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Africa
The Development Challenge
Africa's future continues to look brighter as the region has achieved measurable progress in improving several important indicators of economic, political and social development since the beginning of the millennium. New avenues for growth are emerging as key countries in the region move toward greater political stability, as lengthy conflicts are being resolved, and as many countries continue to adjust their policies and priorities to take advantage of expanded opportunities created through globalization.
What happens in Africa is of growing concern to the United States and our active engagement advances significant U.S. interests. The overarching goals of U.S. policy in Africa seek to enhance African capacity to fight terrorism and create favorable conditions for U.S. and African trade and business opportunities, while developing the foundation for sustained growth, regional stability, good governance, a healthier population and responsible use of natural resources.
A change in the policy environment affecting the region is the New Partnership for Africa's Development (NEPAD), launched in 2001, that provides a positive framework for development in Africa. Basically, the thrust of the new direction is to shift the development paradigm so that African leaders take greater responsibility for their own destiny while working constructively with the international community. These efforts are beginning to show results. NEPAD is deepening its support among African government leaders and its road map for African development is gaining wider credibility A key litmus test will be the completion of peer reviews of political, economic and corporate governance in those sixteen countries that have now agreed to undertake the process. The United States continues to affirm its endorsement of NEPAD.
Of the many positive trends in Africa during the first years of the decade, perhaps the most significant has been the cessation of major conflicts in Angola, Sierra Leone, Liberia, the Democratic Republic of the Congo (DRC), Burundi and Sudan, conflicts that had sapped the vitality of much of the continent. As these countries become more politically stable, the prospects for increased economic growth and a better standard of living for their citizens are much enhanced and their recovery will have beneficial repercussions for the entire continent.
The spread of democratic values is also a positive sign for improving the living standards of millions of Africans. The rapid growth of new communications media and expansion of a free press have empowered civil society to hold governments more accountable for their actions and made ordinary citizens increasingly aware of their basic human rights. Nigeria, Africa's most populous country, took a major step forward with free elections and the new governments in Kenya and Zambia have taken very positive strides to address the rampant corruption that had colored the previous administrations. According to Freedom House, over the last decade, the number of free democracies in Africa has almost tripled from four to 11 and more than half of the countries in the region are in the transition process toward full and free democracy.
There is extremely promising news in the fight against HIV/AIDS. The President's Emergency Plan for AIDS Relief (PEPFAR), which proposes $15 billion over a five-year period for prevention and treatment, combined with an unprecedented international commitment to increasing resources, now offers real hope that serious inroads can be made against the spread of HIV/AIDS.
Several key indicators of economic growth also create room for optimism. GDP growth remained constant at 3.2% between 2001 and 2002, despite the worldwide economic slowdown, and is projected to increase to 3.8% in 2004, higher than all other developing regions except East and South Asia. Sub-Saharan Africa had highest returns on net foreign direct investment of any region in the world in 2001.
Despite these positive trends, sub-Saharan Africa continues to face enormous development challenges. It remains the world's poorest region, with half of its population of 690 million living on less that $1 per day. While economic growth trends in many countries are positive, with population growth at 2.4% a year, achieving the Millennium Development Goal (MDG) of reducing poverty levels by 50% by 2015 will require almost a doubling of current rates, to 6% a year. This represents a formidable challenge, but nonetheless possible, provided encouraging trends continue in governance and economic policy, conflicts are resolved and economies diversify from over-dependence on agricultural production and export of primary commodities. Food security continues to remain precarious in many parts of the region - only a massive intervention by the international community averted a humanitarian disaster in Ethiopia and significant levels of food assistance were required in much of southern Africa. Education levels, particularly in the rural areas and for girls, remain well below world standards and despite the rapid growth of information and communications technology (ICT), the digital divide between the region and the rest of the world remains vast. While some key indicators of health have improved, the HIV/AIDS pandemic in many countries has compromised efforts to combat other diseases and has dramatically reduced life expectancy in many countries. A shrinking labor pool will slow the continent's economic growth by as much as 2% a year. Gender inequities, such as access to credit and inheritance rights, remain a serious development issue. Finally, conflict and the difficult transition to stability in post conflict states still exact a huge toll on politically fragile democracies.
Meeting these challenges will require redoubled efforts on the part of African governments, civil society and the international community across a broad spectrum: increasing agricultural productivity; preserving the richness and diversity of Africa's natural resources; broadening the economic base; improving the competitiveness of African products; building human capacity at all levels; expanding ICT networks; improving the enabling environment for increased trade and investment; curbing the spread of HIV/AIDS, malaria, tuberculosis and other infectious diseases; and improving the transparency and accountability of government. USAID will structure its FY 2005 program to take advantage of its inherent strengths in addressing all of these challenges.
Agriculture, Trade, Education and the Environment Agriculture is the mainstay of most sub-Saharan economies, supporting over 70% of the population and contributing an average of over 30% to GDP. Increasing agricultural productivity is critical to the region's efforts to achieve food security and to reduce poverty. Despite the adoption by many countries of policies to stimulate rural agricultural-led growth, agricultural yields in Africa remain the lowest in the world and per capita food production has actually declined to 1980 levels. The major constraints to increasing agricultural productivity include low usage of improved technologies and information, limited access to credit, inefficient land use, market distortions which discourage production, poor rural infrastructure and the debilitating effects of the HIV/AIDS pandemic. The flagship of USAID efforts in the agriculture sector is the Presidential Initiative to End Hunger in Africa (IEHA), a five-year program designed to harness science and technology and unleash the power of market forces to increase small holder productivity.
An educated population is fundamental to sustaining democracy, improving health, increasing per capita income and conserving environmental resources. Although literacy rates have increased from 50% in 1990 to 63% in 2001, Africa continues to lag behind the rest of the world in investment in its people. Access to formal education has risen in most African countries during the past several years, yet 39% of boys and 43% of girls still are not enrolled in primary school. Drop-out rates remain high, with just 20% of all children completing primary school. Educational quality is also poor, with large class sizes, significant numbers of poorly qualified teachers, a severe shortage of textbooks and teaching aids and inadequate facilities. HIV/AIDS also continues to decimate the ranks of teachers. Systemic education reform is critical if Africa's children are to compete successfully in today's world. USAID bilateral programs focus on educational policy and systems development, decentralized decision making and greater involvement of parents and civil society, with an emphasis on basic education, particularly for girls, which has proven to yield higher returns. USAID's commitment to education in Africa is centered on the President's $200 million Africa Education Initiative, launched in FY 2002. This initiative will provide 250,000 scholarships for girls and other vulnerable children, 4.5 million much-needed textbooks and training for 420,000 teachers over a five-year period.
The globalization of the world economy offers Africa genuine opportunities to attract resources for development. However, globalization can be a two-edged sword and unless countries make the policy and institutional reforms necessary to benefit from the changing economic environment, they will increasingly be left behind. Sub-Saharan Africa has enormous potential to become a much more significant player in international trade, yet the region accounts for just 2% of world trade. Although a number of countries in the region have begun to take measures to increase their competitiveness, trade is still hampered by systemic constraints such as high transaction costs, capacity limitations, poor infrastructure, and market distortions. Foreign Direct Investment (FDI) decreased dramatically by almost 50% between 2001 and 2002, to $7 billion, due in large measure to the global economic downturn, and remained highly skewed toward extractive industries in just a few countries. This nonetheless represents a modest increase from 2000 and was higher than FDI flows to either the Middle East or South Asia. Through the African Growth and Opportunities Act of 2001(AGOA), the U.S. has shown worldwide leadership in efforts to transform African economies through increased trade and investment. AGOA is demonstrating ever more encouraging results. U.S. total trade with sub-Saharan Africa rose 36% in the first half of 2003 over the same period a year earlier and AGOA imports during the same period increased by 66% to $6.6 billion. In 2003, the enactment of AGOA II further expanded trade opportunities and the President has recently proposed to extend AGOA up to seven years beyond its original expiration date of 2008. Through the Presidential Trade for African Development and Enterprise (TRADE) Initiative, launched in 2002, USAID is directly supporting not only AGOA but also U.S.-African business linkages, increased regional trade and export opportunities to help countries in the region better integrate themselves into the multilateral trading system.
Africa has a diverse and abundant natural resource base which if prudently managed and protected can contribute to sustainable economic growth as well as to worldwide efforts to improve the global environment and maintain bio-diversity. Experience has demonstrated that community-based natural resource management programs, such as those supported by USAID in Madagascar, Guinea and Namibia, have successfully preserved valuable environmental assets while extending their economic benefits to a broader range of households. Major challenges remain, however, as the region contains 45% of global bio-diversity yet has the highest rate of deforestation in the world. Africa is also urbanizing at the highest rate in the world, creating new environmental challenges. By 2016, half of all Africans will reside in urban areas. The centerpiece of USAID's efforts in the environmental sector is the Congo Basin Forest Partnership (CBFP), a three-year effort, announced at the World Summit on Sustainable Development in 2002, to provide a six-country network of national parks and protected areas, well managed forestry concessions and assistance to communities in the world's second largest tropical forest.
Global Health A healthier population is critical to Africa's efforts to reduce poverty and improve living standards. However, during the past decade health status gains have been undermined in many countries of the region by increasing poverty, conflict, the rapid spread of HIV/AIDS and other infectious diseases, such as tuberculosis (TB), malaria, meningitis and cholera. The disease burden in Africa is the highest in the world and life expectancy has continued to decline, to less than 50 in the countries most affected by HIV/AIDS. Over 90% of the world's 600 million yearly malaria cases occur in Africa and this disease alone causes over 2.3 million deaths a year, mostly of young children. TB rates have also jumped by 95% between 1995 and 2000. While under-five mortality rates are continuing to decline, the rate of decrease has slowed over the last decade. AIDS is driving this trend, as well as that of the TB increases, and the highest HIV/AIDS prevalence countries are seeing an actual increase in their under-five mortality rates. Malnutrition in children has also increased in many countries due largely to conflict and natural disasters. Investment in health systems and basic health interventions has not kept pace with need. USAID is implementing broad based health programs in every country in the region. Successful efforts to create alternative new community based health care financing schemes in Senegal, Rwanda and Zambia, offer promise to hundreds of thousands of households and provide successful models for replication. USAID efforts have also produced generalized increases in immunization coverage in target areas and expanded use of impregnated bed nets to protect against malaria throughout the region. Spectacular results from Malawi, where sales of treated bed nets reached almost one million people in 2003, almost a five fold increase over 2002, provide an excellent model. Nonetheless, immunization rates for children under one year have remained at 2002 levels and are still below 80%, leaving significant numbers vulnerable. As funding levels are clearly linked to improved health outcomes, it is expected that new funding from USAID, other donors, the Global Alliance for Vaccines and Immunizations (GAVI) and the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria will result in more positive trends in the near future.
The HIV/AIDS pandemic continues to ravage the continent, although there are hopeful signs that prevention and treatment measures are beginning to slow its spread. Prevalence rates remain high in all of southern Africa, reaching 25% in Zimbabwe and almost 40% in Swaziland and Botswana. Of the estimated 34-46 million people infected by HIV worldwide, 25-28 million reside in sub-Saharan Africa. Over 80% are in their productive years and two thirds are female. The number of AIDS orphans is expected to rise from 11 million to 20 million by 2010. Average life expectancy will continue to decline over the next decade, falling below 35 in several high prevalence countries, significantly impacting prospects for economic growth and further straining household incomes. However, the experience of Uganda, where infection rates have decreased by 50% from 1997-2001 and promising results among certain groups in Zambia and elsewhere demonstrate that strong leadership and a comprehensive approach to prevention can be effective in stabilizing and/or reducing prevalence rates. HIV/AIDS is the major health priority for USAID and through the $15 billion PEPFAR Initiative, prevention, care and treatment programs of all U.S. Government agencies will expand exponentially.
With a growth rate of 2.4% a year, the highest in the world, Africa's population of 690 million will swell to over one billion by 2025, despite the effect of the HIV/AIDS crisis. This will place its natural resources, public services and social fabric under enormous stress and compromise per capita income growth. Though the majority of women say they desire fewer children, contraceptive prevalence rates remain under 20% in all but five countries and above 50% only in South Africa and Zimbabwe. Dramatic increases in contraceptive prevalence rates in Botswana and Malawi over the past 15 years, however, offer proof that reproductive health programs, such as those supported by USAID, can indeed promote behavioral change.
Democracy, Conflict and Humanitarian Assistance Accountability in government, observance of the rule of law and respect for human rights mitigate against civil strife and violent conflict. They are also critical to equitable economic development. Good governance, coupled with improved economic well-being and better social services, also diminish the appeal of extremist ideologies and terrorist agendas. The past year has witnessed a series of extremely positive achievements in conflict resolution with the restoration of peace in Liberia, Sudan, and the DRC, and with the continued progress of reconciliation in Angola and Sierra Leone after years of bitter strife. The United States has played a seminal role in international efforts to assist these processes. However, the conflict in the Cote d'Ivoire is a reminder that peace is fragile. Through the Conflict and Peace Building Fund, begun in 2003, USAID is implementing a multi-faceted approach to strengthen African capacity to manage and mitigate conflict.
Democratic governance and improved governmental accountability have continued to expand throughout the region. A major milestone was met in Nigeria, when for the first time in its history a civilian government successfully and relatively peacefully transferred power to a succeeding civilian government. National elections were also held successfully in Rwanda, Mauritania, Togo and Guinea and, while the openness of the political process has been called into question, the elections do signal that the continent continues to move in the direction of democratic consolidation. Zimbabwe has unfortunately continued to be a problem with increasing disrespect for the rule of law and for human rights. USAID programs in democracy and governance have focused on the development of democratic institutions and the rule of law, free and fair elections, strengthening of civil society, decentralization of governmental functions and improved accountability of both the public and private sectors. USAID's humanitarian assistance programs have been vital to international efforts to mitigate the effects of several natural disasters during the past year, the most severe being in Ethiopia and parts of southern Africa. Humanitarian assistance programs have also been critical to post conflict recovery in several countries, including the DRC, Sudan, Liberia and Burundi.
Global Development Alliance -- Public-Private Alliances Public-private alliances enable USAID to enhance the impact of its programs by mobilizing the ideas, efforts, and resources of the private sector with those of the public sector and non-governmental organizations. In FY 2003, USAID created 41 public-private alliances through 15 bilateral missions and all three regional programs in sub-Saharan Africa. USAID missions leveraged $37.5 million of their own resources to generate $135 million from its partners. Alliances were created in almost every sector of development, including health, agriculture, the environment, education, information technology and small enterprise development. A major new alliance brings together Shell Oil with USAID in a $20 million effort to spur agricultural growth in Nigeria.
Debt Issues With the advent of real reductions in external debt resulting from the international Heavily Indebted Poor Countries (HIPC) Initiative, the overall debt picture in sub-Saharan Africa has begun to brighten appreciably. The continent's total debt service ratio (debt as a percentage of exports of goods and services) has fallen from 13.9% in 1999 to 10.7% in 2002, well below the critical 15% mark that is generally viewed as unsustainable. The debt service savings enable the 30 African countries benefiting from HIPC debt relief to free up public resources for other priority sectors, such as education and health.
Other Donors The United States remained the largest bilateral provider of Official Development Assistance (ODA) to sub-Saharan Africa in 2002. The United Kingdom, France and Japan follow as the other major bilaterals. The largest ODA levels continue to be provided through the multilateral organizations, primarily the World Bank group, which lends almost exclusively in Africa through its concessional International Development Association (IDA) window. The European Union, the African Development Bank and the various U.N. agencies are also significant multilateral donors in the region. The United States has become an active participant in discussions to better harmonize ODA procedures and policies among the donor organizations.
Program and Management Challenges
Security Issues Security remains an ever-increasing concern at most USAID missions in Africa. Five of 23 bilateral missions exist in critical or high-threat security situations. Missions continue to take steps to improve security within the limits of available funding. USAID missions are required to co-locate with new embassies as they are being built, but this may present dilemmas where space restrictions may constrain overall personnel ceilings, which would in turn affect USAID's ability to manage its programs.
Staffing and Operating Expenses Using the Agency-wide "workforce template" as a base, the Africa region has developed a plan to make the best use of its human resources. Overseas direct-hire field staff levels will be at 227 in FY 2005, including nine new HIV/AIDS professionals. The Bureau continues to look at re-deploying staff among Missions over the next two years to maximize performance. In 2003 a new mission was established for Sudan, based in Nairobi, but may move to Sudan as conditions improve. USAID also established a presence in Djibouti and is in the planning stages of establishing an AID Representative Office in Sierra Leone. The Washington USDH staff level is expected to increase by one, to 91, to meet the demands of the Sudan program. Operating expenses continue to be severely constrained by overall increases in local costs and by significant exchange rate fluctuations.
The FY 2005 Program
In FY 2005, USAID will continue to support a broad range of programs which address the most pressing of sub-Saharan Africa's development challenges. In FY 2005, USAID proposes to invest $1.028 billion in development assistance, child survival and health, and Global AIDS Initiative funding in Africa. This figure includes $50.6 million in funding for HIV/AIDS to be made available for Africa through the President's Emergency Plan for AIDS Relief (PEPFAR). The PEPFAR funding will be programmed through the Office of the Global AIDS Coordinator in the Department of State. USAID anticipates that it will be one of the key implementing agencies for PEPFAR. USAID programs in Africa will contribute directly to the priorities outlined in the joint State/USAID Strategic Plan for FY 2004-2009, particularly those which advance sustainable development and global interests. The centerpieces of the FY 2005 program continue to be the four Presidential Initiatives launched in FY 2002, the Initiative to End Hunger in Africa (IEHA), the TRADE initiative, the Congo Basin Forest Partnership, and the Africa Education Initiative, as well as PEPFAR, launched in FY 2004. Other key elements of the program include the continuation of the African Anti-Corruption Initiative, the Conflict Initiative and the Leland Initiative to increase access to information technology.
Economic Growth, Agriculture, Trade, Education and the Environment It is through increased and sustained economic growth that African countries will generate the resources and provide the employment opportunities required to meet the Millennium Development Goal target of halving poverty by 2015. Since the livelihoods of so many Africans depend on agriculture and increased productivity is central to efforts to improve food security, almost all USAID Missions in Africa will implement programs to boost agricultural productivity and rural incomes. At the local level, programs will stress the use of improved technologies, better quality control, wider access to rural finance, stronger producer associations, small scale rural infrastructure, increased access to information and improved functioning of markets. Related efforts will be made to promote private sector-led diversification of the rural economy, such as agro-processing, and to increase agricultural exports. At the national level, policy dialogue will target changes to provide better incentives to farmers and reduce market distortions. The five-year IEHA Initiative, which will channel significant new resources to countries with high potential to increase agricultural productivity, will expand from three to at least six countries in FY 2004 and 2005.
Strengthening the ability of African countries to participate competitively in the global economy is critical to overall economic growth and reducing poverty. Through the four-year, $70 million Presidential TRADE Initiative, which began full scale implementation in FY 2003, USAID will promote U.S.-African business linkages, expand the role of trade in poverty reduction strategies and build African capacity for sophisticated trade analysis. It will also improve the provision of public services supporting trade (e.g. customs procedures), strengthen the enabling environment for African business and enable African business to take advantage of opportunities under AGOA. In partnership with other U.S. Government Agencies, including the Department of Commerce, the Office of the U.S. Trade Representative and the Department of Agriculture, USAID is providing technical assistance, policy advice, economic analysis and training to countries through three "Hubs for Global Competitiveness," which became fully operational in 2003, in east, west and southern Africa. In FY 2005, USAID will invest $229 million, or 22% of its program resources, in programs to promote economic growth and support agriculture and trade, including $44.5 million for IEHA and $25 million for the TRADE Initiative.
USAID's focus in the environmental sector will remain on policy change and capacity building in support of community-based approaches to natural resource management. USAID will also support efforts to reduce long-term threats to the environment, particularly global climate change and the loss of bio-diversity. USAID's flagship program in the environment is the three-year, $53 million Congo Basin Forest Partnership (CBFP). The 20-year Central African Regional Program for the Environment (CARPE), initiated in 1995, is the principal vehicle to achieve the goals of the CBFP. Funding for USAID's environmental programs in Africa will total $75.9 million in FY 2005.
USAID's priority in the education sector will remain the $200 million African Education Initiative (AEI) which will continue to operate in over 40 African countries. In addition, basic education programs that address system reforms, community-based education programs, and increased parental and civil society involvement in education will expand to include 18 countries in FY 2005. USAID will invest $105.2 million, or about 10% of its program resources, in education programs in Africa in FY 2005, including $53 million for the AEI.
Global Health, HIV/AIDS and Population USAID programs to improve the health of sub-Saharan Africans focus on increasing the availability, effectiveness and access to quality health care. USAID programs address the leading causes of child mortality and morbidity, such as malaria, TB, malnutrition, respiratory diseases, diarrhea and vaccine-preventable illnesses. USAID will increase immunization coverage, strengthen surveillance and build human capacity to provide better quality care, improve community and household practices for prevention and management of childhood illnesses and promote innovative health financing strategies. USAID will invest $160.4 million, or 15.5 % of its program resources, for these activities in FY 2005. USAID will continue to support a range of family planning programs, including public education, advocacy and outreach through traditional and community structures, community-based distribution and social marketing of contraceptives and encouragement of child spacing practices. Funding for family planning programs will total $86.8 million in FY 2005.
HIV/AIDS is the major health priority for USAID in Africa. Overall USG policy for coordination of the $15 billion PEPFAR Initiative rests with the newly created Office of the U.S. Global AIDS Coordinator in the Department of State. In FY 2005, $50.6 million in Global AIDS Initiative funding, programmed through the Global AIDS Coordinator, and $231 million of Child Survival HIV/AIDS funding, will be made available for combating HIV/AIDS in Africa. USAID anticipates playing a key role in the implementation of PEPFAR. USAID Missions will maintain their focus on preventive primary health care and expand service coverage, including those for orphans and vulnerable children. Programs will build on successful efforts in Uganda, Senegal and Zambia, which include the promotion of abstinence and other behavioral interventions, voluntary counseling and testing, distribution of condoms, and care and support for persons living with AIDS, including anti-retroviral therapy. Programs to prevent mother-to-child transmission of AIDS will also be expanded. Most Missions in Africa have fully integrated HIV/AIDS mitigation programs throughout their development portfolios.
Democracy, Governance and Humanitarian Response Weaknesses in democratic governance inhibit social development and economic growth, cause civil unrest and provide fertile ground for the rise of extremist ideologies. USAID's efforts to improve democratic governance and promote increased accountability advance the national security goal of creating the conditions for peace and improved security. USAID programs promote representative political processes and institutions, the rule of law, the growth of a vibrant civil society and respect for human rights. Many USAID Missions have integrated the principles of transparency, participation and accountability throughout their development portfolios. Twelve Missions are participating in the Anti-Corruption Initiative, launched in FY 2003, which promotes public access to information, citizen awareness and advocacy, transparency and accountability of government procedures and public-private dialogue. USAID will also extend its efforts to manage and mitigate conflict, promote community reintegration and strengthen African networks to identify and respond to potential crises. In FY 2005, USAID will invest $89.5 million, or 8.7% of its program resources, in programs to strengthen democracy and governance. USAID Missions will also strengthen their linkages with the Office of Foreign Disaster Assistance (OFDA) and the Office of Transition Initiatives (OTI) to better prepare for the relief-to-development transition in countries under stress.
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