Short Overview of African Countries
region is reducing and investors are having second thoughts, leaving many
projects on the drawing board. Aids, malaria, cholera and other diseases
are rampant. Foreign debt servicing and corruption mean that little foreign
exchange trickles through to fund education, health and infrastructure.
Tourism and, strangely enough, information technology provide the best hope
for the dark continent.
The highest GNP per capita from the mentioned countries have
Botswana($3240), Algeria($1550) and the lowest Chad($210), Rwanda($250).
There’s no need to bring the whole figures in the text but I want to
mention some common clauses.
. All the countries in the list besides the Algeria situated in
the south Africa. The rule is that the South Africa is poorer
then the North. Though there is some exceptions Botswana
($3240), South African Republic ($3240).
. I try to select the countries which indicators are representing
the picture of southern part. Some of the other countries have
the indicators lower then mentioned,Burundi ($120), Malawi
($180), Sierra Leone ($ 130) and the other higher, Seychelles
($6500), Gabon ($ 3300), South African Republic.
As it can be easily seen Algeria and Botswana per capita GDP is 3 – 6
times higher then the average on Africa. Some others have 2-6 times lower.
In order to explain these exceptions one must consider the particularities
of the countries. That’s why I’m bringing short overviews of the mentioned
countries followed by some generalizations.
Algeria. The hydrocarbons sector is the backbone of the economy,
accounting for roughly 52% of budget revenues, 25% of GDP, and over 95% of
export earnings. Algeria has the fifth-largest reserves of natural gas in
the world and is the second largest gas exporter; it ranks fourteenth for
oil reserves. Algiers' efforts to reform one of the most centrally planned
economies in the Arab world stalled in 1992 as the country became embroiled
in political turmoil. Burdened with a heavy foreign debt, Algiers concluded
a one-year standby arrangement with the IMF in April 1994 and the following
year signed onto a three-year extended fund facility which ended 30 April
1998. Some progress on economic reform, Paris Club debt reschedulings in
1995 and 1996, and oil and gas sector expansion contributed to a recovery
in growth since 1995. Still, the economy remains heavily dependent on
volatile oil and gas revenues. The government has continued efforts to
diversify the economy by attracting foreign and domestic investment outside
the energy sector, but has had little success in reducing high unemployment
and improving living standards.
Angola. Angola is an economy in disarray because of a quarter century
of nearly continuous warfare. Despite its abundant natural resources,
output per capita is among the world's lowest. Subsistence agriculture
provides the main livelihood for 85% of the population. Oil production and
the supporting activities are vital to the economy, contributing about 45%
to GDP and 90% of exports. Notwithstanding the signing of a peace accord in
November 1994, violence continues, millions of land mines remain, and many
farmers are reluctant to return to their fields. As a result, much of the
country's food must still be imported. To take advantage of its rich
resources - gold, diamonds, extensive forests, Atlantic fisheries, and
large oil deposits - Angola will need to implement the peace agreement and
reform government policies. Despite the increase in the pace of civil
warfare in late 1998, the economy grew by an estimated 4% in 1999. The
government introduced new currency denominations in 1999. Expanded oil
production brightens prospects for 2000, but internal strife discourages
investment outside of the petroleum sector.
Botswana. Agriculture still provides a livelihood for more than 80% of
the population but supplies only about 50% of food needs and accounts for
only 3% of GDP. Subsistence farming and cattle raising predominate. The
sector is plagued by erratic rainfall and poor soils. Diamond mining and
tourism also are important to the economy. Substantial mineral deposits
were found in the 1970s and the mining sector grew from 25% of GDP in 1980
to 38% in 1998. Unemployment officially is 21% but unofficial estimates
place it closer to 40%. The Orapa 2000 project, which will double the
capacity of the country's main diamond mine, will be finished in early
2000. This will be the main force behind continued economic expansion.
Cameroon. Because of its oil resources and favorable agricultural
conditions, Cameroon has one of the best-endowed primary commodity
economies in sub-Saharan Africa. Still, it faces many of the serious
problems facing other underdeveloped countries, such as a top-heavy civil
service and a generally unfavorable climate for business enterprise. Since
1990, the government has embarked on various IMF and World Bank programs
designed to spur business investment, increase efficiency in agriculture,
improve trade, and recapitalize the nation's banks. The government,
however, has failed to press forward vigorously with these programs. The
latest enhanced structural adjustment agreement was signed in October 1997;
the parties hope this will prove more successful, yet government
mismanagement and corruption remain problems. Inflation has been brought
back under control. Progress toward privatization of remaining state
industry should support continued economic growth in 2000.
Chad. Landlocked Chad's economic development suffers from it's
geographic remoteness, drought, lack of infrastructure, and political
turmoil. About 85% of the population depends on agriculture, including the
herding of livestock. Of Africa's Francophone countries, Chad benefited
least from the 50% devaluation of their currencies in January 1994.
Financial aid from the World Bank, the African Development Fund, and other
sources is directed largely at the improvement of agriculture, especially
livestock production. Due to lack of financing, the development of the Doba
Basin oil fields, originally due to finish in 2000, has been substantially
delayed.
Democratic Republic of Congo (Zaire). The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth - has
declined drastically since the mid-1980s. The new government instituted a
tight fiscal policy that initially curbed inflation and currency
depreciation, but these small gains were quickly reversed when the foreign-
backed rebellion in the eastern part of the country began in August 1998.
The war has dramatically reduced government revenue, and increased external
debt. Foreign businesses have curtailed operations due to uncertainty about
the outcome of the conflict and because of increased government harassment
and restrictions. Poor infrastructure, an uncertain legal framework,
corruption, and lack of openness in government economic policy and
financial operations remain a brake on investment and growth. A number of
IMF and World Bank missions have met with the new government to help it
develop a coherent economic plan but associated reforms are on hold.
Assuming moderate peace, annual growth is likely to increase to nearly 5%
in 2000-01, but inflation will continue to be a problem.
Djibouti. The economy is based on service activities connected with
the country's strategic location and status as a free trade zone in
northeast Africa. Two-thirds of the inhabitants live in the capital city
(Djibouty), the remainder being mostly nomadic herders. Scanty rainfall
limits crop production to fruits and vegetables, and most food must be
imported. Djibouti provides services as both a transit port for the region
and an international transshipment and refueling center. It has few natural
resources and little industry. The nation is, therefore, heavily dependent
on foreign assistance to help support its balance of payments and to
finance development projects. An unemployment rate of 40% to 50% continues
to be a major problem. Inflation is not a concern, however, because of the
fixed tie of the franc to the US dollar. Per capita consumption dropped an
estimated 35% over the last seven years because of recession, civil war,
and a high population growth rate (including immigrants and refugees).
Also, renewed fighting between Ethiopia and Eritrea has disturbed normal
external channels of commerce. Faced with a multitude of economic
difficulties, the government has fallen in arrears on long-term external
