Africa's economic woes reflect global crisis

From People's Democracy, 18 June, 1995.
Newspaper of the Communist Party of India (Marxist)

Reprinted in People's Weekly World, 1 July, 1995, pg. 8

According to the "'Report on the Economic and Social Situation in Africa, 1995," which was issued by the United Nations Economic Commission for Africa (ECA) the gross domestic product (GDP) of the African region grew by 2.4 percent in 1994.

Despite the modest increase, which was the fastest from 1990 to 1994, the African economy has continued to fall behind those of other developing regions, and the region's growth is yet to keep pace with the three percent population growth. It means that the African economy is facing challenges in both absolute and relative terms.

Firstly, the African economy losing ground reflects the low growth in the agricultural and industrial sectors. Its agricultural production rose by only 2.1 percent in 1994, compared to 3.7 percent in 1993. For developing Africa, which excludes South Africa, agricultural production rose 1.8 percent in 1994, compared to 2.6 percent in 1993.

Unfavorable weather conditions resulted in the slow growth in agricultural production. A failed rainy season in the third quarter of 1993 and the first quarter of 1994 precipitated food shortages in the first half of last year in 10 countries in central, eastern and southern Africa. In the most affected countries, large amounts of food imports and food aid were required.

Meanwhile, the output of mining products, including fuel, continued to decline in 1994, mainly because of the crises in mineral producing countries and the Iack of investment in the sector.

SecondIy the modest GDP growth in the decline of capita in Africa, which fell by one per cent last year. Africa's GDP increased at an average annual rate of nearly 1.4 percent, but income per head fell at 1.6 percent over 1990-1994 period.

The number of people living in poverty has increased both in rural areas and cities. Thirty two of the 47 Ieast developed counties in the world are in Africa. Income per head in Mozambique and Somalia is less than 100 US dollars, about one-day's income per head in the richest developed countries.

Thirdly, Africa's share in the world's trade continued to shrink. Though the value of merchandise exports of Africa increased by 4.2 percent in 1994, it accounted for only 2.4 percent of the world merchandise trade, as against 2.6 percent in 1992. The deficit on the balance of trade increased to 8.2 billion dollars in 1994 from 5.6 billion in 1993.

Fourthly, Africa's external debts are estimated to have increased by 3.2 percent to reach 312.2 billion dollars by the end of 1994. Though Africa's debts, estimated at 16 percent of the developing countries total, are less important in volume terms, it is the heaviest in percent capita terms. African countries will use more than 20 percent of their export revenue to debt servicing.

The deteriorating social situation in Africa has restricted the development of its economy. Africa's rapid population growth has exerted intolerable pressure on already over-stretched infrastructures, especially housng, water and sanitation, health and education facilities, growing unemployment and underemployment, and the rapid environmental degradation

The unemployment rate in urban areas has increased without abatement over the past two decades and it is projected to reach 30 percent by the year 2000. Youth unemployment is already a critical problem in many African countries.

The rapid spread of aids has brought untold havoc in the African health landscape in recent years. The World Health Organization estimated in 1994 that there were over 10 million cases of HIV infection in Africa and the figure would reach a staggering 14 million by the year 2000.

Today, the numher of refugees in Africa, is in excess of seven million, approximately one-third of the world's total. Besides, there are 21 million displaced people in various parts of the continent

Africa's adult illiteracy rate is the highest in the world. In sub-Saharan Africa, 65 percent of women over the age of 15 and 40 percent of adult men are illiterate.

The disappointing economic performance in the Africa region has many reasons: civil wars, ethnic conflicts, political instability, an unfavorable international economic environment and fluctuations in weather constrained agricultural output. It also has constraints of low productivity, inefficient management, as well as the failure to diversify the narrow production and export base.

However, Africa has its own good examples. Six counties: Morocco, Namibia, Ghana, Uganda, Mauritius and Zimbabwe were expected to register a GDP growth rate of over six percent in 1994. It indicates that African countries can make satisfactory economic progress if they solve the problems facing them.

E.C.A. Acting Executive Secretary Marha D. Sarr said at the 30th session of the Commission that "Africa is pareparing to take up the challenges it must meet."

He added, "We must bear in mind that this objective could be achieved only through an enhanced commitment of the governments and peoples of Africa, their intergovernmental and non-governmental organizations and their development partners, including United Nations system, to the achievement of sustainable growth and development in the region."

Meanwhile, an Angolan government health official said that malnutrition has hit 70% of the Angolan children, who have borne the brunt of nearly two decades of civil war in the country. The children under the age of 15 suffering from malnutrition outnumber adults because they need more nutrition for growth.

The malnutrition of children is attributed mainly to political instability caused by years of civil war, insufficiency of iodine and food shortages. According to the official, the Angolan Ministry of Health and the Angola Office of the United Nations Children's Fund have drawn up plans to solve the children's problem.

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