Burkina Faso economy: Struggling to come up.

Burkina Faso is one of the poorest countries of the world, located in Africa, with few resources to boast of, and an uncertain future, that sees a large part of its labor force migrating to neighboring countries for seasonal work every year.

Most of the population (90%) is engaged in subsistence farming which is hostage to rains and droughts. Unemployment is nearly 80% and is a strikingly negative feature of the economy, with poverty and disease being major concerns.

The projected GDP growth rate for the current fiscal is 4.5%, and inflation stands at around 11%. The country exports cotton, livestock, gold, etc., and imports capital goods, foodstuffs, petroleum, etc. Cotton is the major cash crop, but it faces stiff competition from other producing countries, and its landlocked geographical situation adds to its problems in international trade. Other agricultural produce includes sorghum, peanuts, millet, corn, rice, etc.

Among the industries in Burkina Faso are soap, textiles, beverages, agricultural processing, etc. However, the industrial base of the country is very small, and contributes very little to the economy. Industry is growing at the rate of 4.5% though. Burkina Faso’s major trading partners are France, China, Singapore, Ghana, etc.

The contradiction in the country’s economy is that whereas agriculture provides employment to 90% of the population, it contributes only 29% to the GDP. On the other hand, the services industry contributes over 50% to the GDP whereas it provides employment to only 10% of the workforce.

The country is liberalizing its economy through privatization of State owned enterprises, that is aimed at attracting foreign investment. It is keen to develop its gold mining industry and taken steps in that direction. Though Burkina Faso may not be able to become a major economic power in its region, in the foreseeable future, it can strive to become self-sufficient through sound economic policies.

Djibouti economy: An African surprise with potential.

Djibouti, a small country located on the Horn of Africa, has an economy whose 80% of GDP is contributed by services and not agriculture, and other such traditional economic activities.

The reason for this surprising fact is its strategic location at the Horn of Africa, on the shipping routes between the Mediterranean and the Indian Ocean. 60% of the world’s commercial shipping is said to avail of the transit facilities and related services like refuelling, transshipment, container facilities, etc., provided by the Port of Djibouti, that bring in the country handsome returns through the year.

The country also caters to the international trading activites of its landlocked neighor Ethiopia, that depends on Djibouti to conduct its overseas trade through the Port of Djibouti. Both industrial, as well as agricultural products pass through this port, which is attracting overseas investment, especially from the Middle East.

Djibouti has no significant activity in the agricultural and industrial fields. Most of the land is uncultivable as it is a desert. That apart, infrastructural issues and lack of skilled manpower have prevented any progress in this area. As such, Djibouti has relied upon its strategic location and encashed on it by making itself an attractive commercial destination through liberal economic policies. It is, in fact, a free enterprise economy in the true sense, that is attracting a lot of foreign direct investment in its services sector.

The major problem faced by the country is the scandalous unemployment rate at 60% in the urban areas, and 80% in the rural. Inflation is running at 5%. The GDP growth is expected to be around 6% this fiscal. The country mainly reexports coffee, hides and skins, etc., and imports most of its food requirements, petroleum, consumer goods, etc. The country depends to a great extent on overseas aid to balance its trade, and keep development projects running.

Djibouti has to further develop its infrastructure, and adopt modern management techniques to attract more international trade in the form of services, to keep its economy in good shape.

Cameroon economy: Waiting to realize potential.

Cameroon is one of those African countries that is rich in potential, but poor in its realization. Mismanagement, corruption, and incorrect priorities have retarded the growth of one of the most promising economies of Africa.

Cameroon is richly endowed with natural resources like oil, natural gas, iron ore, uranium, nickel, cobalt, etc. Agriculture, forestry, and fishing occupy an important place in the economy. The country produces timber, coffee, cocoa, tea, bananas, rubber, palm oil, cotton, fruits, etc as agricultural produce. Cameroon exports oil, timber, cocoa beans, aluminum, coffee, cotton, etc., mainly to the European Union, U.S.A., China, etc. It also imports machinery, electrical equipment, transportation equipment, food, fuels, lubricants, etc., mainly from France, United States, Germany, Italy, Nigeria, etc.

The above three sectors of Agriculture, Forestry, and fishing provide employment to 50% of the workforce, and contribute to about 30% of the country’s GDP. Mining is also a growing activity, with deposits of gold, diamonds, uranium, nickel, cobalt, etc., having been identified. Agriculture, however, continues to play the most important economic role in the country’s life.

The country’s GDP is expected to grow by 3.9% this fiscal, and inflation is running at 5.3%. Unemployment presents a complex picture with underemployment rampant, and said to be as high as 70%. In spite of the riches of the country, it scores very poorly on socio-economic indicators, with poverty and unemployment, health, eduction, etc, a major concern. This deadly cocktail had even resulted in street violence in 2008.

Cameroon has high potential to transform the lives of its people, and contribute to the overall economic development in the region. But it requires strong leadership, free of corruption, and rooted to the fundamentals of economic development.

Ethiopian economy: Growing, but still impoverished.

One of the poorest countries in the world, Ethiopia is not much affected by the global recession, and projected to record economic growth of 10% this fiscal. Even though commodity prices have come down in the international market, it still had a minimal impact on the Ethiopian economy.

Ethiopia is an agricultural economy, with coffee being its major cash crop, and foreign exchange earner. Apart from coffee, the country produces cereals, oilseeds, cotton, sugarcane, pulses, etc. Livestock breeding is also an important activity.

The country exports coffee, gold, leather, tea, sugar, etc. And imports chemicals, machinery, industrial capital goods, foodstuffs, etc. Among the major industries are food processing, textiles, metals processing, cement, etc.

The impact of the global recession on Ethiopia, though not very high, has nevertheless, affected its revenues mainly on account of lower commodity prices, apart from impacting on foreign inward remittances. On the other hand, the country has also incurred lesser expenditure for the import of oil and other capital goods.

The major problem faced by the country is its dependence on agriculture for over 60% of its export earnings, and 80% employment. And agriculture is not highly mechanized and efficient. Dependence on rainfall makes it difficult to plan ahead and make projections. Inflation is another problem that puts a lot of pressure on the economy though it has eased to a good extent from 40% in 2008 to around 15% in 2009.

A high birth rate and high unemployment have been a fixture of the national like in Ethiopia for long. Lack of foreign exchange has hampered the growth of the country and it has had to depend on foreign aid time and again to keep its economy oiled. On one occasion, it has also been a beneficiary of a write down of foreign loans extended by the IMF.

The Ethiopian economy presents a contradictory picture of growth without percolation of prosperity down the line, among the people.

Tanzania economy: Slowing down.

The Tanzanian economy, among the better managed in Africa, is expected to register a growth of only 5% in 2009, down by about 2.5% compared to the previous fiscal. It is a consequence of the global economic slowdown.

A primarily agricultural economy, Tanzania has suffered on account of declining commodity prices. Agriculture provides employment to nearly 80% of those employed. The major agricultural products are coffee, cotton, cashew, tobacco, sugar, etc.

Apart from agriculture, mining and tourism are the other major components of the economy, with tourism contributing the major share of foreign exchange. Tanzania is also a major exporter of gold, apart from coffee and cotton; and imports consumer goods, machinery, crude oil, etc.

The country is alive to the risks of economic downturn on account of the present global eocnomic situation, and has taken steps in the national budget of 2009-10 to address these problems. Agriculture, the mainstay of the economy, will receive special attention in the budget. Infrastructure would be a major area of special focus, with efforts to improve its contribution to economic development through the development of roads, ports, railways, etc.

The GDP of the country is expected to be in the region of 5-6% in 2009, while the inflation rate is around 12%, which the Government is trying to bring down. There are signs of recovery in the economy, but a recent survey showed that the confidence of the business community in the economic system was low. One area of concern is the limited choice of financial instruments available in the market, that does not cater to all kinds of needs of the consumers. Also the dependence on the mining sector has resulted in environmental degradation, on the one hand, and has skewed the revenue streams of the economy.

Hopefully, with the economic outlook at the global level improving, Tanzania may benefit from the cascading effect of it.

Namibian economy: Recovering, but slowly.

Namibia is one of those resource-rich African countries, that are trying to find their way in the global economic jungle, after a long spell of white and often racist rule. The current global economic situation has set back developmental efforts in many of these countries by several years.

The Namibian economy is slowly inching towards recovery, while still marking a negative growth this year. Only, the negative figures have reduced to 0.6% growth for 2009.

Mining, agriculture, and fishing are the major economic activities of the country, with diamonds contributing to the chunk of revenues from the mining sector. Apart from diamonds, the country also exports minerals, and certain manufactured items. And it imports foodstuffs, fuels, capital goods, etc. The country’s fish catch is considered as among the top ten in the world. It has a thriving fishing industry that is an important sources of foreign exchange, as well as employment opportunities.

The slow recovery in the global economy has improved the prospects of an economic recovery in Namibia. According to the Central Bank of the country, the Bank of Namibia, the country has a deficit in the second quarter to the tune of N$ 2.20 billion. Revenues from export of minerals are down by 34.4%. Overall exports have come down by14%, while imports have declined only by 6.7%, which might present balance of payment issues. Inflation is said to be around 10.3%, and unemployment at around 5%.

The Government is taking various steps to alleviate the problems, among them is opening up the economy to foreign participation, to attract foreign capital and investment. Recently the Central Bank gave licenses to a few foreign Banks to set up shop in the country.

Though there are various signs of economic improvement like increased demand for credit and pick up in exports, it is still too early to predict a robust economic growth for Namibia in the next couple of years.

Zambian economy: Growth without prosperity.

The Southern African state of Zambia is among the poorest nations of the world, in spite of economic growth at around 6% for the last three years, and a projected growth rate of 5% next year.

Poverty, unemployment, and disease have been constant companions of the people of Zambia. Unemployment currently runs at 50%, and the country has a large AIDS-afflicted population, that necessitates diversion of resources away from developmental activities towards treating the sick.

The Finance Minister of the country recently presented the national budget, and projected a growth rate of 5% for 2010. Some of the salient features of the budget are:

To develop mining, agriculture, and construction to become the main contributors of economic growth. The Government aims to bring down the inflation rate to 8%. Agriculture would be given special attention in view of its critical role in feeding the population, and providing employment to the rural people.

Diversification of economic activities to include tourism and manufacturing is another priority to enlarge the revenue sources. The budget also seeks to stimulate the economy, while diversifying it to achieve a higher sustainable growth. Building up resilience to external shocks is also a stated goal of the Government in the budget.

While trying to experiment with new sources of income, the country aims to protect the existing key social sectors like eduction and health, so that adequate resources are earmarked for these sectors.

The major source of revenues for the country is from export of copper, that contributes 80% of the foreign exchange. The recent fall in the price of the metal has impacted on the economic well-being of Zambia, apart from throwing several thousands of people out of work.

With the recent improvement in the global economic outlook, and the increase in the commodity prices, there is hope for an economic resurgence for Zambia, that is home to Victoria Falls, one of the seven natural wonders of the world.

Zimbabwe economy: End to madness in sight.

After nearly a decade of what may be called as a mad roller-coaster ride, the Zimbabwean economy seems to be coming to a halt. Thankfully.

Historical injustices by whites against the blacks were cited as the reason by the Mugabe Government to reset its priorities of economic development, by seizing the farms owned by the whites and settling landless blacks on them. It was supposed to be a wealth redistribution program, to rectify the mistakes of the past.

However, it ended up compounding the economic problems of the country turning it into a virtual wasteland, and impoverishing the populace even further. Unemployment reached ridiculous levels of 94%. From a fairly robust economy in the region, with a good crop, Zimbabwe became a net importer of food grains. It also became a target for economic sanctions by the European Union in 2002, further complicating matters.

The economy went for a toss, with nothing under control. The national currency was devalued so frequently on account of inflation that set world records touching 11.2 million percent, that it had to be eventually abandoned. The country set another world record by printing currency notes of higher and higher denomination, the highest being the Zimbabwean Dollar 100 trillion!. Presently the country is using the U.S. Dollar as a reference currency.

With so many “superlatives” afflicting the economy and the country, it is left with no alternative but to seek foreign assistance to the tune of USD 5.00 billion. It has also appealed for an end to the sanctions. After the formation of the unity Government, the economy seems to be slowly coming to a halt from its crazy spin, and may be actually growing. Though the Finance Minister of the country predicts a 7% growth in 2009 and 13% in 2010, the IMF pegs the growth rate at 3.7% in 2009.

A resource-rich country, Zimbabwe has the potential for a decent economic growth rate and development if only it gets its act together.

Angolan economy: Need for stability and diversity.

The African nation of Angola engaged itself in the task of economic development after nearly three decades of Civil War ended in 2002, and has achieved impressive results. The country appears to have overcome the painful part of establishing and getting the economy up and about, crossing the initial hurdles, and overcoming the teething problems.

The country has been consistently clocking double digit growth rates over the year, reaching about 16.5% for the year 2008. One of Africas’s largest oil producers and current Chairman of the OPEC, Angola has thrived from high oil prices in recent years, and derives the major part of its revenues from oil industry related activities.

Apart from crude, the country also exports diamonds, gas, coffee, sisal, fish, timber, cotton, etc., and imports machinery, electrical equipment, vehicles, medicines, food, etc. Being highly dependent on the oil sector, the country was affected by the dip in the oil prices, and consequently, has had to revise its growth projections for 2009 from 16%-17% to 9%-10%.

Nevertheless, the Angolan economy is presently growing at a faster clip than many of its advanced counterparts, so much so that it has attracted thousands of Portuguese, it’s erstwhile colonizers, for jobs and other opportunities.

But the problem with the country’s economy is with the over-dependence on oil revenues to the extent of 90%, placing the economy at the mercy of a single economic activity. Angola needs to diversify its sources of revenues, as well as employment generation to bring about stability to economic development. Diversifying economic activities to include industry, agriculture, and other services would help the country in achieving a more stable and durable growth, with contributions from various sectors.

Botswana Economy: On the growth path.

Botswana, the world’s largest producer of diamonds, is steadily moving towards an economic recovery, and expected to record positive eocnomic figures after going through an economic contraction of more than 10% in 2009.

Figures released by the Central Statistics Office indicate a economic recovery in the second quarter of 2009, with diamond mining growing by triple digits, by nearly 150%. The demand for the gem of gems around the world has boosted the prospects of the Botswana economy, as mining, especially diamond mining, contributes 70%+ of the export earnings of the country and 30% of its GDP.

Apart from diamonds, Botswana exports copper, nickel, soda ash, meat, textiles, etc. The country imports food, fuels, chemicals, manufactured goods, etc. Agriculture is another important contributor to the economy, after mining.

Botswana has been effected by the global crisis, though not so adversely, and has avoided borrowing money from international financial institutions. However, it could not avoid taking a loan from the African Development Bank of USD 1.50 billion. This resulted in a budget deficit of over 10%, that the Government is trying to overcome sincerely. It is notable that the Botswana Government is not very keen to borrow money to overcome its economic problems, but to rely on its internal resources, which is good for it in the long run.

Recently the country decided against going in for a loan from the Internaional Monetary Fund, in view of the positive economic developments, mainly a pick up in the diamond mining activity. Some of the diamond mines that were earlier closed have been reopened, providing employment and boosting consumption and growth.

If this momentum can be sustained through 2010, Botswana has a good chance to emerge out of the recession and move towards genuine growth and development, rather depend on statistics alone.

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