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 running, Africa's GDP has grown faster than its population, reversing the falling living standards of the previous 15 years. While growth trends for the region as a whole remain depressed, some African countries are doing well. Fourteen countries have grown on average by 4 percent a year during the 1990s, with rising annual incomes of 2-3 percent and even higher, with another 10 countries following close behind with growth rates above 3 percent a year. Some countries have grown at 7 percent a year or higher (Mozambique, 7 percent, and Uganda, 7.1 percent). "These figures show us that economic reforms over recent years have slowly but surely improved growth in many African countries and allowed the private sector to take root," says Alan Gelb, Chief Economist of the World Bank's Africa region. "However, despite this rising trend, countries are still vulnerable to conflict and external shocks in world markets, such as the recent rapid increase in oil prices and fallout from the East Asia crisis. These two forces have together produced highly unfavorable terms of trade for oil importers."
Now shortly about the social indicators. Although life expectancy has risen slightly in Africa, this is happening at a slower rate than elsewhere and, since 1990 the HIV/AIDS epidemic has caused it to decline, especially in countries with high adult infection rates. In Zimbabwe, for example, life expectancy has fallen by five years, while in Botswana, it has fallen by over ten. Life Expectancy at birth is ranging between 37 year (Sierra Leonne) and 71.8 year (Seychelles). The rule is that Africans living in countries beset by conflict are more likely to have shorter life expectancy at birth and have higher infant mortality rates than other more stable countries. Sierra Leone is a striking illustration of this trend with the region's lowest life expectancy rate at just 37 years, and its highest infant mortality rate at 169 deaths per one thousand. Child mortality is a particularly acute problem for many countries in Africa. Infant mortality is close to 10 percent, and on average 151 of every 1,000 children die before the age of 5, although in many countries the mortality rate exceeds 200 per 1,000. Illiteraci level is extremelly high for the whole territory of Africa. Population per physician oscillates in the following range lowest: 827 (Seychelles), highest: 53986 (Niger). There’s no use to say that population per hospital bed is also in very poor condition. Despite major strides that had been made in the eradication of malaria, the disease is on the rise again throughout Africa. Elsewhere in the world HIV/AIDS is on the decline. In Africa, HIV/AIDS has reached pandemic proportions, threatening to wipe out Africa’s fragile social and economic gains. Two-thirds of the world’s 34 million AIDS sufferers are in sub-Saharan Africa. Today in 21 African countries more than 7 percent of adults live with HIV/AIDS, with the highest absolute number of cases found in South Africa, where one in every five adults has contracted the virus. Countries like Niger, Sudan, and Mauritania, which have some of the lowest incidence of AIDS in the region, offer great potential for control.Yet as countries like Senegal and Uganda show, with the necessary political will and resources, the AIDS pandemic can be rolled back. A little bit better situaion is observed in the sphere of education. The new report shows that Africa has made more progress in education than in health with literacy rates improving for both men and women. At 41 percent, the illiteracy rate in the region is still high compared to rest of the world, but it is at its lowest point ever. Of particular significance is the advance being made in girls' education. While this represents welcome progress, far more needs to be done. Half of Africa's children of school going age are out of school; this is even lower in rural areas and among girls.
The statistical data may vary depending on source due to the insufficent automatization of statistical institutions of the region. That’s why World Bank approved a grant to transfer systems to six Southern African countries (Mozambique, Botswana, South Africa, Lesotho, Tanzania, and Zambia) to strengthen their statistical reporting capabilities. "The quality of development data depends on the source. Our goal is to empower statistical offices in Africa, and help them to move from hand-written National Account tables to a modern system that is easy to adopt, maintain, and capable of delivering quality data," says Ziad Badr, the team leader of African Development Indicators 2001, and a senior World Bank economist in its Africa region. "This will bring statistical institutions in Africa into the new millennium, and provide a reliable system to measure development progress and identify remaining challenges."
In summary, macro balances, or getting the prices right, is not economic reform just as casting a ballot is not democracy. The hallmarks of a capable state are strong institutions of governance; a sharp focus on the needs of the poor; powerful watchdogs; the rule of law; intolerance of corruption; transparency and accountability in the management of public affairs; respect for human rights; participation by all citizens in the decisions that affect their lives; as well as the creation of an enabling environment for the private sector and civil society.
4. Economic organizations in Africa
The main economic power of Africa south of the Sahara Desert is South African Republic. Through its well developed infrastructure and deepwater ports, South Africa handles much of the trade for the whole southern African region. In 1970 its immediate neighbours, Botswana, Swaziland and Lesotho, and latterly Namibia, signed the Southern African Customs Union (SACU) enabling them to share in the customs revenue from their trade passing through South African ports. In order to counter the economic dominance of South Africa in the southern African region, the countries to the north of it organised themselves into the Southern African Development Conference (SADC). Member states include those of the SACU as well as Angola, situated north of Namibia, and it's oil-rich enclave of Cabinda, and Mozambique on the east coast, and the countries of south-central Africa, Zimbabwe, Zambia and Malawi. Kenya, Uganda and Tanzania signed Treaty for Enhanced East African Co-operation in order to allow free flow of goods and people. The small landlocked central African countries of Rwanda and Burundi form part of an economic union of countries in the central African region. Other members of the Economic Community of Central African States are Cameroon, the Central African Republic, Chad, Equatorial Guinea, the oil-rich Congo and Gabon and the vast country of the Democratic Republic of Congo. The Economic Community of West African States (ECOWAS) is a solid geographical bloc of 15 states from Nigeria in the east to Mauritania in the west. The countries of Mauritania, Mali and Niger are located in the southern stretch of the Sahara Desert while the remaining countries are splayed out along the coast line. As a result of their respective colonial histories, these countries are divided into French and English-speaking states. The francophone countries include the republics of Benin, Burkina Faso, Togo, the Ivory Coast (Côte d'Ivoire), Guinea and Senegal while the remaining states of Nigeria, Ghana, Liberia, Sierra Leone, and the Gambia have English as their official language. The Republic of Guinea Bissau is a Portuguese-speaking state to the south of Senegal.
5. Problems and ways to solve them
The biggest challenge to doing business in Africa is the lack of quality information about Africa. Some of the other challenges of Africa are:
· fluctuating currencies
· bureaucratic red tape, which is slowly getting easier to wade through
· graft and corruption
· nepotism
· wars and unrest, though the changes in South Africa are starting to create a ripple of peace and democracy throughout the region
· lack of local capital
· monopolies such as marketing boards, state trading firms, foreign exchange restrictions, trade taxes and quotas and concentration on limited commodities all place a disincentive on exports, thus delinking Africa from the world economy.
· lack of infrastructure, though in areas such as telecommunications and energy, Africa is able to use new technologies to leapfrog more advanced economies