AFRICA: An Overview

Written by MCJStaff   // September 8, 2012   // Comments Off

(Africa the Good news)

Africa is all too often described as if it is one country as opposed to a continent of 53 very different countries, with very different peoples, languages, terrains, economic and political situations, and cultures. A major factor contributing to this problem of generalisation is that research and information about many of the continent’s countries is limited. This leads to a view of Africa dominated by those countries that make the headlines, usually for all the wrong reasons. When we look deeper we learn that Africa is a continent of many contrasts and surprises.

Understanding Africa

Understanding Africa is difficult.  There is a dearth of information on the one hand and the continent is changing so rapidly on the other.  It looks like Africa will be the only continent in 2008 to grow faster than it did in 2007, it has less debt than other continents and its diaspora contribute more in foreign capital than the sum of the World’s aid.

Extraordinary differences exist between Africa’s countries, between the north and south, east and west, between the large and the small and between the wealthy and the poor.  

Observers of Africa very often fall into the trap of aggregating the countries of Africa to the extent that the conclusions drawn are very often so general as to be meaningless.  “The Hopeless Continent” does not describe every country in Africa.  “The Shackled Continent” does not capture the consequences of Africa’s history.  The 16 year old holding an AK47, or the mother holding a starving child does not represent Africa’s state.  The bullet-ridden buildings in the dilapidated high street do not represent the average African city.  The madness of Mugabe is not reflective of some deep seated attribute of African leadership.  The Landrover battling through inhospitable terrain does not capture the essence of African infrastructure.  These images so often represented in Western media are not the truth of Africa today.

Population

PopulationOnly 11 countries in Africa have a population in excess of 30 million people and 27 countries have a population of less than 10 million.  Population growth averages around 2.3%, which means that Africa will, for the foreseeable future, have a population which is young, with more people under 20 than over 40 (the case in the developed world).  However the incidence of HIV prevalence, particularly in Sub-Saharan Africa is likely to create a large number of AIDS orphans and continue to reduce life expectancy.  Most of the rest of Africa has an HIV prevalence of less than 3%.

Life Expectancy

Only eight countries have a life expectancy of more than 70 years (Algeria, Cape Verde, Egypt, Libya, Mauritius, Morocco, Seychelles, and Tunisia) with some 27 countries having a life expectancy of less than 50 years.

Literacy Rates

Some 17 countries have literacy rates that exceed 70% with 12 at below 50%.  In Zimbabwe, Zambia, Swaziland, South Africa, Seychelles, Mauritius, Lesotho, Kenya and Equatorial Guinea, literacy rates exceed 85%.

Arable Land

Only 13 countries have arable land that exceeds 15% of their land mass, with 23 countries having arable land that is less than 5% of their land mass.

Gross Domestic Product

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Only four countries have GDP of in excess of $100 billion with South Africa by far the largest at $274 billion followed by Egypt ($127 billion), Nigeria ($126 billion) and Algeria ($125 billion).  Thirty one countries have GDP of less than $10 billion, and 7 have a GDP of less than $1 billion.

GDP Growth

Thirty three countries have a GDP growth rate that exceeds 4.5% with ten countries exceeding 7% GDP growth.  Africa as a whole is expected to grow at 6.2% in 2008, significantly higher than the United States and Canada (2.2%), Japan (2.5%), European Union (2.3%), Latin America (4.9%).  Only China, India and Russia have higher growth rates.

Only 12 countries have GDP growth of less than 3%, with three of those showing negative growth (Zimbabwe, Comoros and Chad).  GDP per capita (PPP) varies from $44.400 in Equatorial Guinea to $300 in the DRC.  Only nine countries exceed $7 500 per capita (Algeria, Botswana, Equatorial Guinea, Gabon, Libya, Mauritius, Seychelles, South Africa and Tunisia) while 18 have a GafricagdppercapitaDP per capita at less than $1 000 per annum.

 

Seventeen countries carry a budget surplus forward annually, with very few carrying an enormous debt burden.  And although public debt as a percentage of GDP was only available for 25 countries in only half of those did it exceed 30% of GDP.  Twelve countries have a positive current account balance while only six countries have a current account deficit that exceeds $1 billion (South Africa at $20 billion followed by Sudan at just over $4 billion).  Africa does not have a great debt burden currently, with the whole continent carrying approximately $300 billion in debt. Only five countries have debt in excess of $3 billion (Egypt, Morocco, South Africa, Sudan, DRC, Cote d’ Ivoire and Angola), carrying in excess of 50% of the debt of the whole continent.

Public Stock Exchanges

Only 15 African countries have a public stock exchange Cote d’ Ivoire (market capitalisation $4.6 billion), Egypt ($93 billion), Ghana ($13 billion), Kenya ($11 billion), Mauritius ($5 billion), Morocco ($49 billion), Namibia ($0.5 billion), Nigeria ($32b), South Africa ($842b), Tunisia ($4 billion), Uganda ($0.1 billion), Zambia ($5 billion), Zimbabwe ($26 billion).  Rwanda opened its Public Stock Exchange in February 2008.

Poverty and Unemployment

While statistics are available for both poverty and unemployment these are often unreliable.  In the case of poverty it is inappropriate to use income as the basis for defining poverty, as many households have a standard of living without earning an income either through barter, subsistence or diaspora transfers.  In South Africa for instance the Social Grant System now extends to 12.3 million people, approximately 28% of the population.  Official poverty statistics do not reflect the reality on the ground.  Likewise with unemployment, the official figures relate to formal employment as per Workman’s Compensation or Unemployment Insurance returns.  No-one truly understands the level of the informal sector.

Telephones, Cell Phones and Internet Users

While figures are only available up until 2006 for Africa as a whole, and the growth of cell phone usage is exploding, a general rule of thumb would seem to indicate that most countries have ten times the number of cell phone users than fixed line users and five times the number of internet users than fixed line users

Railway Lines, Paved Roads and Airports (with paved runways)

In total, Africa has approximately 80 000 kilometres of railway lines, 20 000 kilometres of which are in South Africa with 35 other African countries having 1 000 kilometres or less.  Likewise Africa has 560 000 kilometres of paved roadways, 73 000 of which is in South Africa, with only 12 other African countries having more than 10 000 kilometres of paved roads and 13 having less than 1 000 kilometres.  The same story can be told of airports with paved runways, 31 countries have less than ten such airports, in South Africa there are 146.  Most countries have to import electricity and access is very difficult.

Conclusion

africatradeblocsOn the positive side, Africa is a continent of 53 countries many of which are positioning themselves for GDP growth exceeding 5% per annum.  It has a young population, is rich in resources, has relatively little debt, and is embracing communication technology.  Political transformation is sweeping through the continent and foreign investment is growing.  Clearly there are many challenges – tuberculosis, HIV/Aids and malaria pose serious health challenges, with many thousand of people dying every day; doing business in Africa is complicated; infrastructure is woefully inadequate; crime, poverty and unemployment loom large in most countries and the skill levels required to drive a modernising economy are desperately short.

The markets in Africa are fragmented. 80% of Africa’s GDP is attributable to South Africa, Algeria, Libya, Morocco, Egypt and Nigeria. But Angola, Ethiopia, Cameroon, Cote d’ Ivoire, Ghana, Kenya, Sudan and Tunisia have a reasonably strong GDP base and market place.

The formation of free trade blocks, customs unions such as SADC (Southern African Development Community), ECOWAS (Economic Community of West African States), EAC (East African Community), COMESA (The Common Market for Eastern and Southern Africa) and ECCAS (Economic Community of Central African States) is essential if the smaller African countries are to prosper.  Alongside that must come economic freedom, media freedom, improved infrastructure, political stability, the protection of property rights and of course, the rule of law.


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