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A Partner of Choice for the Eastern Africa We Want

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A Partner of Choice for the Eastern Africa We Want THE AFRICAN DEVELOPMENT BANK A Partner of Choice for the Eastern Africa we want The African Development Bank A Partner of Choice for the Eastern Africa we want THE AFRICAN DEVELOPMENT BANK A PARTNER OF CHOICE FOR THE EASTERN AFRICA WE WANT THE AFRICAN DEVELOPMENT BANK GROUP This report has been prepared by the African Development Bank (AfDB) Group. Designations employed in this publication do not imply the expression of any opinion on the part of the institution concerning the legal status of any country, or the limitation of its frontier. While efforts have been made to present reliable information, the AfDB accepts no responsibility whatsoever for any consequences of its use. Vice President: Zondo Sakala Regional Director (EARC): Gabriel Negatu Lead Economist: Stefan Muller Regional Integration Specialist: Robert Rudy Consultants: Andy Dijkerman, James Adams Copyright 2014 — AFRICAN DEVELOPMENT BANK GROUP Photo Credits: AfDB photo fi les. PUBLISHED BY African Development Bank Group - East Africa Regional Resource Centre (EARC) Khushee Tower Longonot Road, Upper Hill Nairobi, Kenya Phone: (254) 20 2712925/26/28 Fax: (254) 20 2712938 Email: [email protected] Website: www.afdb.org 4 | AFRICAN DEVELOPMENT BANK GROUP Table of Contents List of Figures ii List of Tables iii List of Text Boxes iv List of Project Showcase Profi les iv Abbreviations and Acronyms v Acknowledgements vi Preface vii Executive Summary viii 1 Eastern Africa — A Region on the Rise Aided by the AfDB as a Partner of Choice 1 1.1 A Region on the Rise 2 1.2 The AfDB as a Partner of Choice 12 2 Country Profi les and AfDB Engagement 23 2.1 Burundi 25 2.2 Comoros 33 2.3 Djibouti 41 2.4 Eritrea 49 2.5 Ethiopia 57 2.6 Kenya 65 2.7 Rwanda 75 2.8 Seychelles 83 2.9 Somalia 91 2.10 South Sudan 99 2.11 Sudan 107 2.12 Tanzania 115 2.13 Uganda 123 3 Eastern Africa Tomorrow — The Coming Decades of Change and AfDB’s Role 131 3.1 Where is Eastern Africa Likely Heading 132 3.2 How Can the AfDB Best Support Eastern Africa’s Future? 147 Annexes 154 NOTE: All information and data used in this report are from the African Development Bank, unless otherwise indicated. AFRICAN DEVELOPMENT BANK GROUP | i THE AFRICAN DEVELOPMENT BANK A PARTNER OF CHOICE FOR THE EASTERN AFRICA WE WANT List of Figures Figure 1: East Africa Figure 2: East African Rift Figure 3: Gregory Rift Figure 4: Oil Discoveries in Africa: 1975 to 2014 Figure 5: Real GDP Growth, Annual % Figure 6: Positive Per Capita Growth in Eastern Africa Figure 7: Contribution of EAC, Horn and Island States to Regional GDP in 2012 Figure 8: Regional GDP—Country Shares in 2012 Figure 9: Eastern Africa Infl ation, Fiscal Balance and Real GDP Growth Trends Figure 10: FDI Infl ows to Africa, 2000-2008 Figure 11: Regional Institutional Landscape Figure 12: Africa Infrastructure Development Index Figure 13: New ICT Park in Nairobi, Kenya Figure 14: The AfDB’s Ten-Year Strategy and Means of Engagement 2013-22 Figure 15: Building Blocks for East African Power Pool Figure 16: Public Sector Highway Infrastructure Figure 17: Infrastructure Portfolio for East Africa, Current Value by Sector Figure 18: GDP Composition in Burundi Figure 19: Composition of Djibouti Economy Figure 20: Extent of Structural Shift in Ethiopian Economy Figure 21: Selected Macroeconomic Trends for Sudan Figure 22: East Africa on the Continuum of Country Competitiveness Figure 23: Rich Attributes of a Fully Developed Value Chain Figure 24: The Contrast Between a Fragmented and Integrated East Africa Figure 25: East Africa Power Pool Figure 26: Signature Energy Projects in East Africa Figure 27: ICT Infrastructure Plans in East Africa Figure 28: The Planned Trans-Africa Highway System Figure 29: Diverse Starting Gates for East African Countries Figure 30: Action Priorities for a Diverse Array of East African Governments ii | AFRICAN DEVELOPMENT BANK GROUP List of Tables Table 1.1: Selected Socioeconomic Indicators for East African Countries Table 1.2: Eastern Africa Macroeconomic Indicators Table 1.3: Composition of Labour Productivity Growth 2000-2005 Table 2.1: Burundi: Socioeconomic Indicators Table 2.2: Burundi Business Indicators 2013 Table 2.3: Comoros GDP and Growth Rates Table 2.4: Comoros: Socioeconomic Indicators Table 2.5: Comoros Business Indicators Table 2.6: Djibouti Socioeconomic Data Table 2.7: Djibouti Business Climate 2014 Table 2.8: Composition of Eritrea GDP Table 2.9: Eritrea Socioeconomic Indicators Table 2.10: Eritrea Business Climate 2012 Table 2.11: Ethiopia Socioeconomic Indicators Table 2.12: Ethiopia Business Climate Table 2.13: Kenya Economic Growth Rates Table 2.14: Kenya Socioeconomic Indicators Table 2.15: Kenya Business Climate Table 2.16: Composition of Rwandan Economy Table 2.17: Rwanda Socioeconomic Indicators Table 2.18: Rwanda Business Climate Table 2.19: Composition of Seychelles Economy Table 2.20: Seychelles Socioeconomic Indicators Table 2.21: Seychelles Business Climate Table 2.22: South Sudan Socioeconomic Indicators Table 2.23: South Sudan Business Climate Table 2.24: Composition of Sudan Economy Table 2.25: Sudan Socioeconomic Indicators Table 2.26: Sudan Business Climate Table 2.27: Composition of Tanzania Economy Table 2.28: Tanzania Socioeconomic Indicators Table 2.29: Tanzania Business Climate Table 2.30: Composition of Uganda Economy Table 2.31: Uganda Socioeconomic Indicators Table 2.32: Uganda Business Climate Table 3.1: Gross Resource Production per Capita AFRICAN DEVELOPMENT BANK GROUP | iii THE AFRICAN DEVELOPMENT BANK A PARTNER OF CHOICE FOR THE EASTERN AFRICA WE WANT List of Boxes Box 1: ‘One Bank Approach’ To Convene, Connect and Catalyse Box 2: Aid Effectiveness Principles Applied by EARC Box 3: Skills and ICT to Equip Young Men and Women for Private Sector Jobs Box 4: Climate Smart Water Infrastructure for Drought Resilience and Food Security Box 5: Road Links Improve Regional Corridors: Rwanda-DRC Box 6: Financial Intermediation Behind the Scenes Box 7: Lessons on Governance Applied by EARC Box 8: Agricultural Technology for Regional Public Good Box 9: A Revised Strategy for Engagement with Fragile States Box 10: Synergy between Extractive & Agricultural Growth Corridors Box 11: The East African Community (EAC) One People, One Destiny Box 12: The Role of IGAD in Promoting Regional Peace and Security List of Project Showcase Profi les Project Showcase # 1: Bugesera Rural Agricultural Infrastructure Project, Burundi Project Showcase # 2: Energy Sector Support Project, Comoros Project Showcase # 3: Helping Djibouti Progress Toward Green Energy Independence Project Showcase # 4: AfDB Supports Human Capital Development in Eritrea Project Showcase # 5: Ethiopia Wacha-Maji Road Project Relieves Poverty Project Showcase # 6: Support to Kenya for Technical and Vocational Education for Youth Project Showcase # 7: Promotion of Inclusive Growth in Rwanda by Addressing Skills Gaps Project Showcase # 8: Supporting Seychelles and the Region with Better ICT Infrastructure Project Showcase # 9: Somalia Economic & Financial Governance Support on the Pathway out of Fragility Project Showcase # 10: Knowledge Product to Support South Sudan Transition Out of Fragility Project Showcase # 11: Enhancing Sudan’s Governance & Accountability in Public Financial Management Project Showcase # 12 Small Money, Big Impact—Interventions to Support Tanzanian Entrepreneurs Project Showcase # 13: Uganda Community Agricultural Infrastructure Improvement Programme iv | AFRICAN DEVELOPMENT BANK GROUP Abbreviations and Acronyms AfDB African Development Bank MSME Micro, Small and Medium Enterprises AU Africa Union NEPAD New Partnership for Africa’s Development bn Billion NPCA NEPAD Planning and Coordinating Agency CEPGL Economic Community of the NPV Net Present Value Great Lakes Countries IOC Indian Ocean Commission CES COMESA, EAC and SADC LNG Liquid Natural Gas COMESA Common Market for Eastern and Southern Africa ODA Offi cial Development Assistance CPA Comprehensive Peace Agreement OECD Organization for Economic Cooperation DP Development Partner and Development EAMU East African Monetary Union PIDA Programme for Infrastructure Development EAC East African Community for Africa EEZ Extended Economic (marine) Zone PFM Public Financial Management EIT Eritrea Institute of Technology PSD Private Sector Development EITI Extractive Industry Transparency Initiative PRMB Petroleum Revenue Management Bill EPA Economic Partnership Agreement REC Regional Economic Community EU European Union RMC Regional Member Country FDI Foreign Direct Investment SADC Southern African Development Community FTA Free Trade Area SBG State Building Goals GDP Gross Domestic Product SEFA Sustainable Energy Fund for Africa GEF Global Environment Fund SID Society for International Development HDI Human Development Index SIDS Small Island Developing States HIPC Highly Indebted Poor Countries SSA Sub-Saharan Africa ICARDA International Center for Agricultural Research TAH Trans-Africa-Highway in the Dry Areas trn Trillion ICT Information and Communications Technology UA Units of Account (of the AfDB, equivalent IGAD Intergovernmental Authority on Development to Special Drawing Rights SDR) IITA International Institute of Tropical Agriculture UNDP United Nations Development Program m Million UNSC United Nations Security Council MDG Millennium Development Goals WTO World Trade Organization MDRI Multilateral Debt Relief Initiative AFRICAN DEVELOPMENT BANK GROUP | v THE AFRICAN DEVELOPMENT BANK A PARTNER OF CHOICE FOR THE EASTERN AFRICA WE WANT Acknowledgements This report was prepared by a
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