The 2003 edition of the Economic Report on Africa (ERA 2003), the Economic Commission for Africa's annual flagship publication, will be launched on 30 July. The main theme this year is accelerating the pace of development, which examines how Africa can achieve growth rates necessary to attain the Millennium Development Goals.
ERA 2003 finds that economic performance on the continent last year was lacklustre, with growth slowing from an average of 4.3% in 2001 to 3.2% in 2002. The slowdown is a reflection of the weaker global economy, effects of low commodity prices in 2001, the droughts in various parts of southern and eastern Africa, and the political and armed conflicts in some parts of the region -- notably, Côte d'Ivoire, Zimbabwe, Madagascar, and the Central African Republic.
However, some well-managed reformers with a record of stability and good governance, like Uganda, Rwanda and Mozambique, managed to buck the trend with growth rates of 6.2%, 9.9% and 12% respectively.
The report includes in-depth analyses of seven African economies -- Egypt, Gabon, Ghana, Mauritius, Mozambique, Rwanda and Uganda. The purpose of the country-specific chapters is to identify policies that provide the best stimulus for sustained growth and development.
The importance of fiscal discipline is clearly demonstrated by the performance of the Ghana economy, hobbled by massive public expenditure hikes during electoral cycles. The Mozambican experience demonstrates the importance of implementing pro-poor policies in order to tackle deep pockets of poverty. For while the economy has grown by over 10% in the past few years, over 60% of the population still live in poverty.
Using ECA's unique Economic Policy Stance Index, the report shows that countries where second generation reforms are entrenched, like Mauritius, have managed steady growth over long periods with lower poverty rates. These economies provide the best opportunities for the private entrepreneurs to flourish.
The experience of Egypt shows that public sector reforms need to focus on strengthening the sector's ability to manage the economy, rather than concentrating on quantitative targets like overall wage bill and staffing levels.
Medium term prospects for Africa depend to a great extent on external developments. Unfortunately for Africa, the World Trade Organization talks on farm trade reform -- by far the most important issue in the Doha development round for Africa -- appear to have faltered. The U.S. decision in May 2002 to introduce a six-year $51.7 billion farm bill increasing crop and dairy subsidies by 67% will not help Africa's prospects. The report warns that the subsidy will reduce agricultural prices, making it difficult for small African countries to compete.
The Economic Report on Africa is published every year. In addition to an ongoing evaluation of the state of the continent's economies, it includes in-depth studies on selected African countries.
