Drought, conflict a drag on continent

http://www.busrep.co.za/index.php?fSectionId=565&fArticleId=198322

July 30, 2003

By Sapa-DPA

Addis Ababa - Drought and conflict contributed to slower economic growth in Africa last year, according to an annual UN report released yesterday.

The UN Economic Commission for Africa said in its 2003 report that economic performance on the continent was "lacklustre" last year, with growth slowing to 3.2 percent from 4.3 percent in 2001.

The report blamed the slowdown on low commodity prices, droughts in parts of southern and eastern Africa, and political and armed conflicts in such countries as Ivory Coast, Zimbabwe, Madagascar and the Central African Republic.

But the commission also expressed concern about the effect that huge farm subsidies in western nations were having on African economies.

The report said "medium-term prospects for Africa depend to a great extent on external developments", and noted that World Trade Organisation talks on reforming the agricultural sector had faltered.

It said the move by President George W Bush last year to increase US crop and dairy subsidies by $51

.7 billion "will not help Africa's prospects".

It added: "The subsidy will reduce agricultural prices, making it difficult for small African countries to compete."

Statistics compiled in the report indicated that post-conflict nations whose governments were engaged in reform showed higher-than-average growth. Mozambique's economy grew by 12 percent last year, Rwanda's by 9.9 percent and Uganda's by 6.2 percent.

Yet economic growth alone was not necessarily lifting populations out of poverty, the commission said.

Mozambique's economy had grown at an annual rate of 10 percent in recent years, but more than 60 percent of its people lived below the poverty line.

"Countries where second generation reforms are entrenched, like Mauritius, have managed steady growth over long periods with lower poverty rates," the commission said.

"These economies provide the best opportunities for the private entrepreneurs to flourish."