ECONOMY
Africa's top economic performers

Published: 28-SEP-04

If the state of a country’s economy is a good indicator of the quality of its political leadership, then Africa has not been doing too badly over the last decade.

1) Angola

Angola’s economy was in the doldrums for most of the 1980s following nearly three decades of war. In 1999, at the height of the political turmoil, the economy was growing at an average of 2.1% and consumer price inflation was at a staggering 325%.

The death of warlord Jonas Savimbi in 2000 ended years of conflict and set the country on a path to recovery. Angola started an IMF staff-monitored program in 2000, which succeeded in unifying exchange rates and moving fuel, electricity and water prices closer to market rates. These moves helped reduce inflation to 106% in 2002. The oil sector, now producing up to 993,000 barrels per day (bpd), behind only Nigeria in Africa, accounts for 90% of exports and government revenues. In the first half of 2004, Angola earned an extra US$275m as a result of higher oil prices. Let‘s hope the cash will go towards its 13 million people living below the poverty line.

• Real GDP growth rate - 11.4 % (2004)

• GDP per capita - $2,525 (2004)

• Inflation rate- 95.2 % (2004)

• Currency: kwanza

• Exchange rate: kwanza per US dollar - 74.61(2003)

2) Benin

Since Benin’s transition to democracy in 1990, the economy of this country is finally on the road to recovery. Growth in real output has averaged 4.9% in the past six years, a far cry from the dismal -0.9% per capita growth between 1982-1992.

In January this year, Benin was assigned sovereign credit ratings of ‘B+’ long-term and ‘B’ short-term by international ratings agency Standard & Poor’s. The agency said it expected the government to continue with prudent fiscal policies while raising social expenditure and reducing poverty. The government had been hoping for growth of around 7% in 2004, but it appears it would only manage growth of around 5%. Maize prices have doubled in recent months, contributing towards inflationary pressures. Hopefully, the government of President Kérékou is not losing the plot.

• Real GDP growth rate: 5.5% (2003)

• GDP per capita: US$539 (2003)

• Inflation rate: 2.4% (2002)

• Currency: Communaute Financiere Africaine franc (XOF)

• Exchange rate: XOF per US dollar - 581.2 (2003)

3) Botswana

Botswana has an impressive record of economic growth, thanks to a stable government and a flourishing multi-party democracy. Between 1966 and 1999, economic growth averaged more than 9% per year, and the government has maintained budget surpluses for 12 of the last 13 years.

The country has transformed itself from one of the poorest countries in the world before independence to a middle-income nation with a per capita GDP of US$8,800 in 2003. Inflation has been limited to single digit figures since 1997. Diamond mining accounts for more than one-third of GDP and nine-tenths of export earnings. The government has yet to fully develop the tourism, subsistence farming, and cattle raising sectors. Unemployment remains high: official figures say 21%, but unofficially the figure is thought to be closer to 40%. The government will need to rectify this anomaly if it is to remain the economic jewel of Africa.

• Real GDP growth rate - 7.6% (2003)

• GDP per capita - US$8,800

• Inflation rate- 8.1% (2002)

• Currency - Pula

• Exchange rate - Pula per US dollar - 4.95 (2003)

4) Cape Verde

Cape Verde’s recent economic upsurge has surprised even the most eternal optimist. In the mid-1980s, a devastating drought that lasted for years nearly brought the economy to its knees, leading to the delivery of emergency food aid into the Island. Again in 1997, drought wiped out over 80% of the island’s grain crops. In the same year, the government laid out a four-year economic development plan, and by 1998, GDP growth was hovering at about 5.6%, and inflation had dropped to 4.7% from 8.7% the year before.

In 2002, the economy grew by about 4%, inflation was lower, and the fiscal deficit slightly lower than expected. The economy is service-oriented, with commerce, transport, tourism, and public services accounting for 72% of GDP. Last year, the IMF commended the government for its solid macro-economic policies. This country’s prospects for 2004 depend heavily on the maintenance of aid flows and the momentum of the government’s development programs.

• Real GDP Growth rate - 6% (2002)

• GDP per capita: US$1,400 (2002)

• Inflation rate: 1.7% (2002)

• Currency: Cape Verdean escudo (CVE)

• Exchange rate: CVE per US dollar - 97.7 (2003 average)

5) Chad

In 1993, per capita income in this landlocked country was US$210, making it one of the poorest countries in the world. The economy was showing little progress, with many citizens dependent on subsistence farming and fishing. With political turmoil and a severe drought in the 1980s, inflation was a staggering 41% in 1994. In 1995, the economy grew by a mere 2.6% and GDP per capita was at US$600. Inflation has since dropped to 9% in 1995 and 6% in 2002, and Chad’s economy is expected to grow at an impressive 54% this year, thanks to oil exports. But the country remains incapable of producing electricity to meet its own power needs.

The World Bank has identified the electricity crisis as one of the major development issues facing Chad. The question is whether the government will channel its foreign earnings from oil to develop the poor, or will President Idriss Deby use it to reinforce his military infrastructure?

• GDP - Real growth rate: 15% (2003)

• GDP per capita: US$1,200 (2003)

• Inflation rate: 6% (2002)

• Currency: Communaute Financiere Africaine franc (XAF)

• Exchange rate: XAF per US dollar - 581.2 (2003 average)

6) Equatorial Guinea

This country is back on the world map not only because of news linking Sir Mark Thatcher, the son of former British Prime Minister Margaret Thatcher to a coup plot, but also because of its oil. Since the discovery of the Zafiro field in 1995, oil production has increased more than tenfold, and oil has become the country’s most important export commodity.

Despite the country’s economic windfall from oil production resulting in a massive increase in government revenue in recent years, critics say there have been few improvements in the country’s living standards. But real GDP growth was 45.5% in 2001, up from 16.9% in 2000, and narrowly missing the record 71.2% growth in 1997. It remained strong in 2002 at 24%, but dropped to 15% last year. Consumer inflation has averaged 6% over the few years. A November 2003 IMF report says progress has been made in enhancing the transparency of oil-related transactions. The jury remains out on that one.

• GDP - Real growth rate: 15% (2003)

• GDP per capita - $2,700 (2002 est.)

• Consumer Inflation- 6.8% in (2003)

• Currency - Communaute Financiere Africaine franc (XAF)

• Exchange rate - XAF per US dollar - 581.2 (2003 average)

7) Tanzania

Not yet a stellar economy, but certainly heading in the right direction. Once labelled the slowest country in East Africa, Tanzania is fast becoming a viable and attractive market for foreign investors. In 1995, GDP per capita was US$68.67, one of the lowest in the world. Since then, that figure has grown ten-fold. Tanzania was named by the IMF as one of the top ten fastest growing economies in sub-Saharan Africa in 2004.

The IMF says real GDP growth has been strong, averaging almost 6% in the past three years. With growth of 4.6% in 2003, this country has managed to recover from years of economic turmoil. Year-on-year inflation was pegged at 6.4% in May 2004. Real GDP is forecast to grow by 5.8% in 2004 and 6.1% in 2005. But, the economy still lacks the dynamism to achieve growth of 7-8% needed to have a significant impact on poverty. Since the economy is highly dependent on aid, the IMF has warned that its macroeconomic stabilisation could be vulnerable to sudden withdrawals of aid.

• GDP: 5.2% (2003)

• GDP per capita: US$600 (2003)

• Inflation rate- 4.6% (2003)

• Currency - Tanzanian shilling (TZS)

• Exchange rate - TZS per US dollar - 966.58 (2002 average)

8) Mauritius

Mauritius has been a virtual miracle in the Indian Ocean over the past 16 years. It has moved from a per capita income of US$260 at the beginning of the 1960s to a middle-income country with a per capita income of US$3,800 in 2003. The economy has grown 5-6% a year over the last 20 years. Inflation remains in single digits - around 6.3% in 2002 - and the fiscal deficit has averaged about 4% a year between 1985 and 1999.

Mauritius’s success is largely due to good fiscal governance, which has kept the country from falling into a debt trap, but unemployment is rising, having jumped from 2.7% in 1991 to just over 10% in 2002.The country is also facing tough times ahead as it prepares to lose its status of preferential access to US and European markets by 2007. This is likely to hit hard on the sugar and textiles industries. The leadership will have to prove its mettle.

• Real GDP growth rate - 4.6% (2003)

• GDP per capita - US$11,400 (2003)

• Consumer Inflation rate- 6.4% (2002)

• Currency - Mauritian rupee (MUR)

• Exchange rate - MUR per US dollar - 27.9 (2003 average)

9) Mozambique

The early 1990s saw a steady upswing in Mozambique’s economy after 16 years of civil war and recurring droughts. In 1994, the economy grew at an average 8.2%, and inflation was low, thanks to structural economic reforms backed by the World Bank and the IMF.

Devastating floods in 2000 and 2001 were a setback, leading to lower growth of 1.3%, but in 2002, on the back of solid reform agendas and good governance, the economy grew at an impressive rate of 12%, among the fastest in Africa. In spite of these gains, Mozambique remains dependent upon foreign assistance for much of its annual budget, and the majority of the population remains below the poverty line.

• Real GDP Growth Rate: 7% (2003)

• GDP per capita: US$1,200 (2003)

• Inflation rate: 15.2% (2002.)

• Currency: metical (MZM)

• Exchange rate: MZM per US dollar - 23,782.3 (2003)

10) Rwanda

Having survived the 1994 genocide and food shortages in the early 1990s, Rwanda is making a remarkable recovery. The economic upshot of the genocide was a 50% decline in output, and inflation rocketing to 64%.

The country’s main industry, the coffee sector, lost export earnings because of production disruptions. In 1993, at the height of political strife, the economy recorded negative growth of -10%. Between 1995 and 2001, it improved to an impressive 8.2%. The government says its “central goals of 2001-2010 are to concentrate on improving and expanding the economic foundation at a steady and firm pace”. In June, the World Bank approved a grant of US$2m for poverty alleviation in rural areas. The biggest challenge is to channel economic development through the rural productive sector.

• GDP: 3.5% (2003)

• GDP per capita: US$1,300 (2003)

• Inflation rate: 7.7% (2003)

• Currency: Rwandan franc (RWF)

• Exchange rate: RWF per US dollar - 537.66 (2003)





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