Interview with Economic Development and Research Department Director, Léonce Ndikumana

“Economic development and good governance are certainly closely linked. The AEO reflects this by not only discussing macroeconomic and structural developments on the continent, but also political and governance aspects. Indeed, each country note devotes a section to recent changes in the political situation and economic governance that presents annual updates in this area,” says EDRE Director, Léonce Ndikumana.

Question: What are the key themes in the 2010 African Economic Outlook (AEO) that is at the heart of today’s peer review meeting organized by the Bank?

Answer: The peer review meeting brings together the contributors to the 2010 AEO in order to discuss the detailed country-level analysis on the economic situation and prospects for AfDB Regional Member Countries (RMCs). It is a very important gathering to ensure consistent, high-quality analysis across all the 50 countries that will be covered in this year’s report.

Question: The Bank Group is in a partnership with the OECD, UNECA and the European Union. Could you explain the relevance of this collaboration to our readers?

Answer: The AEO is a large collaborative project that builds on the respective strengths of its core partners, that is, the OECD Development Center, UNECA, and the AfDB, and it enjoys financial support from the European Commission. It also benefits from the expertise and contributions of research institutes in 10 Bank Group RMCs, as well as Bank staff involvement as country note authors, peer reviewers, and discussants. This year, the AEO has a record participation of country economists in operations, including several colleagues based in field offices.

Question: What contribution is the Bank Group going to make during the deliberations? In other words, what will be the Bank’s value added during the collaboration?

Answer: Since 2007, the AfDB has taken over the role of a lead partner in the project and is responsible for coordinating the preparation of the report and for undertaking key parts of the analysis, notably the overview of economic developments on the continent, the preparation of the economic forecasts, and the drafting of the majority of country notes.

Question: The Bank Group has played its role before, during and after the global financial crisis which hit the continent. A look at the economic aggregates of some African countries shows a great improvement in terms of economic performance. For example, Malawi, which the AfDB President, Donald Kaberuka, has cited on more than one occasion, is showing signs of growth. We are witnessing economic growth in this country. Some hold that this gives to understand that there is a positive link between economic prosperity and good governance. What is your view regarding this?

Answer: Economic development and good governance are certainly closely linked. The AEO reflects this by not only discussing macroeconomic and structural developments on the continent, but also political and governance aspects. Indeed, each country note devotes a section to recent changes in the political situation and economic governance that presents annual updates in this area.

Question: You have underscored that bilateral and multilateral partners, including the World Bank and the IMF should increase official development assistance to Africa to help position the continent for the post-crisis period. Do you thin this call was heard given that all the promises were not fulfilled and that developed countries are posting high levels of unemployment and other economic indicators are pointing south? Should the continent still count on aid?

Answer: Every year, the AEO addresses a particular theme of high relevance to the continent. The theme for the 2010 edition of the report is: “Public Resource Mobilization and Aid” and this directly relates to the issue you have raised. The thematic discussion in the country notes and the Africa-wide synthesis will present information on the situation and prospects of mobilizing resources for development with a view to addressing the large investment needs in Bank Group RMCs, becoming less dependent on external financial resources, and strengthening the accountability and legitimacy of public spending by establishing stronger links between governments and tax-paying citizens.

Question: Most African countries are faced with growing deficits with ever growing expenses. As an economist, which sectors should African countries depend on to attain growth?

Answer: The Africa’s economic situation is highly diverse, so that one has to carefully look at individual countries to address your question properly. But what is clear is that while the financial and economic crisis did not originate in Africa, it affected countries on the continent quickly through global markets. The same transmission channels of global trade, financial flows, worker remittances, and tourism revenues are now also driving the recovery. I would very much like to share with you our forecasts for 2010 and 2011, but deriving and discussing these is part of the objective of the peer review meeting that we are holding in Gammarth this week.