This fourth edition of the African Economic Outlook assesses economic developments and prospects for the continent based on in-depth country studies. The coverage has been expanded from 22 countries in the third edition to the following 29 countries in the present one – these account for 85 per cent of Africa’s population and 90 per cent of its economic...

A GROWTH RATES OF 6.9 PER CENT in 2003 and 5.4 per cent 2004 confirm the country’s economic health and stability and underpin expectation of further substantial growth of around 4.5 per cent in 2005 and 2006. Algeria has reduced its debt ratio to 24.7 per cent, rebuilt official reserves to the equivalent of nearly two years of imports, still has a budget surplus (even taking into account its FRR revenue regulation fund) and has...

ANGOLA HAS BEEN LARGELY AT PEACE since a ceasefire between the armed forces and the rebels was signed in April 2002, putting an end to more than 25 years of almost uninterrupted civil war. The country now faces the daunting task of channelling its huge resource endowment into reconstruction of its infrastructure and into poverty reduction activities. Diamonds and, especially, offshore oil dominate the national economy...

BENIN’S MACROECONOMIC RESULTS have been satisfactory since the early 1990s, with annual growth averaging five per cent and inflation under control, accompanied by stable politics and great freedom of expression that is an example to the rest of Africa. But the mainstays of the economy have recently shown signs of fragility, slowing economic activity in 2003 and...

WITH A TRACK RECORD OF sound macroeconomic policies, good governance, reliable institutions and political stability, Botswana remains one of the topperforming economies in Africa. The country has managed its diamond wealth efficiently, in stark contrast to the widely cited cases of natural resource curse experienced by many developing countries. Botswana also has the reputation of being the least corrupt country in Africa and has the highest sovereign credit rating on the continent. These virtues, together with prudent...

BURKINA’S VERY HIGH GROWTH RATE of 8 per cent in 2003 showed the economy’s resilience in the face of the worsening crisis in neighbouring Côte d’Ivoire, even if part of it was due to one-off factors such as excellent cotton and record cereal harvests. An external shock of this kind should have had not only economic consequences (from closure of the trade corridor through Côte d’Ivoire, congestion and premature deterioration of roads and...

PRESIDENT PAUL BIYA WAS PREDICTABLY re-elected in October 2004 after more than 20 years in power. Meanwhile the country failed to qualify for new international funding by missing the year-end target for reaching completion point under the Heavily Indebted Poor Countries (HIPC) initiative. Economic conditions were good thanks to robust...

CHAD IS ONE OF AFRICA’S POOREST COUNTRIES, a landlocked state with the nearest access to the sea the Cameroonian port of Douala, 1 700 km from the capital, N’Djamena1. It has been torn by civil war for nearly 20 years and fighting still continues between ethnic groups and between cattle herders and crop farmers. The conflict in neighbouring Sudan also threatens Chad’s...

CONGO SUFFERED ENORMOUS DAMAGE during successive civil wars (especially between 1993 and 1999) but the oil sector, mainly-offshore, was spared. The fighting greatly increased poverty and the government became heavily indebted, in particular by mortgaging its oil resources. Since the end of the war in 1999 and elections in 2002, the economy has experienced a solid revival and growth should accelerate...

THE DEMOCRATIC REPUBLIC OF CONGO (DRC) has one of the richest natural resource endowments in the world, with mining, forestry and hydro-electric sectors offering enormous growth potential. The domestic market is considerable, as the country has a population of more than 50 million, but ten years of war have devastated its economy, infrastructure and social fabric. During this period of conflict, more than 3 million people died, the incidence of HIV/AIDS soared and...

CÔTE D’IVOIRE, LONG A MODEL OF STABILITY, with an open economy, social redistribution and ethnic peace, has been torn by a political crisis since a failed coup in September 2002 that split the country into two parts. Lawlessness worsened in 2004 and further violence occurred, notably in March, after the government banned opposition demonstrations, and in November, when clashes with French forces resulted in many...

THE GROWTH OF THE EGYPTIAN ECONOMY, driven primarily by export revenue and improved external competitiveness, has revived since mid-2003, returning to rates identical to those of the 1990s, at close to 5 per cent. Exports have benefited from the 25 per cent depreciation of the national currency against the US dollar following the introduction in January 2003 of a partially floating exchange rate, and the current account showed a surplus of nearly $3.7 billion at the...

IN MAY 2004, AFTER TWO YEARS of negotiations with the IMF and on completing its efforts to make structural adjustments and settle its external debt, Gabon obtained a 14-month stand-by agreement with the IMF. Domestic debt to the private sector piled up in 2002 and 2003, however, leading to a deterioration in companies’ cash positions and to job losses in some sectors. During the same period, the non-oil sector, which is heavily...

IN ITS ADOPTION OF MARKET-FRIENDLY economics and democratic politics, Ghana has been among the first and most ambitious reformers in Africa. Generally prudent macroeconomic policies and substantial structural reforms have paid off in the form of steady if unspectacular economic growth and lower inflation. The economy remains reliant on cocoa and a few other primary products, although some promising signs of diversification have emerged. Ghana has benefited from...

SINCE 2003, KENYA HAS MADE significant progress in reversing its poor economic performance of the preceding decade. Following a protracted recession, a modest rebound in economic activity has got underway: fiscal performance has strengthened under the IMFsupported programme approved in November 2003, and some steps have been taken towards improving governance. In the political sphere, progress has been made towards reaching a broad consensus on the...

THE INDIAN OCEAN ISLAND OFMADAGASCAR belongs to the low revenue group of countries. GDP progressed rapidly between 1997 and 2001, growing at an average 4.5 per cent following the launch of a rigorous stabilisation and structural adjustment programme in collaboration with the IMF and the World Bank. Because of the lack of appropriate redistribution measures, the consequences of this improvement have not always...

THERE ARE CONSIDERABLE CONSTRAINTS holding back economic development and the reduction of poverty in Mali. The crisis in Côte d’Ivoire highlighted the problems caused by the country’s hemmed-in position, while current tensions between the government and the private concessionaire responsible for electricity production underline the more general difficulty the cost of factors represents for the domestic economy. High factor cost, in a context of strong international...

SINCE 1975, MAURITIUS HAS ACHIEVED steady economic growth of more than 5 per cent, reaching one of the highest gross national incomes (GNI) per capita in Africa. In a generation, the country has undergone a deep transformation from mono-crop (sugar) production into a diversified economy built on five pillars, namely, sugar, export processing zones (EPZ), tourism, financial services and information and...

THE MOROCCAN ECONOMY PERFORMED well overall in 2003 and should continue to show growth rates of over 3 per cent in the coming years. The 2003 growth rate of 5.5 per cent was achieved in a context of increased macroeconomic stability. In 2004, inflation was kept down to 2.3 per cent; the level of external debt fell by 4.5 per cent to 31.7 per cent of GDP; and the budget deficit was kept within reasonable limits at 2.5 per cent of GDP - though the budgetary situation remains...

SINCE THE END OF A DEVASTATING WAR in 1992, Mozambique has recorded one of the world’s highest growth rates, averaging 8.1 per cent from 1993 and continuing in 2003 and 2004. Owing to high population growth and the very low initial level in 1993, however, Mozambique’s per capita income remains among the lowest in the world at $229 in 2003. Poverty has decreased sharply but more than 50 per cent of the population is still classified as...

NIGER IS NOT WELL ENDOWED by nature. Landlocked and dry, the country has one of the lowest levels of per capita income in the world and it ranked second to last of the 175 countries surveyed in the 2003 United Nations human development index. In spite of this, Niger recently registered noteworthy economic performances, demonstrating the importance of political...

THE RETURN TO CIVILIAN RULE IN 1999 with the election of President Obasanjo has given rise to hopes that Nigeria will finally begin to fulfil its enormous economic potential. Until recently, the country had little to show for some $300 billion in oil revenues earned since independence. President Obasanjo’s ambitious economic reforms aim to combat entrenched corruption and reduce poverty while establishing macroeconomic stability. So far, however, little progress...

FOLLOWING THE 1994 GENOCIDE, Rwanda has made remarkable progress during the last ten years. The average real GDP growth between 1995 and 2004 was 8 per cent. Rwanda, however, remains highly dependent on foreign aid which, during 2000-04, accounted for about 50 per cent of the current budget and about 80 per cent of the development budget, even though the share of government revenues to GDP has recently increased. Progress in Rwanda’s structural transformation has remained slow, as a stagnating...

WITH A VIBRANT DEMOCRACY, relatively developed industrial sector and good geographic position, Senegal could replace pre-crisis Côte d’Ivoire as the motor for growth in French Africa. Following the collapse of agricultural production and a growth rate of just 1.1 per cent in 2002, the country has recovered with two consecutive years of marked economic growth: 6.5 per cent in 2003 and an estimated 6 per cent in 2004. Although partly due to exogenous...

NOTWITHSTANDING APARTHEID’S LEGACIES of inequality and poverty, the South African government’s fiscal and monetary policies have been remarkably restrained. With low inflation, little indebtedness and a strong currency, the country is now in a favourable position to move more aggressively towards tackling its profound social ills, most crucially the pervasive unemployment. The government is increasing social spending and public...

SINCE 1995, TANZANIA has successfully pursued economic reforms, resulting in accelerating economic growth and decelerating inflation. Strong growth and fiscal restraint in spite of a serious drought in 2003, demonstrates an impressive resilience. GDP growth has been 5.6 per cent in 2003 and is estimated at 6.4 per cent in 20041. Yet, the share of manufacturing in GDP has only slightly increased from an average of 8.3 per cent during 1997-99 to an average of 8.4 per cent during 2001-032. Growth in manufacturing is expected to take off soon due to various recent policy measures. Significant...

BETWEEN 1999 AND 2004, reforms undertaken in Tunisia were chiefly aimed at preparing for opening to the world economy, encouraging diversification and increasing competitivity. These enabled the country to adapt to a difficult international environment and to survive three consecutive years of drought. In 2003, good performances in agriculture and tourism accelerated growth from 1.7 per cent (2002) to 5.6 per cent. According to estimates, this should reach 5.5 per cent...

SINCE YOWERIMUSEVENI and his National Resistance Movement (NRM) came to power in 1986, Uganda has recovered from the economic devastation wrought by Idi Amin. Annual output growth has averaged above 5 per cent, while fiscal consolidation and responsible monetary policy have brought inflation under control. This success has, however, relied heavily on foreign assistance. Uganda’s management of multiparty elections...

AGAINST A BACKDROP OF ECONOMIC decline in the preceding two decades, Zambia achieved its fifth consecutive year of solid growth, with GDP growing at 5.1 per cent in 2004, significantly above the target of 3.5 per cent, as a result of strong copper output and exceptionally good agricultural performance. Strong GDP growth is expected to continue over 2005-06, at about 5 per cent, on account of increasing mining production and continuous efforts to raise agricultural productivity. However, the economy has not diversified...