Africa's GDP Falls 1 Percentage Point

VOA News 31 Jul 2003, 15:20 UTC

The United Nations Economic Commission for Africa says the continent's gross domestic product fell more than 1 percentage point in 2002.

In a new report, the ECA says global and regional political strife, bad weather, declining world trade and unhelpful agricultural subsidies in the developed world were major factors in the weakening of African economic growth last year.

Average GDP growth dropped from 4.3 percent in 2001 to 3.2 percent in 2002.

The ECA forecasts a rebound to 4.2 percent this year. But it warns of risks to Africa's growth prospects, including the current unrest in Liberia, the political turmoil in Zimbabwe, and the threat of flooding in various parts of the continent.

Last year only 5 of Africa's 53 countries achieved the 7 percent growth rate necessary to meet development goals set by the United Nations in September 2000. Five saw a decline in GDP.

The ECA points out Africa's continuing vulnerability to factors outside its governments' control. For example, it says a United States decision to boost crop and dairy subsidies by $52 billion or 67 percent over 6 years will reduce agricultural prices, hurting Africa's exports and making it difficult for small countries to compete.

The report lists Botswana, South Africa, Mauritius, Namibia and Tunisia as top performers with lower budget deficits, interest rates and foreign debt. It says they follow a model of good governance with solid reform agendas.

The Republic of Congo, Zimbabwe, Chad, Guinea and Nigeria are the worst performers, according to the report.