Africa: Development Issues and Policy Options (CRS Report for Congress)
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| Release Date |
July 22, 2004 |
| Report Number |
RL32489 |
| Report Type |
Report |
| Authors |
Raymond W. Copson, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
Summary:
Sub-Saharan Africa has been a focus for U.S. development assistance for decades. Many believe
that U.S. interests in the region are increasing, partly because of its oil resources and the international
terrorist threat. However, at the beginning of the twenty-first century, Africa faces grave challenges
that potentially threaten long-term stability, including the world's most serious HIV/AIDS pandemic,
widespread rural poverty, and high levels of urban unemployment. In constant dollar terms, incomes
in Africa are only about $100 higher than in 1960. Recently, gross domestic product (GDP) has
been growing, but at rates well below the 7% or better needed to make significant headway against
poverty.
The reasons for slow growth and poverty in Africa are the source of much analysis and debate.
Some emphasize factors largely beyond Africa's control, such as a difficult geographical endowment
that has limited growth in manufacturing, agriculture, and trade. Dependence on primary product
exports has made the region vulnerable to cyclical price trends and global economic downturns.
Meanwhile, the HIV/AIDS pandemic and the "brain drain" to developed countries have taken away
large numbers of adults in their most productive years. The colonial powers made minimal
investments in African infrastructure, and left the region divided into some 48 separate countries
-- several of them landlocked -- complicating prospects for economic integration and growth. Trade
barriers imposed by developed countries to Africa's exports of cotton and other primary products
have also come in for criticism.
Many analysts blame Africa's economic problems primarily on the limited capabilities of
African governments, inappropriate economic policies pursued into the 1990s, and corruption. They
maintain that further free market reforms are essential if the continent is to grow more rapidly. Some
stress Africa's heavy burden of foreign debt, which required the payment of $12 billion in debt
service in 2002. Africa's difficulties have limited foreign investment in the region, hampering the
development of an export manufacturing sector that could provide jobs and growth.
Development experts and advocates are recommending a number of measures to accelerate
growth in Africa, including increased foreign assistance; debt forgiveness; the easing of trade
barriers; expanded HIV/AIDS programs; and support for capacity building, both in terms of human
capital and infrastructure. Investment promotion programs and expanded applications of research
and technology also have support. Each of these approaches has its critics and some could face
political problems in the donor countries. In both Europe and the United States, for example, there
is strong opposition to any proposal perceived as having the potential to export jobs, as some fear
would happen if trade barriers were eased. Moreover, some experts doubt that existing assistance
agencies in the developed countries have the knowledge and capacity needed to help Africa grow.
Thus, Africa's ability to escape its current economic dilemmas remains very much in question. For
background on the U.S. foreign aid program in Africa and information on current legislation, see
CRS Issue Brief IB95052, Africa: U.S. Foreign Assistance Issues. This report will be
updated as
events warrant.
