nepad-oecd africa investment initiative · nepad-oecd africa investment initiative 3 1. ... %...

1

NEPAD-OECD

AFRICA INVESTMENT INITIATIVE

2NEPAD-OECD Africa Investment Initiative

Presentation outline

1. CONTEXT

2. GOALS & DESIGN

3. ACTIVITIES & WORK METHODS

4. EXPECTED IMPACT

5. GOVERNANCE


1. CONTEXT

Investment is a driver of economic development and poverty reduction,

but obstacles to investment keep African country investment rates low


Africa’s poverty rate is declining, but is unlikely to meet MDG target

0

10

20

30

40

50

60

1990 2000 2007 2015

Actual (Sub-Saharan Africa)

Path to goal

Population living on less than $1 a day%

Source: UN-OECD


Africa attracts a small share of global FDI, yet relative to GDP,

FDI is large and rising…

Europe

48.7 %

Americas

25.1 %

Asia and

Oceania

23.5 %

Africa

2.7 %

Share of global FDI inflows, 2006

0

5

10

15

20

25

30

1985 1990 1995 2000 2005 2006

Africa

World

%

FDI inward stock as % of GDP, 2006

Source: UNCTAD-OECD Source: UNCTAD-OECD


Mauritius

… but mostly in oil-rich countries...

Net oil importer

Above 30%

Below 15%

15% to 30%

Net oil exporter

Above 30%

Below 15%

15% to 30%

FDI inward stock as a % of GDP (2005)

Algeria

Libya Egypt

Mauritania

Mali

Niger

Chad

Dem.Rep.

Congo

Sudan

Central African

Republic

Equatorial Guinea

Gabon Congo

Cameroon

Angola

Guinea-Bissau

Guinea

Sierra Leone

Liberia

Côte

d'Ivoire

Tunisia

Burkina

Faso

Ghana

NigeriaTogo

Ethiopia

Somalia

Djibouti

Kenya

Tanzania

Mozambique

South

Africa

Botswana

Zimbabwe

Namibia

Zambia

Swaziland

Lesotho

Malawi

Uganda

Burundi

Rwanda

Madagascar

Senegal

The Gambia

Cape Verde

Benin

Comoros

Eritrea

Sao Tome & Principe

Seychelles

Morocco

Source: UNCTAD-OECD

7

Investment climates still need much

improvement so as to attract FDI…

NEPAD-OECD Africa Investment Initiative

The cost of doing business in Africa remains the highest in the world:


Low savings rates limit Africa’s growth potential…

Savings trends: regional comparison per decade


Above 20%

… and domestic investment rates therefore also remain very weak.

Business investment as a % of GDP (2005)

10% to 20%

Below 10%

Algeria

Libya Egypt

Mauritania

Mali

Niger

Chad

Dem.Rep.

Congo

Sudan

Central African

Republic

Equatorial Guinea

Gabon Congo

Cameroon

Angola

Guinea-Bissau

Guinea

Sierra Leone

Liberia

Côte

d'Ivoire

Tunisia

Burkina

Faso

Ghana

NigeriaTogo

Ethiopia

Somalia

Djibouti

Kenya

Tanzania

Mozambique

South

Africa

Botswana

Zimbabwe

Namibia

Zambia

Swaziland

Lesotho

Malawi

Uganda

Burundi

Rwanda

Madagascar

Senegal

The Gambia

Mauritius

Cape Verde

Benin

Comoros

Eritrea

Sao Tome & Principe

Seychelles

Morocco

Source: UNCTAD-OECD


Advancing private sector development in African countries

2. GOALS & DESIGN STRUCTURE


Objectives of the Initiative

• To support and strengthen the capacity of African countries to identify and implement concrete policy reforms that improve the investment climate

• To raise the profile and image of Africa as a place in which to invest

• To facilitate regional co-operation among African countries

• To strengthen Africa’s voice in international dialogue on policies for investment


• Demand-driven, African-led partnership with NEPAD and OECD support

• Focused on areas of technical need and where OECD experience and expertise add maximum value

• Cost-effective, process-based and result-oriented, with outcomes aimed at impacting policy development and capacity-building within African governments

• Complementary and in co-operation with other institutions active in the field (e.g. World Bank, AfDB, RECs, UNECA, UNCTAD)

Design principles of the Initiative


• A partnership approach to policy capacity building, based on experience-sharing and peer learning

• The availability of multilaterally-backed investment policy tools which African countries can adapt and develop to their specific needs

• Comprehensive, coherent and process-oriented policy assessments

• Mobilisation of other fields of OECD expertise and its role as a facilitator

• A forum for conditionality-free policy co-operation and dialogue with the world’s major investing countries

Value added from OECDco-operation with NEPAD


Political support for the Initiativeis strong

“African countries need to build a much stronger investment climate:

we will continue to help them do so, including through the promotion

of a stable, efficient and harmonised legal business framework",

noting "the improvement of the investment climate through the OECD-NEPAD Investment Initiative".

G8 Heads of State Communiqué on Africa, Gleneagles, July 2005

"We will individually and collectively continue to support initiatives which address the investment climate, such as … the NEPAD-OECD

Africa Investment Initiative."

G8 Summit Declaration on Growth and Responsibility in Africa, Heiligendamm, June 2007


Political support for the Initiativeis strong

“The G8 will continue to advance a number of initiatives to improve

the investment climate and strengthening financial markets in Africa,

such as the NEPAD-OECD Africa Investment Initiative”.

Progress Report by the G8 Africa Personal Representatives (APRs) on

implementation of the Africa Action Plan, Hokkaido Toyako, July 2008

"In the next 5 years the TICAD process will specifically focus on … promotion of good governance, including strengthening economic

governance through the NEPAD-OECD Africa Investment

Initiative”.

TICAD IV Yokohama Action Plan,

Yokohama, May 2008


3. ACTIVITIES & WORK METHODS

Result-oriented and process driven, using and adapting multilaterally-

backed policy assessment and capacity-building tools

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The Initiative supports the efforts of NEPAD governments to enhance

their investment climates by:

• Strengthening country capacity for designing, implementing and monitoring investment policy reforms

• Creating a network of dialogue between investment policy makers from NEPAD and OECD countries

• Creating a favourable environment for employment creation through investment climate improvements

• Assisting ministries and government agencies in co-ordinating their work

• Reinforcing the impact of development initiatives supported by international, regional and bilateral donors



The Initiative follows a comprehensive approach to driving feasible reforms (A)…

Administrative

practicabilityPolitical

support

Assessing this …

… helps stimulate

this

… helps stimulate thisBuilding capacity here …

Obstacles to

investment

A

Source: Adapted from Lax and Sebenius

19

Administrative


support

Obstacles to

investment

A


Source: Adapted from Lax and Sebenius

Administrative


support

Obstacles to

investment

A

Administrative


support

Obstacles to

investment

A

… using and adapting policy assessment and capacity building tools…


…such as the Policy Framework for Investment

• PFI is a tool to support African governments in:

– Coherently identifying the bottlenecks to investment

– Formulating the right policies and governance structures to address the obstacles

– Enabling effective implementation and monitoring of policy reforms

• Key features of the PFI:

– Non-prescriptive

– Focus on policy governance

– Domestic and international investment

– Comprehensive, covering all policies that are important for investment

• Download the PFI at: www.oecd.org/daf/investment/pfi

http://www.oecd.org/daf/investment/pfi


Recent achievements

Brazzaville roundtable (Dec. 2006):Main outcomes• A dialogue was initiated between the APRM Secretariat, other

NEPAD actors and reform-oriented countries wishing a more robust investment dimension in the APRM

• African countries have begun to use the PFI for self-evaluation

Lusaka roundtable (Nov. 2007):Main outcomes• Country experiences were given on challenges relating to the

investment climate content of Africa’s own peer review process (APRM). The decision was taken to review the APRM country self-assessment questionnaire.

• The PFI User’s Toolkit was discussed based on its application in Zambia and on its role in supporting investment climate reform

• The investment environment conditions conducive to attracting sustainable investment in water and sanitation were analysed in light of new trends in private involvement in the sector.


Next steps

Next roundtable (Uganda, 10-11 Dec. 2008):Main focus• Making the most of best practices that will help NEPAD

countries implement investment policy reforms, using innovative policy papers and country-specific experiences as a springboard for comprehensive , multi-stakeholder dialogue.

• Engaging the business sector as an agent for development

• Taking advantage of Africa’s own peer review process (APRM) and of multilaterally-backed policy tools such as the Policy Framework for Investment (PFI).

• Sharing best practices to identify the business environment conditions conducive to attracting investment in Africa’s road transport infrastructure.

• Investigating regional initiatives for improving transport infrastructure in the East African context


Next steps

Renewal of the Initiative for 2009-2011:

• The first phase of the Initiative has focused on region-wide dialogue on investment policy. The second phase will focus on implementation. It will prioritize:

• Consolidating the regional dialogue on investment policies, including on reforms aimed at facilitating regional infrastructure projects and on strengthening the APRM’s investment dimension;

• Engaging the private sector and reinforcing the dialogue with African governments on issues such as corporate responsibility; and

• Supporting pilot countries that are willing to review/reform their investment framework, by: evaluating the current investment climate based on the PFI, providing technical support, and facilitating peer-sharing of national experiences.


4. EXPECTED IMPACT

An increase in beneficial private investment in African countries and closer regional economic integration


Expected impacts of the Initiative

• Better-informed decision-making

• Policy coherence within the Government on investment climate issues

• More effective policies for development-geared, pro-poor investment

• Strengthened capacity in African countries to reform and implement policies which create a level playing field for all investors

• Better perceptions and reality of African countries as locations to invest

• Improved competitiveness, attracting more FDI and domestic investment

• Closer integration into the global economy


5. GOVERNANCE

The Initiative is governed by a Steering Group and is entirely

funded through voluntary contributions


A Steering Group manages the Initiative

• Roles: To provide strategic direction, oversee the work programme, mobilise political and financial support and assist in the dissemination of outputs of the Initiative

• Chair: Chief Executive, NEPAD Secretariat. Vice Chairs from a NEPAD and an OECD country

• Other members: Senior investment experts from NEPAD countries, OECD countries, AU Commission, the Regional Economic Communities, multilateral development banks, UNCTAD, the OECD’s Network on Poverty Reduction (POVNET) and Development Centre, the Africa Partnership Forum (APF), the Investment Climate Facility for Africa (ICF), the donor community, and the private sector


Financing the Initiative

• The Initiative is entirely funded through voluntary contributions

• Japan, Belgium and Germany have so far provided financial support to the Initiative

• Support for the programme is building, but more is needed


From the NEPAD secretariat:Mr. Victor Mathale, Advisor: Private Sector Initiativese-mail [email protected]: +27 (11) 313 3384; Fax +27 (11) 313 3583

From the OECD secretariat: Mr. Karim Dahou, Executive Programme Manager,e-mail: [email protected]: +33 145241938; Fax +33 144306135

Mr. Toru Homma, Project Manager,e-mail: [email protected]: +33 145248448; Fax +33 144306135

Contact informationVisit: www.oecd.org/daf/investment/africa

THANK YOU

mailto:[email protected]




http://www.oecd.org/daf/investment/pfi

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