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Africa Algeria, one of the largest countries in Africa, occupies most of the western Mediterranean coast of North Africa, and faces Spain and Italy across the Mediterranean at a distance of no more than 150km. In 2001, Algeria and the EU reached an Association Agreement, which Algeria agreed to cut tariffs on EU agricultural and industrial products over the next 10 years and the EU agreed to eliminate duties and quotas on many Algerian agricultural products. Angola is the third largest oil producer in Africa behind Nigeria and Libya . Most oil comes from offshore fields. A number of oil analysts believe that new discoveries could soon make the country Africa's leading producer. Domestically, oil accounts for over 50% of GDP and almost 90% of the government's revenues and export earnings. Manufacturers are benefiting from an improved economic environment and construction is booming. The pace of growth improved in 2006 and 2007 owing to strong gains in services (mainly transport and communications) and greater activity at the Port of Cotonou. One in three youths is thought to be HIV-positive. The government, however, has been commended by international experts for its positive attitude toward the problem and its efforts to slow the disease's progress. Diamond output has doubled in the past decade and is currently 28-30 million carats per year. Botswana produces more than a quarter of the world’s diamonds. The economy has performed reasonably well with growth averaging 6% per year over the past decade. Much of this success, however, is due to favorable climatic conditions. Cotton accounts for nearly 70% of exports, while oil makes up some 20% of imports. The economy has performed reasonably well with growth averaging 6% per year over the past decade. Much of this success, however, is due to favorable climatic conditions. Cotton accounts for nearly 70% of exports, while oil makes up some 20% of imports. The economy is predominantly agricultural with roughly 90% of the population dependent on subsistence agriculture. The government intends to increase productivity in the agriculture sector, which still makes up for about 50% of GDP. Its economic health depends on the coffee crop, which accounts for 80% of foreign exchange earnings. Reform of the coffee and sugar industries is in process. One of the objectives of the coffee sector reform is to phase out the government's crop credit guarantee. Reform of the sugar sector focuses on liberalizing domestic prices, reducing the minimum import valuation, and lifting export and domestic distribution restrictions. Cameroon is a member of the six-country Central African Economic and Monetary Union (CEMAC), created in 1991 to improve economic and political cooperation in the region. Cameroon is richly endowed with natural resources and has a diversified, commodity-based economy. The tourism sector is strengthening, driven by significant growth in FDI in hotels and other tourism-related construction. Since 2003 tourism revenues almost doubled. More recently, the tourist industry has benefited from public investment in infrastructure and better external transportation links. The banking industry’s total assets have grown to the equivalent of more than 90% of GDP, with growth heavily concentrated in the construction sector. Central African Republic (top) The government’s fiscal situation has improved with better control over spending (particularly wages and salaries) and stronger tax collections. Tax revenues are still equivalent to less than 8% of GDP however – a much lower figure than in most developing countries. The country has experienced consistently high economic growth rates associated with the development of the Doba Basin oil fields and the construction of the Chad-Cameroon pipeline. Infrastructure is minimal. Electricity is accessible to only 1% of the population and there are only 650km of paved roads in a country more than twice the size of France. Congo, Democratic Republic (top) Construction and beverages, such as beer are the most important industries. It is one of Africa’s most abundant countries, replete with resources and the world’s second biggest rainforest. The Congo is emerging from a decade of political instability marked by three civil wars. The wars resulted in enormous human losses, the exodus of many and the destruction of entire villages, buildings, infrastructures and enterprises. This is the largest country in the West African Economic and Monetary Union (WAMU). The government’s overriding goal is to transform the economy into a hub for regional trading and services. The country is well positioned to become a services and logistics hub. The hope is that it will become the central link between the raw materials of Africa and the oil wealth of Arabia. The country provides services as both a transit port for the region and an international trans-shipment and refueling center. Port facilities were upgraded in 2007. With more investment from Dubai, Djibouti expects to expand its port from 300,000 containers per year to 3 million. The US hopes to launch free-trade talks with Egypt in the near future to push ahead with a decade-long plan to build a web of trade deals spanning the Middle East. The economy has grown impressively throughout most of this decade. The direction of economic policy has also veered sharply in favor of liberalization. Structural reforms created a surge in exports while tax cuts drew more firms and workers into the formal economy. Foreign investors see Egypt as an export platform for Europe. The country's Industrial Development Authority intends to establish up to 1,000 new privately-owned factories by 2011. Recent economic developments have been dominated by rapid growth in the country's oil sector. Production has increased more than tenfold since the first discovery in 1995. Oil has quickly become the country's most important export commodity and presently accounts for 97% of total export earnings. Ethiopia is a country made up of 82 ethnic groups and many separatist movements. The government hopes to stimulate production through additional investment and to formalize most of the unregistered production. The financial sector has showed some growth but no foreign banks are allowed. Gabon is a wealthy country by African standards but its wealth is not equally divided. Access to potable water remains a problem for many, especially those who live in the poorer suburbs of Libreville. Gabon's membership in the CFA Franc zone, through which its currency was pegged to the euro in 1998, may also have handicapped development. The government has endorsed a plan to privatize state-owned assets in the groundnut industry but marketing problems and a decline in quality continue to plague the industry. Guinea has one-third of the world's bauxite reserves and is the world's second largest bauxite producer. Bauxite alone accounts for nearly half of the country’s exports. The country's modest program of privatization has attracted some foreign investment, particularly in the mining sector. In 2005, Kenya, Tanzania and Uganda created the East African Community (EAC) Customs Union. The EAC calls for the elimination of duties on goods traded within the Community. A common currency and a central bank are to be created before 2010. Kenya is the world’s second-largest exporter of black tea. Coffee, tea, cotton, sugar, tobacco and pyrethrum are produced for export. To strengthen Kenya's external competitiveness, the government is trying to reform the wage-setting system and liberalize trade. The cost of employment is much lower than in South Africa. Lesotho's underdeveloped financial system is closely tied to South Africa through the Common Monetary Area. Completion of the US$4 billion Highlands Water Scheme should provide enough hydroelectricity for the whole country and allow it to become a substantial exporter of electricity. With its long Mediterranean coast and Roman antiquities, Libya has much to attract tourists. With its oil revenue and small population, Libya is the wealthiest nation in North Africa. Since the lifting of the UN and US trade sanctions, the pace of economic and structural reforms has increased with the implementation of measures designed to encourage development of the private sector. Textile exports have struggled somewhat since the Multi Fibre Arrangement (MFA) expired but the industry is diversifying and moving toward higher-value-added products. The government hopes for diversification throughout the manufacturing sector by quickening the pace of integration into the Southern African Development Community (SADC) and encouraging the sugar industry. Regulations and administrative procedures have been simplified to improve the business environment but the legal operating system for private firms in Malawi is still difficult. The mining sector is an important source of foreign currency, with uranium, salt, gold and phosphates being mined. There are known deposits of bauxite, iron, manganese and tin, but these are only marginally exploited. Mali is part of the West African Power Pool, an organization of 14 countries which share power across the region in order to ensure more reliable energy supplies. The economy has doubled in size since the transition to democracy in the 1990s and is gradually becoming more diversified with agriculture, services and mining all showing growth. The state power company is expected to be privatized soon. Mining offers great potential, with extensive deposits of iron ore accounting for almost 50% of the country's total exports. Several new mining projects have been launched and output is expected to rise briskly in 2008-2010. A new trade zone costing US$700 million is being financed by Chinese investors that will create 40,000 jobs and serve a variety of export industries that will eventually earn US$300 million per year. A new city is also being built in the highlands at the cost of US$3 billion to relieve congestion and pollution in the capital. Tourism is the country’s second largest industry and is performing well. The government is promoting niche sectors such as eco-tourism and medical tourism and hopes to boost tourist arrivals to 2 million by 2015. In northwestern Africa, Morocco is probably the most affluent. Trade liberalization is proceeding in line with the schedule of the Association Agreement with the EU, Morocco's main trading partner, and new trade agreements have been signed with the US, Tunisia, Egypt, and Jordan. Morocco's proximity to the EU attracts many foreign investors from both Europe and the USA. The textile industry is being modernized with government help and exports are on the rise. Policies to encourage the development of industries such as communications and vehicle manufacture are underway. Construction of a multi-million dollar oil pipeline linking Mozambique's seaport of Nacala to Malawi has begun. The project is expected to greatly reduce transport costs for the countries involved. As part of the Southern African Development Community (SADC) agreement, the government reduced all tariffs from 25% to 20% in 2006. Namibia has a strong tourism potential, but this has yet to be fully developed. As a member of the Southern Africa Customs Union (SACU), Namibia participates in the largest market in Sub-Saharan Africa. SACU is becoming more open over time, enhancing Namibia's access to the global economy. Niger is a member of the West African Economic and Monetary Union (WAEMU). The business environment is very difficult owing to a lack of credit and inadequate infrastructure. Mining accounts for around 40% of exports and 3% of GDP. Foreign investment in the sector is expected to reach US$1.4 billion in 2008-2012. A revised mining code has also encouraged investment. To improve the business environment, the government has simplified regulations and reduced the costs of starting new businesses. Nigeria has proven oil reserves of 36 billion barrels and the government expects these to rise to 40 billion barrels by 2010. New sources have been discovered in deeper waters offshore. The government hopes to boost oil production to 4 million bbl/d by 2010. The country has 184 trillion cubic feet of natural gas, the 7th largest in the world. The government hopes to boost earnings from natural gas exports to 50% of oil revenues by 2010. A vigorous privatization program is underway. Several reform programs are being implemented such as measures to reduce the cost of doing business, improve the delivery of public services, and raise agricultural yields. São Tomé shares a Joint Development Zone (JDZ) with Nigeria. Major tax reforms introduced in 2007 aimed at reducing distortions, lowering some rates and enlarging the tax base. One goal is to draw in more of the informal sector. The private sector should benefit from structural reforms, improvements in the business climate and better banking supervision. Corporate income tax was reduced from 45% to 25% in 2007. The government hopes to boost revenues in order to cut the fiscal deficit. Tourism has considerable potential and the government wants to raise the number of tourists to 1.5 million by 2010. The financial system is sound but lumbered by a high proportion of non-performing debts and an inadequate regulatory framework. Livestock production) is the mainstay and largest foreign exchange earner of the Somali economy. South Africa has helped to broker peace in Burundi and taking the lead in creating the African Union and the New Partnership for Africa's Development (Nepad). The contribution of the tourist sector to the economy has doubled since the end of apartheid. With its job-creating potential, the sector has been singled out as a priority by the government. Sudan is one of the fastest-growing economies in Africa, however it has a limited infrastructure and a huge external debt estimated to represent a debt-to-GDP ratio of about 134%. Large private inflows, including foreign direct investments, finance the current account deficit. Steps are being implemented to strengthen tax revenue, including reducing tax exemptions and reforming the direct tax system. In 2005, Kenya, Tanzania and Uganda created the East African Community (EAC) Customs Union. The EAC calls for the elimination of duties on goods traded within the Community. A common currency and a central bank are to be created before 2010. Tanzania is regarded as corruption-free, at least in comparison with neighboring countries. This has made it a favorite of international donors. The government is committed to pursuing closer regional integration and further trade liberalization, mainly in the framework of the East African Community. Agriculture is the dominant sector in Togo, accounting for more than 40% of GDP and employing 60% of the workforce. Tunisia's economic performance has surpassed that of its neighbours over the past decade, with growth of GDP averaging almost 5% per year. Meanwhile, per capita income has increased by over 45% and is now the highest in the region. Gradual structural reforms combined with a flexible exchange rate policy have supported competitiveness and export growth. The unemployment rate is very high but falling, and macroeconomic imbalances remain under control. The government has concluded numerous trade agreements as part of its development strategy. The most important is the EU Association Agreement, which took full effect in 2008. A free-trade agreement was also signed with Turkey in 2006 and there are plans to develop a free-trade zone also involving Morocco, Jordan, and Egypt. In 2005, Kenya, Tanzania and Uganda created the East African Community (EAC) Customs Union. The EAC calls for the elimination of duties on goods traded within the Community. Burundi and Rwanda joined the EAC in 2006. A common currency and a central bank are to be created before 2010. The country's largest single foreign investment is in the development of its cobalt reserves in the Rwenzori foothills. Rehabilitation of copper mines closed in the 1970s is also underway. To further this effort, a new mining code has been put in place. Foreign Direct Investment in mining has risen to more than 8% of GDP. Most farmers still lack access to credit and inputs at affordable prices, making it difficult for them to market their products. With better organization, the agricultural sector could produce much greater quantities of food. Euromonitor International |