Short Overview of African Countries
debt and has been struggling to meet the stipulations of foreign aid
donors.
Ghana Well endowed with natural resources, Ghana has twice the per
capita output of the poorer countries in West Africa. Even so, Ghana
remains heavily dependent on international financial and technical
assistance. Gold, timber, and cocoa production are major sources of foreign
exchange. The domestic economy continues to revolve around subsistence
agriculture, which accounts for 40% of GDP and employs 60% of the work
force, mainly small landholders. In 1995-97, Ghana made mixed progress
under a three-year structural adjustment program in cooperation with the
IMF. On the minus side, public sector wage increases and regional
peacekeeping commitments have led to continued inflationary deficit
financing, depreciation of the cedi (national currency), and rising public
discontent with Ghana's austerity measures. A rebound in gold prices is
likely to push growth over 5% in 2000-01.
Kenya. Kenya is well placed to serve as an engine of growth in East
Africa, but its economy is stagnating because of poor management and uneven
commitment to reform. In 1993, the government of Kenya implemented a
program of economic liberalization and reform that included the removal of
import licensing, price controls, and foreign exchange controls. With the
support of the World Bank, IMF, and other donors, the reforms led to a
brief turnaround in economic performance following a period of negative
growth in the early 1990s. Kenya's real GDP grew 5% in 1995 and 4% in 1996,
and inflation remained under control. Growth slowed in 1997-99 however.
Political violence damaged the tourist industry, and Kenya's Enhanced
Structural Adjustment Program lapsed due to the government's failure to
maintain reform or address public sector corruption. A new economic team
was put in place in 1999 to revitalize the reform effort, strengthen the
civil service, and curb corruption, but wary donors continue to question
the government's commitment to sound economic policy. Long-term barriers to
development include electricity shortages, the government's continued and
inefficient dominance of key sectors, endemic corruption, and the country's
high population growth rate.
Lesotho. Small, landlocked, and mountainous, Lesotho's only important
natural resource is water. Its economy is based on subsistence agriculture,
livestock, and remittances from miners employed in South Africa. The number
of such mine workers has declined steadily over the past several years. In
1996 their remittances added about 33% to GDP compared with the addition of
roughly 67% in 1990. A small manufacturing base depends largely on farm
products which support the milling, canning, leather, and jute industries.
Agricultural products are exported primarily to South Africa. Proceeds from
membership in a common customs union with South Africa form the majority of
government revenue. Although drought has decreased agricultural activity
over the past few years, completion of a major hydropower facility in
January 1998 now permits the sale of water to South Africa, generating
royalties that will be an important source of income for Lesotho. The pace
of parastatal privatization has increased in recent years. Civil disorder
in September 1998 destroyed 80% of the commercial infrastructure in Maseru
and two other major towns. Most firms were not covered by insurance, and
the rebuilding of small and medium business has been a significant
challenge in terms of both economic growth and employment levels. Output
dropped 10% in 1998 and recovered slowly in 1999.
Mozambique. Before the peace accord of October 1992, Mozambique's
economy was devastated by a protracted civil war and socialist
mismanagement. In 1994, it ranked as one of the poorest countries in the
world. Since then, Mozambique has undertaken a series of economic reforms.
Almost all aspects of the economy have been liberalized to some extent.
More than 900 state enterprises have been privatized. Pending are tax and
much needed commercial code reform, as well as greater private sector
involvement in the transportation, telecommunications, and energy sectors.
Since 1996, inflation has been low and foreign exchange rates stable.
Albeit from a small base, Mozambique's economy grew at an annual 10% rate
in 1997-99, one of the highest growth rates in the world. Still, the
country depends on foreign assistance to balance the budget and to pay for
a trade imbalance in which imports outnumber exports by five to one or
more. The medium-term outlook for the country looks bright, as trade and
transportation links to South Africa and the rest of the region are
expected to improve and sizable foreign investments materialize. Among
these investments are metal production (aluminum, steel), natural gas,
power generation, agriculture (cotton, sugar), fishing, timber, and
transportation services. Additional exports in these areas should bring in
needed foreign exchange. In addition, Mozambique is on track to receive a
formal cancellation of a large portion of its external debt through a World
Bank initiative.
Rwanda. Rwanda is a rural country with about 90% of the population
engaged in (mainly subsistence) agriculture. It is the most densely
populated country in Africa; is landlocked; and has few natural resources
and minimal industry. Primary exports are coffee and tea. The 1994 genocide
decimated Rwanda's fragile economic base, severely impoverished the
population, particularly women, and eroded the country's ability to attract
private and external investment. However, Rwanda has made significant
progress in stabilizing and rehabilitating its economy. GDP has rebounded,
and inflation has been curbed. In June 1998, Rwanda signed an Enhanced
Structural Adjustment Facility (ESAF) with the IMF. Rwanda has also
embarked upon an ambitious privatization program with the World Bank.
Continued growth in 2000 depends on the maintenance of international aid
levels and the strengthening of world prices of coffee and tea.
Zambia. Despite progress in privatization and budgetary reform,
Zambia's economy has a long way to go. The recent privatization of the huge
government-owned Zambia Consolidated Copper Mines (ZCCM) should greatly
improve Zambia's prospects for international debt relief, as the government
will no longer have to cover the mammoth losses generated by that sector.
Inflation and unemployment rates remain high, however.
Zimbabwe. The government of Zimbabwe faces a wide variety of difficult
economic problems as it struggles to consolidate earlier progress in
developing a market-oriented economy. Its involvement in the war in the
Democratic Republic of the Congo, for example, has already drained hundreds
of millions of dollars from the economy. Badly needed support from the IMF
suffers delays in part because of the country's failure to meet budgetary
goals. Inflation rose from an annual rate of 32% in 1998 to 59% in 1999.
The economy is being steadily weakened by AIDS; Zimbabwe has the highest
rate of infection in the world. Per capita GDP, which is twice the average
of the poorer sub-Saharan nations, will increase little if any in the near-
term, and Zimbabwe will suffer continued frustrations in developing its
agricultural and mineral resources.
So the generalization is obvious. The countries which have the highest
GDP per capita are oil, gas as well as other raw materials exporters.
Almost none of the countries has stable source of incomes. Oil exporters
are in a better condition then the last, but it has a number of negative
consequences. The first is that their economy are heavily dependant on the
oil prices. The next is that even the richest resources may be easily
wasted if the incomes are not managed properly. The corruption in a
government, continuous possibility of warfare wouldn’t let foreign capital
flow easily into these countries. Even the oil fields couldn’t attract
investitions if there’s no political stability. Though the most population
of these countries are involved in agriculture the most of them couldn’t
provide enough food for themselves. The reason is simple lack of water
resources. A number of countries having a lot of resources are not able to
use them efficently because of continuous warfares, which are draining
budgets. These are the major negative facts considering African economy,
but there are a lot of positive ones.
According to ECA’s "Africa Economic Report 2000" shows, for five years
