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03/01/2007
Africa, Part II
More tidbits from The Africa Report / 2007.
--Good governance rankings
Of 53 countries on the African continent, #1 is Botswana when
ranked on items such as ‘political stability,’ ‘government
effectiveness,’ ‘regulatory quality,’ ‘rule of law’ and ‘control of
corruption.’ Others in the top five are #2 Mauritius, #3 Cape
Verde, #4 Namibia and #5 South Africa.
At the bottom are #53 Somalia, #52 Democratic Republic of
Congo, #51 Zimbabwe, #50 Sudan and #49 Ivory Coast.
And when looking at two other key oil producers, aside from
Sudan, you have #41 Angola and #42 Nigeria; not exactly a good
thing.
--Angola: Thanks to rapidly rising oil production, from 1.4
million barrels per day to an estimated 2 million by end of 2007,
the IMF projects GDP growth here to be a staggering 31.4% in
’07. It was likely around 14% in 2006. Some say oil production
could hit 2.8 mmbd by 2010 as deepwater discoveries go online.
Major infrastructure projects are underway, including a $300
million upgrading of the airport in Luanda, while work at
Luanda’s port is another $130 million. But this economy is all
about oil and little else.
--Botswana: I’m surprised by this nation’s top-ranking for
governance, but that’s simply due to sheer ignorance on my part
I’ll freely admit. Botswana has been diversifying away from its
chief diamond trade. Booming China is nonetheless helping
jewelry exports, even as there has been a slight cooling in the key
U.S. market.
--South Africa: Economic growth is slated for around 4.5% in
2007, with the chief contributors being the service and
construction industries. But the unemployment rate here remains
above 25%. On the HIV/AIDS front, President Thabo Mbeki is
no longer in denial and the government has set a goal of cutting
infections in half and providing treatment to 80% of sufferers by
2011.
--Zimbabwe: The decline in GDP has averaged 7% a year since
2001 and as I’ve been pointing out in my “Week in Review”
columns inflation is now running 1,600%.
From The Africa Report:
“If the policy drift of 2006 persists for much longer, there can
only be more economic damage in store for the majority of
remaining citizens whose horizons have already been reduced to
a day-to-day struggle for survival. Life expectancy in the
country has collapsed to only 36 years, the lowest in the world,
and this appears to be a combined result of declining nutrition
and the spread of HIV/AIDS. In the coming year, Zimbabwe’s
food supplies could be in even shorter supply than they have
been in the recent past, and now the situation is worsening as fuel
imports begin to dry up .
“The lure of the country’s resources (in the mining industry)
have so far still proved irresistible to the existing platinum, gold,
diamond and nickel miners in the country, and none have yet
packed their bags to leave but, on the other hand, (the) forced
nationalization measures (a la Venezuela and Bolivia) have
successfully stopped all new project investments in their tracks.”
Even Chinese and Russian investors appear allergic to
Zimbabwe’s many risks. “Cooperation projects are no sooner
announced than they are abandoned. In late 2006, central bank
governor Gideon Gono’s hopes for a $300 million injection from
Russian investors also quickly turned out to be an illusion.”
Aside from mining, “Nearly all forms of farming are in complete
disarray. A manufacturing sector that was once the pride of
Africa seems destined to disappear – factories have been forced
to lay off workers as markets dwindled to almost nothing. The
transport and freight industry can provide only skeleton services.
For genuine businesspeople, other than those who specialize in
collecting cheap assets, it is an unsustainable scenario.”
--Sudan: Khartoum plays the Iraq card, “accusing the West of
wanting to invade and re-colonize Sudan.” But it’s impossible to
see the U.S. or U.K. joining in any military effort in Darfur,
while at the same time Russia and oil-hungry China have major
economic interests of their own here, let alone poor track records
on human rights. On the oil front, Sudan currently produces
around 600,000 b/d.
--Liberia: Home to Africa’s first woman president, Ellen
Johnson-Sirleaf, who is receiving pretty favorable early reviews
after taking office in 2005. But she faces some of the biggest
challenges on the continent following the end of Liberia’s 15-
year civil war in 2004 and 15,000 UN peacekeeping forces
remain to enhance security. Of 3.3 million people in the country,
500,000 once displaced have been resettled. Think about that
one. I don’t know how many were displaced in the first place,
but this is rather depressing.
Liberia’s government budget is only $130 million, on top of
which donors have pledged an additional $200 million. The state
budget is subject to direct foreign oversight to avoid corruption.
“Illegal diamond mining persists, as do the trading networks that
have evaded the international ban on Liberia’s diamonds since
2001 .For the moment, Liberia’s only large-scale export
product allowed to trade is rubber, and here the government has
been more successful in re-exerting control.”
Nigeria: Turmoil here with national elections slated for April.
Oil and gas earnings, though, are forecast at over $40 billion for
each of the next three years, assuming unrest in the heavy
energy-producing Niger Delta region can be handled
satisfactorily. Offshore projects are key and Nigeria’s
production capacity is nearing 3 million b/d.
But Nigeria, like almost everywhere else in Africa, is subject to
massive corruption, especially with the oil wealth. Nonetheless,
President Obasanjo’s government secured an $18 billion debt
reduction deal from foreign creditors.
The election, though, “sends Nigeria into uncharted territory. It
will be the first time that an elected president has handed power
to a successor.” Obasanjo’s reformist credentials have been poor
and rivalries between the states over the distribution of revenues
are at the height of concerns in the current campaign.
Then there is the “bitter argument over the imposition of the
sharia criminal code in the twelve northern states .Many
Christians and some Muslims in the north reject the
reintroduction of huddud punishments: amputation for theft,
stoning to death for adultery. President Obasanjo, a fervent
evangelical Christian, and his government managed to dampen
religious tensions after thousands died in clashes over sharia in
2000-01.”
Next week back to Iran.
Brian Trumbore
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