African Republic

80.7

71.7

65.5

82.7

16.8

78.3

70.2

32.4

84.8

64.3

89.4

91.5

82.1

92.2

73.0

44.7

78.5

78.7

Congo, Dem. Rep.

Côte d’Ivoire

Djibouti

Egypt*

Equatorial Guinea

Eritrea

Ethiopia*

Gabon

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

Malawi© AfDB, OECD, UNDP 2016

29.7

Congo

100.5

46.0

Botswana

Comoros

68.0

Benin

74.4

34.9

Chad

36.4

AngolaPrivate

12.5

10.2

52.1

23.4

35.0

14.0

11.9

11.5

18.0

10.2

16.4

9.2

19.3

6.9

12.0

22.6

8.7

11.5

16.4

14.4

7.7

8.1

11.8

26.9

15.1

12.2

16.4

15.9

30.2

19.4

PublicFinal consumption

Algeria

STATISTICAL ANNEX

10.1

11.6

23.6

15.1

19.6

15.6

3.3

12.6

22.2

13.2

20.0

10.7

2.0

21.2

8.1

14.1

10.8

9.3

42.1

10.6

20.9

8.1

18.2

26.9

16.6

4.5

22.3

19.6

5.3

16.9

4.0

3.9

7.9

7.6

14.4

5.7

4.7

5.7

5.0

11.3

6.7

27.3

6.0

26.7

5.7

30.0

6.0

6.4

21.4

8.0

9.6

2.1

2.5

6.6

16.5

6.3

8.3

5.4

23.7

28.7

% of GDP

Private Public

Gross capitalformation

20142016 (p)2017 (p)

34.0

32.8

33.5

29.9

40.0

16.4

20.6

25.7

39.5

29.6

56.7

11.6

18.9

95.6

14.4

32.1

42.3

33.8

69.9

17.0

31.5

12.3

21.7

52.3

10.4

21.9

62.2

36.1

40.7

30.5

39.3

37.1

61.9

49.0

101.2

33.9

32.0

44.8

48.9

49.1

32.4

29.1

24.5

67.1

23.0

64.3

39.4

41.8

79.4

50.5

44.1

37.1

31.2

71.7

37.6

30.9

55.2

45.1

34.7

32.0

9.2

-1.0

0.4

2.4

28.4

-1.8

8.4

3.9

-3.1

-0.6

7.1

5.9

5.3

12.6

20.4

3.4

7.6

7.3

2.7

5.2

-3.3

0.6

2.2

4.4

-7.5

-11.9

2.9

-5.5

3.6

-9.0

14.8

8.2

-1.4

77.8

9.2

0.7

10.5

12.1

9.0

3.9

2.5

31.4

7.0

24.8

11.9

10.5

22.6

10.6

-15.8

3.5

1.7

4.2

7.8

8.0

-5.9

10.2

4.6

8.1

-29.1

0.6

3.8

1.0

-18.3

-36.6

1.5

1.2

15.1

-3.8

2.0

-4.4

1.3

-2.0

-6.8

-4.5

0.3

0.8

6.6

12.0

9.9

5.5

9.1

10.9

7.5

6.9

5.8

3.7

3.8

1.6

23.6

-1.5

Real percentage growth
3.6

-4.2

-2.7

1.6

38.9

-2.7

7.5

9.8

-1.0

-4.3

4.1

1.4

23.0

29.4

5.0

4.6

7.2

9.0

5.3

-6.0

-6.0

-0.5

1.5

4.8

-4.6

-18.5

0.5

-4.2

1.3

-22.7

2.4

3.0

1.9

-25.5

-4.6

4.9

9.5

5.8

5.3

6.2

3.5

14.4

6.3

9.8

3.7

7.6

5.7

7.6

3.5

4.7

2.5

0.4

4.2

0.5

9.7

3.7

5.5

6.3

0.0

0.2

1.9

10.1

-19.3

34.0

4.5

8.1

9.1

-7.5

-5.4

11.0

-3.3

4.7

5.4

-6.8

8.6

10.7

9.5

1.3

-12.7

2.7

1.7

11.1

10.6

-1.3

-14.1

11.4

17.0

14.1

12.5

6.8

1.7

3.0

2.0

41.3

6.0

0.7

-10.9

0.4

18.0

1.0

6.4

1.9

0.0

5.3

2.6

2.0

9.5

9.2

10.3

3.7

2.6

23.3

5.3

7.0

1.2

5.0

-1.1

3.7

0.8

3.0

Real percentage growth

-4.5

3.8

-5.6

-0.1

-6.9

2.1

6.1

-1.7

4.5

7.9

-0.3

13.4

11.8

1.4

4.8

7.1

4.5

8.4

-6.2

4.7

1.7

0.8

5.8

-0.5

-0.3

3.8

9.9

10.7

1.0

2.1

5.3

5.8

3.4

-12.0

-0.7

11.3

2.3

1.4

19.1

1.1

3.6

11.6

-0.6

13.0

3.9

9.1

11.7

18.2

4.1

7.2

-0.7

2.1

4.7

2.2

5.9

4.8

3.3

6.7

5.8

1.9

7.5

13.4

-5.9

2.0

7.3

-13.5

8.1

8.7

1.8

22.1

2.5

4.7

5.5

1.3

8.6

7.1

15.2

11.9

-2.5

-7.4

3.8

29.1

10.1

-6.3

4.7

13.2

-7.2

5.7

9.3

6.6

-0.3

-0.2

8.6

10.3

1.5

0.9

14.5

3.8

1.1

5.8

5.3

3.2

5.3

0.0

2.8

1.8

-0.7

7.4

1.0

3.5

14.8

9.6

2.6

7.2

1.3

3.1

5.3

5.3

-4.0

-0.6

3.2

7.6

0.7

-9.4

-0.9

4.6

0.1

0.1

23.6

4.2

1.1

10.0

-1.7

2.8

5.0

6.9

8.1

26.0

-5.1

6.0

0.7

4.9

6.0

-0.9

7.0

4.0

-2.8

6.9

0.9

3.3

African Economic Outlook

Real percentage growth

Total
Gross
Total
Gross
Total
Gross
final
capitalfinal
capitalfinal
capitalcon- formation
con- formation
consump- formation
Exports Imports sumption total
Exports Imports sumption total
Exports Imports
Exports Imports
tion
total

External sector

2015 (e)Table 3. Demand composition and growth rate, 2014-17

340

73.9

60.3

73.4

64.5

65.5

70.9

75.0

92.2

77.7

54.6

100.5

Mauritius

MoroccoMozambique

Namibia

Niger

Nigeria

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

65.6

81.1

69.1

76.4

52.7

88.1

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

24.1

9.0

9.1

18.7

14.2

13.8

19.0

9.6

…

20.9

…

10.2

26.3

16.6

13.1

15.5

7.4

15.0

27.5

25.6

19.9

14.5

21.9

17.3

Public

10.5

31.7

21.3

14.4

13.8

26.2

4.0

11.8

…

13.3

…

7.9

30.0

18.1

15.5

13.0

10.3

26.7

29.8

31.9

28.3

18.2

37.1

14.4

2.7

3.1

4.8

8.8

9.4

4.8

5.2

3.6

…

7.1

…

5.4

6.6

6.8

15.7

13.0

5.5

11.1

4.4

14.3

3.9

4.9

9.3

11.9

% of GDP

Private Public

Gross capitalformation

2014© AfDB, OECD, UNDP 20162016 (p)2017 (p)

27.1

41.8

16.9

45.0

39.7

19.5

49.8

6.4

…

31.3

…

39.8

78.6

28.1

9.7

14.8

18.4

21.0

39.9

30.7

34.3

51.5

43.0

24.3

52.5

38.3

28.4

55.9

58.1

29.9

55.2

11.6

…

33.1

…

63.8

96.1

47.2

46.2

31.3

12.5

39.2

66.1

75.9

46.6

63.0

72.4

31.8

10.9

18.9

6.6

-0.5

7.0

8.8

2.9

3.9

…

0.4

…

-30.7

20.7

8.8

-0.2

7.7

-7.0

4.5

-1.8

5.3

5.2

6.8

1.8

6.6

2.4

6.9

3.2

1.0

5.6

10.5

10.7

13.5

…

3.1

…

6.7

52.8

7.1

7.4

7.6

5.8

14.2

2.4

13.6

7.0

6.4

7.4

3.2

5.1

-15.3

6.8

-1.5

-0.2

5.3

-0.7

0.6

…

1.8

…

-12.8

0.4

2.7

7.1

4.1

33.3

-15.4

8.4

-4.9

2.5

3.1

2.3

1.5

Real percentage growth

20.8

7.4

7.6

-2.7

4.4

13.3

3.8

6.9

…

0.5

…

-21.4

38.0

12.6

-1.2

7.9

-0.9

5.5

-3.6

3.6

5.9

7.7

3.6

4.5

0.2

-1.9

5.9

1.1

7.0

8.0

-1.1

6.0

…

-1.3

…

-1.6

7.1

4.0

4.3

6.9

-6.0

2.4

4.4

1.8

1.3

-2.0

3.9

8.6

8.3

8.2

4.2

0.5

5.7

10.7

7.3

11.0

…

3.7

…

17.2

28.3

2.5

4.5

7.0

-1.4

13.0

-8.6

-2.3

4.1

6.4

9.1

4.0

2.3

1.9

4.0

2.3

4.9

2.5

-0.2

1.5

…

1.1

…

-2.3

5.2

6.1

1.6

3.0

28.2

2.0

4.0

-3.0

1.8

7.1

2.1

-3.1

Real percentage growth

0.9

-3.0

5.8

-0.1

7.0

9.8

-2.5

10.6

…

-2.5

…

2.0

19.8

0.1

2.9

5.4

-2.9

6.4

-3.5

-8.3

2.6

0.7

6.4

7.6

1.3

1.8

6.2

1.8

5.1

8.1

0.0

4.7

…

1.5

…

7.6

0.8

2.3

4.2

6.7

9.2

4.6

-5.1

-3.1

4.0

0.2

3.2

2.8

6.1

6.0

4.5

1.6

4.3

9.3

8.8

10.9

…

4.0

…

11.8

16.7

4.1

3.7

10.5

10.4

-1.3

13.5

3.7

6.0

4.0

7.6

4.8

6.3

3.1

3.5

3.3

5.7

4.3

1.1

2.6

…

-0.9

…

0.1

9.8

8.4

0.2

2.7

-6.7

16.8

12.6

5.7

2.5

4.1

4.9

4.0

1.8

-0.9

4.4

1.7

3.6

9.7

-0.5

5.1

…

-0.2

…

8.7

11.0

-2.6

1.1

7.0

3.1

1.0

-3.1

-9.0

5.2

0.3

5.2

-1.2

African Economic Outlook

Real percentage growth

Total
Gross
Total
Gross
Total
Gross
final
capitalfinal
capitalfinal
capitalcon- formation
con- formation
consump- formation
Exports Imports sumption total
Exports Imports sumption total
Exports Imports
Exports Imports
tion
total

External sector

2015 (e)Table 3. Demand composition and growth rate, 2014-17 (cont.)

Note: * For Egypt and Ethiopia, fiscal year July (n-1)/June (n).
Sources: AfDB Statistics Department, various domestic authorities and AfDB (e) estimates and (p) projections.

77.1

Swaziland…

80.2

South Sudan

Sudan

60.6

South Africa

…

61.2

Mauritania

Somalia

63.8

PrivateFinal consumption

Mali

STATISTICAL ANNEX

341

2014

19.4
32.2
23.2
30.1
32.4
22.1
12.4
22.2
24.5
46.0

17.4

37.8

21.4

28.9

25.0

18.2

15.6

17.5

23.9

Benin

Botswana**

Burkina Faso

BurundiCabo Verde

Cameroon

Central African Rep.

Chad

Comoros

41.7

28.2

20.8

27.8

Mali

Mauritania© AfDB, OECD, UNDP 2016

22.3

Malawi*

84.4

40.9

12.4

Libya

Madagascar

30.2

60.4

27.3

Lesotho**Liberia*

25.2

31.5

24.4

28.2

14.7

62.9

25.7

23.1

20.0

Guinea-Bissau

23.5

22.0

Kenya*

21.8

23.5
32.9

26.1

21.9

Gabon

Gambia

19.4

29.3
17.7

14.7

15.1

Eritrea*

Ethiopia*

Ghana

33.9
40.4

21.7

33.6

Egypt*

Equatorial Guinea

Guinea

46.0

19.8

35.6

Côte d'Ivoire

Djibouti

13.3

41.2

13.7

Congo

Congo, Dem. Rep.

35.7

33.4

30.1

Algeria

Total
expenditure
Total revenue
and netand grants
lending

AngolaSTATISTICAL ANNEX

-3.7

-3.5

-5.9

-2.3

-43.5

-2.9

-2.5

-5.7

-2.1

-4.1

-6.4

-11.0

2.7

-2.6

-14.6

-6.8

-12.2

-10.5

-2.3

0.5

-4.8

-0.7

-4.7

3.2

-3.9

-7.4

-1.2

-1.8

5.6

-1.9

-5.6

-8.3

Overallbalance

28.8

20.8

21.2

12.3

41.8

27.0

60.6

22.5

22.9

18.1

23.1

23.1

24.8

16.1

18.6

29.7

21.3

37.0

20.8

14.8

41.6

23.4

16.5

11.0

17.6

26.5

28.3

22.1

38.4

17.7

25.9

26.9

31.7

24.5

26.9

16.9

100.7

37.0

60.0

31.3

25.1

25.6

28.7

32.7

27.5

18.1

29.4

36.6

32.8

43.8

24.3

15.3

51.2

24.6

22.9

14.2

22.9

31.0

34.0

24.6

34.8

22.0

30.0

42.9

Total
expenditure
Total revenue
and netand grants
lending2015 (e)

-2.9

-3.7

-5.7

-4.6

-58.9

-9.9

0.6

-8.8

-2.2

-7.5

-5.7

-9.6

-2.7

-2.0

-10.7

-6.9

-11.5

-6.7

-3.5

-0.5

-9.6

-1.2

-6.4

-3.2

-5.3

-4.5

-5.7

-2.5

3.6

-4.3

-4.1

-16.0

Overallbalance

27.1

20.8

22.3

12.8

41.4

27.2

60.5

22.0

21.2

18.4

23.4

23.5

24.2

14.5

18.7

30.1

22.9

36.4

20.6

14.7

42.3

22.6

15.7

12.3

17.1

25.9

31.7

21.8

36.0

18.4

25.0

25.7

-3.5
-2.4

24.3
29.5

-3.3

-3.1

-60.7

-5.6

-3.1

-8.2

-2.7

-5.0

-5.0

-9.3

-4.6

-1.3

-10.3

-7.3

-9.6

-5.8

-3.4

-0.7

-1.8

-2.2

-7.0

-2.8

-5.7

-4.0

-2.2

-3.1

-2.8

-3.6

-5.5

-15.4

Overallbalance

25.6

15.9

102.1

32.8

63.5

30.1

23.9

23.4

28.4

32.8

28.8

15.7

28.9

37.4

32.5

42.2

24.0

15.4

44.1

24.8

22.6

15.1

22.8

29.9

33.9

24.9

38.8

22.0

30.5

41.2

Total
expenditure
Total revenue
and netand grants
lending2016 (p)Table 4. Public finances, 2014-17 (percentage of GDP)

26.2

21.0

22.4

13.4

40.7

25.0

62.0

20.7

20.9

18.0

22.7

23.3

24.3

14.2

18.7

29.3

22.5

35.4

20.9

15.2

40.4

22.7

15.6

10.8

17.3

25.7

29.0

21.7

36.2

18.3

24.7

26.3

28.3

24.7

25.4

17.0

97.5

30.8

67.5

27.0

24.0

22.7

26.5

29.3

26.5

15.0

28.6

38.3

31.1

41.2

24.7

14.2

39.1

24.4

23.0

13.1

22.2

29.5

31.1

25.4

38.5

22.0

30.4

41.0

Total
expenditure
Total revenue
and netand grants
lending2017 (p)African Economic Outlook

-2.2

-3.6

-3.1

-3.6

-56.8

-5.7

-5.5

-6.3

-3.1

-4.6

-3.9

-6.1

-2.3

-0.8

-9.9

-9.0

-8.7

-5.8

-3.8

1.0

1.3

-1.7

-7.4

-2.3

-4.9

-3.8

-2.1

-3.7

-2.3

-3.7

-5.6

-14.7

Overallbalance

342

37.1
28.4
13.7
30.0
31.5
30.6

33.3

32.8

22.9

14.6

26.0

26.0

Mozambique

Namibia**

Niger

Nigeria

Rwanda*Sao Tome and Principe

23.9

…

…

25.3

30.1

28.4

19.1

-4.8

-1.9

-5.9

-4.1

-4.4

-3.4

-3.4

0.7

-1.0

-10.9

-3.6

…

-3.0

2.2

-5.2

-5.5

-4.0

1.0

-5.5

-4.3

-6.6

-4.9

-3.2

Overallbalance

22.8

26.7

18.5

14.1

24.5

24.9

14.6

34.1

10.0

…

28.4

...

19.3

34.4

26.0

24.3

25.4

13.2

25.0

36.0

32.9

27.4

21.4

29.4

28.3

26.7

18.6

28.7

30.2

18.5

35.5

11.5

…

32.3

…

23.0

32.5

30.6

30.4

30.4

15.6

32.2

39.8

38.4

31.7

25.7

Total
expenditure
Total revenue
and netand grants
lending2015 (e)

-6.6

-1.6

-8.2

-4.5

-4.2

-5.3

-3.9

-1.4

-1.5

-21.3

-3.9

...

-3.7

1.9

-4.6

-6.1

-5.0

-2.3

-7.1

-3.8

-5.4

-4.3

-4.4

Overallbalance

23.0

26.9

19.3

13.9

24.3

25.1

14.4

31.4

9.3

…

30.0

…

17.7

34.0

26.4

24.1

24.5

12.4

24.3

37.3

33.5

27.3

22.4

30.5

28.4

25.9

19.9

28.2

29.9

18.8

33.2

10.7

…

33.2

…

23.7

32.5

30.5

28.0

29.4

15.8

31.1

40.5

37.3

30.8

26.3

Total
expenditure
Total revenue
and netand grants
lending2016 (p)© AfDB, OECD, UNDP 20162017 (p)

27.1
23.7

-6.5

20.1

13.7

24.4

25.5

14.8

32.0

9.1

…

30.7

…

16.4

32.8

26.6

24.5

23.9

12.4

23.4

37.5

33.7

26.8

22.5

29.8

28.3

26.3

19.2

28.1

29.9

20.2

34.1

10.2

…

33.8

…

22.4

31.8

29.8

28.5

29.5

15.6

27.8

41.2

36.1

29.8

26.3

Total
expenditure
Total revenue
and netand grants
lending

-1.5

-6.6

-6.0

-3.9

-4.7

-4.4

-1.8

-1.4

-22.0

-3.3

…

-6.0

1.4

-4.1

-3.9

-4.9

-3.4

-6.7

-3.1

-3.7

-3.5

-3.9

Overallbalance

Table 4. Public finances, 2014-17 (percentage of GDP) (cont.)

Note: * Fiscal year July (n-1)/June (n) ** Fiscal year April (n-1)/March (n) [South African fiscal year is April (n)/ March (n+1)].
Sources: AfDB Statistics Department, various domestic authorities; IMF country reports and AfDB (e) estimates and (p) projections.

Africa

24.8

18.9

26.5

Zambia

29.6
17.1

25.2

13.0

Tunisia

Uganda*Zimbabwe

28.3

15.7

24.9

Tanzania*

Togo

26.3

27.0

…
11.4

Swaziland**

…

10.4

South Sudan*

29.7

Sudan

26.1

South Africa**

Somalia

17.3

14.2

Sierra Leone

32.7

25.5

34.9

Senegal

Seychelles

40.0

33.0

20.6

28.0

Mauritius

Total
expenditure
Total revenue
and netand grants
lending

2014

MoroccoSTATISTICAL ANNEX

African Economic Outlook

-5.9

-1.2

-6.2

-5.5

-3.7

-4.4

-5.4

-2.1

-1.0

-18.1

-3.1

…

-6.0

1.0

-3.2

-4.0

-5.6

-3.1

-4.4

-3.7

-2.4

-3.0

-3.8

Overallbalance343

© AfDB, OECD, UNDP 2016

0.9

Mali

6.0

23.8

Madagascar

Malawi

9.9

2.4

Liberia

5.3

Lesotho

Libya

1.9

6.9

9.7

Guinea-Bissau

17.2

17.0

Ghana

Guinea

Kenya

1.2
6.5

3.2

6.3

Gabon

Gambia

2.0

21.2

7.9

8.6

7.7

3.8

6.0

1.5

8.0

7.7

8.1

3.6
12.5

Ethiopia*

4.3

12.3

Equatorial Guinea

11.2

3.1

1.5

0.8

0.9

2.1

4.0

5.6

2.7

0.0

5.5

0.8

Eritrea

3.0

10.8

Djibouti

Egypt*

1.0

0.4

Congo, Dem. Rep.

Côte d’Ivoire

2.9

3.0

Comoros

1.7

Congo

11.6

1.9

Central African Republic-0.2

Cabo Verde

Cameroon

Chad

4.4

Burundi

3.1

4.4

-0.3

Botswana

Burkina Faso

0.4

-1.1

Benin

4.8
10.2

2.9

7.3

2.7

18.1

7.4

9.7

7.0

3.9

6.0

2.1

8.5

10.2

5.5

2.4

7.4

12.0

2.6

8.8

3.3

1.8

2.1

1.5

2.2

2.7

4.7

2.2

1.6

7.5

2.0

4.5

2.3

14.1

4.3

2016 (p)Inflation(%)
2015 (e)Algeria

2014

AngolaSTATISTICAL ANNEX

1.8

16.0

7.8

5.8

7.5

4.0

5.2

1.8

8.8

7.9

5.5

2.4

8.9

11.7

2.3

10.2

3.4

1.9

2.5

1.0

2.6

4.0

4.0

2.1

2.7

6.7

1.9

4.3

2.4

14.8

4.0

2017 (p)

494.0

364.4

2 206.9

1.3

1.0

9.7

86.1

494.0

6 995.9

2.0

36.0

494.0

18.6

15.4

494.0

6.9

177.7

494.0

919.8

494.0

370.5

494.0

494.0

494.0

83.1

1 555.1

494.0

8.4

494.0

96.5

79.4

2013

494.4

424.9

2 414.8

1.3

1.0

10.9

87.9

494.4

7014.1

2.6

41.7

494.4

19.7

15.4

494.4

7.1

177.7

494.4

925.2

494.4

370.8

494.4

494.4

494.4

83.1

1 546.7

494.4

9.0

494.4

98.3

80.6

2014

Exchange rate
(LCU / USD)

804.6
2 238.5591.4

6 662.0

81.0

0.7

9.3

2 694.7272.4

1 6974.0

45.1

22.6

2 077.0

369.7

82.7

1 320.1

1 765.4257.5

3 070.8

4 217.0

2 659.7

100.0

1 115.9275.4

4 091.6

154.6

906.5

2 477.2

67.9

2 754.9

5 712.9

13 457.2

Level

35.9

27.3

23.3

173.2

25.4

39.6

41.9

43.1

31.2

43.4

56.5

25.3

28.3

128.1

14.4

73.6

81.4

16.3

13.9

50.1

40.9

15.9

28.9

23.9

90.7

22.3

36.9

49.4

51.5

44.0

77.1

% of GDP

13.2

27.8

1.7

3.5

0.4

3.1

15.6

11.3

15.7

22.5

11.0

-5.2

24.2

12.9

-15.2

16.4

9.7

17.4

6.7

1.4

2.9

3.5

12.5

8.6

4.7

0.0

14.5

7.7

17.1

11.5

-1.6

Growth2014-15

Broad money (LCU billion)
2015

499.5

2 934.4

1.4

1.0

12.8

98.1

591.4

7 425.7

3.8

47.2

591.4

20.7

15.4

591.4

7.7

177.7

591.4

926.0

591.4

443.6

591.4

591.4

591.4

99.4

1 570.6

591.4

10.1

591.4

120.1

100.7

2015

Table 5. Monetary indicators, 2014-17

624.0

640.2

832.0

74 863.0…

904.2

7 762.4

332.1

233.5

…

143.3

2 083.6…

…

1457.213 282.0364.9

4 715.7

1 215.9

2 259.9

136.6

207.3

221.8

3 353.2

428.4

135.1

259.6

7 958.9731.6

23 901.2

144 677.5

Stock atyear-end

African Economic Outlook

2.5

3.8

2.9

38.3

…

5.8

4.6

11.5

1.0

…

4.6

5.0

…

…

1.9

2.5

4.4

5.0

1.2

2.8

6.0

0.5

4.8

4.7

4.6

2.1

0.9

13.4

2.2

8.1

29.1

Eq. monthsof imports

Reserves, excluding gold,(USD million)
2015

344

1.0
9.0

5.3

-0.9

Namibia

Niger

1.8

4.4
9.9
...

1.4

7.1

...

Seychelles

Sierra Leone

1.9

-0.2

7.2

Zimbabwe

Africa

7.3

-2.0

10.1

4.5

5.0

6.7

7.2

-1.3

10.8

5.2

4.0

2.1

5.9

6.0

13.1

14.7

6.8

...

10.0

2.6

-0.4

4.6

3.0

10.1

1.3

3.9

5.7

1.4

2.8

7.2

-0.7

8.9

5.3

3.5

2.2

6.0

6.7

11.2

25.0

7.0

...

10.1

2.7

1.2

4.7

3.0

9.4

0.9

5.5

5.2

1.6

2.5

6.1

2017 (p)

…

…

5.4

2 586.9

1.6

494.0

1 600.4

9.7

4.8

3.0

9.7

...

4 332.5

12.1

494.0

18 450.0

646.6

157.3

494.0

9.7

30.1

8.4

30.7

302.1

2013

…

…

6.2

2 599.8

1.7

494.4

1 654.0

10.9

5.7

3.0

10.9

...

4 524.2

12.7

494.4

18 466.4

681.9

158.6

494.4

10.9

31.4

8.4

30.6

303.3

2014

Exchange rate
(LCU / USD)

…

…

8.6

3 241.4

2.0

591.4

1 979.7

12.8

6.0

3.0

12.8

...

4 905.3

13.3

591.4

2 2090.6

729.0

192.4

591.4

12.8

40.1

9.8

35.1

318.6

2015

…

4.6

39.7

17 323.9

62.9

1 212.3

21 626.3

12.5

91.7

9.1

2 866.2…

5 446.7

11.6

3 752.3

2 877.3

1 416.7

20 612.6

1 113.9

81.8

239.8

1 149.2

418.4

530.4

Level

…

36.7

18.7

22.5

77.6

51.3

23.1

27.8

15.0

21.8

72.8

26.4

51.8

48.0

40.6

24.7

23.0

26.9

59.1

0.0

106.6

91.6

26.5

% of GDP© AfDB, OECD, UNDP 2016

…

5.1

13.4

13.3

6.9

10.5

16.2

7.4

18.0

16.6

6.3

…

10.5

5.7

7.7

15.1

15.8

9.6

0.3

9.8

17.1

5.8

5.2

4.0

Growth2014-15

Broad money (LCU billion)
2015

Table 5. Monetary indicators, 2014-17 (cont.)

Note: * For Egypt and Ethiopia, fiscal year July (n-1)/June (n).
Sources: AfDB Statistics Department, various domestic authorities; International Financial Statistics and AfDB (e) estimates and (p) projections.

4.3

7.8

UgandaZambia

0.2

5.5

Togo

Tunisia

5.6
5.6

5.7

6.1

Swaziland

41.1
16.9

Tanzania

1.7

36.9

South Sudan

4.6

5.3

Sudan

6.1

South Africa

Somalia

0.0

6.7

-0.5

Sao Tome and Principe

Senegal

2.5

7.8

2.4

Nigeria

Rwanda

3.5

2.0

0.4

2.3

MoroccoMozambique

1.5
1.3

3.5

3.2

2016 (p)Inflation(%)
2015 (e)Mauritania

2014

Mauritius

STATISTICAL ANNEX

…

328.0

2 967.6

2 829.8

7 205.5574.0

4 071.9

553.6

181.5

229.9

41 619.5

…

556.5

541.5

2 011.8

78.4

1 029.8

31 561.8

1 039.0

1 208.7

2 411.4

22 253.9

3 957.0…

Stock atyear-end

African Economic Outlook

…

0.6

3.5

4.6

4.3

3.1

4.1

3.1

0.2

0.8

5.0

…

2.6

5.0

3.9

7.3

5.4

6.2

4.1

2.1

0.0

5.8

5.7

…

Eq. monthsof imports

Reserves, excluding gold,(USD million)
2015

345

773
-32
-399
-501
-3 494

541

-242

-600

-610

-3 913

Botswana

Burkina Faso

BurundiCabo Verde

-189

4 488

ComorosCongo-12 121-6 118

-586

-441

-711

-2 220

MalawiMali

Mauritania

Mauritius© AfDB, OECD, UNDP 2016

-457

Madagascar

Libya

-607

-2 046

-946

-66

-339

-293

-792
-1 052-1 055

LesothoLiberia7-10 647-5 880Kenya-56-1 403-1 897-1 209Ghana

GuineaGuinea-Bissau

-208

-235
-1 275

3 103

6 313

Gabon

Gambia-374-11 106-235-10 243

Eritrea

Ethiopia*

8 038-34 950

9 286-34 063

Equatorial Guinea

Egypt*-645-674

Djibouti

3 908

3 671

559

1 741

-137

-3

-251

Côte d’Ivoire

116

393

Chad

Congo, Dem. Rep.

-325

Central African Republic

Cameroon

-426

-589

Benin

16 531-16 157

326

30 5832015 (e)Algeria

2014-2 030

-995

-309

-234

-429

-11 089

-980

-654

-10 390-30-1 283-2 277

-224

2 391

-12 633

-465

8 392

-36 556

-681

3 671

658

2 504

-150

237

-185

-3 772

-462

-391

-107

58

-475

19 601-20 5882016 (p)-1 961-1 033

-374

-219

-488

-9 051-836-667-11 824-31-1 321-2 331

-252

3 538

-14 690

-455

8 212

-39 188

-764

2 791

-857

3 084

-171

112

-176

-4 039

-455

-440

-111

141

-535

20 065-18 6772017 (p)-740-1 471

-670

-495

-21

-12 387

-495

-231

-6 097-13-1 889-4 208

-146

1 510

-5 876-93-1 549-2 716-407-766-3 291-359-42-1 240-105-4 857

-139

-275

-767

2 496

-690

-3 722-9 4652014-644-1 394

-380

-356

-226

-17 247-1 014-154-5 15816-1 730-2 254-169-841-9 214-143-1 097-11 467

-285

-791

-2 866-1 302-41-1 177-185-4 046

-154

-116

-515

2 165

-639

-7 824-26 957

2015 (e)-624-1 404

-451

-349

-167

-15 697

-917

-104

-4 501-27-2 265-2 415-146-1 284-6 184-207-364-3 878-278-1 043-3 959-1 157-40-1 072-89-4 430

-175

-173

-630

757

-695

-6 165-29 2882016 (p)Current account balance(USD million)-552-1 475

-600

-373

-203

-13 160

-819

-240

-5 009-30-2 215-2 210-112-614-7 680-249-282-5 547-283-1 484-5 987-998-48-1 068-76-4 811

-193

-215

-845

678

-730

-6 539-27 0772017 (p)Table 6. Balance of payments indicators, 2014-17
Trade balance(USD million)

AngolaSTATISTICAL ANNEX

-3.6
-5.9

-4.9

-22.2

-5.7
-30.0

-6.0

-2.3

-51.0

-36.9

-8.4

-7.9

1.5

-23.6

-8.2

-20.0

-6.1

-14.6

-3.4

-7.1

-3.7

-16.0

-2.5

-8.7

-14.5

-7.4

-9.9

-11.5

-14.0

-9.0

-4.5

-4.5

16.0

-7.1

-7.2

-15.6

2015 (e)

-8.2

-0.2

-30.1

-24.1

-10.6

-10.0

-1.3

-26.1

-9.5

-17.7

8.3

-10.9

-2.4

-10.0

-0.9

-25.6

-2.3

-9.2

-2.6

-6.1

-8.9

-6.1

-15.2

-8.0

-9.5

-6.1

15.7

-7.2

-2.5

-4.4

2014

-4.7

-20.3

-4.1

-6.1

-1.7

-44.5

-32.0

-6.5

-6.3

-2.4

-28.4

-7.7

-15.0

-9.6

-8.4

-4.1

-2.3

-1.1

-14.0

-3.0

-10.8

-12.4

-6.9

-8.6

-5.1

-14.6

-9.8

-6.0

-5.3

5.6

-7.1

-5.4

-17.1

2016 (p)Current account balance(as % of GDP)

African Economic Outlook

-4.0

-19.3

-5.2

-6.7

-2.0

-33.3

-29.5

-15.7

-6.9

-2.6

-25.6

-6.0

-10.2

-4.1

-9.3

-4.5

-1.8

-1.4

-12.8

-3.9

-13.9

-9.6

-7.9

-8.5

-4.0

-15.0

-10.4

-6.6

-6.9

5.2

-7.0

-5.4

-15.2

2017 (p)346

2015 (e)-57

-59 274-115 991-2 967-116 602-2 888345-2 032-2 409-724-1 210182-4 878-1 023

309

…

-184

-533

-4 158-53-1 311-3 878-1 021-1 576-4 628-15 053

2016 (p)-115 346-2 865606-2 236-2 947-759-1 847224-5 150-1 093

-759

…

-336

-569

-4 247-47-1 499

5 146

-743

-1 297-3 865-18 0942017 (p)2014-120 714-3 288604-2 625-4 302-591-4 947128-7 434572-19 041

…

-813

-297

-1 376

-81

-929

1 279

-1 724-1 355-7 055-6 226© AfDB, OECD, UNDP 2016

Note: * For Egypt and Ethiopia, fiscal year July (n-1)/June (n). (e) Estimates; (p) projections.
Sources: AfDB Statistics Department; IMF WEO October 2015.

Africa

-122

1 625

-3 437

ZambiaZimbabwe-1 968-2 360Uganda-693-3 228-902-6 670Togo-1 663-3 385123-5 923-940-1 450

…

-155

-456

-4 172Tunisia

Tanzania

213

1 044

-5 230South Sudan

Sudan

Swaziland-6 325South Africa

…

-340

Sierra Leone

Somalia-523-5 781Seychelles

Senegal-63-1 422

Sao Tome and Principe-1 57620 992

Nigeria

Rwanda-1 269-987-1 788-5 455-16 239-2 507-147 676-164 180-250-2 301-2 497-474-4 20654-6 989124-11 476

…

-385

-289

-843

-48

-978

-14 642-1 624-1 101-7 021-7702016 (p)-2 683-732-2 165-3 136-474-4 45333-6 684-322-13 361

…

-475

-238

-1 070-45-968-16 127-1 481-875-7 732-2 9922015 (e)Current account balance(USD million)-142 734-2 408279-2 510-2 453-488-3 87248-7 235392-10 330

…

-436

-323

-629

-50

-977

-10 666-1 357-1 019-6 514-1 1042017 (p)Table 6. Balance of payments indicators, 2014-17 (cont.)
Trade balance(USD million)-874-2 736

Namibia

Niger-5 051

Mozambique2014-20 611

MoroccoSTATISTICAL ANNEX

-4.8

-23.2

2.2

-9.6

-9.0

-13.2

-10.3

2.9

-9.0

4.0

-5.4

…

-16.4

-21.3

-9.0

-24.2

-11.8

0.2

-20.9

-10.4

-41.6

-5.7

2014

-7.3

-21.4

-3.0

-9.1

-7.6

-11.9

-9.4

0.9

-6.5

-2.5

-4.3

…

-11.3

-14.2

-8.1

-14.0

-12.3

-3.5

-21.2

-8.1

-44.0

-2.7

2015 (e)

-6.4

-19.8

-1.1

-9.1

-5.9

-11.0

-8.2

1.6

-6.4

0.9

-4.1

…

-8.4

-15.4

-6.0

-13.8

-11.9

-3.2

-21.9

-11.3

-46.1

-0.7

2016 (p)Current account balance(as % of GDP)

African Economic Outlook

-5.8

-18.7

1.3

-9.1

-5.8

-10.5

-7.0

1.5

-6.2

2.8

-4.0

…

-8.1

-15.9

-4.2

-13.5

-11.4

-2.0

-17.5

-11.1

-47.9

-0.9

2017 (p)347

Gold (incl. gold plated with platinum), in unwrought
forms (excl. powder) (65.2%)

Coffee, not roasted, not decaffeinated (46.1%)

Petroleum oils and oils obtained from bituminous
minerals, crude (50.1%)

Skipjack/stripe-bellied bonito (Euthynnus [Katsuwonus]
pelamis), frozen (23.0%)

Tropical wood, excluding Dark Red Meranti, Light Red
Meranti and Meranti Bakau, in the rough (44.0%)

Petroleum oils and oils obtained from bituminous
minerals, crude (95.2%)

Cloves (whole fruit, cloves and stems) (53.4%)

Petroleum oils and oils obtained from bituminous
minerals, crude (78.9%)

Cathodes and sections of cathodes, of refined copper,
unwrought (37,6%)

Cocoa beans, whole/broken, raw/roasted (33.9%)

Wood charcoal (incl. shell/nut charcoal) (16.2%)

Petroleum oils and oils obtained from bituminous
minerals, crude (28.4%)

Petroleum oils and oils obtained from bituminous
minerals, crude (68.2%)

Copper ores and concentrates (93.7%)

Sesame seeds, whether or not broken (24.7%)

Petroleum oils and oils obtained from bituminous
minerals, crude (81.3%)

Cashew nuts, in shell (36.6%)

Burkina Faso

BurundiCabo Verde

Cameroon

Central African Republic

Chad

Comoros

Congo

Congo, Dem. Rep.

Côte d’Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia© AfDB, OECD, UNDP 2016

5

Wood, in the rough, whether or not stripped(27.6%)

Manganese ores and concentrates, incl.
ferruginous manganese ores and concentrates
with a manganese content of 20% or more (8.5%)

Coffee, not roasted, not decaffeinated (24.2%)

Natural gas, liquefied (23.5%)

Coffee, not roasted, not decaffeinated (14.7%)

Cocoa paste, not defatted (7.6%)

Copper ores and concentrates (22.1%)

Cathodes and sections of cathodes, of refinedcopper, unwrought (9.9%)

Vanilla (14.5%)

Cotton, not carded/combed (20.6%)

Mackerel, prepared/preserved, whole/in pieces(excl. minced) (14.6%)

Cocoa beans, whole/broken, raw/roasted (11.4%)

Tea, black (fermented) and partly fermented tea,
whether or not flavoured (17.3%)

Cotton, not carded/combed (19.8%)

Diamonds, non-industrial, other than unworked/
simply sawn/cleaved/bruted (8.0%)

Ground-nut oil, crude (5.0%)

Cut flowers and flower buds of a kind suitable forbouquets/ornamental purposes, fresh (9.8%)

Sesame seeds, whether or not broken (6.5%)

Cocoa butter, fat and oil (5.6%)

Petroleum oils and oils obtained from bituminous
minerals, crude (16.8%)

Vessels and other floating structures for breaking
up (12.6%)

Wood sawn/chipped length wise, sliced/peeled,whether or not planed, sanded or end-jointed (16.8%)

Fish whole/in pieces (13.8%)

Wood sawn/chipped length wise, sliced/peeled,whether or not planed, sanded or end-jointed (6.7%)

Niobium/tantalum/vanadium ores andconcentrates (6.9%)

Nickel mattes (6.4%)

5

1

6

1

2

80

16

10

3

1

3

1

3

7

5

5

2

2

Diamonds, non-industrial, unworked/simply sawn/
cleaved/bruted (72.9%)

Cotton, not carded/combed (9.6%)

Petroleum oils, other than crude (40.1%)

Benin

Botswana

Light oils and preparations (13.6%)

1

4

Petroleum oils and oils obtained from bituminous
minerals, crude (96.0%)

Light oils and preparations (12.1%)

Product III

AngolaNatural gas, in gaseous state (15.3%)

Product II

African Economic Outlook

No. of products
accounting for morethan 75% of exports

Petroleum oils and oils obtained from bituminous
minerals, crude (40.0%)

Product I

Table 7. Exports, 2014
Three main exports, with their share in total exports*

Algeria

STATISTICAL ANNEX

349

Petroleum oils and oils obtained from bituminous
minerals, crude (40.4%)

Cashew nuts, in shell (75.0%)

Tea, black (fermented) and partly fermented tea, whether
or not flavoured (15.9%)

Diamonds, non-industrial, unworked/simply sawn/
cleaved/bruted (40.2%)

Iron ores and concentrates (excl. roasted iron pyrites),
non-agglomerate (40.7%)

Petroleum oils and oils obtained from bituminous
minerals, crude (78.5%)

Nickel, not alloyed, unwrought (24.0%)

Tobacco, partly/wholly stemmed/stripped (59.7%)

Cotton, not carded/combed (43.0%)

Iron ores and concentrates (excl. roasted iron pyrites),
non-agglomerate (42.4%)

Tunas, skipjack and bonito (13.8%)

Ignition wiring sets and other wiring sets of a kind usedin vehicles, aircraft or ships (8.8%)

Aluminium, not alloyed, unwrought (20.7%)

Diamonds, non-industrial, unworked/simply sawn/
cleaved/bruted (28.0%)

Light oils and preparations (32.3%)

Petroleum oils and oils obtained from bituminous
minerals, crude (81.4%)

Niobium/tantalum/vanadium ores and concentrates(27.0%)

Cocoa beans, whole/broken, raw/roasted (61.2%)

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

MalawiMali

Mauritania

Mauritius

MoroccoMozambique

Namibia

Niger

Nigeria

Rwanda

Sao Tome and Principe© AfDB, OECD, UNDP 2016

Petroleum oils and oils obtained from bituminous
minerals, crude (32.5%)

Product I

Table 7. Exports, 2014 (cont.)

Vessels and other floating structures for breaking
up (13.3%)

Tin ores and concentrates (19.8%)

Natural gas, liquefied (12.3%)

Petroleum oils and oils obtained from bituminous
minerals (excl. crude) (19.7%)

Zinc, not alloyed, unwrought (13.7%)

Precious stones (excl. diamonds, rubies,
sapphires and emeralds) and semi-precious
stones, unworked/simply sawn/roughly shaped
but not strung/mounted/set (16.8%)

Phosphoric acid and polyphosphoric acids,
whether or not chemically defined (6.0%)

Cane/beet sugar and chemically pure sucrose(9.3%)

Gold (incl. gold plated with platinum), in
unwrought forms (excl. powder) (11.4%)

Gold (incl. gold plated with platinum), in
unwrought forms (excl. powder) (34.2%)

Tea, black (fermented) and partly fermented tea,
whether or not flavoured (8.0%)

Vanilla (9.1%)

Natural gas, in gaseous state (13.4%)

Chemicals products and preparations of thechemical/ allied industries (5.6%)

Coffee, not roasted, not decaffeinated (15.5%)

Sesame seeds, whether or not broken (16.2%)

Fish fillets, frozen (6.8%)

Light oils and preparations (8.8%)

Men's/boys' shirts (excl. knitted or crocheted),of cotton (6.8%)

Octopus, other than live/fresh/chilled (7.3%)

Sesame seeds, whether or not broken (6.2%)

Cane sugar, raw, in solid form (6.2%)

Cloves (whole fruit, cloves and stems) (4.7%)

Technically specified natural rubber (TSNR)(12.9%)

Women's/girls' trousers, bib and brace overalls,
breeches and shorts (excl. Swimwear) (6.0%)

Men's/boys' trousers, bib and brace overalls,
breeches and shorts (excl. swimwear) (11.1%)
Vessels and other floating structures (13.9%)

Petroleum oils and oils obtained from bituminous
minerals, (excl. crude) (8.1%)

Gold (incl. gold plated with platinum), in
unwrought forms (excl. powder) (10.8%)

Gold (incl. gold plated with platinum), in
unwrought forms (excl. powder) (19.7%)

Product III

Cut flowers and flower buds (11.5%)

Wood, in the rough (excl. treated, conferous,
tropical, beech and oak) (19.8%)

Aluminium ores and concentrates (35.6%)

Cocoa beans, whole/broken, raw/roasted (19.8%)

Product IIThree main exports, with their share in total exports*

Ghana

STATISTICAL ANNEX

African Economic Outlook

3

5

1

4

13

9

66

40

6

2

4

25

1

4

9

52

1

2

5

No. of products
accounting for morethan 75% of exports

350

Yellowfin tunas (8.7%)

Iron ores and concentrates (excl. roasted iron pyrites),
non-agglomerate (76.8%)

Sesame seeds, whether or not broken (29.0%)

Gold (incl. gold plated with platinum), in unwrought
forms (excl. powder) (8.9%)

Petroleum oils and oils obtained from bituminous
minerals, crude (99.8%)

Petroleum oils and oils obtained from bituminous
minerals, crude (66.1%)

Mixtures of odoriferous substances and mixtures (incl.
alcoholic solutions) (24.3%)

Gold (incl. gold plated with platinum), in unwrought
forms (excl. powder) (15.5%)

Gold (incl. gold plated with platinum), in unwrought
forms (excl. powder) (24.6%)

Petroleum oils and oils obtained from bituminous
minerals, crude (9.0%)

Coffee, not roasted, not decaffeinated (30.1%)

Cathodes and sections of cathodes, of refined copper,
unwrought (59.7%)

Tobacco, partly/wholly stemmed/stripped (39.9%)

Petroleum oils and oils obtained from bituminous
minerals, crude (38.2%) [12.3%]

SomaliaSouth Africa

South Sudan

Sudan

Swaziland

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

AfricaNatural gas, liquefied (3.7%) [12.0%]

Ferro-chromium, containing by weight more than
4% of carbon, in granular/powder form (10.9%)

Tobacco, partly/wholly stemmed/stripped (5.8%)

Natural gas, in gaseous state (3.1%) [8.4%]

Cane sugar, raw, in solid form, not Containing
added flavouring/colouring matter (6.9%)

Portland cement (excl. white cement, whether or
not artificially coloured) (5.5%)

Men's/boys' trousers, bib and brace overalls,
breeches and shorts (excl. Swimwear) (5.2%)

Ignition wiring sets and other wiring sets of a kindused in vehicles, aircraft or ships (7.8%)
Sesame seeds, whether or not broken (6.3%)

Electrical energy (6.2%)

Petroleum oils and oils obtained from bituminous
minerals (excl. crude) (18.2%)

Notes: *Products are reported when accounting for more than 4% of total exports.
** Figures in [ ] represent the share of Africa in the world export for each product.
Sources: AfDB Statistics Department; COMTRADE WITS Online Database - UN Statistics Division.

© AfDB, OECD, UNDP 2016

Other chem. prods. and preps. of the chem./alliedindustries (incl. those consisting of mixts. of nat.
prods.) (10.8%)

Platinum, unwrought/in powder form (5.5%)

Live bovine animals other than pure-bred breeding
animals (22.8%)

Bigeye tunas (7.9%)

Phosphoric acid and polyphosphoric acids,
whether or not chemically defined (7.3%)

Product III

Tobacco, partly/wholly stemmed/stripped (10.3%) Sesame seeds, whether or not broken (6.5%)

Cane sugar, raw, in solid form, not containing
added flavouring/colouring matter (15.1%)

Sesame seeds, whether or not broken (7.7%)

Iron ores and concentrates (excl. roasted ironpyrites), non-agglom. (6.1%)

Live goats (24.2%)

Diamonds, non-industrial, unwkd./simply sawn/
cleaved/bruted (8.1%)

Tunas, skipjack and bonito (56.3%)

Seychelles

Sierra Leone

Product II
Fish frozen (excl. fillets/oth. fish meat /livers androes) (10.3%)

Product I

Table 7. Exports, 2014 (cont.)Three main exports, with their share in total exports*

Gold (incl. gold plated with platinum), in unwrought
forms (excl. powder) (16.8%)

SenegalSTATISTICAL ANNEX

African Economic Outlook

36

10

7

16

88

11

22

21

3

1

75

3

1

4

27

No. of products
accounting for morethan 75% of exports351

Egypt© AfDB, OECD, UNDP 2016

Malawi

3.0

32.7

1.5

Madagascar

8.2

Guinea-Bissau

Libya

5.1
3.1

GuineaLiberia

4.1

Ghana

9.7

11.4

GambiaLesotho

1.8

15.4

4.3

Ethiopia

Gabon

Kenya

21.3

Eritrea

1.7

3.6
23.5

Djibouti

Equatorial Guinea

7.7

Côte d’Ivoire

1.4

1.3
5.2

Congo

Comoros

Congo, Dem. Rep.

2.3

1.5
4.3

Chad

5.3

4.3

12.6

1.4

8.2

6.3

16.6

2.0

4.5

5.7

7.8

1.8

4.2

1.1

1.8

14.3

4.7

6.4

5.1

1.1

4.8

4.9
6.3

8.4

Central African Republic

9.8

Cabo Verde

2.1

2.9

1.8

7.4

1.1

3.6

2011

3.4

22.1

1.3

9.0

7.4

17.6

1.5

4.2

5.5

3.7

1.6

5.8

1.2

1.7

13.5

7.9

8.2

3.8

1.3

2.7

1.4

5.0

4.3

9.9

2.7

1.8

2.0

8.0

1.1

3.6

2012

Diversification index

3.2

18.8

1.5

5.7

7.8

17.2

2.2

3.8

6.2

3.4

1.8

7.1

2.5

2.1

14.3

11.2

8.3

4.2

1.4

3.3

1.1

5.4

4.7

5.1

3.7

1.9

1.7

7.8

1.1

3.8

2013

2.7

12.9

1.6

4.6

5.4

19.3

1.7

3.3

5.4

4.6

1.5

7.0

1.1

1.9

11.7

14.9

7.2

4.3

1.6

3.0

1.1

3.7

3.6

8.5

4.0

2.1

1.8

4.8

1.1

4.5

2014

Table 8. Diversification and competitiveness, 2010-14

Cameroon

4.0

4.7

Botswana
2.2

6.1

Benin

Burundi

1.1

Burkina Faso

4.0

Angola2010

Algeria

STATISTICAL ANNEX

0.1

29.4

-14.7

0.6

6.3

10.6

11.3

3.1

43.3

16.7

4.0

15.8

924.4

8.8

-1.7

-14.6

5.0

7.8

-1.5

10.7

-0.2

-11.6

5.9

13.5

-1.7

60.1

29.4

15.8

5.0

0.0

2010-14Annual export
growth
(%)

-2.9

5.1

0.8

-8.8

3.6

-1.0

5.9

2.1

-2.3

3.4

-0.1

3.1

-4.3

1.9

0.9

-6.1

-1.7

-5.0

0.6

10.4

0.5

-2.7

-0.2

-1.1

-2.0

-1.1

-1.7

5.0

0.6

1.8

SectoraleffectAfrican Economic Outlook

-1.0

20.3

-19.6

5.4

-0.4

7.7

1.4

-3.0

41.6

9.3

0.2

8.7

924.8

2.9

-6.6

-12.5

2.7

8.8

-6.0

-3.8

-4.6

-12.8

2.2

10.5

-3.7

57.3

37.3

6.8

0.4

-5.8

GlobalcompetitivenesseffectCompetitiveness indicator
2010-14 (%)

352

5.3

8.5
4.7

Sierra Leone

21.1
10.8
39.0
9.4
2.1
11.2
5.2

Togo

Tunisia

UgandaZambiaZimbabwe

Africa

5.7

9.6

2.1

6.7

41.2

10.6

16.3

14.1

1.2

...

37.7

2.7

5.1

8.5

2.5

9.1

38.9

6.9

11.0

11.3

2.2

...

34.9

4.7

4.0

3.3

13.4

4.1

6.0

1.4

6.1

8.9

8.6

44.3

19.6

4.5

2.7

2012

5.7

6.8

2.4

10.6

37.9

6.6

18.9

9.3

2.4

1.0

33.3

4.6

1.9

2.9

17.8

2.0

4.1

1.4

1.8

15.1

9.3

46.4

19.0

4.0

3.7

2013

© AfDB, OECD, UNDP 2016

Sources: AfDB Statistics Department; COMTRADE Database (Harmonized System 2002) - UN Statistics Division.

15.8

Sudan

Swaziland...
1.2South Sudan

Tanzania

42.5

South Africa

Somalia9.5

3.8

Seychelles

5.1
12.7

5.4
10.5

Senegal

5.2

1.4

1.9

12.0

6.0

39.8

22.4

3.6

3.4

2011

Diversification index

6.5

5.5

2.7

9.1

44.4

9.2

18.5

10.0

2.2

1.0

40.1

4.8

1.7

3.0

18.9

2.5

6.3

1.5

5.6

8.9

10.4

47.3

22.0

4.7

3.3

2014

2.9

15.8

0.0

4.7

-0.6

19.9

17.1

4.3

-16.9

...

1.9

-1.0

127.1

9.8

0.0

-2.4

26.2

3.8

44.2

8.6

19.3

9.4

6.4

6.6

32.3

2010-14Annual export
growth(%)

Table 8. Diversification and competitiveness, 2010-14 (cont.)

Sao Tome and Principe

1.4
5.3

Rwanda8.4

Niger

Nigeria

3.9

48.0

Morocco14.6

24.3

Mauritius

Namibia

3.6

Mauritania

Mozambique

3.7

2010

Mali

STATISTICAL ANNEX

0.7

-3.3

-4.1

-0.7

-0.9

-0.2

5.5

-2.5

0.7

...

0.8

-7.3

0.4

3.3

-0.5

-1.7

1.2

1.4

-0.5

-1.4

-0.5

-1.1

-0.3

-1.8

-2.4

SectoraleffectAfrican Economic Outlook

-1.7

15.1

0.2

1.4

-3.7

16.1

7.5

2.8

-21.6

...

-2.9

2.3

122.7

2.6

-3.5

-4.7

21.0

-1.6

40.8

7.9

15.9

6.5

2.7

4.4

30.8

GlobalcompetitivenesseffectCompetitiveness indicator
2010-14 (%)

353

($/mt)

Groundnut oil(cents/kg)(cents/kg)(cents/kg)

Sugar (US)Tea (Avg. 3 auctions)Tea (Mombasa)
3 588.74

221.76242.05

46.86

28.21

69.69

284.08345.59948.5497.64

223.12526.89209.07140.602 131.12

871.71

1 133.08

157.396 955.88

232.09308.16257.71

127.10844.21

2 572.79

2008

4 241.18

251.96272.40

54.88

40.00

52.44

214.64121.66682.8361.86

165.51421.47171.93100.95

1 183.67

972.971 230.25

138.205 149.74

164.42317.11288.8871.84

847.14

1 664.83

2009

4 304.78

256.00288.49

79.25

46.93

44.18

386.62123.02900.8379.04

185.91428.56214.84145.86

1 403.96

1 224.66

1 687.42

228.347 534.78

173.59432.01

313.3098.97

868.322 173.12

2010

4 485.05

271.90292.05

83.92

57.32

45.46

482.32184.901 125.42

104.01291.68484.81240.08167.75

1 988.17

1 569.21

1 537.42

332.858 828.19

240.76597.61298.01121.45967.992 401.39

2011

4 302.35

288.05289.78

63.56

47.49

42.01

337.73185.89999.33105.01

298.42451.39206.46128.502 435.67

1 669.52

1 558.33

196.71

7 962.35

226.68411.10239.1996.36

983.982 023.28

2012

Table 9. International prices of exports, 2008-15© AfDB, OECD, UNDP 20162013

4 588.82

239.88286.20

45.05

39.00

43.38

279.45148.11856.90104.08259.39463.53213.98135.36

1 773.04

1 411.46

1 747.17

199.27

7 332.10

207.59307.60243.8884.56

924.07

1 846.67

Notes: $ = US dollar; bbl = barrel; cents = US cents; dmt = dry metric ton; kg = kilogram; m 3 = cubic meter; mt = metric ton; toz = troy oz.
Sources: World Bank, Global Commodity Price Prospects, March 2016.

($/mt)(cents/kg)

Tobacco, US import(cents/kg)($/mt)

Phosphate (rock)

Sugar (World)($/mt)

Palm oil

Sugar (EU)($/bbl)Oil (crude)(cents/kg)($/mt)

Rubber (US)($/m3)

Logs (Cameroon)(cents/kg)

Maize

Lead

(cents/dmt)($/toz)Gold

Iron ore($/mt)(cents/kg)

Fish meal

Cotton(cents/kg)

Coffee (Robusta)($/mt)(cents/kg)

Coffee (Arabica)

Copper(cents/kg)($/mt)

Coal (Australia)

Cocoa($/mt)

Banana (US)Unit($/mt)

Aluminum

STATISTICAL ANNEX

2014

4 990.77

204.51272.05

53.11

37.50

43.40

195.66110.22821.4496.24

192.88465.17209.5596.94

1 313.00

1 265.58

1 708.85

183.206 863.40

221.64442.38306.2270.13

927.791 867.42

2015

African Economic Outlook

4 908.30

274.16270.73

54.63

29.63

36.26

155.94117.46622.6750.75

169.75388.58178.7855.83

1 336.92

1 160.66

1 557.75

155.745 510.46

194.11352.61

313.5057.51

957.06

1 664.68

355

129

101

Botswana

Burkina Faso

42

© AfDB, OECD, UNDP 2016

49

1 066

Madagascar

Malawi

218

3 310

Libya

92

LesothoLiberia

17

141

115

2 897

Ghana

Guinea

Kenya

2 527

1

GambiaGuinea-Bissau

20

573

Gabon

91

97

808

1 909

450

30

178

33

101

499

288

91

221

Eritrea

Ethiopia

2 734

6 386

6 712

1 636

Equatorial Guinea

37

339

2 939

928

8

313

62

538

159

1

35

218

177

-3 227

2 300

2010

Egypt

75

377

Djibouti

864

Côte d’Ivoire

1 274

14

Congo, Dem. Rep.

Congo

Comoros

375

Central African
Republic

Chad

174

740

Cabo Verde

Cameroon

0

134

Benin

Burundi

2 746

2 205

Algeria

2009

AngolaSTATISTICAL ANNEX

129

810

0

785

61

335

25

956

3 237

66

696

627

39

1 975

-483

79

302

1 687

2 180

23

282

37

652

155

3

144

1 371

161

-3 024

2 580

2011

129

812

1 425

985

57

259

7

606

3 293

93

832

279

41

2 015

6 031

110

330

3 312

2 152

10

343

70

526

70

1

329

487

230

-6 898

3 052

2012

FDI inflows

120

567

702

1 061

50

505

20

135

3 226

38

968

953

44

1 914

4 192

286

407

2 098

2 914

9

538

2

326

70

7

490

398

360

-7 120

2 661

2013

130

351

50

302

46

989

21

566

3 357

28

973

1 200

47

1 933

4 783

153

462

2 063

5 502

14

761

3

501

78

32

342

393

377

-3 881

1 488

2014

6

-1

0

1 165

364

2

42

0

2 722

369

-21

2

0
46

0

0

...

81

...

...

0

1 176

...

25

7

4

0

0

0

503

0

0

-4

-1

-18

1 340

220

2010

0

7

...

87

...

...

0

571

...

-9

35

-5

0

0

0

-69

1

0

8

6

31

7

214

2009

50

0

131

372

-41

9

1

1

25

...

88

...

...

0

626

...

15

91

53

0

0

0

187

1

0

102

10

60

2 093

534

2011

50

0

2 509

1 354

-38

16

0

2

1

...

85

...

...

0

211

...

14

421

-31

0

0

0

-284

-3

0

73

-8

19

2 741

193

2012

FDI outflows

-46

0

180

698

-34

6

0

0

9

...

85

...

...

0

301

...

-6

401

0

0

0

0

-379

-5

0

58

-85

59

6 044

117

2013

Table 10. Foreign direct investment, 2009-14 (USD million)

-50

0

940

0

-31

0

0

1

12

...

86

...

...

0

253

...

9

344

7

0

0

0

-159

-5

0

59

-43

31

2 131

-4

2014
5

21

47

11

...

7

3

15

44

25

45

15

2

14

22

15

30

9

59

61

10

9

22

10

10

0

14

9

18

-40

21

30

5

...

7

5

44

10

30

25

17

6

15

21

11

69

7

33

70

7

15

1

5

10

1

20

8

18

-39

4

2013

17

20

0

...

5

8

45

65

40

14

19

8

15

23

12

24

7

29

108

9

14

2

8

10

5

14

8

21

-20

2

2014

FDI inflows/GFCF (%)
2012

African Economic Outlook

135

154

…

170

173

98

171

139

73

165

87

112

168

119

46

161

141

106

128

175

158

177

116

153

172

151

107

142

100

62

2012

InwardFDI*
potential
index

356

112

108

...

44 07247 705

387

1 110

894

1 148

711

1 229

107

1 734

...

4 243

102

951

207

338

32

119

8 915

1 066

816

3 559

2 568

433

589

556

2011

56 435

400

2 433

1 205

1 603

122

1 800

32

2 311

0

4 559

107

225

260

276

23

255

7 127

841

1 133

5 629

2 728

589

1 389

398

2012

FDI inflows

53 969

400

1 810

1 096

1 117

184

2 131

84

1 688

-78

8 300

107

144

170

311

11

258

5 608

719

801

6 175

3 298

259

1 126

308

2013

53 912

545

2 484

1 147

1 060

292

2 142

13

1 277

-700

5 712

106

440

229

343

20

268

4 694

769

414

4 902

3 582

418

492

199

2014

6 225

0

270

29

77

37

0

7

...

...

1 151

...

0

5

77

0

0

1 542

59

-3

3

470

37

4

-1

2009

9 264

43

1 095

37

74

37

0

-8

...

...

-76

...

0

6

2

0

0

923

-60

4

2

589

129

4

7

2010

6 500

43

-2

-12

21

1 060

0

-2

...

...

-257

...

0

8

47

0

0

824

9

5

3

179

158

4

4

2011

12 386

49

-702

46

13

420

0

39

...

...

2 988

...

0

9

56

0

0

1 543

2

-11

3

406

180

4

16

2012

FDI outflows© AfDB, OECD, UNDP 201615 951

27

66

-47

22

-21

0

4

...

...

6 649

...

-4

8

33

0

14

1 238

101

-13

0

332

135

4

3

2013

13 073

72

-213

0

39

464

0

-1

...

...

6 938

...

-2

8

37

0

0

1 614

21

-34

0

444

91

4

8

2014

Table 10. Foreign direct investment, 2009-14 (USD million) (cont.)

Note: * The Potential Index is based on 16 economic and policy variables. See note on methodology for further details.
Sources: UNCTAD, FDI Online Database (January 2016) and World Investment Report 2015.

54 379105

Africa634

426

ZambiaZimbabwe

166

544

842

1 513

1 688

Uganda

86

1 813

120

2 064

...

3 636

Tunisia49

Tanzania

Togo

66

953

Swaziland

1 726

South Sudan

Sudan

7 502

South Africa

Somalia

238

211

110

51

266

Sierra Leone

16

Sao Tome and Principe

251

6 099

171

119

RwandaSeychelles

8 650

Nigeria

793

940

320

791

1 018

1 574

430

131

406

2010

Senegal506

Namibia

Niger

1 952

Morocco898

248

Mauritius

Mozambique

-3

748

2009

Mauritania

Mali

STATISTICAL ANNEX

12

19

32

23

16

16

19

10

22

...

6

41

22

61

8

18

15

10

34

40

82

9

22

93

23

2012

11

23

23

20

12

23

20

23

14

...

12

38

14

32

8

10

14

7

29

26

81

11

10

74

15

2013

11

...

34

17

11

29

19

3

11

...

9

...

57

43

8

14

14

5

20

13

59

10

15

31

6

2014

FDI inflows/GFCF (%)

African Economic Outlook

…

114

109

132

86

143

91

166

111

…

34

…

164

96

121

163

144

53

155

125

103

69

110

147

157

2012

InwardFDI*
potential
index

357

648

242

561

Cameroon

Central African
Republic

Chad

9

41

373

Mali

Mauritania

1 015

472

370

1 089

© AfDB, OECD, UNDP 2016

771

984

Malawi444

Libya

Madagascar

256

1 413

513

125

1 625

122

147

Guinea-Bissau

218

1 690

Liberia214

GuineaLesotho

1 582

Ghana

120

1 776

127

Gambia

104

3 453

161

85

589

131

845

3 481

1 315

67

491

261

541

328

629

1 044

Kenya

77

3 819

Ethiopia

Gabon

144

Eritrea

31

1 000

Egypt

Equatorial Guinea

167

Djibouti

2 357

2 402

Côte d’Ivoire

283

Congo, Dem. Rep.

Congo

50

196

Comoros

561

Cabo Verde

1 082

BurundiBurkina Faso

279

153

690

682

Benin

Botswana

198

237

318

239

Angola2010

Algeria2009

STATISTICAL ANNEX

381

1 267

797

445

641

761

257

2 481

120

204

1 800

135

73

3 493

133

24

416

141

1 435

5 525

261

52

458

269

611

252

570

982

118

673

193

191

2011

408

994

1 169

375

87

566

274

2 653

79

340

1 799

139

73

3 221

134

14

1 807

149

2 635

2 847

139

69

472

227

596

246

521

1 142

73

509

241

145

2012

ODA net total, all donors

293

1 398

1 130

499

129

535

320

3 312

104

473

1 330

115

90

3 885

81

4

5 508

148

1 272

2 584

151

79

458

202

748

245

556

1 044

107

660

283

201

2013

257

1 234

930

583

210

744

104

2 665

109

561

1 126

100

111

3 585

83

1

3 532

163

922

2 398

106

74

388

610

852

230

502

1 120

100

600

231

158

2014

122

575

439

242

32

342

71

1 225

52

171

821

22

53

1 818

43

25

586

98

1 721

1 100

226

28

356

99

268

162

264

453

223

326

141

200

2009

102

685

512

217

17

699

94

1 157

54

92

898

33

84

1 857

36

79

363

98

437

2 384

1 219

22

290

113

267

248

282

441

103

340

152

143

2010

129

777

448

226

464

519

143

1 564

52

82

898

36

62

1 930

34

22

232

88

722

4 240

176

28

246

108

326

220

269

451

88

424

118

118

2011

166

732

640

185

104

334

152

1 669

37

147

844

30

61

1 798

15

13

304

86

2 102

1 655

49

32

246

73

257

218

225

522

62

260

133

99

2012

125

723

646

226

72

318

186

2 019

42

249

734

34

75

1 914

14

6

306

76

723

1 190

78

39

219

112

362

217

249

526

90

254

144

98

2013

ODA net total, DAC countries

49

31

158

281

447

180

216

562

62

253

92

102

2014

91

678

509

191

102

417

49

1 602

27

183

606

22

99

1 915

15

5

2

83

245

1 166

Table 11. Aid flows,* 2009-14 (USD million)

231

408

332

201

8

171

47

547

95

47

755

105

25

1 983

86

6

296

58

678

1 255

57

21

205

143

380

34

297

628

56

353

98

107

2009

250

404

504

246

-10

712

159

464

71

128

789

85

20

1 562

105

6

148

25

406

1 090

95

28

202

148

274

81

347

598

51

349

85

57

2010

239

487

350

215

59

242

110

912

67

121

902

97

9

1 548

95

3

74

46

711

1 285

84

23

213

160

285

32

301

529

22

249

74

72

2011

191

261

529

189

-20

232

118

979

41

196

949

107

13

1 406

64

1

897

54

525

1 191

89

25

226

154

339

27

296

617

10

244

108

49

2012

ODA net total, multilateral

140

548

416

393

45

322

41

1 055

81

358

514

73

12

1 661

69

-5

366

64

673

1 231

56

41

229

327

399

49

285

553

37

338

139

47

2014

African Economic Outlook

160

663

483

274

52

216

128

1 284

60

201

595

77

14

1 961

67

-1

36

64

545

1 392

72

38

239

88

384

25

307

514

17

398

139

57

2013

358

506

...

Swaziland

713

736

47 41147 061

4 335

1 688

51 427

5 025

723

1 034

1 573

922

542

2 440

124

1 741

437

1 395

1 099

423

22

1 055

72

1 263

1 765

645

283

2 065

1 435

187

2011

50 950

5 183

999

955

1 642

1 017

241

2 823

88

1 366

1 187

1 066

990

440

36

1 073

49

879

1 912

890

255

2 074

1 465

178

2012

ODA net total, all donors

56 460

4 476

824

1 142

1 701

710

224

3 431

116

1 503

1 400

1 295

1 054

447

25

992

52

1 086

2 515

797

261

2 315

2 004

148

2013

47 775

...

758

995

1 633

921

208

2 648

86

872

1 964

1 070

1 109

911

10

1 107

39

1 034

2 476

918

227

2 103

2 247

49

2014

27 621

3 052

621

702

1 017

350

362

1 409

19

1 912

...

862

500

196

12

515

20

520

688

255

249

1 289

705

64

2009

28 485

3 157

505

597

1 001

355

253

1 654

31

1 509

...

818

317

191

29

535

33

547

846

375

213

1 349

596

58

2010

32 4093 460© AfDB, OECD, UNDP 2016

547

701

990

492

327

1 660

66

1 315

390

1 026

758

173

7

590

38

590

852

298

236

1 692

849

113

2011

30 089

3 754

671

651

923

375

114

1 764

55

862

1 039

683

659

188

6

706

28

424

895

413

191

1 466

884

86

2012

29 870

3 384

542

729

964

202

83

1 952

45

1 073

1 137

1 015

717

208

7

635

22

567

1 138

336

200

1 642

1 144

65

2013

ODA net total, DAC countries

24 186

...

538

775

1 030

220

80

1 455

51

533

1 629

735

764

521

3

800

18

474

1 062

315

180

1 425

1 061

75

2014

2 083

115

564

768

159

136

1 526

38

379

...

211

152

252

11

497

11

411

967

212

78

723

323

93

2009

19 421

Table 11. Aid flows,* 2009-14 (USD million) (cont.)

Note: ODA : official development assistance. DAC : Development Assistance Committee of OECD.
* Net disbursements.
Sources: OECD Development Assistance Committee 2016.

AFRICA

Africa unspecified

5 195

1 267

ZambiaZimbabwe

917

1 785

Uganda

550

499

503

Togo

404

91

2 957

2 933

56

...

2 028

Tunisia

Tanzania

2 351

South Sudan

Sudan

1 027

662

1 075

SomaliaSouth Africa

56

458

23

448

937

Sierra Leone

1 016

49

Seychelles

Senegal31

934

Sao Tome and Principe

2 058

1 657

Nigeria

Rwanda

1 031

739

256

326

1 941

469

2 012

Mozambique

990

Niger

1 047

Morocco125

2010

Namibia

155

Mauritius

2009

STATISTICAL ANNEX

18 239

1 148

209

321

686

192

151

1 298

60

487

...

207

181

266

10

388

16

482

1 210

361

44

590

382

69

2010

18 387

1 467

176

327

581

413

214

773

54

402

46

368

230

245

10

456

34

664

911

342

46

371

562

75

2011

19 727

1 364

328

304

718

574

123

1 044

30

416

147

382

237

249

18

370

20

453

1 014

472

65

608

594

93

2012

1 018

283

381

735

464

135

1 468

69

390

261

279

211

235

11

348

29

516

1 375

453

61

658

739

86

2013

19 270

...

220

220

601

453

130

1 183

35

325

327

333

245

383

4

304

20

555

1 413

600

46

669

662

-16

2014

African Economic Outlook

20 754ODA net total, multilateral359

4 013

2 519

Botswana

Burkina Faso

12 703Côte d’Ivoire

365

5 574

4 615

1 802

Libya

Madagascar

Malawi© AfDB, OECD, UNDP 2016920

Liberia

13 368271

LesothoKenya

Guinea-Bissau

1 634

Guinea437

Gambia15 821

3 865

Gabon

Ghana

12 492894

1 022

46 067

Ethiopia

EritreaEquatorial Guinea

Egypt

854

6 686

Congo, Dem. Rep.

Djibouti

4 577

153

3 981

Congo

Comoros

Chad

488

4 894

Cameroon

Central African Republic

1 840

Cabo Verde

508

1 784

Benin

Burundi32 993

Angola

56.5

65.3

...

28.7

72.9

38.5

37.5

45.6

23.6

57.8

11.4

36.1

65.8

...

27.2

44.8

7.4

35.9

4.6

43.0

50.5

10.5

27.6

45.4

45.5

78.1

73.3

72.3

4.0

0.1

43.5

34.4

57.4

71.3

27.1

61.5

62.5

54.4

74.5

42.2

88.6

63.9

34.2

99.0

72.7

55.2

74.5

64.1

95.4

57.0

49.5

89.5

67.2

54.6

54.5

21.9

22.5

27.7

96.0

63.7

2014

3 735

(as % of total)

Bilateral

2014

Multilateral

Of which:

Debt outstanding, at year end(million USD)

Total

Algeria

STATISTICAL ANNEX

0.0

0.3

42.6

0.0

0.0

0.0

0.0

0.0

1.9

0.0

0.0

0.0

0.0

1.0

0.1

0.0

18.1

0.0

0.0

0.0

0.0

0.0

5.2

0.0

0.0

0.0

4.2

0.0

0.0

36.2

Private

29.8

43.2

13.6

17.8

42.2

21.9

26.2

23.5

35.6

53.0

21.3

23.2

23.2

6.6

15.5

53.7

37.7

18.6

32.8

22.4

28.6

28.3

15.3

105.8

17.5

20.2

25.3

18.6

22.2

1.7

2014

34.2

49.8

16.5

24.0

52.1

24.5

26.2

29.5

64.4

50.7

34.1

24.5

23.9

6.4

15.0

65.8

42.8

26.6

50.7

28.5

25.7

27.0

20.7

110.1

18.2

23.2

27.9

19.5

36.1

1.9

2015(e)

36.4

49.8

18.9

28.1

61.1

25.0

24.9

34.6

60.4

44.4

39.6

24.2

20.3

6.3

16.0

75.8

41.6

27.5

52.2

29.3

24.4

25.9

23.4

107.8

15.0

24.6

28.4

19.4

31.4

1.9

2016(p)Total debt outstanding(as % of GDP)

Table 12. External debt indicators

37.8

49.6

17.0

30.9

65.2

28.0

24.6

38.7

52.6

39.9

35.6

24.3

21.1

6.2

16.5

78.5

39.5

27.6

49.9

30.0

24.0

24.6

25.5

105.7

12.5

27.0

29.6

19.6

30.5

1.8

2017(p)

4.0

22.1

0.0

7.7

4.3

14.7

0.8

3.5

5.8

41.2

5.5

14.1

6.8

2.3

23.2

6.7

8.0

1.6

3.6

7.2

10.1

7.9

4.3

10.0

10.4

3.7

6.2

2.8

6.1

2.6

2014

5.8

23.5

0.0

8.7

5.1

7.3

0.7

7.2

13.2

42.3

8.1

19.0

6.1

1.8

30.9

18.8

10.2

2.2

4.2

2.9

8.1

8.9

5.8

9.0

12.6

4.5

8.1

3.3

3.2

2.2

2015(e)

5.2

22.2

0.0

5.1

5.1

9.1

1.1

6.8

12.7

41.7

9.4

21.7

4.0

2.3

28.7

17.3

12.8

2.2

4.3

3.9

16.6

9.1

6.6

9.1

13.2

4.8

7.7

2.7

7.8

2.8

2016(p)African Economic Outlook

4.8

20.7

0.0

5.1

5.5

10.5

1.5

6.6

15.3

39.0

10.7

22.8

4.0

2.0

29.8

14.5

13.7

3.2

4.4

4.4

15.4

6.0

7.6

9.2

12.0

5.4

7.3

2.8

8.5

2.8

2017(p)Debt service(as % of exports of goods and services)

360

...

507

556 897

Africa

37.6

14.5

16.4

71.1

33.4

29.4

47.2

42.9

16.0

...

2.5

...

45.6

...

48.5

17.2

54.5

25.1

42.8

...

40.7

31.1

8.5

50.6

69.6

55.1

33.2

65.3

28.9

58.2

70.6

37.0

57.1

84.0

...

51.9

...

54.4

49.1

45.6

82.8

45.5

12.3

57.2

20.0

59.3

55.6

15.9

49.4

30.4

10.1

52.3

18.3

0.0

8.4

0.0

15.8

0.0

0.0

...

45.6

...

0.0

46.5

5.9

0.0

0.0

62.6

0.0

80.0

0.0

13.3

75.6

0.0

0.0

Private

22.3

92.1

22.7

29.0

57.5

25.7

29.2

11.5

56.8

...

41.5

...

24.8

119.7

75.3

69.0

22.6

1.7

51.5

42.4

75.7

30.4

105.3

93.0

27.9

2014

26.3

121.2

31.9

41.3

69.0

31.5

35.2

15.2

47.7

...

48.0

...

33.6

106.4

80.5

92.6

27.9

2.1

70.8

56.5

83.1

30.2

93.8

66.9

35.3

2015(e)

27.7

135.4

40.0

45.3

70.7

32.2

35.7

17.0

46.2

...

56.6

...

33.4

100.3

79.4

93.2

30.3

2.4

73.0

66.5

116.7

30.9

94.8

64.4

36.6

2016(p)Total debt outstanding(as % of GDP)

27.9

147.6

48.1

47.8

73.2

33.2

36.4

18.5

44.4

© AfDB, OECD, UNDP 2016

...

66.2

...

28.9

99.1

76.9

91.6

35.0

2.1

75.4

76.9

158.1

31.2

97.1

60.4

38.0

2017(p)

Table 12. External debt indicators (cont.)

Note: Estimates (e) and projections (p).
Sources: AfDB Statistics Department; IMF, World Economic Outlook Database, October 2015; World Bank, GDF Online Database.

6 170

13 080

7 964

UgandaZimbabwe

27 352Tunisia

Zambia1 153

14 044Togo

Tanzania

Swaziland

47 116South Sudan

Sudan

145 082

South Africa

...

1 230

Sierra Leone

Somalia

1 670

11 535Seychelles

Senegal

233

1 786

Rwanda

Sao Tome and Principe

9 906

Nigeria

12 826

Mozambique

4 248

33 472

Morocco

5 512

13 301

Mauritius

Niger

4 553

Namibia

3 285

2014

Mauritania(as % of total)

Bilateral

2014

Multilateral

Of which:

Debt outstanding, at year end(million USD)

Total

Mali

STATISTICAL ANNEX

10.7

21.7

2.9

7.2

9.2

4.8

3.7

8.1

2.4

...

42.3

...

2.3

2.8

10.7

13.6

6.0

0.4

6.0

42.2

15.1

7.7

4.7

9.9

6.6

2014

12.1

26.0

4.2

10.2

7.1

4.2

5.1

7.6

2.1

...

46.3

...

3.5

4.0

9.1

13.9

7.3

0.5

9.0

50.4

25.2

7.5

4.5

11.0

9.9

2015(e)

11.8

27.0

6.5

12.6

9.3

4.3

5.7

8.8

2.2

...

45.8

...

2.2

4.7

11.0

13.1

7.7

0.5

21.3

55.0

27.4

8.0

4.3

11.6

7.6

2016(p)African Economic Outlook

12.3

27.0

7.3

11.6

8.7

3.6

6.7

9.0

2.7

...

48.7

...

3.2

4.7

12.7

12.9

12.3

0.5

29.3

56.2

30.1

9.6

5.0

12.5

8.4

2017(p)Debt service(as % of exports of goods and services)361

1 84417 21517 600Madagascar

MalawiMali© AfDB, OECD, UNDP 2016

6 278

24 235

Libya

2 135

4 503

LesothoLiberia

46 05036.4

12 609GuineaGuinea-Bissau

Kenya

53.2

27 410

36.9

16.4

35.1

79.0

49.7

27.1

26.0

47.8

59.0

Ghana

88.5

1 725

1 991

19.4

Gabon

29.2

5 228

99 391

Eritrea

Ethiopia

Gambia37.8

39.9

91 508845

Egypt

Equatorial Guinea

78.4

50.8

888

22 702

Côte d'Ivoire

Djibouti

39.2

66.1

77 267

Congo

Congo, Dem. Rep.

4 620

21.8

14 037

Comoros

27.6

39.2

4 900

788

54.5

23 344

Cameroon

Central African Rep.

Chad

64.0

11.7

29.5

521

Cabo Verde18 106

11 179Burundi2 262

Burkina Faso

44.0

10 880Benin

Botswana

52.2

40.2

25 022

Angola72.5

Urban
population(% of total)
2015

39 667

Total
population(thousands)
2015

Algeria

STATISTICAL ANNEX

101.9

99.7

99.4

101.1

101.6

98.0

99.9

98.6

100.6

99.0

98.0

102.3

99.6

100.4

105.1

102.1

100.9

103.5

99.5

100.1

101.8

100.3

97.2

100.0

97.4

97.7

98.5

99.9

99.5

98.5

101.3

Sex ratio(males per
100 females)
2015

3.4

3.0

2.9

1.7

4.3

0.8

2.7

2.2

2.7

2.6

3.3

2.3

2.7

2.1

3.1

1.8

1.3

2.1

3.3

3.2

2.5

3.3

1.9

2.6

0.5

3.6

3.1

1.9

3.1

3.4

1.6

2008

3.0

3.1

2.8

0.3

2.4

1.2

2.6

2.4

2.7

2.3

3.3

2.2

2.5

2.3

2.9

2.2

1.3

2.5

3.2

2.6

2.4

3.3

2.0

2.5

1.3

3.3

2.9

1.9

2.7

3.3

1.9

2015

Population growth rate
(%)

74.5

43.4

35.9

11.4

52.8

69.2

35.5

60.3

61.0

42.8

47.9

36.1

41.4

34.1

68.2

20.3

54.2

66.6

74.5

33.2

55.1

85.0

91.5

57.1

20.7

54.1

60.9

34.8

64.2

96.0

21.9

6.1

5.0

4.4

2.4

4.6

3.1

4.3

4.8

4.9

4.1

5.7

3.8

4.3

4.2

4.7

3.3

3.1

4.9

5.9

4.8

4.4

6.1

4.2

4.6

2.3

5.9

5.4

2.8

4.7

6.0

2.8

InfantTotal
mortality rate fertility rate
(per 1 000) (per woman)
2015
2015

Table 13. Demographic indicators

114.7

64.0

49.6

13.4

69.9

90.2

49.4

92.5

93.7

61.6

68.9

50.8

59.2

46.5

94.1

24.0

65.3

92.6

98.3

45.0

73.5

138.7

130.1

87.9

24.5

81.7

88.6

43.6

99.5

156.9

25.5

Mortality
under age 5(per 1 000)
2015

47.5

45.2

41.7

29.8

42.3

36.1

41.9

40.8

42.5

38.8

46.2

37.1

41.4

42.8

39.3

33.2

32.7

42.5

46.0

42.6

40.3

47.7

39.1

42.5

29.7

44.8

45.6

32.0

42.2

47.7

28.5

0-14

50.0

51.4

55.5

65.6

54.7

59.8

55.3

56.0

54.4

57.8

51.5

57.8

55.1

54.6

57.9

61.6

63.1

54.5

51.0

53.7

56.9

49.8

57.1

54.3

65.8

52.7

52.0

64.4

55.0

50.0

65.5

2015

15-64

Distribution by age(%)

African Economic Outlook

2.5

3.4

2.8

4.5

3.0

4.1

2.8

3.2

3.1

3.4

2.3

5.1

3.5

2.6

2.9

5.2

4.2

3.0

3.0

3.7

2.8

2.5

3.9

3.2

4.6

2.5

2.4

3.6

2.9

2.3

5.9

65+

362

190

69.3

39.2

15 603
39.7

31.2

39.2

16.6

66.7

21.3

100.1

97.1

99.7

99.9

97.7

97.7

98.8

97.8

100.8

100.3

96.8

99.1

98.0

102.6

96.5

99.1

91.9

103.8

101.6

94.8

95.5

97.7

97.6

101.3

Sex ratio(males per
100 females)
2015

2.6

1.5

3.0

3.4

1.1

2.8

3.2

1.7

2.5

4.5

1.3

2.5

2.4

0.9

2.8

2.2

2.8

2.7

3.8

1.6

2.8

1.1

0.4

2.6

2008

2.6

2.3

3.1

3.3

1.1

2.7

3.2

1.4

2.2

3.6

1.0

2.6

2.2

0.6

3.1

2.1

2.4

2.7

4.1

2.3

2.8

1.3

0.4

2.5

2015

Population growth rate
(%)

52.2

46.6

43.3

37.7

12.1

52.3

35.2

44.5

47.6

60.3

33.6

85.0

87.1

11.7

41.7

34.6

31.1

69.4

57.1

32.8

56.7

23.7

11.8

65.1

4.6

3.9

5.3

5.7

2.1

4.5

5.1

3.2

4.3

4.9

2.3

6.4

4.5

2.3

5.0

4.5

3.8

5.6

7.6

3.5

5.3

2.5

1.5

4.5

InfantTotal
mortality rate fertility rate
(per 1 000) (per woman)
2015
2015

Table 13. Demographic indicators (cont.)

75.5

70.7

64.0

54.6

14.0

78.4

48.7

60.7

70.1

92.6

40.5

136.8

120.4

13.6

47.2

47.3

41.7

108.8

95.5

45.4

78.5

27.6

13.5

84.7

Mortality
under age 5(per 1 000)
2015

© AfDB, OECD, UNDP 2016

Note: *Including Agalega, Rodrigues and Saint Brandon.
Sources: United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects, The 2015 Revision.
AfDB Statistics Department, various domestic authorities and AfDB estimates.

1 184 501

Zimbabwe

Africa39 03216 212

UgandaZambia7 305

53 470

Tanzania

11 254

30.9

1 287

Togo

33.3

40 235

Sudan

Swaziland

Tunisia18.5

12 340South Sudan

40.8
63.6

10 78754 490Somalia

39.1

52.4

43.3

6 453

96

15 129

30.8

48.1

18.1

45.4

31.2

59.5

39.1

60.0

Urban
population(% of total)
2015

South Africa

Sierra Leone

Seychelles

Senegal

Sao Tome and Principe

11 610

Rwanda2 459

Namibia

182 20227 978

Mozambique

Nigeria

34 378Morocco19 899

1 273

Mauritius*

Niger

4 068

Total
population(thousands)
2015

Mauritania

STATISTICAL ANNEX

41.0

41.6

45.9

48.1

23.4

42.2

45.2

37.4

40.5

42.1

29.2

46.7

42.4

23.4

43.8

42.6

41.1

44.0

50.5

36.7

45.3

27.2

19.3

40.0

0-14

55.5

55.4

51.2

49.4

69.1

55.0

51.6

59.1

56.2

54.4

65.7

50.5

55.0

69.7

53.3

54.3

56.2

53.3

47.0

59.8

51.3

66.6

71.1

56.8

2015

15-64

Distribution by age(%)

African Economic Outlook

3.5

3.0

2.9

2.5

7.6

2.8

3.2

3.6

3.3

3.5

5.0

2.8

2.7

6.9

2.9

3.1

2.8

2.7

2.6

3.5

3.3

6.2

9.6

3.2

65+

363

64.9

37.9

2008

Mauritania© AfDB, OECD, UNDP 2016

2010

2009

Malawi

Mali

2010

...

Libya

Madagascar

2010

2007

LesothoLiberia

2010

2005

Guinea-Bissau

Kenya

2012

2012

2010

Ghana

44.6
73.9

2005

Gabon

GambiaGuinea30.4

2010

Ethiopia

59.4

50.6

56.6

81.5

...

67.7

61.2

49.1

75.6

64.7

...

79.9

32.3

...

56.8

1993

2012

2015

Congo, Dem. Rep.

Côte d’Ivoire

48.7
74.8

2006

2011

Equatorial Guinea

2004

Comoros

Congo

52.5

Eritrea

2011

Chad

69.4

...

2008

Central African Republic

55.0

44.3

2010

2007

Cameroon

Djibouti

2007

Cabo Verde

52.8
68.9

Egypt

2009

2006

Burkina Faso

Burundi

24.3

39.7

2011

2009

Benin

Botswana

...
58.3

...

2008

Rural

AngolaSurvey year

20.8

18.9

17.3

51.1

...

55.1

39.6

33.7

51.0

35.4

10.6

32.7

29.8

25.7

62.0

31.5

15.3

...

35.9

61.6

...

34.5

20.9

49.6

12.2

13.2

34.0

25.2

11.0

31.4

18.7

...

Urban

42.0

43.6

50.7

75.3

...

63.8

57.1

45.9

69.3

55.2

24.2

48.4

32.7

29.6

69.0

76.8

25.2

...

46.3

63.6

46.5

44.8

46.7

62.0

39.9

26.6

66.9

46.7

19.3

36.2

36.6

...

National

2008

2009

2010

2010

...

2007

2010

2005

2010

2012

2005

2003

2005

2010

...

...

...

2012

2008

2012

2011

2004

2011

2008

2007

2007

2006

2009

2009

2011

2008

...

Survey year

10.9

49.3

70.9

81.8

...

68.6

59.7

33.6

67.1

35.3

25.2

45.3

8.0

33.5

...

...

...

18.3

29.0

77.2

28.7

13.5

38.4

66.3

29.3

17.6

77.7

55.3

18.2

53.1

30.1

...

Below
USD 1.90

32.5

77.7

87.6

92.9

...

89.6

77.3

58.9

83.6

68.7

49.0

68.0

24.4

71.3

...

...

...

37.0

55.1

90.7

52.9

32.3

64.8

82.3

54.3

39.3

92.2

80.5

35.7

75.6

54.5

...

Below
USD 3.10

International poverty line
Population below the poverty line (%)

Table 14. Poverty and income distribution indicators
National poverty line*
Population below the poverty line (%)

Algeria

STATISTICAL ANNEX

2008

2009

2010

2010

...

2007

2010

2005

2010

2012

2005

2003

2005

2010

...

...

2008

2012

2008

2012

2011

2004

2011

2008

2007

2007

2006

2009

2009

2011

2008

1995

Survey year

37.5

33.0

46.1

40.6

...

36.5

54.2

48.5

50.7

33.7

42.8

47.3

42.2

33.2

...

...

30.8

45.1

43.2

42.1

40.2

55.9

43.3

56.2

42.8

47.2

33.4

39.8

60.5

43.4

42.7

35.3

Index

Gini coefficient**

2.5

3.3

2.2

2.6

...

2.4

0.9

1.7

1.6

3.0

1.9

1.8

2.3

3.2

...

...

4.0

1.3

1.8

2.1

2.2

1.5

1.8

1.2

2.5

2.0

4.0

2.7

1.1

2.5

2.1

2.9

Lowest 10%

African Economic Outlook

27.9

25.7

37.5

33.2

...

28.3

40.9

38.8

42.0

26.4

32.7

36.9

33.2

27.4

...

...

26.6

34.4

32.6

32.0

29.9

48.1

32.4

46.2

33.0

37.1

28.0

32.1

49.6

34.5

32.3

26.9

Highest 10%

Shareof consumption (%)

364

2011

2009

2010

2009

2010

2006

2011

Nigeria

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

73.4
...
22.4
77.9

2009

2011

2011

2010

2012

2010

2011

Swaziland

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

55.4

46.5

27.5

9.6

...

34.6

15.5

31.1

26.5

24.4

39.2

...

31.2

39.0

33.1

63.8

22.1

34.1

18.6

14.6

49.6

4.8

...

Urban

72.3

60.5

19.5

15.5

58.7

28.2

63.0

46.5

50.6

53.8

...

52.9

37.8

46.7

61.7

44.9

46.0

48.9

28.7

54.7

8.9

...

National© AfDB, OECD, UNDP 2016

...

2010

2012

2010

2011

2011

2009

2009

...

2011

...

2011

2006

2011

2010

2010

2009

2011

2009

2008

2007

2012

Survey year

Notes: * The national poverty line is defined as two-thirds of the average consumption.
** The Gini coefficient is based on income distribution.
Sources: Domestic authorities and World Bank, Online Database, Country DHS.

84.3

33.3

73.1

57.6

2009

2009

South Sudan

77.0

...

66.1

37.2

57.1

59.4

48.7

37.4

56.9

Sudan

2010

South Africa

...

52.8

2009

Namibia

Niger

Somalia

55.2

2008

Mozambique

14.4

2007

Morocco

...

Rural

...

Survey year

...

64.4

33.2

2.0

54.2

46.6

42.0

14.9

...

16.6

...

52.3

0.4

38.0

33.9

60.3

53.5

50.3

22.6

68.7

3.1

0.5

Below
USD 1.90

...

78.9

63.0

8.4

74.5

76.1

63.1

38.9

...

34.7

...

80.0

1.0

66.3

69.2

80.7

76.5

81.8

45.7

87.5

15.5

3.0

Below
USD 3.10

International poverty line
Population below the poverty line (%)

...

2010

2012

2010

2011

2011

2009

2009

...

2011

...

2011

2006

2011

2010

2010

2009

2011

2009

2008

2007

2012

Survey year

...

55.6

42.4

35.8

46.0

37.8

51.5

35.4

...

63.4

...

34.0

42.8

40.3

30.8

51.3

43.0

31.5

61.0

45.6

40.7

35.8

Index

Gini coefficient**

Table 14. Poverty and income distribution indicators (cont.)
National poverty line*
Population below the poverty line (%)

Mauritius

STATISTICAL ANNEX

...

1.5

2.4

2.6

1.9

3.1

1.5

2.6

...

0.9

...

3.3

2.4

2.3

3.5

2.1

2.0

3.8

1.3

1.9

2.6

3.0

Lowest 10%

African Economic Outlook

...

45.2

33.9

27.0

34.5

31.0

40.0

26.7

...

51.3

...

26.9

33.8

31.1

24.2

44.3

32.7

26.4

51.8

36.8

33.1

29.0

Highest 10%

Shareof consumption (%)

365

0.72

0.98

16.76

0.69

1.28

Libya

Madagascar

Malawi© AfDB, OECD, UNDP 2016

2.43

0.06

LesothoLiberia

0.31

1.23

Guinea-Bissau

Kenya

1.67

0.22

3.18

Gambia

Ghana

1.83

Gabon

Guinea2.93

1.09

Ethiopia

0.38

1.06

11.30

0.23

1.96

0.40

0.29

0.00

1.08

0.85

0.98

1.94

1.56

7.57

0.72

15.13

Egypt

2.47

1.17

Equatorial Guinea

1.77

Djibouti

Eritrea

1.38

Côte d'Ivoire

0.00

0.36

0.36

0.01

Congo

Congo, Dem. Rep.

3.12

4.11

Comoros

0.18

0.30

0.02

4.61

11.62

0.21

Chad

...

0.99

Central African Rep.

14.84

Cabo Verde

Cameroon

0.82

0.34

Burkina Faso

Burundi

8.30

1.85

1.27

7.15

Benin

Botswana

1.27

0.53

Angola

7.66

11.45

77.83

15.98

24.67

30.06

19.96

19.91

33.76

52.33

80.77

1.50

1.62

23.45

40.54

8.71

41.61

11.53

34.26

9.82

8.59

8.28

23.75

31.47

3.24

13.05

60.14

23.56

28.01

33.47

41.21

161.12

73.35

85.02

73.84

63.48

72.10

114.82

119.63

171.38

31.59

6.39

66.39

114.31

32.39

106.2553.49

108.15

50.90

39.75

24.54

75.69

121.79

30.46

71.74

167.30

99.65

63.48

92.95

2014

2007

7.76

8.74

78.53

2007

2014

Mobile line
per 100 inhabitants

Telecommunications

Main telephone line
per 100 inhabitants

Algeria

STATISTICAL ANNEX

0.97

0.65

4.72

0.55

3.45

7.95

2.21

0.78

3.85

6.21

5.77

0.37

0.41

1.56

16.03

1.62

1.80

0.37

2.76

2.50

0.85

0.38

2.93

8.28

0.70

0.75

5.28

1.79

3.20

9.45

2007

5.83

3.70

17.76

5.41

11.00

43.40

3.32

1.72

18.90

15.56

9.81

2.90

0.99

18.86

31.70

10.71

14.60

3.00

7.11

6.98

2.50

4.03

11.00

40.26

1.38

9.40

18.50

5.30

21.26

18.09

2014

Internet users per
100 inhabitants

1 689

1 261

29 883

230

590

6 415

30

819

8 043

236

1 742

3 504

271

100

129 177

326

4 911

6 918

786

43

137

160

5 197

275

183

730

3 216

891

3 948

37 827

2007

1 566

1 570

28 231

280

794

8 412

35

652

12 127

261

2 318

7 742

346

97

162 149

396

6 552

8 348

1 612

41

186

170

5 942

386

250

1 212

3 650

1 208

5 848

54 928

2014

Electricity consumption(KWh - millions)

Access to electricity

Table 15. Access to services

52
90

96

82

...

89
...

95
76

82

99

93

93

94

97

93

73

73

100

97

93

81

96

93

72

90

95

94

91

97

99

85

75

84

2013

82

63

79

77

89

90

93

57

58

48

99

90

82

52

76

90

51

68

76

92

76

82

96

78

49

84

89

35

...

63

77

57

60

67

84

84

67

49

53

31

99

65

69

31

40

89

45

54

53

87

74

76

92

72

28

82

Rural

41

12

97

17

30

30

21

20

15

59

42

28

16

75

95

47

22

29

15

36

12

22

46

72

48

20

63

20

52

88

Total

47

18

97

28

37

31

34

34

20

62

43

27

45

80

97

60

33

29

20

48

31

44

62

82

44

50

79

36

89

90

2013

Urban

African Economic Outlook

40

9

96

6

28

30

8

12

9

55

32

28

7

71

93

5

10

29

6

31

6

7

27

54

49

7

43

7

22

82

Rural

(%)

Urban

(%)
Total

Sanitation coverage

Water supply coverage366

29.807.43

29.57

Mauritius*

0.53
6.86

1.07

0.23

4.68

2.26

25.49

0.56

1.12

9.84

...

Nigeria

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

SomaliaSouth Africa

South Sudan

1.70

12.39

0.54

0.76

2.71

3.32

Togo

Tunisia

UgandaZambiaZimbabwe

Africa

2.15

2.26

0.76

0.84

8.54

0.76

0.30

3.50

1.08

0.00

0.27

3.44

0.41

0.10

0.57

7.78

28.59

9.62

21.79

13.65

76.34

20.40

20.07

33.48

20.36

...

85.28

6.73

14.33

86.70

30.50

18.42

6.40

27.45

6.34

38.46

13.89

65.31

76.12

42.46

19.89

78.08

80.82

67.34

52.43

128.49

64.58

62.77

72.32

72.20

24.50

149.19

50.90

76.66

162.19

98.84

64.94

64.02

77.84

44.44

113.76

69.82

131.71132.2594.20

149.07

5.69

10.85

4.87

3.67

17.10

2.20

1.60

4.10

8.66

...

8.07

1.12

0.24

38.38

6.89

14.59

2.12

6.77

0.39

4.84

0.91

21.50

20.22

1.43

0.81

2007

21.37

19.89

17.34

17.71

46.16

5.70

4.86

27.10

24.64

15.90

49.00

1.63

2.10

54.26

17.70

24.41

10.60

42.68

1.95

14.84

5.94

56.80

41.44

10.70

7.00

2014

Internet users per
100 inhabitants

600 557

8 445

9 623

2 054

14 578

788

4 441

1 401

...

...

239 744

324

138

262

2 567

48

261

20 506646

4 197

12 001

24 578

2 519

753

1 148

2007

706 931

10 22312 0022 742

17 685

1 110

5 633

1 397

10 251454

236 967

350

164

347

3 364

67

483

28 132993

4 149

14 70633 436

2 888

870

1 210

2014

Electricity consumption(KWh - millions)

Access to electricity

Table 15. Access to services (cont.)

72

77

65

79

98

63

56

74

...

59

93

...

63

96

79

97

76

69

58

91

51

85

100

58

77

© AfDB, OECD, UNDP 2016

88

97

86

96

100

91

77

94

...

67

100

...

85

96

93

99

87

81

100

98

81

99

100

58

97

2013

Urban

60

67

51

76

93

44

46

69

...

57

81

...

48

96

67

94

72

57

49

85

37

65

100

57

64

Rural

39

37

44

19

92

12

16

57

...

7

66

...

13

98

48

35

62

29

11

34

21

77

93

40

25

Total

51

49

56

29

97

25

31

63

...

16

70

...

23

98

65

41

59

33

38

54

42

84

94

58

38

2013

Urban

African Economic Outlook

31

31

36

17

80

3

8

56

...

4

61

...

7

98

34

23

63

25

5

17

10

66

93

14

16

Rural

(%)

(%)
Total

Sanitation coverage

Water supply coverage

Note: * Including Agalega, Rodrigues and Saint Brandon.
Sources: AfDB Statistics Department; Telecommunications: International Telecommunication Union, ICT Indicators Online Database.
Electricity: United Nations Statistics Division, Energy Statistics Database.
Water supply coverage and sanitation coverage: WHO/UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation.
Domestic authorities.

3.95

0.40

Swaziland

Tanzania

0.85

22.73

0.29

Niger

Sudan

2.14

6.64

Namibia

0.33

7.81

0.35

MoroccoMozambique

1.29

1.21

0.98

0.63

Mauritania

2014

2007

2007

2014

Mobile line
per 100 inhabitants

Telecommunications

Main telephone line
per 100 inhabitants

Mali

STATISTICAL ANNEX

367

52.7

59.8

64.5

59.0

57.1

73.5

56.0

51.5

51.9

63.6

62.9

59.1

51.9

62.3

71.3

57.9

64.2

64.6

64.9

60.5

61.5

59.2

55.5

62.2

50.1

61.2

71.8

65.5

63.9

AngolaBenin

Botswana

Burkina Faso

BurundiCabo Verde

Cameroon

Central African Rep.

Chad

Comoros

Congo

Congo, Dem. Rep.

Côte d'Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

Malawi© AfDB, OECD, UNDP 2016

75.0

2015

55.1

...

...

57.5

49.1

58.0

48.8

54.7

64.7

59.0

63.3

60.0

62.2

51.5

...

58.5

56.4

48.9

58.0

...

50.1

49.5

52.5

...

51.1

56.0

52.7

56.8

51.7

...

63.2

...

...

58.7

64.1

62.7

49.9

55.6

66.2

60.2

66.8

60.9

62.7

53.9

...

59.3

59.5

49.9

60.3

...

52.1

53.1

56.1

...

53.6

57.7

69.6

57.5

52.8

...

No-AIDS
scenario

2010-2015

With
AIDS

Life expectancy at birth (years)

Algeria

STATISTICAL ANNEX

21

33

...

32

11

21

21

16

5

5

5

32

...

...

5

16

13

...

31

...

34

48

10

9

...

21

24

8

14

5

2015

2 334

2 052

...

2 251

2 595

2 206

2 304

2 553

3 003

2 849

2 781

2 131

...

...

3 557

2 526

2 799

...

2 195

...

2 110

2 154

2 586

2 716

...

2 720

2 285

2 594

2 473

3 296

2011-13

Prelevance ofFoodundernourishedavailability
in total
population (Kcal/person/
(%)
day)

8.3

4.2

4.3

10.0

11.5

4.5

5.5

4.7

5.4

6.0

3.8

5.1

3.0

3.5

5.1

8.9

5.7

3.5

4.1

5.8

3.6

3.9

5.1

4.4

8.0

6.4

5.4

4.6

3.8

6.6

As %
of GDP

50.0

62.6
26.2

19.6

35.9

79.1

41.7

20.3

35.8

60.6

60.1

54.4

61.0

45.4

77.8

40.7

60.0

33.1

53.1

77.5

32.7

36.9

50.3

34.7

73.7

54.7

58.5

57.1

54.2

66.7

74.2

70.3

2013

Public (%)

50.0

37.4

29.7

64.1

20.9

58.3

79.7

64.2

39.4

39.9

45.6

39.0

54.6

22.2

59.3

40.0

66.9

46.9

22.5

67.3

63.1

49.7

65.3

26.3

45.3

41.5

42.9

45.8

33.3

25.8

Private (%)

Distribution

432.8

44.4

123.4

44.5

31.8

24.8

99.5

28.9

441.4

24.5

16.5

713.9

151.3

137.4

86.8

15.9

130.7

51.5

37.2

13.0

67.2

164.7

21.5

45.7

397.3

36.7

267.2

313.5

Per
capita**(USD)

Total health expenditure

Table 16. Basic health indicators

2009

2007

2009

2008

2003

2013

2009

2005

2010

2008

2004

2009

2004

2004

2009

2006

2008

2004

2007

2004

2006

2009

2009

2011

2004

2010

2009

2008

2009

2007

Survey
year

2

16

190

1

5

20

7

10

10

11

29

3

5

30

283

23

14

11

10

15

4

5

8

31

3

5

40

6

17

121

Physicians

2009

2004

2009

2008

2003

2012

2009

2005

2010

2008

2004

2009

2004

2004

2009

2008

2008

2004

2007

2004

2006

2009

2009

2011

2004

2010

2009

2008

2009

2007

Surveyyear

Health personnel (per 100 000)

African Economic Outlook

34

32

680

27

62

82

59

4

93

87

502

25

58

54

352

80

48

53

82

74

19

26

44

56

19

57

335

77

166

195

Nurses andmidwives

368

63.2

74.6

74.3

55.5

65.1

61.9

53.1

64.7

66.6

66.9

73.3

51.3

55.7

57.7

56.1

63.7

48.9

65.5

60.2

75.0

59.2

60.8

59.2

61.2

Mauritania

Mauritius*

MoroccoMozambique

Namibia

Niger

Nigeria

Rwanda

Sao Tome andPrincipe

Senegal

Seychelles

Sierra Leone

SomaliaSouth Africa

South Sudan

Sudan

Swaziland

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

Africa

54.2

53.5

49.6

54.7

...

57.8

59.3

49.2

...

…

53.8

...

48.2

...

...

...

55.8

52.5

...

62.7

51.0

...

...

...

52.1

2010-2015

57.9

67.5

57.7

59.0

...

60.1

63.7

63.7

...

…

65.8

...

49.1

...

...

...

57.5

55.1

...

71.3

58.2

...

...

...

53.5

No-AIDS
scenario

16

33

48

26

5

11

32

27

...

...

5

...

22

...

25

7

32

7

10

42

25

5

5

6

5

2015

2 448

2 110

1 930

2 279

3 362

2 366

2 208

2 275

2 346

...

3 007

...

2 333

...

2 454

2 676

2 148

2 700

2 546

2 086

2 283

3 334

3 055

2 791

2 833

2011-13

Prelevance ofFoodundernourishedavailability
in total
population (Kcal/person/
(%)
day)

5.7

...

5.0

9.8

7.1

8.6

7.3

8.4

6.5

2.2

8.9

...

11.8

4.0

4.2

6.9

11.1

3.7

6.5

7.7

6.8

6.0

4.8

3.8

7.1

As %
of GDP

236.1

...

92.8

59.1

308.6

54.4

49.3

256.1

115.0

18.1

593.5

...

95.8

550.8

45.6

110.0

70.5

115.0

27.2

422.6

40.3

189.2

462.5

48.4

53.3

Per
capita**
(USD)
2013

45.5

...

58.3

44.4

59.3

52.1

36.3

74.7

21.1

35.3

48.4

...

14.3

92.0

52.3

28.8

58.8

23.9

36.7

60.4

46.4

33.9

49.1

49.0

39.7

Public (%)

54.5

...

41.7

55.6

40.7

47.9

63.7

25.3

78.9

64.7

51.6

...

85.7

8.0

47.7

71.2

41.2

76.1

63.3

39.6

53.6

66.1

50.9

51.0

60.3

Private (%)

Distribution

Total health expenditure

Table 16. Basic health indicators (cont.)

…

2011

2012

2005

2010

2008

2012

2009

2008

...

2013

2006

2010

2012

2008

2004

2010

2009

2008

2007

2012

2009

2004

2009

2010

Survey
year

…

8

17

12

122

5

3

17

28

...

78

4

2

107

6

49

6

41

2

37

4

62

106

13

8

Physicians

…

2011

2010

2005

2009

2008

2012

2009

2008

...

2013

2006

2010

2012

2008

2004

2010

2008

2008

2007

2012

2009

2004

2009

2010

Surveyyear

Health personnel (per 100 000)

…

134

78

131

328

27

44

160

84

...

511

11

17

481

42

187

69

161

14

278

41

89

373

67

43

Nurses andmidwives© AfDB, OECD, UNDP 2016

African Economic Outlook

Note: * Including Agalega, Rodrigues and Saint Brandon.
** At average exchange rate.
Sources: AfDB Statistics Department; Life expectancy at birth and HIV/AIDS: United Nations, Department of Economic and Social Affairs, Population Division, World Population
Prospects, The 2015 Revision.
Undernourishment prevalence and food availability: FAO, Food Insecurity Online Database.
Total health expenditure and public health expenditure: WHO Online Database.

58.5

2015

With
AIDS

Life expectancy at birth (years)

Mali

STATISTICAL ANNEX

369

48

64

49

44

44

54

50

44

46

53

62

47

55

56

54

53

54

50

46

53

43

52

64

55

51

BurundiCabo Verde

Cameroon

Central African Republic

Chad

Comoros

Congo

Congo, Dem. Rep.

Côte d’Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

Malawi© AfDB, OECD, UNDP 2016

51

Burkina Faso

50

54

64

52

41

52

45

49

53

52

53

54

53

47

61

52

45

43

50

53

44

43

48

61

47

50

53

50

50

54

Benin

Botswana

43

44

Angola

62

2013

Male

62

Total

52

56

65

53

44

54

47

50

55

54

55

57

56

48

63

54

46

46

51

55

45

44

49

66

49

51

55

51

46

63

FemaleHealthy life expectancy at birth (years)

Algeria

STATISTICAL ANNEX

1 064

39

...

33

315

1 367

42

118

250

20

48

730

16

32

9

10

460

447

81

...

215

135

657

3

85

108

392

78

304

11

10.0

0.3

...

1.2

23.4

5.3

3.7

1.6

1.5

1.8

3.9

1.2

0.7

6.2

0.1

1.6

3.5

1.0

2.8

...

2.5

4.3

4.8

1.1

1.1

0.9

25.2

1.1

2.4

0.1

2014

People living
Adultwith HIV / AIDS prevalence
(000)
(%)

HIV / AIDS

32.6

3.2

...

2.0

9.3

33.0

1.9

3.8

9.2

0.9

1.5

23.4

0.7

0.8

0.3

0.6

21.8

24.1

4.4

...

11.7

9.9

34.2

0.1

3.9

3.8

5.1

2.4

11.8

0.2

AIDS deathsin adults &children(000)

Malaria

Tuberculosis

2013

2013

...

2013

...

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

2013

Survey year

1 280 892

387 045...

1 244 220...

2 335 286

54 584211 257

1 639 451

240 792

28 9822 645 454

21 31713 1290

1 684

2 506 953

6 715 223

43 23253 156754 565

116 300

26 6510 022

4 141 387

3 769 051

0 456

1 078 834

1 999 868

16

16 26728 466

1 153

2 702

8 840

88 0252 282

11 73414 668

2 552

5 608

119 592

2 391

1 166

7 177

2 220

23 275

115 795

10 017148

11 97310 18626 038

274

7 226

5 546

6 019

3 886

53 55222 5172014(new and(number of reported cases) relapse cases)

Table 17. Major diseases
Measles

3

3

372

34

0

354

1

175

124

1

33

12 739

127

13

1 314

...

50

33 711

71

0

1 275

210

831

0

0

343

1

786

11 6990

2014

Incidence(number ofreportedcases)

85

64

93

58

92

79

69

52

92

96

61

70

96

44

93

71

63

77

80

80

54

49

80

93

94

88

97

63

85

95

MCV
2014

African Economic Outlook

91

73

94

50

96

81

80

51

98

96

70

77

94

24

94

78

67

80

90

80

46

47

87

95

95

91

95

70

80

95

DTP3

Vaccination (%)

370

54

65

61

46

58

51

47

56

57

55

67

39

46

52

48

53

45

53

50

66

50

50

50

52

Mauritius

MoroccoMozambique

Namibia

Niger

Nigeria

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

SomaliaSouth Africa

South Sudan

Sudan

Swaziland

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

Africa

51

48

49

49

65

49

52

45

52

48

49

45

39

63

55

56

55

47

51

56

46

60

62

53

50

2013

Male

53

52

51

52

68

51

55

45

54

49

54

47

40

71

56

59

57

47

51

60

47

62

68

55

48

Female25 950

1 550

1 150

1 487

3

114

1 499

214

53

193

6 836

35

54

...

44

1

211

3 392

52

264

1 543

29

8

16

133

3.8

16.7

12.4

7.3

0.1

2.4

5.3

27.7

0.2

2.7

18.9

0.5

1.4

...

0.5

0.8

2.8

3.2

0.5

16.0

10.6

0.1

0.9

0.7

1.4

2014

People living
Adultwith HIV / AIDS prevalence
(000)
(%)

HIV / AIDS

801.1

38.6

18.9

32.9

0.1

4.3

46.1

3.5

2.9

12.7

138.4

2.4

2.7

...

2.4

0.1

3.0

174.3

3.4

5.1

44.9

1.1

0.5

1.1

5.3

AIDS deathsin adults &children(000)

Tuberculosis

2013

2013

...

2013

...

2013

2013

2013

2013

2013

2013

2013

2013

...

2013

2013

2013

2010

2013

2013

2013

2012

...

2013

2013

Survey year

45 368 192

422 633...

1 502 362...

882 430

1552 444402

592 383

262 5208 645

10 4701 701 958...

345 8899 243

962 618551 187

1 431 798

4 911

2 998 874

0

...

1 587

1 367 218

1 376 548

29 65337 93144 187

3 134

2 525

61 5715 583

19 2668 335

306 166

12 90312 47713

13 332158

5 761

86 46410 8518 972

57 77329 843

126

2 420

5 809

2014

(new and(number of reported cases) relapse cases)

Malaria

Table 17. Major diseases (cont.)
Measles

86 579

0

9

314

15

577

88

0

676

441

66

10 278

1 006

0

32

0

10

6 855

1 142

477

9

10

0

14

290

2014

Incidence(number ofreportedcases)© AfDB, OECD, UNDP 2016

Notes: DTP: Diphtheria, tetanus toxoids and pertussis antigen. MCV: Measles Containing Vaccine.
Sources: UNAIDS and WHO, Global report, UNAIDS report on the global AIDS epidemic 2015; Malaria reported cases, tuberculosis new and relapse cases,
measles incidence, MCV and DTP3 vaccination coverage: WHO, Global Health Observatory Data Repository online Database, February 2016.

49

Mali

Total

Healthy life expectancy at birth (years)

Mauritania

STATISTICAL ANNEX

75

92

85

82

98

82

99

86

86

22

70

46

78

99

80

92

98

51

72

83

85

99

98

84

80

MCV
2014

African Economic Outlook

79

91

86

78

98

87

97

98

94

39

70

42

83

99

89

95

99

66

68

88

78

99

97

84

77

DTP3

Vaccination (%)

371

95.3
73.8
49.1
83.2
55.5
76.6
30.4
59.9
78.0
79.4
47.6
91.0
64.7
65.8
38.7
52.1

Equatorial Guinea

Eritrea

Ethiopia

Gabon

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

MalawiMali

Mauritania© AfDB, OECD, UNDP 2016

...
75.2

Egypt

Côte d’Ivoire

Djibouti

77.3
43.1

Congo, Dem. Rep.

77.8
79.3

Comoros

Congo

36.8

Cameroon
40.2

75.0

Cabo Verde

Chad

87.6

BurundiCentral African Republic

36.0
85.6

Burkina Faso

62.6

48.2

73.0

66.7

96.7

62.4

70.1

81.1

71.8

38.1

82.0

63.9

85.3

57.2

82.4

97.4

83.2

...

53.1

88.9

86.4

81.8

48.5

50.7

81.2

92.1

88.2

43.0

88.0

49.9

38.4
88.5

Benin

Botswana

71.1

87.2
82.0

80.2

Male

Algeria

Total

41.6

29.2

58.6

62.6

85.6

32.8

88.3

74.9

48.3

22.8

71.4

47.6

81.0

41.1

65.5

93.0

67.3

...

32.5

66.0

72.9

73.7

31.9

24.4

68.9

83.1

83.1

29.3

88.9

27.3

60.7

73.1

FemaleEstimated adult literacy rate, 2010-15 (%)(people over 15)

62.6

54.1

75.1

65.1

100.0

54.5

85.1

85.9

77.3

45.2

90.6

73.2

89.1

69.5

93.2

98.3

93.3

...

50.2

86.0

80.9

87.6

52.7

36.4

83.8

98.3

87.6

45.4

97.9

52.5

72.9

95.6

Total

70.0

61.5

74.9

65.4

100.0

64.7

77.0

85.2

80.8

43.0

91.3

75.6

87.8

71.1

94.5

97.7

94.5

...

59.6

91.6

85.7

86.9

55.3

48.9

87.1

98.1

87.4

47.6

96.1

62.6

78.6

95.6

Male

55.0

46.4

75.2

64.8

99.9

44.0

93.4

86.6

73.7

47.5

89.9

70.8

90.5

67.8

91.9

98.8

92.1

...

40.7

80.5

76.9

88.2

50.2

27.0

80.4

98.6

87.8

43.2

99.6

42.5

67.3

95.5

FemaleEstimated youth literacy rate, 2010-15 (%)(people between 15 and 24)

Table 18. Basic education indicators

AngolaSTATISTICAL ANNEX

4.0

4.2

7.7

2.1

...

2.8

13.0

5.5

...

3.5

8.1

4.1

3.8

4.7

2.1

0.7

3.8

4.5

4.4

1.5

6.2

7.8

2.3

1.2

3.0

4.9

5.4

4.3

9.5

5.0

3.5

4.3

African Economic Outlook(% of GDP)

Public expenditure on
education
2000-13

372

48.1
...

Sierra Leone

Somalia

86.5
67.1

Zimbabwe

AFRICA

74.7

88.5

70.9

80.8

89.6

78.3

84.8

87.4

83.3

38.6

95.5

...

58.7

94.7

68.5

81.8

73.2

69.2

27.3

79.2

73.3

82.7

92.9

Male

59.6

84.6

56.0

66.9

74.2

55.3

75.9

87.5

68.6

25.3

93.1

...

37.7

95.7

43.8

68.4

68.0

49.7

11.0

84.5

45.4

62.5

88.5

FemaleEstimated adult literacy rate, 2010-15 (%)(people over 15)

78.4

91.7

65.8

87.0

98.1

85.1

87.3

94.8

89.6

44.3

99.0

...

67.6

99.0

69.8

83.2

80.4

72.8

26.6

89.9

76.7

95.1

98.7

Total

© AfDB, OECD, UNDP 2016

81.5

90.0

69.4

87.4

98.3

88.9

87.4

93.5

91.3

46.9

98.6

...

75.8

98.6

75.9

84.0

78.5

79.9

36.4

86.5

83.7

96.6

98.4

Male

75.3

93.5

62.1

86.6

97.8

81.4

87.2

96.0

87.8

41.7

99.4

...

59.3

99.6

63.6

82.3

82.2

65.3

17.1

93.3

69.7

93.5

99.1

FemaleEstimated youth literacy rate, 2010-15 (%)(people between 15 and 24)

Table 18. Basic education indicators (cont.)

Sources : AfDB Statistics Department; UNESCO Institute for Statistics (UIS), Database January 2016; domestic authorities.

73.9
63.4

81.8

Tunisia

Zambia66.5

Togo

Uganda87.5
80.3

Tanzania

Sudan

Swaziland

31.9
75.9

South Sudan

94.3

95.2

Seychelles

South Africa

74.9
55.7

Senegal

70.5

Rwanda

Sao Tome and Principe

19.1

81.9
59.6

58.8

Mozambique

Namibia

Nigeria

72.4

Morocco

Niger

90.6

Total

Mauritius

STATISTICAL ANNEX

4.7

2.0

1.1

2.2

6.2

4.4

3.5

7.8

2.2

...

6.0

...

2.8

3.6

5.6

9.5

5.0

...

4.5

8.3

6.6

6.3

3.7

African Economic Outlook(% of GDP)

Public expenditure on
education
2000-13

373

95.6

Liberia

146.5

Malawi© AfDB, OECD, UNDP 2016

146.7

Madagascar

...

107.1

Lesotho

Libya

111.4

109.9

Ghana

Kenya

85.8

Gabon

Gambia

89.4

142.0

Ethiopia

113.7

51.2

100.1

Eritrea

Guinea-Bissau

144.0

84.5

Equatorial Guinea

Guinea

104.3

105.5

Egypt

145.1

146.9

...

99.5

108.3

111.2

117.5

94.8

109.9

83.5

55.2

85.2

106.0

70.1

95.6

112.0

89.6

107.0

Congo, Dem. Rep.

107.0

108.3

66.3

110.9

Congo

Côte d’Ivoire

105.2

Comoros

114.6

107.3

120.1

116.3

126.8

88.7

110.1

131.1

156.9

122.3

Male

Djibouti

93.5

101.4

Chad

113.6

Cameroon

Central African Republic

127.6

86.9

Burkina Faso

113.2

108.6

Botswana

Cabo Verde

125.6

Benin

Burundi

118.7

128.7

Algeria

Total
115.1

148.0

146.5

...

91.6

105.8

111.6

109.8

83.8

109.9

88.0

139.9

95.8

47.1

83.7

105.1

62.3

83.6

101.8

114.8

102.0

88.0

79.8

106.9

109.9

128.4

85.1

107.0

119.9

100.4

...

...

...

37.7

80.2

84.9

68.2

74.0

91.1

67.9

...

85.8

40.6

56.8

99.9

57.4

74.7

...

91.4

83.2

84.4

70.6

91.6

98.2

95.4

67.5

91.0

95.9

84.0

97.3

Total

...

...

...

38.6

78.7

83.2

69.8

77.8

90.9

65.3

...

88.7

42.7

56.8

99.5

60.7

79.2

...

87.6

85.5

94.7

79.1

96.6

98.0

94.5

69.2

90.4

99.9

94.9

...

Male

...

...

...

36.7

81.8

86.6

66.7

70.1

91.3

70.6

...

82.9

38.4

56.8

97.1

54.0

70.1

...

95.2

80.8

74.0

62.1

86.6

98.3

96.2

65.7

91.6

88.2

73.0

...

FemaleNet enrolment ratio (%)

37.9

61.4

41.7

39.5

38.4

...

52.2

67.6

...

38.8

71.0

57.5

...

36.2

35.5

...

86.0

47.1

40.1

43.5

54.5

59.3

22.4

17.4

56.4

92.6

37.9

30.3

83.9

54.4

28.9

99.9

Total

32.8
...

Secondary school, 2010-15

41.4

38.8

...

42.5

44.1

70.1

...

46.8

72.9

58.9

...

37.9

39.3

...

86.8

52.1

47.0

53.6

58.4

58.3

30.7

23.0

60.9

86.8

41.1

32.4

81.6

64.8

35.1

98.1

Male

37.5

38.1

...

33.1

60.4

65.2

...

30.7

69.1

56.0

...

34.5

31.6

...

85.3

41.9

33.2

33.3

50.6

60.4

14.0

11.8

51.9

98.5

34.8

28.2

86.2

43.9

22.7

101.7

FemaleGross enrolment ratio (%)

26.5

56.6

51.9

44.6

31.3

36.8

24.5

64.3

40.3

26.2

23.2

33.0

42.5

35.3

44.4

27.8

62.4

80.1

44.2

22.6

43.7

44.5

22.6

45.9

42.5

23.7

Ratio (%)

Pupil /
teacherTable 19. School enrolment
Primary school, 2010-15

FemaleGross enrolment ratio (%)

AngolaSTATISTICAL ANNEX

70.4

23.1

...

14.9

24.7

41.1

...

33.1

16.6

...

...

38.8

38.5

...

...

22.8

22.3

14.6

18.7

8.7

29.8

68.1

20.4

16.0

37.2

27.1

11.2

9.9

27.4

...

Ratio (%)

Pupil /
teacher

…

3.5

…

…

1.6

1.0

1.8

2.1

4.0

…

…

6.2

0.7

…

…

5.4

…

19.2

…

…

1.1

…

19.1

…

5.2

6.0

6.1

…

…

…

Total
secondary

…

0.9

…

…

3.8

…

…

0.2

…

…

…

…

…

…

…

1.4

…

1.9

…

…

0.1

…

19.7

…

1.8

1.9

…

…

…

…

Lower
secondary

2006-08 (%)

African Economic Outlook

…

14.5

…

…

3.3

2.1

…

6.9

13.5

…

…

54.2

1.9

…

…

15.9

…

34.1

…

…

4.2

…

17.7

…

19.0

23.8

19.1

…

…

…

Upper
secondary

Enrolment ratio in technical andvocational programmes374104.1130.0

Seychelles

Sierra Leone

111.3

109.9

Tunisia

Uganda

104.0

103.2

103.3

108.9

113.0

128.8

86.2

118.2

73.0

101.1

102.2

...

130.3

103.6

77.5

116.1

136.2

88.3

75.9

113.3

108.6

118.7

101.7

95.8

101.7

104.0

110.9

109.5

121.4

87.4

108.3

65.1

67.0

97.3

...

129.8

104.7

84.3

111.1

139.2

80.9

65.0

109.5

99.6

113.4

103.7

100.7

73.0

Female

79.5

88.7

87.4

93.7

98.6

91.2

80.9

78.5

53.8

40.6

...

...

97.9

94.7

71.1

94.9

96.1

63.8

61.0

89.7

87.6

98.4

96.2

74.4

59.4

Total

80.9

88.0

86.5

92.2

...

94.3

80.6

78.8

52.4

47.3

...

...

98.6

94.1

68.2

96.2

94.8

69.3

65.6

88.5

89.7

98.6

95.1

72.7

62.5

Male

80.9

89.5

88.3

95.1

...

88.0

81.2

78.3

55.1

33.7

...

...

97.3

95.3

74.1

93.6

97.4

58.1

56.2

91.0

85.4

98.3

97.3

76.2

56.2

FemaleNet enrolment ratio (%)

Primary school, 2010-15

41.3

35.9

47.9

45.6

17.4

41.1

43.4

28.1

46.1

49.9

32.0

...

34.8

12.6

31.6

38.8

59.8

37.6

35.8

29.8

54.5

25.7

18.7

34.4

42.5

Ratio (%)

Pupil /
teacher

51.1

46.7

...

27.6

90.1

54.7

32.3

63.0

40.2

...

98.2

...

43.4

74.6

40.1

84.9

40.2

43.8

18.8

...

24.5

69.1

97.9

29.9

43.5

Total

53.4

47.4

...

29.5

90.0

...

33.7

63.6

42.0

...

87.6

...

46.9

73.9

41.9

80.7

38.7

46.4

22.1

...

25.5

74.4

96.9

31.2

49.4

Male

© AfDB, OECD, UNDP 2016

48.6

45.9

...

25.7

94.2

...

30.8

62.4

38.4

...

110.7

...

40.0

75.3

38.2

89.3

41.6

41.2

15.6

...

23.5

63.5

99.0

28.6

37.4

FemaleGross enrolment ratio (%)

Secondary school, 2010-15

Table 19. School enrolment (cont.)

Sources: AfDB Statistics Department; UNESCO Institute for Statistics (UIS) Database, January 2016; various domestic authorities.

100.6

125.1

Togo

Africa

86.8

103.7

113.3

Swaziland

Tanzania

102.4

69.1

Zimbabwe

84.2

South Sudan

Sudan

Zambia99.7

South Africa

...

80.9

Somalia

113.6

Sao Tome and Principe

Senegal

70.6

Niger

84.7

111.4

137.7

104.1

Mozambique

Namibia

Rwanda116.1

MoroccoNigeria

102.7

Mauritius

95.3

81.2

77.2

98.0

Mali

Male

Total

Gross enrolment ratio (%)

Mauritania

STATISTICAL ANNEX

24.4

22.4

...

21.3

13.6

26.2

26.4

16.0

31.1

...

...

...

20.7

12.5

27.4

20.8

22.8

33.1

25.1

...

31.2

...

15.2

...

18.9

Ratio (%)

Pupil /
teacher

…

…

7.9

5.0

9.5

7.8

…

…

1.9

…

…

…

4.9

…

5.9

1.6

16.2

4.3

1.0

…

5.8

5.6

…

3.2

12.3

Total
secondary

…

…

…

1.8

1.0

1.4

…

…

…

…

…

…

1.2

…

6.1

…

…

4.1

0.7

…

5.5

2.1

13.6

1.6

…

Lower
secondary

2006-08 (%)

African Economic Outlook

…

…

19.6

20.9

8.5

25.0

…

…

4.5

…

…

…

16.0

…

4.9

10.9

44.8

4.5

3.5

…

7.4

5.2

…

5.4

39.6

Upper
secondary

Enrolment ratio in technical andvocational programmes

375

2013

2013 (b)

2013

2013

2013

2013 (b)

2013

2013

2013

2013 (b)2013 (b)GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

MalawiMali© AfDB, OECD, UNDP 20162013 (b)

2013

2013

2013

Equatorial Guinea

Eritrea

Ethiopia2013 (b)

Egypt

Gabon

...

2013

Côte d’Ivoire

Djibouti

2013

2013

Congo, Dem. Rep.

2013

Comoros

Congo

2013

Chad

4.0

2013

Cabo Verde

2013

2013

Burundi

2013

2013

Burkina Faso

Cameroon

2013

Botswana

Central African Republic

10.5

2013

Benin

7.3

6.4

1.3

20.6

3.7

24.4

9.1

7.6

1.7

5.2

29.8

20.3

5.0

8.0

7.8

13.2

…

9.4

3.8

7.3

19.1

5.6

8.4

1.6

3.2

17.4

1.0

7.6

2013

Angola9.8

Total

2013 (b)

Year

5.5

6.1

1.0

17.1

3.5

22.4

7.9

6.9

2.4

5.0

21.8

14.5

3.0

7.3

7.3

9.6

…

8.5

3.1

6.6

17.4

4.6

8.0

3.4

9.1

1.2

4.1

14.4

0.9

7.0

8.3

Male

10.2

6.7

1.6

30.3

3.8

26.9

10.5

8.3

0.8

5.4

38.6

28.9

7.2

8.8

8.5

25.3

…

10.9

4.5

8.0

23.2

6.8

8.8

4.8

12.5

1.9

2.3

20.6

1.2

8.4

16.3

Female

66.1

80.9

86.6

53.8

60.9

66.0

66.8

72.5

82.3

76.8

77.4

48.2

83.1

83.8

82.0

49.2

52.0

67.0

71.2

69.9

57.1

71.6

77.9

75.9

67.6

83.4

83.6

77.1

71.6

68.3

43.6

58.8

59.3

76.7

36.2

34.4

45.3

39.7

52.9

72.6

55.0

63.8

18.3

78.1

77.2

71.4

33.4

42.8

50.9

44.4

44.8

39.3

56.4

60.1

56.4

59.9

65.6

77.8

57.6

41.7

51.6

28.2

Total among youth(age 15-24)

2013

ILO’s latest estimates (a)Total(age 15+)

Participation rate*

33

20

12

44

38

33

33

26

16

22

22

49

15

15

16

48

45

32

28

29

42

28

22

23

29

16

15

21

28

31

53

Total

17

20

10

18

36

25

28

21

14

21

17

41

9

9

6

20

29

18

28

26

20

21

15

18

14

17

9

18

26

22

25

Male

2013

49

19

14

784

25

398

...

360
70

649
41

934

52

65

152

108

...

513

...

...

14 324

32

373

115

...

108

...

...

219

177

45

120

20

172

11.2

1 942

2011

40

38

32

18

23

27

59

20

20

28

75

61

47

29

31

64

35

28

28

44

15

21

24

29

39

82

FemaleInactivity rate* (age 15-64)

Table 20. Employment and remittances

Unemployment rate*

Algeria

STATISTICAL ANNEX

827

28

397

...

516

554

1 211

46

66

138

141

...

624

...

...

19 236

33

373

12

...

110

...

...

210

178

46

120

18

208

11.1

1 942

2012

895

28

427

...

383

462

1 304

46

93

119

181

...

624

...

...

17 833

36

373

33

...

116

...

...

244

176

49

120

36

208

11.1

2 000

2013

895

28

427

...

466

399

1 441

46

93

119

181

...

624

...

...

19 570

36

373

22

...

126

...

...

244

189

49

120

42

208

11.1

2 000

2014

Worker remittances (USD million)

African Economic Outlook

895

29

427

...

568

405

1 571

46

93

119

181

...

635

...

...

20 391

36

373

23

...

134

...

...

244

194

50

120

43

208

11

2 000

2015 (e)

376

…

2013

2013 (b)20132013 (b)

2013

2013

2013

…

Mozambique

Namibia

Niger

Nigeria

Rwanda

Sao Tome and Principe

Senegal9.2

2013 (b)20132013 (b)

2013

2013

2013

2013

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

Africa

…

8.3

12.4

7.8

4.3

15.9

7.7

2.9

27.1

13.0

7.3

10.6

7.5

3.8

13.6

7.0

2.0

25.7

10.9

…

23.1

7.1

4.3

…

8.0

12.0

3.2

6.4

2.7

26.3

20.6

9.1

5.0

28.8

Male

9.6

14.2

8.2

4.9

22.2

8.4

3.9

29.2

19.2

…

26.4

8.6

2.2

…

13.6

16.2

3.7

8.0

1.8

33.1

24.2

9.5

11.7

35.3

Female
47.1

65.1

82.4

75.3

85.0

47.8

80.8

78.6

51.0

48.0

73.2

52.5

54.1

66.6

…

56.8

60.3

85.1

56.1

64.7

58.7

79.2

49.0

59.9

26.9

50.1

71.9

57.5

75.9

35.1

65.1

65.0

33.9

29.6

63.2

26.1

43.4

44.1

…

41.7

38.5

71.3

37.6

57.3

31.1

71.3

34.6

41.7

...

17

24

14

48

18

20

47

51

25

44

44

32

…

41

37

13

44

34

40

20

48

34

52

Total

...

12

19

12

23

19

16

34

27

24

38

22

31

…

28

22

16

36

9

36

25

22

20

34

Male

2013

...

22

29

16

72

17

25

58

75

27

50

66

33

…

54

53

11

52

59

44

16

74

49

70

FemaleInactivity rate* (age 15-64)

56 870

..

46

816

2 004

244

78

38

442

...

1 158

...

59

25

1 614

7

174

20 619

166

15

157

7 256

249

..

2011

..

61 887

..

73

914

2 266

345

67

31

401

...

1 085

...

61

18

1 614

6

182

20 633

152

13

220

6 508

249

2012

61 199

..

54

935

2 291

345

59

30

424

...

971

...

68

13

1 614

27

170

20 890

152

11

217

6 882

249

..

2013

63 178© AfDB, OECD, UNDP 2016

..

58

1 029

2 291

345

59

30

343

...

913

...

68

15

1 614

29

170

20 921

152

11

118

7 053

249

..

2014

Worker remittances (USD million)

Note: * See note on methodology for definitions. (e) Estimates.
Sources: Employment: ILO, KILM database, ninth edition; Trends Estimation Model: (a) Harmonised estimates for 2013. (b) Data as reported by domestic authorities.
Workers’ remittances: World Bank, World Development Indicators, Remittances data (updated as of October 2015).

2013

Swaziland…

2013

South Sudan

Sudan

24.6

7.6

2013

2013 (b)Somalia

3.2

13.6

3.4

7.1

2.4

29.6

22.6

2013

South Africa

Sierra Leone

Seychelles

10.3

2013 (b)Morocco

7.6

30.8

2013

2013 (b)Total

Mauritania

Year

Total among youth(age 15-24)

2013

ILO’s latest estimates (a)Total(age 15+)

Participation rate*

Table 20. Employment and remittances (cont.)

Unemployment rate*

Mauritius

STATISTICAL ANNEX

African Economic Outlook

63 962

..

59

1 053

2 291

345

61

30

348

...

1 003

...

72

15

1 614

29

172

20 865

152

12

118

6 680

249

..

2015 (e)

377

46

69

2.8
2.5

Mali

Mauritania© AfDB, OECD, UNDP 2016

3.0

2.5

Libya
3.3

3.1

Liberia

Malawi

3.3

LesothoMadagascar

1.9
2.2

Guinea-Bissau

Kenya

3.9
1.8

Ghana

Guinea

106

2.9

130

111

89

99

130

97

89

146

162

168

106

120

126

Gambia2.6

Eritrea

168

2.7

1.8

Equatorial Guinea

111

111

2.9

2.8

Egypt

Ethiopia

2.8

Djibouti

154

162

Gabon

2.1

Côte d’Ivoire

162

1.9
1.9

Congo

Congo, Dem. Rep.

175

158

146

143

2.2

2.3

5.1

Cabo Verde

Cameroon

168

Comoros

1.8

Burundi

79

2.0

3.6

Burkina Faso

37

106

1.6

5.6

Botswana

Central African Republic

2.9

Benin

162

111

Countryrank / 180

2009

Chad

2.8
1.9

Algeria

Index

AngolaSTATISTICAL ANNEX

2.3

2.7

3.4

2.6

2.2

3.3

3.5

2.1

2.1

2

4.1

3.2

2.8

2.7

2.6

1.9

3.1

3.2

2

2.2

2.1

2.1

1.7

2.1

2.2

5.1

1.8

3.1

5.8

2.8

1.9

2.9

Index

143

116

85

123

146

87

78

154

154

164

62

91

110

116

123

168

98

91

164

146

154

154

171

154

146

45

170

98

33

110

168

105

Countryrank / 178

2010

2.4

2.8

3.0

3.0

2.0

3.2

3.5

2.2

2.2

2.1

3.9

3.5

3.0

2.7

2.5

1.9

2.9

3.0

2.2

2.0

2.2

2.4

2.0

2.2

2.5

5.5

1.9

3.0

6.1

3.0

2.0

2.9

Index

143

118

100

100

168

91

75

154

154

164

69

75

100

120

134

172

112

100

154

168

154

143

168

154

134

41

172

100

32

100

168

112

Countryrank / 182

2011

3.2

3.1

3.4

3.7

123

105

88

118

160

75

4.1
2.1

64

139

150

154

64

105

102

113

150

163

118

94

130

160

144

133

165

144

144

39

165

83

30

94

157

105

4.5

2.7

2.5

2.4

4.5

3.4

3.5

3.3

2.5

2.0

3.2

3.6

2.9

2.1

2.6

2.8

1.9

2.6

2.6

6.0

1.9

3.8

6.5

3.6

2.2

3.4

Index

Countryrank / 174

2012

3.0

2.8

3.7

2.8

1.5

3.8

4.9

2.7

1.9

2.4

4.6

2.8

3.4

3.3

2.0

1.9

3.2

3.6

2.7

2.2

2.2

2.8

1.9

2.5

2.5

5.8

2.1

3.8

6.4

3.6

2.3

3.6

Index

119

127

91

127

172

83

55

136

163

150

63

127

106

111

160

163

114

94

136

154

154

127

163

144

144

41

157

83

30

94

153

94

Countryrank / 175

2013

Table 21. Corruption Perceptions Index (CPI)*

3.0

3.2

3.3

2.8

1.8

3.7

4.9

2.5

1.9

2.5

4.8

2.9

3.7

3.3

1.8

…

3.7

3.4

3.2

2.2

2.3

2.6

2.2

2.4

2.7

5.7

2.0

3.8

6.3

3.9

1.9

3.6

Index

124

115

110

133

166

94

55

145

161

145

61

126

94

110

166

…

94

107

115

154

152

142

154

150

136

42

159

85

31

80

161

100

Countryrank / 174

2014

3.1

3.5

3.1

2.8

1.6

3.7

4.4

2.5

1.7

2.5

4.7

2.8

3.4

3.3

1.8

…

3.6

3.4

3.2

2.2

2.3

2.6

2.2

2.4

2.7

5.5

2.1

3.8

6.3

3.7

1.5

3.6

Index

African Economic Outlook

112

95

112

123

161

83

61

139

158

139

56

123

99

103

154

…

88

99

107

147

146

136

147

145

130

40

150

76

28

83

163

88

Countryrank / 167

2015

378

106
130

2.5
4.5
2.9

Mozambique

Namibia

Niger

42

3.3

2.8
4.2
2.5
3.0
2.2

Togo

Tunisia

UgandaZambiaZimbabwe

146

99

130

65

111

126

79

146

54

99

111

2.4

3

2.5

4.3

2.4

2.7

3.2

1.6

…

4.5

1.1

2.4

4.8

2.9

3

4

2.4

2.6

4.4

2.7

3.4

5.4

Index

134

101

127

59

134

116

91

172

…

54

178

134

49

105

101

66

134

123

56

116

85

39

Countryrank / 178

2010

2.2

3.2

2.4

3.8

2.4

3.0

3.1

1.6

…

4.1

1.0

2.5

4.8

2.9

3.0

5.0

2.4

2.5

4.4

2.7

3.4

5.1

Index

154

91

143

73

143

100

95

177

…

64

182

134

50

112

100

49

143

134

57

120

80

46

Countryrank / 182

2011

2.0

3.7

2.9

4.1

3.0

3.5

3.7

1.3

…

4.3

0.8

3.1

5.2

3.6

4.2

5.3

2.7

3.3

4.8

3.1

3.7

5.7

Index

163

88

130

75

128

102

88

173

…

69

174

123

51

94

72

50

139

113

58

123

88

43

Countryrank / 174

2012

2.1

3.8

2.6

4.1

2.9

3.3

3.9

1.4

1.1

4.2

0.8

3.0

5.4

4.1

4.2

5.3

2.5

3.4

4.8

3.0

3.7

5.2

Index

157

83

140

77

123

111

82

173

174

72

175

119

47

77

72

49

144

106

57

119

91

52

Countryrank / 175

2013

Table 21. Corruption Perceptions Index (CPI)* (cont.)

2.1

3.8

2.6

4.0

2.9

3.1

4.3

1.1

1.5

4.4

0.8

3.1

5.5

4.3

4.2

4.9

2.7

3.5

4.9

3.1

3.9

5.4

Index

156

85

142

79

126

119

69

173

171

67

174

119

43

69

76

55

136

103

55

119

80

47

Countryrank / 174

2014

2.1

3.8

2.5

3.8

3.2

3.0

…

1.2

1.5

4.4

0.8

2.9

5.5

4.4

4.2

5.4

2.6

3.4

5.3

3.1

3.6

5.3

Index

© AfDB, OECD, UNDP 2016

Note: * CPI score relates to perceptions of the degree of corruption as seen by business people and country analysts, and ranges between 10 (highly clean)
and 0 (highly corrupt).												Source: Transparency International: www.transparency.org.

2.6…

Tanzania176

4.7

South Africa

South Sudan
1.5

2.2
1.1

Sierra Leone

Somalia

3.6

…

4.8

Seychelles

Sudan

55

3.0

SenegalSwaziland

180

2.8

Sao Tome and Principe

89

2.5
3.3

Nigeria

Rwanda

56

130

89

5.4

Countryrank / 180

Morocco

Index

2009

Mauritius

STATISTICAL ANNEX

African Economic Outlook

150

76

139

76

107

117

…

165

163

61

167

119

40

61

66

44

136

99

45

112

88

45

Countryrank / 167

2015

379

…

0.3

…

0.0

…

GambiaGhana

Guinea

0.8

0.0

1.6

Morocco© AfDB, OECD, UNDP 2016…

0.0

Mauritania

Mauritius

1.3

3.9

Malawi

Mali

0.0

0.0

Libya

Madagascar

…

…

…

LesothoLiberia

0.0

1.4

0.0

…

1.2

1.5

0.3

…

8.1

1.8

4.4

Guinea-Bissau

Kenya

…

2.1

1.2

…

0.0

0.0

…

Ethiopia

0.0

Equatorial Guinea

Eritrea

0.0

…

6.7

…

…

…

0.7

…

0.3

0.0

…

0.8

Gabon

…

4.2

Djibouti

Egypt

…

8.2

Congo, Dem. Rep.

Côte d’Ivoire…

…

Comoros

Congo

…

3.0

Central African Republic

Chad

0.0

4.4

Cabo Verde…

Cameroon

1.5

Burkina Faso

Burundi

0.0

0.0

0.8

0.0

Benin

Botswana…

…

Angola

6.7

1998

2.3

1997

Algeria

STATISTICAL ANNEX

0.7

0.8

…

0.9

0.0

0.0

0.0

…

…

0.0

2.0

…

2.0

…

1.3

0.0

…

0.0

0.0

…

10.0

…

…

…

0.5

…

2.2

0.0

…

3.2

0.0

0.8

…

1.4

1999

0.7

0.0

…

0.0

0.0

0.0

0.5

…

…

0.0

0.8

…

0.0

…

0.0

0.0

…

0.0

1.6

…

6.7

…

…

…

0.0

…

0.3

0.0

…

9.4

0.0

0.0

…

…

2000

0.0

0.0

…

0.0

0.8

0.0

0.0

…

…

0.5

0.3

…

0.0

…

0.0

1.3

…

0.0

3.2

…

0.0

…

…

…

2.2

…

0.0

0.0

…

0.5

0.0

0.0

…

9.9

2001

0.0

0.0

…

0.0

0.8

12.8

0.0

…

…

0.0

3.3

…

0.0

…

1.3

0.3

…

0.0

2.6

…

2.9

…

…

…

0.0

…

1.5

0.0

…

1.1

0.0

0.5

…

10.0

2002

0.0

0.0

…

0.7

1.0

0.0

0.0

…

…

0.9

0.0

…

0.5

…

0.0

0.0

…

0.0

1.3

…

0.8

…

…

…

1.5

…

2.0

0.0

…

0.0

0.0

0.0

…

6.6

2003

1.2

0.0

…

0.5

0.3

1.0

0.5

…

…

2.4

1.3

…

0.0

…

0.5

0.0

…

0.0

3.1

…

2.4

2.0

1.5

…

0.0

…

1.0

0.0

…

1.6

0.0

1.5

1.5

1.3

2004

0.5

0.0

…

0.4

0.8

3.3

0.5

…

…

2.2

1.5

…

0.0

…

5.0

2.3

…

0.0

2.3

…

1.1

2.8

0.0

…

1.6

…

2.7

0.0

…

0.9

0.0

0.0

0.0

0.7

2005

2.0

0.0

1.8

0.5

0.3

0.8

0.3

3.3

0.0

2.5

4.0

3.8

0.0

0.0

6.1

0.6

…

0.0

4.1

0.0

12.8

7.3

0.3

0.5

1.3

12.8

4.5

0.0

2.3

3.8

0.0

0.5

1.0

4.0

2006

Table 22. Public protest

3.9

0.3

0.5

2.1

0.8

1.0

0.0

0.3

0.8

1.0

1.8

11.8

0.0

0.0

1.5

0.3

…

0.0

5.8

0.8

6.8

4.8

0.0

1.0

5.3

3.5

2.8

0.0

11.8

0.5

0.0

0.0

0.0

1.5

2007

2.7

0.0

5.3

0.0

0.0

0.0

0.0

0.0

0.0

5.1

0.5

0.8

0.5

0.0

0.9

0.0

…

0.0

4.6

0.0

4.9

1.8

0.0

1.8

1.0

1.8

1.0

0.0

0.0

2.5

0.0

0.0

0.0

2.5

2008

2.2

0.0

2.3

1.4

0.0

8.3

0.0

0.3

0.0

1.4

0.0

3.5

0.0

0.0

4.5

0.3

…

0.0

3.0

0.0

7.2

6.0

0.8

1.8

2.5

1.8

4.0

0.0

4.8

4.3

0.0

0.0

0.3

1.8

2009

1.0

0.0

0.3

0.8

0.5

0.8

0.0

0.0

0.0

0.5

0.8

3.0

0.0

0.0

7.5

0.0

…

1.0

3.5

0.0

3.0

1.8

0.0

0.0

0.5

3.3

6.8

0.5

3.8

0.8

0.3

0.0

0.0

9.0

2010

10.0

0.5

10.8

1.0

0.5

0.5

5.0

0.5

0.0

3.0

4.3

3.5

0.3

0.0

3.0

0.0

0.0

0.5

16.5

0.8

1.8

2.3

0.0

0.5

2.3

1.5

1.0

0.0

5.3

9.8

6.0

0.8

2.5

23.3

2011

9.5

0.0

11.8

7.0

0.8

6.5

7.5

0.0

0.0

4.5

0.8

4.0

0.3

0.0

9.0

0.8

0.0

0.0

20.8

0.0

1.3

3.3

0.5

1.3

4.0

1.3

0.8

0.0

0.3

2.8

0.0

0.0

1.8

5.0

2012

7.0

0.0

3.5

1.5

3.3

1.3

28.0

1.8

0.0

4.5

4.3

6.8

0.5

0.3

6.8

1.8

0.3

0.3

19.8

1.0

2.3

1.5

1.0

0.3

0.3

2.5

0.3

0.0

1.0

2.8

0.0

0.0

1.5

11.0

2013

9.5

0.5

1.5

1.3

0.5

1.0

13.5

1.8

0.0

3.5

0.3

1.8

0.5

0.0

30.3

0.5

0.0

0.0

7.0

0.0

1.0

7.0

0.0

1.5

0.5

4.5

0.3

0.0

1.3

6.5

0.0

8.3

0.3

8.5

2014

African Economic Outlook

2.8

0.0

6.5

2.0

0.0

2.5

7.0

0.3

0.0

4.0

0.3

5.0

2.0

0.0

5.8

1.3

0.0

0.0

1.3

0.3

2.3

5.5

3.3

2.3

2.5

2.8

1.0

0.0

5.5

5.5

0.0

0.3

2.3

3.0

2015

380

2.0

0.8

0.8

…

…

10.3

…

…

…

0.0

Sierra Leone

SomaliaSouth Africa

South Sudan

Sudan

Swaziland

Tanzania

3.7

Zimbabwe

4.8

2.1

0.0

0.3

…

…

…

…

4.6

1.5

0.0

0.7

0.3

0.0

…

…

…

5.6

…

…

…

1.1

…

…

6.3

…

0.0

1.5

1999

1.3

0.5

0.0

0.7

1.8

0.0

…

…

…

1.9

…

…

…

0.0

…

…

4.1

…

0.0

0.5

2000

1.4

5.0

0.0

0.0

1.3

1.0

…

…

…

1.5

…

…

…

1.4

…

…

5.3

…

0.0

0.0

2001

1.0

0.5

0.0

0.0

0.3

0.0

…

…

…

1.0

…

…

…

0.0

…

…

1.0

…

0.0

0.0

2002

5.9

3.4

0.0

2.8

0.5

0.3

…

…

…

0.6

…

…

…

0.0

…

…

0.8

…

0.0

0.8

2003

0.3

1.8

1.0

0.0

0.0

0.3

…

…

…

3.0

…

…

…

1.3

…

0.0

2.9

1.3

0.0

0.0

2004

1.0

0.9

1.0

1.3

6.3

0.3

…

…

…

1.0

…

…

…

2.2

…

0.0

0.5

1.5

0.0

0.0

2005

2.0

6.6

0.3

5.6

0.0

0.0

0.0

2.0

…

3.6

…

0.5

0.3

5.4

0.8

0.0

3.2

6.0

0.0

0.0

2006

6.9

2.4

1.3

1.9

0.3

0.0

1.8

0.5

…

7.5

…

1.3

0.0

4.5

2.3

0.0

2.3

1.8

0.0

0.0

2007

2.7

1.5

0.0

1.7

0.0

0.3

0.0

1.0

…

2.3

…

0.3

0.0

2.5

0.0

0.8

2.8

1.0

0.0

0.5

2008

Table 22. Public protest (cont.)

4.4

1.6

0.5

3.4

0.5

0.0

0.0

1.3

…

8.8

…

0.0

0.0

2.9

0.5

0.0

3.6

7.3

0.0

0.8

2009

3.5

0.3

0.0

0.8

1.8

0.3

0.0

1.3

…

6.3

…

0.3

0.0

2.5

0.0

0.0

3.8

0.0

0.3

0.5

2010

5.0

2.0

4.3

19.3

3.0

0.8

2.5

6.0

0.3

7.8

…

0.5

0.0

5.0

0.3

0.0

2.8

1.0

0.8

0.5

2011

0.8

1.0

1.3

30.5

3.5

1.8

2.0

7.3

0.3

22.3

…

1.0

0.0

11.0

0.0

0.0

4.8

0.5

0.0

0.5

2012

0.3

1.5

0.8

18.8

4.0

1.3

0.0

4.5

0.0

31.8

0.3

0.5

0.0

1.3

0.0

0.3

6.8

4.0

0.0

7.0

2013

0.3

0.3

1.3

10.5

2.5

0.8

0.3

1.5

0.0

39.5

0.3

2.3

0.0

1.8

0.0

0.0

11.0

3.8

0.3

1.0

2014

2.0

1.3

0.0

9.0

2.8

0.3

0.0

1.0

0.0

14.0

0.3

0.5

0.0

5.3

0.0

0.3

3.0

7.8

0.0

0.3

2015

© AfDB, OECD, UNDP 2016

African Economic Outlook

Note: The change in the source might affect the comparability of the 2006 indicator to its historical values. The indicators presented in the tables have been adjusted accordingly.
For more details about the sources and computation, see note on methodology.
Sources: Authors’ calculations based on news verified by the press agencies (Marchés Tropicaux et Méditerranéens for 1996-2005, AFP and Reuters for 2006 onwards).

0.0

1.5

UgandaZambia

0.5

…

…

0.0

1.9

5.0

Senegal

Seychelles

Togo

…

…

…

…

Rwanda

Sao Tome and Principe

Tunisia

…

2.8

…

2.3

Niger

Nigeria

…

0.0

0.0

Namibia

0.0

1998

0.0

1997

Mozambique

STATISTICAL ANNEX

381

0.0

0.0

0.0

Benin

0.3

14.2

Cabo Verde

0.0

5.0

6.5

2.0

0.0

…

…

0.0

…

10.8

0.0

…

4.1

0.3

…

0.0

…

0.0

5.3

…

…

0.0

0.0

2.5

2.3

…

0.0

0.0

Congo

Congo, Dem. Rep.

Côte d’Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar

MalawiMali

Mauritania

Mauritius

Morocco© AfDB, OECD, UNDP 2016

0.0…

Comoros

0.0

0.0

…

0.3

0.0

…

…

…

0.0

…

…

0.5

0.0

…

0.0

…

…

…

1.3

2.4

Chad

…

…

…

Central African Republic

Cameroon

0.0

…

0.0

Burundi

0.0

0.0

0.0

Botswana

Burkina Faso…

…

Angola

37.6

1998

31.3

1997

Algeria

STATISTICAL ANNEX

0.0

1.0

…

2.0

0.3

0.0

0.0

…

…

0.0

3.8

…

0.5

…

0.0

7.2

…

0.0

0.5

…

1.7

…

…

…

6.4

…

0.0

0.0

…

0.3

0.0

0.8

…

43.0

1999

0.0

0.0

…

0.0

0.0

0.0

0.8

…

…

0.0

1.0

…

0.5

…

0.0

2.0

…

0.0

2.0

…

6.2

…

…

…

7.7

…

0.7

0.0

…

0.0

0.0

0.0

…

37.8

2000

0.0

0.0

…

0.0

0.0

0.0

0.0

…

…

2.8

0.8

…

1.0

…

0.0

1.5

…

0.0

1.0

…

1.2

…

…

…

4.7

…

0.4

0.0

…

0.5

0.0

0.0

…

35.0

2001

0.0

0.0

…

0.0

0.3

4.0

0.0

…

…

0.5

0.3

…

1.0

…

0.0

12.4

…

0.0

0.0

…

3.1

…

…

…

3.0

…

0.0

0.0

…

0.5

0.0

0.5

…

15.4

2002

0.0

0.0

…

0.0

1.0

0.0

0.0

…

…

1.5

1.0

…

0.0

…

0.0

4.7

…

0.3

1.2

…

4.7

…

…

…

4.5

…

0.0

0.0

…

0.0

0.0

0.0

…

5.5

2003

0.5

0.5

…

0.0

0.3

1.3

0.3

…

…

0.5

1.0

…

0.5

…

0.0

8.1

…

0.3

1.3

…

6.0

4.5

0.0

…

1.0

…

0.3

0.0

…

0.5

0.0

0.3

13.5

19.2

2004

0.3

0.3

…

0.6

1.3

1.3

0.3

…

…

2.3

0.5

…

0.0

…

0.3

3.6

…

0.0

2.3

…

5.7

4.5

0.5

…

3.2

…

0.9

0.0

…

0.0

0.0

0.0

0.8

10.7

2005

0.0

0.0

0.0

1.0

0.3

0.8

0.0

2.5

0.3

8.3

1.5

0.0

0.0

0.0

0.0

7.4

…

0.0

3.5

0.0

7.0

12.0

0.0

0.0

13.8

6.0

1.8

0.0

6.3

0.0

0.0

0.3

0.3

12.8

2006

1.3

0.0

1.3

2.3

0.0

0.0

0.0

0.3

0.3

6.3

0.3

0.5

0.5

0.0

0.0

7.9

…

0.0

2.0

0.0

1.3

17.3

0.5

1.5

8.3

2.8

1.3

0.0

2.8

0.0

0.0

0.0

0.0

14.8

2007

1.0

0.0

1.5

4.2

0.0

0.0

0.3

0.8

0.0

8.3

0.0

1.3

0.5

0.0

0.0

4.2

…

0.0

4.3

0.8

1.0

10.3

0.0

0.8

3.4

2.5

1.3

0.0

2.3

0.3

0.0

0.0

0.3

10.8

2008

Table 23. Violence by non-state actors

0.0

0.0

1.3

2.6

0.0

2.8

0.0

0.8

0.0

4.8

0.3

0.3

0.0

0.0

0.8

5.0

…

0.8

4.1

0.5

1.0

18.8

1.0

0.0

3.0

7.3

3.3

0.0

4.3

0.0

0.0

0.8

0.5

11.0

2009

0.0

0.0

0.8

1.0

0.0

0.5

0.0

0.5

0.0

0.8

0.0

2.0

0.0

0.0

0.0

2.0

…

0.0

1.3

0.0

2.5

11.5

0.0

0.0

1.3

9.0

0.0

0.0

3.0

0.0

0.0

0.0

1.3

5.8

2010

2011

2.5

0.3

2.5

4.0

0.8

0.3

15.0

0.3

0.0

3.3

0.5

3.3

0.0

0.0

0.5

1.8

1.5

0.0

12.3

0.5

10.8

4.8

0.0

0.5

1.3

4.5

3.5

0.0

6.0

6.0

0.0

1.0

1.3

15.3

2.0

0.0

2.5

12.3

0.0

4.0

22.3

0.8

0.0

17.8

0.5

2.5

1.0

0.0

2.5

2.8

0.0

0.0

16.8

0.0

7.3

12.0

1.0

0.0

0.5

8.3

1.3

0.0

2.3

2.3

0.0

0.5

1.3

6.3

2012

2.8

0.0

0.5

12.5

0.3

2.8

23.8

0.0

0.0

13.5

0.5

8.0

0.3

0.0

0.0

0.8

0.0

0.3

29.0

0.3

2.8

13.8

0.3

0.0

0.5

18.5

2.0

0.0

1.8

1.0

0.0

0.0

0.5

6.3

2013

3.5

0.0

1.3

8.5

0.8

1.0

27.0

0.5

0.8

13.0

0.0

1.3

0.0

0.0

0.3

0.8

0.0

0.0

21.3

1.0

2.3

11.0

0.5

0.3

0.5

20.8

6.0

0.0

1.3

0.0

0.0

0.0

0.0

5.5

2014

African Economic Outlook

0.8

0.0

0.8

16.8

0.0

1.3

24.0

0.3

0.8

7.5

0.0

1.8

0.0

0.0

0.5

0.8

0.0

0.0

19.8

0.0

2.5

12.5

1.0

0.0

7.5

10.5

13.3

0.0

9.5

4.0

0.0

0.0

0.8

2.3

2015

382

0.5

…

…

7.0

…

…

…

0.5

Sierra Leone

SomaliaSouth Africa

South Sudan

Sudan

Swaziland

Tanzania

1.5

Zimbabwe

1.0

0.5

2.8

0.0

…

…

…

…

…

0.6

…

…

0.0

0.5

2.5

0.5

0.0

0.0

…

…

…

8.3

…

…

…

1.4

…

…

16.0

…

2.0

0.3

1999

3.8

0.0

0.0

0.0

0.8

0.0

…

…

…

4.5

…

…

…

1.6

…

…

12.4

…

1.0

1.5

2000

3.0

2.8

6.3

0.0

0.0

1.0

…

…

…

0.0

…

…

…

1.4

…

…

12.7

…

0.0

0.0

2001

3.8

0.0

3.8

0.8

0.0

0.0

…

…

…

0.5

…

…

…

2.2

…

…

6.4

…

0.0

0.0

2002

0.3

0.8

4.5

0.0

0.5

0.0

…

…

…

0.3

…

…

…

1.9

…

…

6.0

…

0.0

0.8

2003

0.8

0.0

10.3

0.0

0.0

0.0

…

…

…

2.0

…

…

…

2.1

…

0.0

11.3

1.0

0.0

1.0

2004

0.8

0.3

1.8

0.3

2.8

1.3

…

…

…

0.3

…

…

…

0.3

…

0.0

0.8

0.3

0.0

0.3

2005

0.0

0.5

3.8

0.0

0.0

0.0

0.5

8.8

…

0.5

…

0.0

0.0

1.9

0.0

0.0

16.4

0.3

0.0

0.0

2006

0.0

0.0

2.5

0.0

0.0

0.0

0.0

9.5

…

0.0

…

0.5

0.0

1.9

0.0

0.3

22.5

7.3

0.0

0.0

2007

8.0

0.3

1.8

0.3

0.0

0.0

0.0

9.5

…

4.3

…

0.0

0.0

0.3

0.0

0.5

12.9

5.5

0.0

0.8

2008

0.8

0.0

3.5

0.3

0.8

0.0

0.5

24.0

…

4.3

…

1.5

0.3

4.1

0.0

0.8

13.8

2.8

0.3

0.3

2009

Table 23. Violence by non-state actors (cont.)

0.8

0.0

0.0

0.0

0.0

0.0

0.0

18.3

…

0.5

…

0.0

0.0

4.8

0.0

1.0

12.5

0.3

0.0

0.8

2010

2.3

1.3

2.8

7.0

1.0

2.0

0.5

17.5

16.0

4.3

…

0.5

0.0

7.5

0.0

1.5

31.5

3.3

0.3

0.0

2011

0.0

0.5

1.0

11.5

0.0

1.8

0.3

15.0

8.3

8.3

…

0.8

0.0

6.0

0.0

5.0

34.8

0.5

0.0

4.0

2012

1.0

1.0

0.0

10.3

0.3

2.5

0.0

18.5

8.0

8.3

20.3

0.3

0.0

2.0

0.0

2.0

30.5

2.3

0.0

5.0

2013

0.3

0.0

© AfDB, OECD, UNDP 2016

African Economic Outlook

0.0

0.5

8.3

1.0

0.3

0.0

3.8

2.8

5.3

14.5

0.0

0.0

0.3

0.0

0.0

37.8

9.5

0.0

2.0

2015

0.0

0.5

8.8

0.0

0.3

0.0

10.8

4.8

3.5

16.5

0.3

0.0

0.3

0.0

0.0

36.5

1.8

0.3

0.8

2014

Note: The change in the source might affect the comparability of the 2006 indicator to its historical values. The indicators presented in the tables have been adjusted
accordingly. For more details about the sources and computation, see note on methodology.
Sources: Authors’ calculations based on news verified by the press agencies (Marchés Tropicaux et Méditerranéens for 1996-2005, AFP and Reuters for 2006 onwards).

4.0

0.8

UgandaZambia0.0…

Seychelles

0.0

0.0

4.2

Senegal

Togo

4.5

…

Sao Tome and Principe

Tunisia…

…

Rwanda

…

5.7

…

16.6

0.0

Nigeria

0.0

Namibia

0.0

1998

Niger

0.0

1997

Mozambique

STATISTICAL ANNEX

383

...

...

...

0.6

...

0.2

...

GambiaGhana

Guinea

2.8

0.0

4.4

Morocco© AfDB, OECD, UNDP 2016

...

0.0

Mauritania

Mauritius

0.5

1.3

Malawi

Mali

0.4

0.0

Libya

Madagascar

...

...

...

LesothoLiberia

2.0

3.9

0.0

...

0.0

0.3

0.1

...

0.9

0.0

2.7

Guinea-Bissau

Kenya

...

0.3

3.2

...

1.3

1.4

...

Ethiopia

0.3

Equatorial Guinea

Eritrea

4.9

...

0.5

...

...

...

0.3

...

1.3

0.0

...

0.2

Gabon

...

5.3

Djibouti

Egypt

0.9

Congo, Dem. Rep.

Côte d’Ivoire

...

...

Comoros

Congo

0.3

Central African Republic

Chad

0.0

2.3

Cabo Verde...

Cameroon

0.5

Burkina Faso

Burundi

0.0

0.0

0.0

0.1

Benin

Botswana...

...

Angola

6.5

1998

7.0

1997

Algeria

STATISTICAL ANNEX

3.8

0.1

...

0.1

0.0

0.0

0.0

...

...

0.0

0.8

...

0.6

...

0.7

2.2

...

0.0

4.1

...

2.8

...

...

...

0.0

...

1.3

0.0

...

1.2

0.2

0.0

...

6.1

1999

4.3

0.0

...

0.3

0.0

0.0

0.0

...

...

0.0

0.7

...

0.0

...

0.2

2.4

...

0.0

5.4

...

2.3

...

...

...

0.3

...

1.1

0.0

...

0.4

0.0

0.0

...

5.6

2000

4.2

0.0

...

0.3

0.4

0.0

0.1

...

...

0.2

0.4

...

0.2

...

0.1

3.1

...

0.2

4.6

...

0.7

...

...

...

0.6

...

1.7

0.0

...

0.3

0.0

0.0

...

7.4

2001

4.1

0.0

...

0.1

0.2

0.6

0.0

...

...

0.3

0.5

...

0.3

...

0.3

4.2

...

1.5

6.4

...

1.1

...

...

...

0.4

...

1.1

0.0

...

0.7

0.0

0.0

...

9.0

2002

4.4

0.6

...

0.3

0.2

0.0

0.1

...

...

0.5

0.0

...

0.0

...

0.5

2.5

...

0.2

4.8

...

2.1

...

...

...

1.6

...

1.4

0.0

...

0.6

0.0

0.0

...

6.5

2003

4.9

0.1

...

0.1

0.2

0.8

0.3

...

...

0.6

0.0

...

0.1

...

1.0

2.5

...

2.1

4.6

...

2.7

6.9

0.3

...

0.2

...

1.5

0.0

...

0.7

0.3

0.1

1.4

7.5

2004

4.0

0.2

...

0.0

0.8

0.3

0.1

...

...

0.7

0.3

...

0.0

...

2.1

5.2

...

0.0

6.4

...

2.1

8.1

0.3

...

1.7

...

0.9

0.0

...

0.2

0.1

0.1

0.1

5.5

2005

4.3

0.0

1.3

0.4

0.3

1.1

0.6

0.8

0.1

1.8

1.2

1.7

0.0

1.4

0.7

3.4

...

0.5

5.7

0.2

3.3

10.5

0.5

0.4

4.3

4.2

1.9

0.0

3.6

0.2

0.0

0.3

0.5

4.6

2006

4.4

0.0

1.1

0.5

0.3

0.9

0.5

0.3

0.3

2.6

0.8

3.0

0.0

0.3

0.5

3.4

...

0.3

7.1

0.1

1.2

8.9

0.4

0.9

2.2

0.8

1.2

0.3

1.4

0.1

0.0

0.1

0.2

6.1

2007

Table 24. Political hardening

4.6

0.0

9.0

1.9

0.3

0.0

0.5

0.5

0.0

7.4

0.6

2.8

0.1

0.9

0.2

1.9

...

0.5

7.9

0.6

1.5

4.0

0.2

0.6

5.7

0.5

1.6

0.2

1.2

0.8

0.0

0.5

0.8

6.8

2008

2.0

0.0

1.3

1.2

0.6

2.7

0.4

0.2

0.0

0.4

2.0

5.4

0.0

2.1

1.3

2.0

...

0.8

4.7

0.0

0.6

4.7

0.9

0.4

1.2

1.7

1.5

0.0

1.8

0.3

0.0

0.1

0.4

5.1

2009

2.2

0.0

0.6

0.1

0.5

0.7

0.1

0.0

0.0

0.0

0.1

1.6

0.2

0.2

0.9

1.4

...

0.5

5.4

0.1

4.0

5.0

0.3

0.0

0.8

1.9

1.8

0.0

2.5

0.1

0.0

0.2

0.7

1.8

2010

2.4

0.0

1.9

0.3

1.2

0.4

7.9

0.4

0.0

0.5

0.5

3.4

0.1

0.1

1.0

1.5

0.3

1.2

8.7

0.6

6.0

1.7

1.1

0.0

1.7

0.8

2.3

0.0

1.9

2.1

0.1

0.4

2.9

4.7

2011

3.9

0.0

1.5

4.7

0.0

2.7

3.5

0.0

0.0

1.0

0.5

1.9

0.7

0.2

2.6

1.5

0.0

1.2

7.5

0.1

1.8

1.1

0.5

0.8

0.4

1.5

1.6

0.0

0.8

0.1

0.0

0.1

1.1

3.4

2012

2.8

0.0

0.7

6.1

0.3

1.1

2.8

0.5

0.0

0.9

0.7

1.5

0.1

1.1

0.7

0.6

0.5

0.3

16.5

0.7

1.5

2.5

0.4

0.2

1.5

0.4

0.7

0.0

1.6

0.5

0.2

0.4

2.1

4.2

2013

2.6

0.0

0.6

1.6

0.1

0.6

3.1

0.6

0.0

3.3

0.0

0.4

0.0

0.4

1.1

1.1

0.0

0.1

10.4

0.6

0.6

3.8

0.6

0.7

0.2

1.7

1.9

0.0

1.5

0.8

0.0

0.0

0.3

3.2

2014

African Economic Outlook

1.9

0.0

0.5

1.7

0.2

0.8

3.6

0.1

0.0

1.7

0.2

1.4

0.0

1.3

0.5

0.7

0.0

0.1

7.9

0.3

1.4

3.9

1.4

0.3

1.4

0.3

1.2

0.0

5.7

0.4

0.0

0.4

1.6

1.7

2015

384

...

...

1.9

...

1.5

...

...

...

...

2.0

...

...

...

3.6

...

Rwanda

Sao Tome and Principe

Senegal

Seychelles

Sierra Leone

SomaliaSouth Africa

South Sudan

0.3

1.8

0.6

1.6

0.1

0.0

1.8

0.4

2.7

0.9

Tanzania

Togo

Tunisia

UgandaZambiaZimbabwe

1.3

1.3

0.7

2.0

0.2

0.0

...

...

...

1.1

...

...

...

1.3

...

...

3.1

...

0.3

0.3

1999

1.2

0.9

0.4

1.8

0.5

0.1

...

...

...

0.5

...

...

...

1.2

...

...

3.1

...

0.4

0.9

2000

3.1

1.8

1.9

2.2

0.6

0.1

...

...

...

0.3

...

...

...

1.7

...

...

2.7

...

0.1

0.3

2001

4.4

1.9

0.8

2.1

0.3

0.0

...

...

...

0.5

...

...

...

1.5

...

...

2.6

...

0.1

0.0

2002

3.9

1.0

1.4

1.8

0.0

0.1

...

...

...

0.4

...

...

...

1.6

...

...

2.9

...

0.2

0.1

2003

4.1

1.2

3.5

3.0

0.0

0.0

...

...

...

1.0

...

...

...

1.5

...

1.1

5.0

0.4

0.1

0.4

2004

3.3

0.9

1.1

2.1

0.8

0.4

...

...

...

1.1

...

...

...

1.9

...

0.1

2.7

0.8

0.0

0.0

2005

2.2

1.7

3.3

1.3

0.0

0.0

0.3

3.5

...

0.5

...

0.4

0.4

1.5

0.1

0.1

4.6

1.3

0.0

0.0

2006

3.0

0.5

2.0

1.9

0.0

0.0

0.3

3.6

...

1.2

...

0.6

0.0

2.6

0.3

0.1

3.7

1.4

0.0

0.0

2007

9.9

0.2

0.9

3.4

0.0

0.0

0.9

7.6

...

1.5

...

0.2

0.0

1.8

0.1

0.2

4.3

2.2

0.0

0.4

2008

Table 24. Political hardening (cont.)

3.3

0.5

3.0

2.1

0.7

0.3

0.2

5.0

...

1.6

...

1.0

0.4

1.2

0.7

0.2

2.9

3.9

0.1

0.5

2009

0.7

0.6

0.9

1.1

0.8

0.2

0.0

6.2

...

0.4

...

0.2

0.0

1.4

0.0

0.6

0.6

0.7

0.0

0.9

2010

3.6

0.7

2.3

4.9

0.8

1.4

1.2

7.9

2.5

0.3

...

0.4

0.0

1.3

0.0

0.7

3.2

0.5

0.0

0.1

2011

0.5

0.2

2.3

8.9

1.0

1.0

1.1

7.3

1.3

7.1

...

0.8

0.0

3.5

0.0

0.6

8.3

0.0

0.0

0.4

2012

3.5

1.9

1.5

7.6

1.2

1.6

0.3

2.0

0.9

4.5

1.2

0.6

0.0

0.8

0.0

0.1

5.2

0.3

0.0

3.0

2013

1.4

0.3

1.8

3.6

0.1

0.4

0.4

4.4

0.7

1.1

1.6

0.3

0.0

0.6

0.0

1.4

2.2

1.7

0.1

0.3

2014

0.4

0.4

1.1

3.1

0.4

0.5

0.2

1.7

0.8

0.9

0.7

0.2

0.0

0.6

0.0

0.3

2.9

2.2

0.0

0.3

2015

© AfDB, OECD, UNDP 2016

African Economic Outlook

Note: The change in the source might affect the comparability of the 2006 indicator to its historical values. The indicators presented in the tables have been adjusted accordingly.
For more details about the sources and computation, see note on methodology.
Sources: Authors’ calculations based on news verified by the press agencies (Marchés Tropicaux et Méditerranéens for 1996-2005, AFP and Reuters for 2006 onwards).

1.9

0.1

...

...

...

Sudan

Swaziland

...

...

...

3.4

...

4.2

Niger

Nigeria

0.6

0.0

0.2

0.1

1998

Mozambique

1997

Namibia

STATISTICAL ANNEX385

1 126

1 266

1 720

2 097

2 533

© AfDB, OECD, UNDP 2016

Mauritania

11 05210 510

Malawi

Mali

3 982

27 80425 93931 0583 087

15 489

Libya

Madagascar

852

4 932

828

2 611

49 454

Lesotho

29 782

Liberia

Kenya

994

8 102

Guinea-Bissau

22 661

16 608Ghana

Guinea14 878

2 990

1 387

Gambia1 438

89 064996

64 151

Ethiopia

5 194

971

59 603298

26 095

118 010

6 111

714

21 0933 881

25 018

Gabon

2 844

624

48 139529

EritreaEquatorial Guinea

Egypt

Djibouti

50 90914 436

Congo, Dem. Rep.

2 819

Côte d’Ivoire

Congo

480

2 626

9 525

Central African Republic

Chad

Comoros

14 412

Cameroon186

17 4897 052

235

24 683

11 283

Cabo VerdeBurundiBurkina Faso

Botswana

11 669

7 162

Benin

16 79540 45120 32916 810Algeria

2.0

2.6

2.5

2.3

1.3

2.1

1.4

2.1

1.9

2.2

1.8

2.5

1.8

1.9

2.0

2.1

1.7

1.3

2.1

2.5

2.3

1.9

2.5

1.8

2.1

1.4

2.6

2.4

1.5

2.1

2.6

1.4

Population
2050/2015
ratio

1 094

6 024

6 078

7 449

1 092

1 318

283

13 723

477

3 737

6 834

675

441

30 6031 633

236

18 145137

5 930

26 356

1 391

206

4 818

1 173

6 687

80

3 593

5 914

438

3 240

8 463

5 953

Activepopulation
increase,
2015-30
831

111

578
79

543

338

694

129

128

50

1 320

50

366

725

64

44

2 746

154

23

2 141

19

631

2 442

137

21

454

125

669

10

352

562

50

310

807

355

498

100

87

49

896

37

250

533

39

34

2 145

100

16

1 584

18

460

1 504

86

16

284

101

473

11

215

361

44

217

487

660

Yearly cohort Yearly cohortof new labour of new labour
entrants,
entrants,
2015
2030

1 522

7 242

7 081

9 529

1 839

1 742

772

17 707

685

4 897

9 868

814

614

39 9562 039

310

28 372288

8 715

31 340

1 760

292

5 877

1 807

9 094

164

4 319

7 368

733

4 240

10 28310 756

Total
entrance
inflow,
2015-30

1.3

1.0

1.1

1.2

1.9

1.2

1.5

1.2

1.3

1.2

1.4

1.1

1.4

1.2

1.2

1.4

1.6

1.7

1.2

1.0

1.2

1.3

1.0

1.3

1.2

1.9

1.1

1.1

1.8

1.2

1.0

1.9

Activityratio,
2015

1.7

1.5

1.6

1.6

1.9

1.7

2.1

1.7

1.7

1.7

1.8

1.5

1.9

2.0

1.8

1.8

1.8

2.1

1.6

1.5

1.5

1.8

1.5

1.9

1.7

2.1

1.4

1.6

2.1

1.7

1.4

1.7

Activityratio,
2050

2 442

6 490

2 816

8 508

4 962

2 238

579

11 978882

4 589

14 583

1 175

1 526

19 266

1 525

319

36 538696

11 53830 275

3 054

218

3 057

1 923

12 721

333

1 304

5 349

1 181

4 782

10 05228 739Urban
population,
2015

Table 25. Demographic projections (all populations are in thousands)

Projected
population
increase,
2015-50

AngolaPopulation
increase,
1980-2015

STATISTICAL ANNEX

3 425

20 7449 621

22 011

2 193

3 883

737

30 658

1 386

9 175

17 610

2 294

1 478

51 2564 504

508

32 326333

18 45963 589

5 114

358

9 385

2 908

21 281160

5 721

15 950761

8 792

24 62416 048

Projected urban
population
increase,
2015-50

African Economic Outlook

416

8 166

14 273

9 251

-160

1 005

-39

19 766

330

2 943

1 076

602

73

37 375

3 072

316

4 766

12

2 585

20 456791

380

10 526

780

3 925

-33

10 157

7 068

-37

2 465

6 881

-2 159Projected rural
population
increase,
2015-50386

16 243

7 638

Swaziland

8 314

1 291 358

14 012

1.0

2.1

1.9

2.7

2.6

1.2

2.1

2.6

1.4

2.0

2.1

1.2

2.5

1.8

1.0

2.4

1.9

1.8

2.2

3.6

1.8

2.3

1.3

324 750

4 433

5 620

14 432683

2 194

18 067177

11 407

3 633

4 721

3 279

1 655

0

4 967

50

3 361

51 433

7 840

574

8 458

3 350

-27

Activepopulation
increase,
2015-30

22 962

326

325

792

176

142

1 026

30

802

251

1 054

215

129

1

297

4

224

3 467

355

52

560

608

20

33 140

447

513

1 285

182

211

1 695

32

1 096

354

1 061

331

178

2

467

5

324

5 366

702

62

867

625

15

Yearly cohort Yearly cohortof new labour of new labour
entrants,
entrants,
2015
2030

443 568

5 951

6 646

16 523

2 693

2 813

21 436477

15 3204 847

16 637

4 336

2 479

22

5 957

73

4 454

70 166

8 233

887

11 438

9 400

290

Total
entrance
inflow,
2015-30

1.2

1.2

1.0

1.0

2.2

1.2

1.1

1.4

1.3

1.2

1.9

1.0

1.2

2.3

1.1

1.2

1.3

1.1

0.9

1.5

1.1

2.0

2.5

Activityratio,
2015

1.6

1.9

1.4

1.5

1.7

1.7

1.5

2.1

1.8

1.7

2.2

1.4

1.9

1.5

1.5

1.7

2.0

1.6

1.2

1.9

1.5

1.8

1.6

Activityratio,
2050

471 602

4 871

6 351

6 463

7 510

2 866

16 528274

13 391

2 285

34 663

4 399

2 524

51

6 544

132

3 581

87 681

3 609

1 116

8 737

20 439497

Urban
population,
2015

866 964

6 608

19 40826 903

2 599

5 538

52 041249

24 9966 118

14 44011 2653 369

14

13 366161

9 769

207 799

20 952

1 422

20 703

11 28173

Projected urban
population
increase,
2015-50359 972

4 599

9 278

37 033

-642

1 812

25 086281

12 5296 490-4 526

4 688

608

-8

4 599

24

3 181

49 03229 189-71

12 105-2 352-95

Projected rural
population
increase,
2015-50© AfDB, OECD, UNDP 2016

African Economic Outlook

Sources: United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects: The 2015 Edition; World Urbanization Prospects: The 2014 Revisions;
FAO STAT.

708 213

26 76410 282

ZambiaZimbabwe

Africa62 841

26 485

Uganda

2 222

4 584

4 885

Togo

8 376

505

83 66534 786684

13 51540 049Tunisia

Tanzania

25 817

South Sudan

Sudan

11 0494 697

25 413

SomaliaSouth Africa

3

4 939

30

3 367

21 093163

Seychelles

9 561

95

Sierra Leone

Senegal

Sao Tome and Principe

6 469

9 578

216 306

108 504

Nigeria

Rwanda1 863

37 56752 339

1 446

-24

9 319

Population
2050/2015
ratio

Table 25. Demographic projections (all populations are in thousands) (cont.)

Projected
population
increase,
2015-50

13 936

16 041

Mozambique

Namibia

Niger

307

14 306

Mauritius

MoroccoPopulation
increase,
1980-2015

STATISTICAL ANNEX

387

55

62

40

48

63

70

48

38

65

GambiaGhana

GuineaGuinea-Bissau

Kenya

LesothoLiberia

Libya

Madagascar© AfDB, OECD, UNDP 2016

51

52

Ethiopia

Gabon

49

53

49

Egypt

Equatorial Guinea

41

Djibouti

Eritrea

49

44

49

Congo

Congo, Dem. Rep.

44

Comoros

Côte d’Ivoire

47

42

Central African Republic

Chad

47

Cameroon

69

64

67

57

Burkina Faso

Burundi69

Botswana

Cabo Verde

63

52

Benin

42

61

12

53

71

63

57

45

68

78

60

68

61

50

47

52

34

75

40

47

71

77

54

55

76

62

55

58

53

75

90

48

81

69

58

40

67

66

75

33

48

68

85

67

57

51

77

72

24

33

65

88

61

60

91

47

41

89

Economic
Humanopportunities development

Algeria

Overall
score
42

59

13

45

58

58

29

35

52

21

22

52

50

31

16

5

40

22

31

13

32

31

22

57

63

46

41

47

64

10

...

38

9

22

21

32

30

52

40

25

...

...

43

...

25

43

20

...

47

33

28

...

17

28

...

28

17

...

Overall
score

49

...

57

43

35

41

54

39

51

65

28

...

...

67

...

50

52

51

...

97

53

50

...

56

54

...

28

46

...

Discriminatory
family
code

31

...

89

41

61

49

95

55

85

53

87

...

...

74

...

59

53

47

...

82

61

53

...

51

73

...

44

50

...

Restricted
physicalintegrity

0

...

2

21

44

7

23

31

0

17

9

...

...

37

...

19

7

0

...

0

1

21

...

17

19

...

37

8

...

Son bias

20

...

41

20

59

59

39

80

100

79

59

...

...

59

...

59

96

41

...

59

59

79

...

41

59

...

59

59

...

Restrictedresources andassetsSocial Institutions and Gender Index (SIGI), 2014 2

Table 26. Gender indicators

Laws andInstitutions

Africa Gender Equality Index 20151

AngolaSTATISTICAL ANNEX

35

...

80

0

20

54

45

54

80

81

20

...

...

81

...

54

81

61

...

61

80

45

...

26

45

...

80

20

...

Restricted
civil
liberties

...

13

65

54

55

...

...

55

62

51

56

...

...

57

...

68

67

59

...

71

66

59

...

49

63

48

61

...

41

Overall
score

GenderInequality
Index (GII),2014 3African Economic Outlook

95

95

79

95

91

...

78

89

89

...

84

...

...

87

...

81

83

92

81

77

77

88

...

91

88

98

82

...

84

Overall
score

GenderDevelopment
Index (GDI),
2014 4

388

65
51

62

73

Mozambique

Namibia

27

50

60

63

58

69

Togo

Tunisia

UgandaZambiaZimbabwe

75

71

67

74

54

61

73

65

46

...

63

60

69

77

63

58

94

41

65

86

43

...

92

9

43

...

65

76

79

59

42

90

58

79

98

59

47

59

45

58

34

47

54

24

6

...

68

12

59

...

40

14

68

39

35

66

60

42

69

14

21

61

Laws andInstitutions

14

45

22

20

19

25

21

56

...

6

46

37

...

20

...

13

39

44

12

14

11

...

40

52

21

Overall
score

57

51

51

43

37

72

49

84

...

2

60

33

...

59

...

26

67

100

17

42

46

...

76

83

40

Discriminatory
family
code

34

56

56

16

55

54

31

98

...

22

99

85

...

63

...

41

48

41

35

38

32

...

99

100

36

Restricted
physicalintegrity

30

17

30

48

13

17

0

14

...

22

9

4

...

9

...

14

25

17

7

0

16

...

17

30

17

Son bias

41

100

59

59

59

59

59

82

...

41

76

80

...

41

...

59

76

59

59

41

39

...

59

41

59

Restrictedresources andassetsSocial Institutions and Gender Index (SIGI), 2014 2

Table 26. Gender indicators (cont.)

0

80

26

45

35

26

61

66

...

20

61

61

...

26

...

26

80

81

28

45

20

...

20

80

61

Restricted
civil
liberties

50

59

54

24

59

55

56

59

...

41

...

65

...

53

...

40

...

71

40

59

53

42

61

68

61

Overall
score

GenderInequality
Index (GII),2014 3

92

92

89

89

83

94

88

83

...

95

...

81

...

88

89

96

84

73

98

88

83

95

82

78

91

Overall
score

GenderDevelopment
Index (GDI),
2014 4© AfDB, OECD, UNDP 2016

African Economic Outlook

Notes: 1. The AfDB GEI scores countries on a scale from 0 to 100, where 100 indicates perfect gender equality.
2. The SIGI and its sub-indices are between 0 and 100, with 0 indicating very low levels of discrimination and 100 indicating very high levels of discrimination.
3. The higher the GII value the more disparities there are between females and males.
4. This is the ratio of the Human Development Index for females compared to that for males. The higher the index, the lower the difference in Human Development Scores
between the genders.
Source: African Development Bank, African Gender Equality Index 2015; OECD, Gender, Institutions and Development Database, 2015; United Nations Development Programme, Human
Development Report, 2015.

58

64

Swaziland

Tanzania...

32

South Sudan

Sudan

16

...

58

Seychelles

Sierra Leone75

52

SenegalSomalia

...
71

50

Sao Tome and Principe

South Africa

51

74

Rwanda

66

42

55

Niger

Nigeria

67

38

53

73

53

53

Mauritius

42

Mauritania

32

89

Economic
Humanopportunities development

Africa Gender Equality Index 20151

Morocco73

33

Malawi

Overall
score

Mali

STATISTICAL ANNEX

389

Maps

maps

Map 6.1. Population settlements and urban catchment areas in West Africa, 2000

Rural density (inhabitants per km²)
<2

2 –15

16 – 50

City population
51 – 150

Rural density (inhabitants per km²)
Share of total rural population (%)< 2 0.3

2 –15
9

16
32 – 50

43 51 – 150 100

Shareof landareapopulationin urban catchment
Shareof totalrural(%) area (%)

0.3

3

9

29

73

32

> 150

94

43

Urban catchment area

50 000 – 100 000

90 km

100 000 – 350 000

120 kmCity population> 150

000 – 100
350 000 – 150
million
150000km> 1 million 100 000 – 350
180 km
000

100

100

Share of land area in urban catchment area (%)

Rural density(inhabitants
per
3
29
73
94 km²)

Urban
catchment area
Radialbufferfunctionof
90 km
agglomeration size
120 km

350 000 – 1 million

150 km> 1 million

180 km100

Radial buffer
function of
agglomeration size

City population

Urban catchment area

50 000 – 100 000
90 km
<2
2 –15
16 – 50
51 – 150> 150
Source: OECD (2013), Settlement, Market and Food Security, West African Studies, OECD Radial
Publishing,buffer
100 000 – 350 000
120 kmParis,
http://dx.doi.org/10.1787/9789264187443-en.
Shareof total rural population (%)
function of
0.3
9
32
43
100
350 000 – 1 million
150 kmagglomeration size

Share of land area in urban catchment area (%)
3

29> 1 million

180 km73
94
100
Map 6.2.
Africancoastal cities
affected by climate change

Source: WWF (2016), prepared for this edition of the African Economic Outlook, World Wildlife Fund, Washington, DC.

African Economic Outlook© AfDB, OECD, UNDP 2016

maps

Map 6.3. Current and future urban areas, forest cover and deforestation in Africa

Source: WWF (2016), prepared for this edition of the African Economic Outlook, World Wildlife Fund, Washington, DC.

Map 6.4. Accra’s urban expansion(Ghana), 1991-2014

Map 6.5. Algiers’ urban expansion(Algeria), 1987-2014

Esri, DeLorme, GEBCO, NOAA NGDC, and other contributors

Accra, Ghana
1991-2014
0

5

10

15

km
20

‡

City footprint
Footprint in 1991
Expansion 1991 - 2000
Expansion 2000 - 14

Water
Roads

Esri, DeLorme, GEBCO, NOAA NGDC, and other contributors

Algiers, Algeria
1987-2014
0

4

8

12

km
16

‡

City footprint
Footprint in 1987
Expansion 1987 - 2000
Expansion 2000 - 14

Water
Roads

Source: UN-Habitat (forthcoming), Atlas of Urban Expansion: The New 2016 Revision, UN-Habitat/New York
University/The Lincoln Institute of Land Policy.
© UN-Habitat with New York University and the Lincoln Institute of Land Policy.

© AfDB, OECD, UNDP 2016

African Economic Outlookmaps

Map 6.6. Arusha’s urban expansion(Tanzania), 1988-2013

Arusha, Tanzania
1988-2013
0

1.5

3

4.5

6

km

‡

City footprint
Footprint in 1988
Expansion 1988 - 2000
Expansion 2000 - 13

Map 6.7. Nakuru’s urban expansion(Kenya), 1989-2014

Esri, DeLorme, GEBCO, NOAA NGDC, and other contributors

Water
Roads

Nakuru, Kenya
1989-2014
0

2.5

5

7.5

km
10

‡

City footprint
Footprint in 1989
Expansion 1989 - 2000
Expansion 2000 - 14

Water
Roads

Source: UN-Habitat (forthcoming), Atlas of Urban Expansion: The New 2016 Revision, UN-Habitat/New York University/
The Lincoln Institute of Land Policy.
© UN-Habitat with New York University and the Lincoln Institute of Land Policy.

Map 7.1. Network of the top 50 foreign direct investments in Africa’s
manufacturing cities, 2003-14

Note: The cities written in red are the top ten source cities, and those in blue are the top ten African
destination cities.
Source: Wall, R. (forthcoming), based on raw data from fDi Markets, Orbis and IHS-Erasmus, in A. Badiane,
J. Maseland, R. Wall and K. Rochell, State of African Cities 2017, UN-Habitat, Nairobi.

African Economic Outlook© AfDB, OECD, UNDP 2016

maps

Map 7.2. Services network of top 50 investments from top 10 source cities
to top 10 African destination cities, 2003-14

Note: The cities written in red are the top ten source cities, and those in blue are the top ten African
destination cities.
Source: Wall, R. (forthcoming), based on raw data from fDi Markets, Orbis and IHS-Erasmus, in A. Badiane,
J. Maseland, R. Wall and K. Rochell, State of African Cities 2017, UN-Habitat, Nairobi.

Map 7.3. Africa’s city regions attracting hi-tech foreign direct investment
at four levels, 2003-14
interpolation using a geographic information system

Source: Wall, R. (forthcoming), based on raw data from fDi Markets, Orbis and IHS-Erasmus, in A. Badiane,
J. Maseland, R. Wall and K. Rochell, State of African Cities 2017, UN-Habitat, Nairobi.

© AfDB, OECD, UNDP 2016

African Economic Outlookmaps

Map 7.4. Current and future urban areas in relation to watersheds in Africa

Source: WWF (2016), prepared for this edition of the African Economic Outlook, World Wildlife Fund, Washington, DC.

African Economic Outlook© AfDB, OECD, UNDP 2016

maps

Map 8.1. Egypt resource flows: Water

AquiferRiver

Urbanised Area

Industrial Area

Agriculture

Desalination Plants

RESOURCE FLOWS

WATER

Map 8.2. Cairo resource flows: Water

River
Residential
Industry & Commercial
Urbanised Area

Water Purification Stations
Water Treatment Plants
Sewage Lifting Stations
Sewage network

Informal Area

Egypt depends on the Nile River for most of its water needs.
Water provision is insufficient with consumption 6.3% higher
than production. Any change in water provision would have a
Created by Phebe Dudek for the MIT Urban Metabolism Group led bymajor effect on agriculture.
Prof. John Fernandez in collaboration with Nourhan Magdy. July 2014
Sources Map: Aerial Picture: 2013 Google Earth; Admin border, Towns,

Rivers, Agriculture: 2002 AFRICOVER; Aquifers: 2003 Atlas of the Middle
Resource – Egypt draws
from
five
differentsources. The
East, water
National Geographic
Society;
Desalination
plants: 2007 Egypt
Holding Water & Waste Water; Rainfall: 2011, General Authority for
Planning; Industrial
areas: 2013, Generalfor
Authority
for PhysicalNile River is the majorPhysicalsource,accounting
79%.
Additional
Planning. Water bodies: 1992 Digital Chart of the World
Sources Data:
CAPMAS 2010/2011
sources are aquifers (9%),
desalination
plants (0.1%), rainwater(1.9%) and recycled agricultural drainage and treated water(10.2%). With 95% bare land, Egypt’s hot desert climate forces
urbanisation to develop close to water sources: the Nile Valley
and the coastlines of the Mediterranean and Red Seas.
Use – Agriculture is a major consumer of non-purified water(64.4% of total water consumption). Most of the purified water
feeds into households (13.5%), and industrial uses accounted
for 1.7%. Some 3% of the water evaporates due to the climate,and 21.6% of the water is lost through leaks in the distribution
network.

Resource – Cairo draws its water entirely from the Nile River.
Use – Half of the city’s water is refined for the following:
residential areas (22.2%), commercial areas (1.3%), industry(3.1%), governmental
agencies
andother uses (8.4%).
Created by Phebe
Dudek for the(5.6%)
MIT Urban
Metabolism
Group led
Prof. John Fernandez
in collaboration
No information
is byavailable
regardingthe withexact use of theNourhan Magdy. July 2014
unrefined half of the water. Some 17.5% of the refined water
SourcesMap:(or 8.6% of the total water provision) is lost due to leaks in the
Aerial Picture: 2013 Google Earth; Refined Water anddistribution Sewage
network.
Network: 2013, General Authority PhysicalPlanning; Admin border: Wagih, A. 1995; Land use: 2010

Waste – OnlyLand
17.8%
of wastewater
Info Worldwide
Mapping, LLCis treated. The remainder is
SourcesData:
dumped in the
Nileand the North Lakes.
CAPMAS 2010/2011(diagram based on Cairo Governorate data – Giza
Governorate not included)

Waste – Only 35% of the domestic wastewater and 50% of
the agricultural wastewater are treated. Large amounts ofuntreated wastewater are discharged into the Nile River, lakes
and the Mediterranean Sea, contaminating some of the water
sources.

Source: Dudek, P., N. Magdy and J. Fernandez (forthcoming), Urban Metabolism – Resource Flow Mapping: The Case of Cairo and Egypt.

© AfDB, OECD, UNDP 2016

African Economic Outlookmaps

Map 8.3. Recent and projected urban expansion of Hawassa (Ethiopia),
1989-2010, 1989-2040

Source: New York University (2016), prepared for this edition of the African Economic Outlook, Ethiopia Urban
Expansion Initiative, New York.

African Economic Outlook© AfDB, OECD, UNDP 2016

African Economic Outlook 2016
ÉCOLE

SUSTAINABLE CITIES AND STRUCTURAL TRANSFORMATIONThe African Economic Outlook 2016 presents the continent’s current state of affairs and forecasts
its situation for the coming two years. This annual report examines Africa’s performance incrucial areas: macroeconomics, financing, trade policies and regional integration, humandevelopment, and governance. For its 15th edition, the African Economic Outlook takes a hardlook at urbanisation and structural transformation in Africa and proposes practical steps tofoster sustainable cities.
A section of country notes summarises recent economic growth, forecasts gross domestic
product for 2016 and 2017, and highlights the main policy issues facing each of the 54 Africancountries. A statistical annex compares country-specific economic, social and politicalvariables.

Contents
Part I: Africa’s performance and prospects
Chapter 1: Africa’s macroeconomic prospects
Chapter 2: External financial flows and tax revenues for Africa
Chapter 3: Trade policies and regional integration in Africa
Chapter 4: Human development in Africa
Chapter 5: Political and economic governance in Africa
Part II: Sustainable cities and structural transformation
Chapter 6: The implications of Africa’s urbanisation for structural transformation
Chapter 7: How sustainable cities can contribute to Africa’s development
Chapter 8: National urban strategies for sustainable cities in Africa

Part III: Country notes

Statistical annex
Full-length country notes are available on www.africaneconomicoutlook.org/en/countries.

ISBN 978-92-64-25646-0
412016071P1