Short Overview of African Countries (стр. 1 из 3)

PLAN

Introduction
Africa in postcolonial period
African economy today
Economic organizations in Africa
Problems and ways to solve them

6. Conclusion

1. Introduction

It isn’t a secret that Republic of Armenia as well as other former socialist republics is at

the end of the list of countries in terms of economy, but almost everyone speaking about our country mentions that there are a number of countries having more troubles with economy then our. Listening to this kind of words makes listener think about Africa, Sahara the countries situated there. Algeria (which situated in north Africa), Angola, Botswana, Cameroon, Chad, Djibouti, Ghana, Kenya, Lesotho, Mozambique, Rwanda, Zaire (Democratic republic of Congo), Zambia, Zimbabwe and a lot of others are countries traditionally considered to be the poorest part of the world. This is the common image of Africa. in the following report I would try to introduce a little bit detailed picture of this object.

I think it will be better to begin with short historical overview of the region, which is the home of one of the human races. The historians have defined four periods of African history research.

This period is 2000 B.C. up to 6-th century A.D. During that time Egyptians were researching the north of the mainland. In 6^th century B.C. Carthaginians travelled along the west coast. Roman travellers went far into Libyan desert.
7-14 centuries A.D. This is a period of Arabian invasions. After conquering the north they moved to the south and reached Senegal and Niger rivers.
The third period of research is associated with the Europeans desire to find a sea way to the wealth of India. By the end of sixteenth century the continent has been outlined on maps.
This period of African history, which begins in eighteenth century is probably the most shameful part of European history. Europeans blinded with the magnificence of African wealth began sacking its territory, the same way as they did it in America.

2. Africa in postcolonial period

From this time and up to 20-th century African continent was a big colony of a number of European countries. After a century of rule by France, Algeria became independent in 1962. Angola – former Portugal colony got its freedom in 1975. Formerly the British protectorate of Bechuanaland, Botswana adopted its new name upon independence in 1966. The former French Cameroon and part of British Cameroon merged in 1961 to form the

present country. Chad was a part of France's African holdings until 1960. The French Territory of the Afars and the Issas became Djibouti in 1977. Formed from the merger of the British colony of the Gold Coast and the Togoland trust territory, Ghana in 1957 became the first country in colonial Africa to gain its independence. Basutoland was renamed the Kingdom of Lesotho upon independence from the UK in 1966. Mozambique almost five centuries was a Portuguese colony came to a close with independence in 1975. Rwanda gains its independence in 1962. The territory of Northern Rhodesia was administered by the South Africa Company from 1891 until takeover by the UK in 1923. During the 1920s and 1930s, advances in mining spurred development and immigration. The name was changed to Zambia upon independence in 1964. The UK annexed Southern Rhodesia from the South Africa Company in 1923. A 1961 constitution was formulated to keep whites in power. In 1965 the government unilaterally declared its independence, but the UK did not recognize the act and demanded voting rights for the black African majority in the country (then called Rhodesia). UN sanctions and a guerrilla uprising finally led to free elections in 1979 and independence (as Zimbabwe) in 1980. But even after formal independence most countries are heavily dependant on Europe in terms of investitions and aids. After the "lost decade" of the eighties when tumbling commodity prices, debt, economic and political mismanagement brought African economies to near bankruptcy, the majority of African countries have embarked on International Monetary Fund (IMF), World Bank and donor supported economic reform programmes. In December of year 2000, the World Bank gave US$155 million in credits to help seven African countries — Madagascar, Mali, Mauritania, Niger, Rwanda, Zambia, and Uganda — cope with an unexpected surge in oil prices and other losses in their terms of trade. These factors were causing serious hardship for the poor in terms of rising energy and transportation costs, which in turn were jeopardizing the success of the countries' reform programs. Still, poverty is higher in Africa than in any other region of the world. According to the latest data two out of five Africans subsist below a poverty line of less than $20 per month; the majority of these are women. This mean that some 300 million Africans live on barely 65 cents a day. Africa has the most unequal distribution of income of any region in the world. The richest twenty percent of Africans own 51 percent of total income, compared to 40 percent in western countries and in South Asia. The last report on Africa made by World Bank group also shows how civil conflict in the region has blunted and reversed growth prospects for war-torn countries. While the trend for many African countries during the 1990s was one of slow but steady economic improvement, those in conflict suffered negative growth and an alarming deterioration in basic conditions (Angola -0.2 percent, Burundi -2.4 percent, Democratic Republic of Congo, -4.6 percent, Rwanda, -2.1 percent, Sierra Leone, -4.6 percent). In essence, the present forecast is that the world's poverty will become even more concentrated in Africa.

But not only the economic problems were quaking the continent. Continuous warfares wouldn’t give a chance to develop national economy of that region. But what is the present situation there? It seemed like the countries stepped on a way of democracy, but as a recent World Bank report on Africa notes, "a sharp distinction should be drawn between formal and real democratisation". During the 1990s, 45 out of 50 African countries held multiparty elections, in addition to the four African countries that had such a system at the start of the decade. But in only ten elections did these lead to a change of government. With the significant exception of Senegal, the trend in the most recent elections on the continent appears to be one of even fewer changes in government. According to the OAU (Organization of African Unity), 26 African conflicts have taken place since 1963, affecting 61 percent of the population. Today, 21 percent of Africa's peoples are in war and conflict (Algeria, Angola, Burundi, Comores, Congo, DRC, Eritrea, Ethiopia, Rwanda, Sierra Leone, Somalia, Sudan and Uganda). It is comparable with Asia (Cambodia, India, Indonesia, Pakistan, Philippines, Sri Lanka, Tibet) or even Europe (Balkans, Northern Ireland, Russia or Spain). According to a recent survey on political rights and civil liberties by Freedom House, 23 out of 50 African countries are classified as "not free". But overall, over the last decade Freedom House has moved Africa’s status from "not free" to "partly free"- a significant improvement. Where there is conflict there is no democracy, there is hardly an economy, and- as we've seen in Somalia and Liberia - one may even question whether there is a state. Poverty, political instability and war go together.

3. African economy today

Economists use a number of indicators to measure a welfare of population of given country. Undoubtaly the most important of them are GDP (Gross Domestic Product) and GNP (Gross National Product). In order to make the comparision more expressive, these indexes are calculated not in absolute values but per capita. This method helps researchers to disengage themselves from the size of the country. Two of other important indicators are Life Expectancy at Birth and Illiteracy Rate.

In 1998 real GDP growth was higher in Africa than any other developing region, while inflation was slightly higher than in Asia and significantly lower than other developing regions. Half the world's ten fastest growing economies are in Africa, although growing off very low bases.

1999 was not a good year for Africa. Armed conflict increased and looks set to continue. The slow-down in the world economy affected stock markets; caused currencies to depreciate; and reduced foreign exchange income from oil, minerals and metals and agricultural products. Aid to the 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 debt and has been struggling to meet the stipulations of foreign aid donors.