Transcript Similarities and Differences between the African Nations

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SIMILARITIES AND DIFFERENCES
BETWEEN THE AFRICAN NATIONS
Week 2
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Theme Topics for discussion
Theme objectives
Facts on Africa
Similarities and Differences: Macroeconomic governance
and performance
Similarities and Differences: Economic development
classification
Similarities and Differences: Regional Economic
Communities in Africa
Similarities and Differences: Farming systems in SubSaharan Africa –SSA
Summary and discussions
Reflection exercise: Questions
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Theme Objectives
• To show the macroeconomic fundamentals for Africa
• To the similarities and differences between African
countries,
• To show the economic development classifications for
African countries
• To show the farming system practiced in Africa
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Background on Africa
• Africa is a continent about
• 5,000 miles from North to South
• 4,600 miles from east to west at it widest point
• There are about 3,000 distinct ethnic groups in Africa
• Nigeria has about 370 recognized tribes and
• Namibia has about 11
• There are over 2,000 languages spoken in Africa
• Arabic has the highest number of speakers
• 170 million people in North and the horn of Africa
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Background on Agriculture in Africa
• World Bank 2006b:11,135; Diao et al. 2007:5, 9:
• Mention that the agricultural sector can be the engine for economic growth and improved
livelihoods in Africa.
• Diao et al. 2007:1 mentions that
• majority of the population in Sub-Saharan Africa lives in rural areas
• and depends directly or indirectly on agriculture.
• In fact, agriculture contributes about 17% to the Gross Domestic Product (GDP) of
many of these countries and
• accounts for 40% of their exports, apart from contributing to employment creation.
• Thus, it has the potential of reducing poverty which has been a great area of
concern in many parts of the continent.
• Statistics reveal that the number of people living below the poverty line in SSA
• is over 180 million and is expected to exceed 300 million by the year 2020
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Background on Agriculture in Africa
• Despite the great potential for agricultural production in Africa,
• UNDP states that about 73% of the poor people living in rural
areas subsist on less than a dollar a day.
• In addition, the continent has about 200 million of the world’s
hungry people (Millennium Development Goals (MDGs)
Technical Support Centre.
• Furthermore, available statistics suggest that about one third of
the continent’s population is malnourished.
• Africa is also the only continent where food production has
been falling over the years.
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Goals and targets for Africa
• Africa, like the rest of the world, needs to attain the United Nation’s
Millennium Development Goals (MDGs)
• And the World Food Summit (WFS) goals to reduce the number of
hungry people from 790 million to 400 million by 2015.
• There is suggestion that to reduce poverty by 50% by 2015,
African economies need to grow at 7% per annum.
• Another target requires that a national strategy for sustainable
development be in place in every country
• to ensure the reversal of current trends in the loss of environmental
resources at both national and global levels by 2015 (ECA 2005).
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Macroeconomic governance and
Performance
• Many African economies appear to have turned the corner
and moved to a path of faster and steadier economic
growth.
• Increasing GDP growth
• Reduction in inflation
• Significant improvement of the debt-to-GDP ratio
• These appear to have slowed down as the 2000s have progressed
• Economic output for Africa as a whole expanded rapidly,
• From a low annual average growth rate of 1.6 percent in
1990–95 to 3.6 percent in 1995–2003 and to 5.03 percent
in 2003–09.
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Macroeconomic governance and
Performance
• For the purpose of distinguishing African countries based
on the similarities and differences;
• We use Diao et al 2007 and World bank 2010:
• LI – 1: Low Income, more favorable agricultural conditions and
mineral rich Countries, consists of 6 countries
• LI – 2: Low Income, more favorable agricultural conditions,
non-mineral rich, consists of 14 countries
• LI – 3: Low Income and less favorable agricultural conditions,
consists of 9 countries
• MI: Middle income countries, consisting of 24 countries
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Macroeconomic governance and
Performance
The rate of expansion in GDP increased over 2003–09
For the eastern Africa region 0.1 percent
For LI-1 about 0.1 percent
For LI-2 about 0.3 percentage points, respectively.
Notable outliers driving growth trends in their respective regions
include Equatorial Guinea of central Africa,
where oil revenue caused GDP to more than double
Liberia - one of the LI-1 countries,
 with more favorable agriculture and mineral resources—which grew at
annual rates above 20 percent between its two civil wars.
Oil exporting African countries—such as Nigeria and Angola—are
currently benefiting from resumption of the demand for oil,
 though they remain vulnerable to fluctuations in international oil prices (IMF
2010a)
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Macroeconomic governance and
Performance
Two other important economic indicators offer additional insight into
the evolution of the enabling environment for African agriculture:
 inflation, and
 debt as a share of GDP
Africa as a whole experienced relatively low inflation levels over the
periods 1990–95 and 1995–2003,
at an average of 1.3 and 0.5 percent respectively;
inflation increased however to an average of 8.3 percent over 2003–
09
This pattern, observed at the continental level, is reflected in the
regions to differing degrees.
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Macroeconomic variable: Inflation
• Comoros, Eritrea, Mauritius, and Sudan drove the
increase in the eastern region,
• While Libya, Morocco, Algeria, and Mauritania drove the
increase in the northern region.
• Overall, inflation was under greater control following 2003
than in preceding years.
• With the exception of the LI-2 economic development
group—favorable to agriculture but mineral poor—each
group experienced an annual average decrease in
inflation over 2003–09.
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Macroeconomic variable: debit-to-GDP
ratio
• In both geographic and economic aggregations:
• For Africa as a whole, government debt as a percent of GDP declined
• from an annual average of 71.12 percent over 2000–03 to 54.86 percent over 2003–
09
• Southern Africa is the least indebted region as a fraction of its GDP, at
45.55 percent in 2000–03 and 33.46 percent in 2003–09
• Mineral-rich group (LI-1) is the most indebted relative to output,
• Still standing at a hefty 120.46 percent in 2003–09, with Congo and
Guinea driving this trend
• The significant reductions in debt have been driven by debt forgiveness
under two initiatives—heavily indebted poor countries (HIPC) and the
multilateral debt relief initiative (MDRI) (IMF 2010; Ricksecker 2001)
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Economic Development Classification
LI - 1
Low income (29)
 These countries are more favorable agricultural
regions:
 Central African Republic
 Congo, Dem.
 Guinea
 Liberia
LI - 1
 Sierra Leone
 Zambia
 Benin
 Burkina Faso
 Ethiopia
 Gambia, The
 Ghana
 Guinea Bissau
 Kenya
 Madagascar
 Malawi
 Mozambique
 Tanzania
 Togo
 Uganda
 Zimbabwe
LI - 2
Middle income (24) (MI)
 Algeria
 Rep. Angola
 Botswana
 Cameroon
 Cape Verde
 Congo, Rep. of
 Cote d’Ivoire
 Djibouti
 Egypt
 Equatorial Guinea
 Gabon
 Lesotho
 Libya
 Mauritius
 Morocco
 Namibia
 Nigeria
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Distinguishing Characteristics
• North Africa has characteristics that distinguish it from Sub-Saharan
Africa.
• For instance, oil revenue is an influential factor in the economies of
North African countries, such as Algeria and Libya.
• The service sector contributes most to GDP growth in the region,
followed by industry, then agriculture.
• This increase in industrial production in the region, the achievement
has been at the expense of agricultural sectors.
• Socio-political implications will eventually force governments to invest
in agricultural services to help poor rural population (ECA 2006a).
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Economic Development
Classification…..
Low income (29)
 These countries are less favorable
agricultural regions;
 Burundi
Middle income (24) (MI)
 Sao Tome & Principe
 Senegal
 Seychelles
 Chad
 Comoros
 South Africa
 Eritrea
 Sudan
 Mali
 Mauritania
LI - 3
 Niger
 Swaziland
 Tunisia
 Rwanda
 Somalia
 Diao et al. 2007, Dixon, Gulliver, and
Gibbon 2001, and
 The World Bank 2010
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Economic Development Classification
Mineral rich LI countries
None-mineral rich LI countries
 Central African Republic
 Benin
 Congo, Dem.
 Burkina Faso
 Guinea
 Liberia
 Sierra Leone
 Zambia
 Ethiopia
 Gambia, The
 Ghana
 Guinea Bissau
 Kenya
 Madagascar
 Malawi
 Mozambique
 Tanzania
 Togo
 Uganda
 Zimbabwe
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Regional Economic Communities (RECs)
o There are eight (8) regional groupings in Africa:
 CEN-SAD: is the Community of Sahel-Saharan States= (27 countries)
 COMESA: is the Common Market for Eastern and Southern Africa= (19 countries)
 EAC: is the East African Community=(5 countries)
 ECCAS: is the Economic Community of Central African States= (11 countries)
 ECOWAS: is the Economic Community of West African States= (15 countries)
 IGAD: is the Intergovernmental Authority for Development= (7 countries)
 SADC: is the Southern Africa Development Community = (15 countries)
 UMA: is the Union du Maghreb Arabe = (5 countries)
• Sources: AU 2011; CEN-SAD 2011; COMESA 2010; EAC 2011; ECOWAS 2010; IGAD 2011;
NEPAD 2010b; SADC 2010; UMA 2011.
Role of RECs in Agriculture
Agriculture is a crucial and dynamic sector in the region
The formation of the RECs is expected to result in:
Economies of scale,
Enlargement of markets,
Develop specialization according to comparative advantage,
Attract foreign investment, and
Improve international bargaining position.
The impact of free trade will be felt both on the import and export sides.
The sector is an important employer.
In fact, large proportion of people in the SSA region live in rural areas and
derive their livelihood from agriculture and related activities
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Geographic Scope in Africa
GEOGRAPHIC SCOPE: RIAs in AFRICA
AMU
Algeria
Libya
Morocco
Tunisia
ECCAS
São Tomé & Príncipe
Ghana
Nigeria
Benin
Togo
Côte d’Ivoire
Guinea-Bissau
Liberia
Sierra Leone
COMESA
IGAD
Mauritania
ECOWAS
Conseil de
l’Entente
Nile Basin
Initiative
CEMAC
Somalia
Cameroon
Central African Rep.
Gabon
Chad Equat. Guinea
Rep. Congo
Cape Verde
Gambia
Djibouti
Egypt
Burundi*
Rwanda*
Niger
Burkina Faso
Ethiopia
Eritrea
Sudan
DR Congo
Mali
Senegal
Kenya*
Uganda*
Angola
EAC
Guinea
WAEMU
Mano River
ACRONYMS
AMU:
Arab Maghreb Union
Union
CBI:
Cross Border Initiative
CEMAC: Economic and Monetary Community of Central Africa
CILSS: Permanent Interstate Committee on Drought Control
in the Sahel
COMESA:
Common Market for Eastern and Southern Africa
EAC:
East African Community
ECCAS: Economic Community of Central African States
ECOWAS:
Economic Community of Western African States
1/ Tanzania is also a member of the
IGAD: Inter-Governmental Authority for Development
Nile Basin Initiative
IOC:
Indian Ocean Commission
SACU: Southern African Customs Union
CILSS
Tanzania1*
Malawi*
Zambia*
Zimbabwe*
SACU
South Africa
Botswana
Lesotho
Mauritius*
Seychelles
*
Namibia*
Swaziland*
SADC
Comoros*
Madagascar*
Reunion
Mozambique
* CBI
IOC
15 SADC countries and their Location
Agricultural dualism and stability in SSA..
Subsistence farming, subject to erratic rainfall, is significant as a form
of agriculture in many countries in the region,
 Mainly characterized by rearing of cattle, sheep, goats and crop cultivation.
Commercial agriculture is also very pronounced in the region, with
large commercial farms and estates being major assets
The agricultural potential in countries such as Angola and
Mozambique were devastated by prolonged civil wars.
Peace and reforms are sweeping across Sub-Saharan Africa,
bringing greater stability to the sector.
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African farming systems
• Agro-pastoral (millet and sorghum)
• Maize mixed with other crops
system
• Pastoral system
• Cereal and root crop mixed system
• Rice-tree crops system
• Coastal fishing system
• Root crops system
• Forest based system
• Sparse (arid) areas
• Highland perennial system
• Tree crops
• Irrigated system
• Water bodies
• Upland system
• Large commercial and smallholder
system
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Farming system in Sub-Saharan Africa-SSA
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In summary:
• African countries differs in terms of the resource endowment, income per
capita and population growth
• Agriculture plays a major role in low income, non mineral countries
• Agriculture can be an engine for economic growth in all African countries
• Macroeconomic conditions are improving in most part of Africa
• Sub-Saharan African countries are lagging behind Northern Africa
• African countries have RECs and overlapping memberships to regional
bodies
• There are different farming system practices in Africa
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Any Questions for discussion
• Contributions are welcomed……
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Review Questions: 100 points
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How many languages are spoken in Africa? 10 points
Which country has the most languages? 2 points
How many distinct ethnics are in Africa? 10 points
Which language is mostly spoken on the continent? 3 points
On average, how much does agriculture contribute to GDP in most African countries?5 points
How many people are estimated to be living under the poverty line in Africa? 5 points
What is the percent of people living in rural area in Africa? 5 points
What is the target percent for poverty reduction to reached by the year 2015? 5 points
On what basis are African countries classified? 5 points
List the major classification. 10 points
How many regional economic groupings are in Africa? list them. 5 points
Name the regional groupings to which Namibia belongs? 5 points
Are there any overlapping in membership? 5 points
What are the perceived role of RECs in Africa? 10 points
How many farming systems are practiced in SSA? 10 points
In which countries would you find “large commercial and smallholder” farming system being
practiced? 5 points