Economic activity in Africa is estimated to have risen by nearly 5 per cent in 2005, and is expected to increase to 5.8 per cent and 5.5 per cent in 2006 and 2007, respectively. Oil-exporting countries, however, are outpacing others by a substantial margin. Moreover, some countries continue to face serious problems – including the humanitarian catastrophe in the Darfur region of Sudan, the economic collapse in Zimbabwe, drought and food crisis affecting several areas in a number of East, West, and Southern African countries...
Algeria's economic growth has continued to be sustained mainly by the ongoing increase in the volume and prices of its oil and gas exports, which have enabled the country to improve its external position considerably. This positive international climate, along with agricultural growth above 2 per cent in 2004, has meant that Algeria’s GDP grew by 5.2 per cent in 2004 and the rate is expected to be 5.4 per cent in 2005. These positive results should continue as long as trade conditions remain favourable.
Angola is experiencing rapid economic growth. Stimulated by high international oil prices and rapidly increasing output from new oil fields, real GDP growth exceeded 11 per cent in 2004 and, with oil production set to surge still higher, growth is expected to increase further to about 15.5 per cent in 2005, 26 per cent in 2006 and 20 per cent in 2007. While offshore oil exploration and production create very few linkages to the rest of the economy, the sheer size of this sector – accounting for 50 per cent of GDP – provides opportunities for the construction industry and the incipient services sector, as well as recycling of oil revenue through the government...
Following satisfactory macroeconomic results during the 1990s, Benin now faces a significant slowdown of growth; the real growth rate was only 3.4 per cent in 2004, while it averaged 5 per cent during the 1990s. With a population growth rate of 3.1 per cent, poverty reduction is inevitably very slow. This slowdown is due to both temporary and structural factors. The year 2004 was characterised by a difficult regional and international environment for Benin’s economy...
Sound macroeconomic policies and prudent use of diamond revenues have made Botswana one of the fastest-growing countries in the world over the last 25 years, and it has now achieved middle-income status. Despite the government’s efforts, however, the economy remains highly dependent on diamond exports, and the country continues to suffer from one of the highest HIV/AIDS infection rates in the world.
The country had a very mixed year in 2005. Between January and September a shortfall in the 2004/05 food-crop harvests created a sub-regional food crisis and a return of inflation. The economic climate was also affected by the delayed impact of the Ivorian crisis on transport costs (and thus supply of raw materials for industry) and by the sustained increase in oil prices. But these problems remained under control. The public adapted to higher fuel prices and the excellent 2004/05...
The economy recorded modest growth of about 2.8 per cent of GDP in 2005 (down from 3.5 per cent in 2004) and budget austerity prevailed after the government’s financial excesses in 2004, which had again prevented the economy reaching completion point. The 2004 indiscipline highlighted the flaws in the country’s governance and showed that domestic politics could call into question the government’s economic promises. The indifferent 2005 results also showed the strengths and weaknesses of Cameroon’s growth. Despite a vigorous private sector, growth was...
After a slowdown in economic growth in 1999 and 2000 and then a return to growth that was fuelled by investments in the oil sector between 1999 and 2003, the Chadian economy has now entered the oil era. The GDP growth rate accelerated to 31 per cent in 2004 from 11.3 per cent in 2003 as a result of the increase in oil output that followed the start of production in the Doba basin in July 2003. Exports of the "black gold" were the principal driving force behind growth in 2004. A marked reduction was expected in 2005, however, under the impact of a fall....
Reconstruction is underway in Congo after more than a decade of political instability and sporadic armed conflicts. The enormous damage wreaked by the civil war, ravaging the capital, Brazzaville, and the Pool region several times between 1997 and 2003 is compounded by the harmful effects of many years of poor public-resource management. The balance after the last outbreak of violence in 2003 is one of a country that is impoverished and heavily in debt, and the economic development of which is immensely hampered by inadequate and outdated infrastructure of all kinds and an important deficit in capacities.
Congo Dem. Rep.
After several years of war and political instability, the challenges with which the Democratic Republic of Congo (DRC) is confronted are manifest. As is generally the case in post-conflict situations, reconstruction, rehabilitation and resumption of the functioning of the wider economy require a very great number of reforms, colossal financial resources and the establishment of transparent management systems and good governance. At the same time, lobbies and political pressure groups are still very much present.
Thanks to its relative economic prosperity, observed until recently in steadily positive growth rates, Côte d’Ivoire was for a long time the main development hub of the subregion. For several years now, however, the country has been in deep crisis, and this has distinctly affected its economy and social cohesion. At the root of the crisis lie several causes, including poorly controlled immigration, the absence of a real policy to manage land assets and the fragility of the country’s institutional and democratic governance systems. For the past three years, Côte d’Ivoire has been divided in two as a result...
An ambitious effort to open up and liberalise the economy initiated in mid-2004 has begun to produce results. GDP growth in 2004/05 was almost 5 per cent (with 5.2 per cent predicted for 2005/06 and 5.4 per cent in 2006/07), and the main macroeconomic indicators were performing well1. The energy, transport and tourism sectors were the drivers of growth. Although access to credit is still a problem for the private sector, the business climate has significantly improved, privatisation is pushing ahead, and domestic and foreign...
Despite five years of rapid economic growth based on sound economic policies and high levels of aid, Ethiopia remains one of the world’s poorest countries, and the lingering effects of the severe drought in 2002/03 continue to be felt by many of Ethiopia’s 73 million people, especially the poor. The economy is estimated to have grown at a rate of 6.8 per cent in real terms in 2004/05 and is approaching the 7 per cent growth rate needed to reach the Millennium...
Gabon is an intermediate-income country in per capita terms, but while GDP is growing, the UN Human Development Report for 20041 says the country has slipped in the Human Development Index. Thus, the assumption that good economic performance also advances human development does not hold true in Gabon, where poverty is increasing.
The Ghanaian economy is reaping the benefits of macroeconomic and structural reforms and nearly fifteen years of political stability. Strong domestic revenue mobilisation, prudent expenditure management, and debt relief granted under the Heavily Indebted Poor Countries (HIPC) debt reduction programme, along with recent debt reduction promises by the G8, have improved the government’s fiscal position. At the same time, credible monetary policy has eased inflationary expectations, brought down the cost of borrowing and provided stability in the foreign exchange market. This improving...
The Kenyan economy has begun to exhibit accelerating economic growth after reversing the poor performance of the last decade in 2003. Real GDP growth rose to 4.3 per cent in 2004 from 2.8 per cent in the preceding year in spite of a resurgence of drought that negatively affected the agricultural sector. Other sectors, especially transport and communications and manufacturing, have shown signs of renewed growth in response to new incentive structures put in place by the government. Similarly, tourism has continued to recover from the adverse effects of terrorism.
Madagascar's per capita GDP was average for a developing country in the late 1970s, but three decades of steady economic decline since then have reduced it to about half that. The country’s stock of human resources is now quite small. Average annual GDP growth has been only 0.5 per cent during that period, while the population has increased by an average of 2.8 per cent a year. Today’s Madagascans are much poorer than their parents and grandparents were. This decline in living standards is mainly due to persistently bad government policies that have held back economic...
Malawi is one of the poorest countries in the world. It was ranked 165th out of 177 countries according to the 2005 United Nations Human Development Index and had the second lowest GDP per capita in 2003. By all measures, the Malawian economy went through very difficult times in 2005. It faced serious food shortages with an estimated 4.85 million people, i.e. nearly 50 per cent of the population in need of emergency food support. Moreover, 2005 has been a year of political turmoil, with the president facing possible impeachment and resigning from his party to form a new one, an initiative which has very little support in parliament.
Mali returned to a stronger 5.5 per cent growth rate in 2005 after 2.2 per cent in the previous year. This figure, close to the average 5 per cent experienced over the 1994-2004 period, is marked by a catch-up effect in relation to 2004, which was an atypical, difficult year. The vulnerable and erratic nature of Malian economic growth is due to exogenous factors such as rainfall, fluctuating international market prices for its principal export products (cotton and gold), rising hydrocarbon prices and regional instability...
Mauritius has one of the highest standards of living in Africa. It enjoyed sustained growth of more than 6 per cent in the 1990s and reached GDP per capita of $11 287 (in PPP terms) in 2003. The traditional engines of growth in Mauritius have been sugar, textiles, and tourism. More recently, Mauritius has diversified into financial services and information and computer technologies (ICT). Mauritius has one of the most competitive economies, ranked first in Africa, and 23rd worldwide for its business activity facility. Mauritius is now a middle-income country as a result of good...
After having performed comparatively well in 2004, the Moroccan economy suffered a setback in 2005 with real GDP growth estimated at 2.1 per cent. However, a recovery to 5.3 per cent is expected in 2006. In 2005, inflation was contained at 2.1 per cent and national unemployment reduced to 10.9 per cent. Public debt reached 75 per cent of GDP, down from 76.7 per cent in 2004, while foreign debt decreased to 25 per cent of GDP. Finally, the budget deficit increased to 4.5 per cent of GDP in 2005, but is expected to decline to 3.2 per cent of GDP in 2006.
Mozambique remains a model of successful postconflict transition, with impressive economic growth averaging 8 per cent over the past decade and sustained political stability. Strong economic growth, reaching 7.7 per cent in 2005, continues to be driven primarily by foreign-financed "mega-projects" and large aid inflows. Agriculture is also increasingly contributing to economic growth, despite a drought that has caused severe hardship in the southern part of the country. The outlook for 2006 and 2007 is favourable, with growth expected at 7.9 and 7.3 per cent respectively...
With the influx of external aid and the cancelling of its foreign debt, the economy of Niger was set for prosperity. Unfortunately, a migratory locust invasion that devastated the harvest, and the drought that followed, had catastrophic economic and social effects. According to estimates, GDP fell -0.6 per cent in 2004, compared with nearly a 4 per cent increase in 2003. It appears that 2005 was a recovery year, furthered by the synergy created between large-scale international humanitarian efforts, debt relief and the organisation of cultural events such as FIMA...
With a presidential election looming in early 2007, Nigeria’s economic and political situation is approaching a critical juncture. Despite encouraging progress, it is too early to judge whether the reforms implemented under President Obasanjo’s administration will prove to be durable enough to reverse the Nigerian paradox: abysmal poverty in the midst of an abundance of natural and human resources.
Eleven years after the genocide that devastated the country and left nearly one million people dead, Rwanda continues to implement its programme for economic, structural and social reform. The programme has already met a number of major milestones. After experiencing low growth in 2003 due to poor weather conditions, real GDP growth recovered to 4 per cent in 2004 and was estimated to reach 4.2 per cent in 2005.
After decades of very average economic growth, Senegal has recorded annual increases slightly above 5 per cent for several years now, largely due to macroeconomic policies and structural reforms. Linked to a generally calm transition of power following the democratic elections of 2000 and to ongoing institutional reforms, this relatively high growth makes the country an interesting case of socio-economic development in Sub-Saharan Africa.
In 2005, the South African economy experienced GDP growth of 5 per cent, its highest since the end of apartheid, and strong GDP growth, estimated at 4.8 per cent, is forecast for 2006. Although this good performance is due in part to a favourable international environment, it also reflects the sound economic policies that have been carried out since 1996 in accordance with the Growth and Employment and Redistribution...
Tanzania has made remarkable improvements in economic management over the last decade which have been rewarded with impressive GDP growth, which reached 6.7 per cent in 2004. Tanzania’s impressive growth in 2004 was supported by rising agricultural production associated with good weather conditions. The inflation rate remained below 4.5 per cent at end- June 2005 as lower food prices compensated for higher fuel costs. However, due to insufficient rains in autumn...
Tunisia is continuing to make major progress in terms of economic and social development. Economic growth reached 6 per cent in 2004 and should be 4.2 per cent in 2005 and 5.3 per cent in 2006, driven essentially by services and tourism. The prudent macroeconomic policies initiated in recent years have allowed inflation and the budget deficit to be stabilised and economic aggregates to be consolidated. Social...
For the past two decades, Uganda has had one of the most successful economies in Africa, combining high growth and low inflation. Real GDP growth was an estimated 5.8 per cent in the 2004/05 fiscal year and is projected to remain roughly steady at that rate in 2005/06. This strong economic performance is attributable to prudent macroeconomic management and bold structural reforms, supported by large inflows of overseas development assistance (ODA). However, recent unsettling political developments have led a number of international donors to reassess their support.
A buoyant copper sector and strong growth in tourism and construction underpinned moderate growth in 2005. GDP growth of 4.5 per cent was, however, slower than expected, reflecting the drought experienced in many parts of the country, the high price of imported oil and fuel shortages, and a nonexpansionary fiscal policy. Stable fuel supplies, better rainfall and continuing investment in mining are expected to boost growth to 5 and 5.5 per cent in...
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