ADDIS ABABA, June 3 (AFP) - Weak European market growth, sluggish commodity prices, war, drought and the HIV/AIDS pandemic conspired to dampen economic performance in Africa in 2002, according to a report released Tuesday.
In 2002, Africa's real GDP growth declined to 2.8 percent from 3.5 percent in 2001, while per capita GDP growth fell by about half to 0.5 percent from 1.1 percent in 2001, said the African Development Bank's (AfDB) annual report, released in Addis Ababa to coincide with the bank group's annual meeting.
The report blamed the decline on the continent's dependence on European markets, where growth was weak; delayed recovery in many commodity prices; and unfavourable domestic conditions, particularly civil conflicts in some countries, drought and the consequential fall in agricultural output, macroeconomic imbalances and the HIV/AIDS pandemic.
The AfDB pointed out that performance varied greatly from country to country, with 16 African states showing growth of more than five percent and five showing negative growth.
Only five African countries attained rates of real per capita GDP growth in excess of five percent and 11 countries recorded negative real per capita GDP growth rates in 2002, the report said.
Inflation, which stood at 12.7 percent across the continent in 2001, came down to 9.7 percent last year, thanks largely to fiscal discipline and tight monetary policy.
Africa's external sector remained weak in 2002, with terms of trade still in the negative zone, while current account balances all worsened from their previous year's levels, the report said, adding that relatively high cocoa and oil prices and a boom in gold prices helped offset the current account deterioration.
The bank, a multilateral development institution aimed at fighting poverty whose shareholders include 53 African and 24 non-African states, noted that capital flows to the world's poorest continent rose dramatically from 14.6 billion dollars in 2000 to 20.1 billion in 2001.
Africa's total external debt last year stood at just over 305 billion dollars.
On the domestic policy front, last year was characterized by a continued focus on macro-economic stability, poverty reduction and private-sector development, notably through privatization of monolithic state-run enterprises.
Africa is struggling to keep up as the world's more successful economies harmonize in tune with technological developments, market liberalization and huge flows of capital, the bank said, noting that no other region in the world had a larger share of its population living below the extreme poverty threshold of one dollar a day.
In 1950, Africa delivered 10 percent of world exports, but this figure had fallen to just 2.7 percent by 2000 despite the increasing trade liberalization of African countries, the report said.
Africa's total share of FDI (foreign direct investment) which halved between the 1970s and 1980s, halved again during the 1990s. Much of this investment is concentrated, geographically and sectorally in a few African countries, including Nigeria, South Africa, Angola and Algeria, and in extractive natural resources such as oil and solid minerals, it explained.
Africa, more than every other region of the world, faces the danger of being left behind by the rapid changes created by the forces of globalization, according to the AfDB, which recommended a package of strategies to avoid further marginalization.
Domestically, an export-led private sector and competitive market economy should be encouraged to flourish and everything possible done to contain the HIV/AIDS pandemic.
On the regional front, the AfDB urged countries to work towards enlarging markets and strengthening trading platforms and called for states to work together to build common institutions such as securities and exchange commissions and regional bond or debt markets.
The bank's recipe also called for a global strategy, one that would involve Africa's development partners, to redress many of the asymmetrical power relations and inequities in globalization and to create a level playing field, particularly low-income countries. ctor and competitive market economy should be encouraged to flourish and everything possible done to contain the HIV/AIDS pandemic.
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