MONITORING INVESTMENTS FOR SOCIAL INCLUSION

S O C I A L D E V E LO P M E N T P O L I C Y D I V I S I O N ( S D P D )U N EC A , A D D I S A BA BA

2 7 - 2 9 M ay 2 0 1 5

Expert and Inter-Agency Technical Meeting on:IMPLEMENTATION OF THE SECOND UNITED

NATIONS DECADE FOR THE ERADICATION OF

POVERTY (2008-17)

Outline

� Background

� Paradox of Growth in Africa

� Inclusive development in Africa

� Status of external flows and FDI in Africa

� ODA and social investments

� Monitoring social investments through the ASDI

� Conclusion

2

The Paradox of Growth in Africa

� Growth in Africa has been strong since 2000 (about 4.5% on avg.); several countries are among the fastest growing in the world.

� This growth has not always led to more jobs, social progress, or reduction in inequality.

� There has been progress on poverty, but the number of people in poverty has increased.

� Growth has not had an impact –a transformative, inclusive effect – on people’s lives

350

370

390

410

430

450

470

490

1999 2001 2003 2005 2007 2009 2011 2014 2016 2018

Number of People in Poverty

GDP annual growth (selected regions)

3

Inclusive Development in Africa

� Like the developing world, countries in Africa characterised by

unemployment and under-employment – especially among the

youth, and increasing inequality.

� Demographic window of opportunity can become a challenge for

Africa as more than 12 million young people likely to join the labour

market per year in 2014-2024.

� Informal sector with low productivity, low wages and poor working

conditions often the only alternative to youth unemployment.

� Access to decent jobs and social protection necessary for inclusive,

equitable and sustainable development as emphasized in Agenda

2063.

4

Monitoring Social Investments

� Inclusive development - as envisioned in Africa 2063 –requires robust monitoring and evaluation mechanisms on the impact of social policies and investments.

� Monitoring improves information flows, effectiveness and mutual accountability of development interventions and investments

� But first, how is development financed in Africa?

5

Status of external flows in Africa

-10

-8

-6

-4

-2

0

2

4

6

8

10

2010 2011 2012 2013 2014e 2015f

Infl

ow

as

a

pe

r ce

nt

of

GD

P

-5

0

5

10

15

20

25

30

35

40

To

tal

fo

reig

n D

eb

t a

s a

pe

r ce

nt

of

GD

P

Foreign Direct Inves tment

Portfol io inves tments

Re mittances

Ofi cia l Development Assi s tance

Net Forein De bt

Total Fore in Debt

• Foreign direct investment (FDI) has

cataylzed growth in Africa – it is

approx. 4% of GDP and is growing

•ODA is declining and expected to

continue this negative trend

•Remittances are an important

contributor to financing development

•Total foreign debt and debt service

remain relatively high

Note: e = ECA estimates; Source: Calculations based on EIU, 2014, UNCTADstats, 2014.

Note: f = ECA forecast.

6

Status of FDI in Africa

0

5

10

15

20

25

30

35

40

45

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FD

I a

s a

p

er

ce

nt

of

GD

P Non-oi l and Non-

minera l

Minera l -rich

Oi l Exporting

Oi l Importi ng

• FDI increasing, but skewed

towards mineral rich and oil

exporting countries

• Growth employment

elasticities less than 1 in many

countries – i.e. economic

growth has not created

enough jobs

• Social inclusion is limited and

policies for improved inclusion

are “residuals”Source: Calculations based on EIU, 2014,

7

ODA – Quantity and composition

0

5

10

15

20

25

30

Bot

swan

a

Bur

kina

Fas

o

Bur

undi

Cen

tral

Afr

ican

Cha

d

Eth

iopi

a

Leso

tho

Mal

awi

Mal

i

Nig

er

Rw

anda

Sou

thS

udan

Sw

azila

nd

Uga

nda

Zam

bia

Zim

babw

e

1990

2000

2012

•ODA is decreasing

relative to 1990, and

reflects a changing donor

landscape

•Aid to the African

continent fell by 5.6% to

USD 28.9 billion.

•Excluding debt relief, net

aid to sub-Saharan Africa

rose by 1.2% (in real

terms) but fell by about

1% in Africa as a whole.

Source: UNSD 2015 (Note: Missing data for Rwanda and Zimbabwe for 2012)

8

ODA – Quality and composition

� ODA is increasingly become MDG-oriented - in most African

countries, ODA exceeds 25% of government expenditure

� Education and health allocation among aid recipients has

remained stable since 2000 at around 8 and 6 percent

respectively

� Investment in public services has pushed school enrolment

figures up to nearly 80% on average and reversed HIV prevalence

in most African countries

� Still, lack of sufficient ownership by countries and most ODA

driven by an external agenda

9

Africa’s Agenda 2063: Based on the Guiding

Principles of SDGs

Agenda 2063

Achieving a prosperous,

inclusive and sustainable

development

Social development in

line with structural economic

transformation

Social development

central to development

planning

Leaving no one behind

Equity

Inclusion

Equality

Social cohesion

Post-2015 Common African Position

and the SDGs

NEED FOR MONITORING

POLICIES AND INVESTMENTS

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Monitoring Investments in Africa

How can we ensure that

sufficient investments are

channelled and effective in

reducing exclusion and

implement inclusive

development policies?

The Marrakech Consensus

(9th ADF 2014) provides a

roadmap which can be

useful in the discussions

during the International

Conference on Financing

for Development (July

2015)

Reaffirm the value of the principles of the 2002 Monterrey Consensus and the Doha Declaration

Exploit the potential of the extractive industries to ensure that current and future generations benefit from resource earnings

Commit to using fiscal policies to address poverty and unemployment

Improve the necessary internal conditions for increasing domestic savings

Establish strong institutions and efficient regulatory and enforcement frameworks

Develop and implement innovative policies to encourage public-private partnerships

Explore ways to lower the cost of remittances, introduce diaspora Explore ways to lower the cost of remittances, introduce diaspora bonds, and employ insurance and pension funds for social

investments

A roadmap for““““Innovative Financing for Africa’s Transformation ””””

From the Marrakech Consensus, 9th African Development Forum (Oct 2014)

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Monitoring Social Investments through the

ASDI

� The African Social Development Index (ASDI) developed to

measure exclusion and assess the impact of social policies and

investments. ASDI:

� A tool to identify the drivers of exclusion

� Maps out and improve the effectiveness of social policies

� Monitors/enhances investments in social sectors

� Social investments can be monitored through a policy mapping

exercise

12

Key features of the ASDI

Focused on exclusion/inclusion

Based on the life-cycle

Disaggregated by gender, location and sub -national levels

Anchored on Africa’s priorities

13

ASDI for Social Policy Mapping

Assess the “inclusiveness” of

social policies

Analyse the drivers of exclusion (improving targeting of social programmes)

Guide social budgeting at sub -

national levels

Enhance the impact of social

investments

ASDI

14

Application of the ASDI in Africa

� ASDI piloted in five countries: Cameroon, Kenya, Morocco,

Senegal and Zambia

� Roll-out underway in the rest of the region - through a series of

subregional training for national experts

Key Objectives:

� Build national capacities for tracking exclusion within countries

and groups of population

� Equip member States with a tool to monitor and enhance the

effectiveness of social policies and investments - at national and

subnational levels

15

Initial Results - Senegal

Historical trends, by sub-regions

� Overall, exclusion in Senegal has dropped by 21% between 2002 and 2011

� South and Central regions remain the most affected, but their situation

improved by 9 and 19% respectively

16

Initial Results - Morocco

The drivers of exclusion vary significantly across subgroups…

17

Unemployment is the most important driver of exclusion in urban

areas, while men face challenges with survival in infancy.

Conclusion

� Need to refocus the development agenda towards a more people-centered, inclusive and sustainable path

� Increase the quantum of domestic and foreign resources to social programmes

� Develop robust M&E mechanisms to carefully monitor social investments

� ASDI a useful tool to guide implementation and monitoring of Agenda 2063 and design of socially inclusive national policies.

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