Short Overview of African Countries
Short Overview of African Countries
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
6th 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.
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.
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