Short Overview of African Countries

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 (Cфte 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

However, none of these challenges is insurmountable; in fact, some

entrepreneurs would contend that African risk is lower than that even of

North America.

There is hardly could be a person, who is able to resolve all the

problems considering the challenges in the list. But there are a number of

tasks to be completed in order to improve the quality of life and gain

stable economic growth.

Resource mobilization To halve poverty by 2015 countries must reach

the 8 percent growth in GDP each year, instead of present 4.4 %. To reach

this rate investments must be 40 percent of gross domestic product. Even

with major increase in domestic savings, there are still huge financing

gaps. Africa’s rate of return on Foreign Direct Investment is 29 percent

per year, higher than any other region of the world. Annual average foreign

investment flows have increased from $1.9 billion in 1983-87 to $6 billion

in 1993-97. But this is just 4 percent of the total investment pouring into

developing countries. In the face of global financial volatility, Africa's

nascent capital markets have also remained buoyant. Yet institutional

investors remain resistant to the possibilities in Africa. African

countries have undertaken significant economic reforms, but investment has

not come.

Regional co-operation Regional integration is the key to Africa's

success in the 21st century. The challenge is for the subregional

initiatives to march together and in step with the World Trade

Organization.

Information technology Information and communication technologies

present some of the most exciting possibilities for Africa in the new

millennium. “With new ways to communicate we can leapfrog through several

stages of development; cut the cost of doing business; and narrow the gap

of huge distances. …At ECA, we want to make sure that Africans are drivers,

not passengers, on the information highway…” says Dr. K.Y. Amoko, executive

secretary, Economic Comission for Africa. at the National Summit on Africa

held in Washington D.C. 17 February 2000. There was registered a

significant growth in Internet spreading through the continent. E-Commerce,

television and radio are also developing rapidly.

Governance Ensuring and sustaining good governance must be an African

responsibility, first and foremost.

Social investment. Social spending has become a major casualty of

recent budget cuts in many African countries. To expect that Africa can

progress when investment in its human capital is declining is a classic

case of being penny wise and pound foolish. Social investment challenges of

health, education, housing, water supplies and sanitation are enormous and

demand the creativity and partnership of all caring parties.

Gender equality Excluding Islamic countries, Africa is the most

remarkable region in terms of discrimination against women. Since the UN's

Fourth World Conference on Women in Beijing in 1995, the world better

understands the need to free women to become equal participants in

development. This is not just a matter of rights but of good economic

sense. “It is past time to lead by rhetoric; it is time to lead by

example.” (from the National Summit on Africa documents”)

Preventing conflict The world has learned expensively that it is

cheaper and far more humane to prevent conflict than to fight a war. So it

is one of the most actual problems for African countries. To quote the UN

Secretary General, "in the past twenty years we have understood the need

for military intervention where governments grossly violate human rights

and the international order. In the next twenty years we must learn how to

prevent conflicts, as well as intervene in them." Peace can no longer be

just about peace making and peace keeping. It is also about peace building.

African diaspora must also take part in ongoing processes. A lot of

Africans live in European countries as well as in United States. They are

able to help their historical homes in three major ways.

First, Become an Advocate for Africa: For every devastating image of

Africa they see on television, not far from that camera there is an image

of people striving to develop. As a start, they should visit Africa, spread

the word about it, become a personal lobbyists for Africa. They must lobby

for African products in their stores; lobby for strong US-Africa ties.

Second, Invest in Africa: Investing in Africa could be profitable. Now

is the time for African-Americans to put their money where their mouths

are. They can invest in Africa, through such convenient ways as the mutual

funds that concentrate on Africa. Members of other diasporas have

accelerated development in their ancestral homelands through widespread

individual investments. Surely African-Americans can do it, too.

Third, Invest politically in Africa, 40 percent of United Nations

assistance is currrently going to Africa. When the US and other flourishing

countries pay their UN dues, when someone pays voluntary contributions

to United Nations he/she helps Africa. Foreign aid helps building schools

as well as improving governance in terms of efficancy.

While many write off Africa as the continent of despair, other

enterprising individuals and organisations have recognised the huge,

untapped potential of Africa and are actively pursuing business ventures

across the continent.

African Development Indicators show clearly where the regions greatest

social challenges and opportunities lie. Indeed, Africa's future economic

growth will depend less on exploiting its natural resources, which are

being depleted and are subject to long-run price declines, and more on its

labor skills and its ability to accelerate a demographic transition.

Africa's opportunities, which range in risk from investing in emerging

market funds or one of the listed multinationals active in Africa to

trading with African partners, include:

. oil and gas (Angola and Libya);

. mining (West and Central Africa);

. privatisations (South Africa and Nigeria);

. international trade (oil producers and SADC);

. infrastructure (pipelines, roads, telecommunications);

. stock exchanges that are mushrooming in many countries

. using educated English and French speaking African nationals

. and leisure (big game + beaches + golf + climate + satellite +

Internet + cell + low cost structure = huge telecommuting

opportunity).

However, perhaps Africa's greatest opportunity lies in its

biodiversity, which ranges from Sahara desert to tropical jungle, from snow-

capped volcanic Mount Kilamanjaro to the beaches of East and West Africa.

Then there is the excitement of stalking big game in the African bush to

the thrill of whitewater rafting through the gorges below Victoria Falls or

the awe of seeing the Egyptian pyramids at sunrise. Africa is going to

become the telecommuting centre of the world, in the short to medium term,

ecotourism provides the opportunity to develop leisure complexes which can

take advantage of game parks, golf courses, beaches and beautiful scenery

one day. “We need to stop thinking of ourselves as a single engine train,

but rather a jumbo jet, with several engines revving up for take off, and

several more back ups in case of engine failure.” said K.Y. Amoako

Executive Secretary of ECA at the 40th Anniversary of Africa Confidential.

6. Conclusion

At the end few words comparing Armenia with the African region. The

main difference is different natural resources of these regions. Africans

may get started their economic growth with incomes from exporting oil, gas,

precious metals and jewels. Alas, Armenia have no this option. Our country

have no significant resources to exploit them or not to exploit, meanwhile

for Africa devastation of resources may stimulate the economy in the case

of peace and efficient government. There are also a lot of differences in

terms of agriculture. Arfican countries cover wide territory, but they have

problems with irrigation. In the case of Armenia it is important to note,

that the situation is just the opposite. Even the most severe droughts can

not be compared with deserted areas of black continent, but the land is

highly limited. I think that the last point of comparison, which is as

important as the previous ones, is the labour force. Labour force is one of

the main differences between former USSR republics and the developing

countries of African region. As a result of USSR educational system Armenia

has educational level which can be easily compared even with the most

developed countries.The level of literacy is 99%, which is higher than in

African countries. Armenian in spheres of programming, medicine, science

highly priced all over the world. The main problem in these sphere is brain

drain. So the primary task for government is to stop this process. With the

foreign investitions Armenia is able to establish advanced technology

production, which is not available for Africans. This could be a good

impulse to become a new “tiger”.

So our regions have different prerequisits, different ways of

developing, but same aim, and unfortunately obstacles in terms of

government and unstable peace.

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Algeria

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Angola

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Botswana

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Cameroon

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Chad

[pic]Congo(Zaire)

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Djibouti

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Ghana

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Kenya

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Lesotho

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Mozambique

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Rwanda

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Zambia

[pic] Zimbabwe

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