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U.S. National Interests
Today, promise, potential and opportunity exist in Africa. The hope for the
future is based on current experiences in many countries on the African continent.
This is good news for the United States. A more prosperous, healthy and stable
Africa is in America’s best interest, and contributes to U.S. efforts
to foster world-wide economic growth and increased trade, and to combat transnational
security threats.
Here are but a few examples of the good news. Africa has enormous potential
to become a significantly larger player in global trade and commerce. The positive
results of the African Growth and Opportunity Act (AGOA) of 2000 demonstrate
this potential. In the first six months of 2002, AGOA imports totaled almost
$4 billion, a 20% increase over the same period a year earlier. Textile and
apparel imports increased seven-fold and transportation equipment more than
doubled. Foreign direct investment in Africa has also increased from just under
$1 billion in 1995 to $6.3 billion in 2000.
With regard to the HIV/AIDS pandemic, encouraging results from Uganda and,
more recently, from Zambia, demonstrate that the right responses, combined
with political will and strong leadership from the top, can be effective in
reducing prevalence rates. There are other positive health indicators on the
continent. Infant mortality under five has decreased in a number of countries
between 1960 and 1999. In Botswana, for example, infant mortality has declined
from 173 to 59 per 1,000 live births and in Mali from 517 to 235 per 1,000
live births.
Another good sign for the continent is that support for democracy continues
to grow: civil society has become increasingly vibrant, increased freedom of
the press and new communications media such as the internet have expanded public
access to information, and citizens are now more aware of their basic human
rights. According to Freedom House, over the last decade, the number of free
democracies in Africa has more than doubled from four to 10 and more than half
the countries on the continent are in the transition process. The successful
2002 elections in Kenya and the anti-corruption drive in Zambia further underscore
this trend.
Experience has shown that for countries to realize their full potential, and
to take advantage of opportunities to address the principal constraints to
poverty reduction, they must start from within, in partnership with the international
community. This certainly applies to Africa. That is why the New Partnership
for Africa’s Development (NEPAD), launched in 2001, provides a welcome
new framework for Africans who plan to take charge of their own destiny. Given
what we know about ownership of the ways in which the challenges of the continent
can be met, the U.S. and the international community have embraced NEPAD and
have encouraged African leaders to move deliberately and purposely forward
with its agenda.
Sustained economic growth and increased agricultural production in Africa reduce
the need for the United States to provide costly and often recurring humanitarian
assistance. Preserving the richness and diversity of Africa’s natural
resource endowment and sound management of the continent’s resource base
are key to global efforts to promote environmentally sound economic growth.
Also, transparent and accountable governance structures make it more difficult
for potential terrorist networks to form and operate effectively.
Despite these very positive developments, sub-Saharan Africa still faces some
formidable challenges in its efforts to improve the standards of living for
all of its peoples.
Development Challenges
Reducing Poverty through Broad-Based Economic Growth Sub-Saharan
Africa has not been spared in the global economic slowdown of the past three
years, yet its effects have not been relatively as severe as elsewhere. GDP
in the region grew by 2.5% in 2002, continuing a downward trend from 3.0% in
2001 and 3.3% in 2000, following the significantly higher growth rates of the
mid-1990s. However, the World Bank forecasts that growth will accelerate to
3.2% in 2003 and 3.8% in 2004 -- about 1.1% per capita -- as the world economy
recovers and important structural reforms and economic liberalization measures
taken by many countries begin to bear positive results. Nonetheless, sub-Saharan
Africa remains the world's poorest region, and average living standards lag
far behind those in the rest of the world. Almost half of Africa's 690 million
people live on less than 65 cents a day. At the current population growth rate
of 2.6% a year, reaching the Millennium Development Goal (MDG) of reducing
poverty levels in sub-Saharan Africa by 50% by 2015 will require a 7% annual
growth rate. Economic growth has also been highly uneven across the continent,
with gains by leaders such as Mozambique, Mauritius and Botswana offset by
poor performances in Zimbabwe and Kenya. Income disparities within many countries
also remain severe. To reach the MDG for reducing poverty, concerted action
is required along multiple fronts: increasing agricultural productivity and
improving the competitiveness of African products; diversifying the economic
base; building human capacity through improved educational opportunities, especially
for girls; expanding information and telecommunications networks; strengthening
African capacity to manage economic and natural resources; improving the enabling
environment for trade and investment and curbing the spread of HIV/AIDS, malaria,
and tuberculosis.
Agriculture is the mainstay of most sub-Saharan economies, supporting over 70% of the population and contributing an average of 30% of GDP. An increasing number of countries have taken initial steps to reform their economies by re-emphasizing rural agriculture-led growth. Nonetheless, agricultural productivity has stagnated over the past five years, and per capita food production has declined to 1980 levels. The most significant constraints to increasing agricultural productivity include low usage of improved technologies and information, under-capitalization of farmers, poor land use and insecurity of tenure, poor infrastructure, and inappropriate policy and regulatory frameworks that create distortions in markets and disincentives for efficient production. Food production has also been negatively affected by the rise of HIV/AIDS, as productivity is compromised by the need to care for infected family members. This past year has also seen drought conditions return to parts of the continent, particularly the Horn of Africa and southern Africa regions, where food assistance programs have been scaled up to avert famine.
In today’s era of globalization, economic growth depends increasingly on an educated workforce that is poised to take advantage of opportunities. Education is also important to sustaining democracy, improving health, increasing income and managing environmental resources soundly. Africa continues to lag far behind the rest of the world in investment in its people. The region suffers from an average illiteracy rate of 41%. With 61% of boys and 57% of girls enrolled in primary school, Africa is the only region of the world where access to education has actually decreased over the past 20 years. Of those who enroll in primary school, one third drop out before completion. Of those who do complete primary school, just half continue on to secondary school (20% of all children). Education is, moreover, often of poor quality, leaving children ill-equipped for entry into the workforce of the 21st century. HIV/AIDS is affecting the demand for education, as family members, particularly girls, drop out of school to care for victims. HIV/AIDS is also decimating the ranks of teachers in many countries. In several countries, two teachers must be trained for every position to compensate for anticipated deaths from HIV/AIDS. Systemic education reform is essential to prepare Africa’s children for the world of today. USAID devotes most of its efforts to improving primary and basic education, because basic education, particularly for girls, has a relatively greater impact on economic and social development.
Countries that have embraced open trade have enjoyed higher rates of economic growth. Africa has enormous potential to become a significantly larger player in global trade and commerce, but there have been disappointments. The global economic downturn reduced total U.S. trade (exports plus imports) with the region by nearly 22% in the first nine months of 2002 compared to the same period in 2001, and after substantial growth in the early-mid 1990s, foreign direct investment fell by 17% from 1997 to 2000. Foreign direct investment in Africa is less than 1% of the global total and just 3.5% of flows to developing nations. Foreign direct investment is also concentrated in just five countries and in a few extractive industries. Slow growth in the industrialized world was a significant factor in decreased investment flows, but sub-Saharan Africa must also continue to address systemic constraints, which weaken its competitive environment and keep transaction costs comparatively high.
Sub-Saharan Africa has an abundant natural resource base which can be a major contributor to sustained economic growth. Several countries in the region, notably Namibia and Madagascar, have implemented highly innovative community-based approaches to improve the management of their natural resource base and to extend the economic benefits to lower income households. Major challenges remain, however: the region contains 45% of global biodiversity yet has the highest rate of deforestation in the world. Rapid urbanization and industrialization also create new environmental challenges. By 2016, over half of all Africans will reside in cities. The top-down approach to natural resource management in many countries has resulted in inefficient exploitation and contributed to degradation, while inequitable access to natural resources is often a root cause of social instability.
Global Health A healthier population is critical to Africa’s
efforts to reduce poverty and improve living standards. Several countries in
the region have demonstrated that political commitment at the highest levels,
focused programs, adequate financial resources, trained professional staff,
and strong coordination of partnerships at the regional and country level can
indeed make a difference in combating infectious diseases. Nonetheless, the
health of Africans remains unacceptably poor by any standard. Continent-wide,
the rate of decrease in child mortality has slowed over the past decade. For
every thousand children born in Africa in 2003, 175 will die before their fifth
birthday, compared to 100 in Asia and just six in the developed world. A woman’s
risk of dying from maternal causes is 1 in 15 in Africa, about 10 times higher
than in Latin America and over 2,000 times higher than in North America. Unlike
any other part of the world, malnutrition rates are actually increasing in
Africa. HIV/AIDS has compounded these problems. Some 90% of the 600 million
malaria cases per year occur in Africa and the incidence of TB is the highest
in the world. Malaria is estimated to decrease the GDP of Africa by as much
as $12 billion per year. Immunization rates for children under one year of
age continue to increase but they are still below 80%, leaving significant
numbers exposed to vaccine preventable illness and death. One notable success
has been the effort to eradicate polio, now close to accomplishment. Nonetheless,
most sub-Saharan African countries are constrained by a continuing scarcity
of resources and limited trained staff, and are challenged by the difficulties
of decentralizing public services. To address the resources issue, several
countries are experimenting with innovative ways to improve health care financing,
such as community or cooperative-based programs, which have often resulted
in better utilization of the service network.
Sub-Saharan Africa’s HIV/AIDS pandemic is continuing to widen and deepen,
and Africa remains by far the world’s most affected region, further compromising
its economic, social and democratic gains. HIV/AIDS prevalence rates remain
above 8% in 18 of 41 African countries, and are nearly 33% in Zimbabwe and
38% in Botswana and Swaziland. Prevalence rates increased in 14 countries in
2001, including four in West Africa where the crisis has been less severe.
Over 20 million Africans have died of complications resulting from HIV/AIDS,
80% of whom were in their productive years. Two-thirds of the 12 million young
people living with AIDS in Africa are female. The number of orphans in Africa
is expected to increase from 34 million in 2001 to 42 million in 2010, almost
half from HIV/AIDS. Average life expectancy will continue to decline over the
next decade, falling below 35 in several high prevalence countries, and a shrinking
labor pool will slow the continent’s growth rate by as much as 2% a year.
Continued high population growth rates in sub-Saharan Africa undermine the
best efforts to improve the standards of living and reduce poverty. Fertility
rates continue to decline in some countries, particularly those with relatively
higher incomes. However, the annual population growth rate is still 2.5% per
year, the highest in the world. Contraceptive prevalence rates remain under
15% in the region, although the majority of women say they desire fewer children.
Even with the devastating effects of the HIV/AIDS pandemic, Africa’s
population will increase from about 690 million now to about one billion in
2020, further straining social infrastructure.
Democracy, Conflict Prevention and Humanitarian Assistance Political
stability and inclusiveness, the rule of law, and accountability in government
and the private sector enhance
investment and trade and promote a more equitable distribution of economic
assets and access to social services. Good governance, coupled with improved
economic and social development, also reduces the vulnerability and receptivity
to terrorist agendas. However, despite recent democratic successes in Kenya,
Zambia and post-war Sierra Leone, much more needs to be done to improve governance
in the region. The entire world is watching
the virtual collapse of democracy in Zimbabwe and the outbreak of violence
in the Cote d’Ivoire -- potent reminders that democratization processes
are still fragile.
Several violent conflicts have moved toward resolution during the past year,
most significantly the conflicts in the Democratic Republic of the Congo, Burundi,
and Sudan. However, new conflicts have arisen, and instability will remain
a serious risk for almost half the countries in Africa for the foreseeable
future. The severe food crises that have afflicted large parts of east and
southern Africa also heighten the potential for conflict. These humanitarian
crises and complex emergencies jeopardize economic development and undermine
gains in the social sectors. Terrorist organizations find more fertile ground
for the exploitation of vulnerable people where conflict or disasters disrupt
normal life.
Private-Voluntary Alliances In FY 2002, 36 public-private alliances
between USAID and the corporate sector, foundations, universities, and non-governmental
organizations were begun in 20 different countries in sub-Saharan Africa, funded
with $30 million in Agency resources and more than $30 million from private
partners. Alliances created were primarily in the agriculture, economic growth,
education, and environment sectors. In addition, four larger alliances were
created through the Global Development Alliance (GDA) program. There is considerable
potential for additional alliances in the region in the future.
Debt Issues Debt burdens remain high in many sub-Saharan African countries. Over 80% of the heavily indebted poor countries (HIPC) are in the region, and the continent’s total debt service ratio in 1999 (debt as a percentage of exports of goods and services) is 13.9%, uncomfortably close to the 15-20% mark that is considered unsustainable. Nonetheless, HIPC debt relief is now reducing debt service payments in 14 countries that have reached Paris Club agreements, freeing up public resources that can be redirected to increased social sector spending, primarily health and education.
Program and Management Challenges
Security Issues Six of 22 USAID Missions and two of the three Regional
Offices in sub-Saharan Africa exist in critical and high-threat security situations.
Of these eight field offices, funding for new facilities that meet new security
standards has been allocated for just three.
Staffing and Operating Expenses Staffing and Operating Expenses USAID continues to rationalize its human resource
base to optimize performance by shifting direct hire staff from field programs
of lesser priority to those of the highest priority. Overseas direct-hire
field staff levels will increase from 216 to 227, including nine additional
HIV/AIDS professionals and training positions for junior officers entering
the workforce. Washington-based Africa Bureau staff levels will remain constant
at 91.
Other Donors The United States has replaced the United Kingdom as
the largest bilateral provider of Overseas Development Assistance (ODA) to
sub-Saharan Africa, and remains ahead of Japan and France. By far the largest
ODA levels are provided through multilateral organizations, particularly the
World Bank group, which lends almost exclusively through its concessional International
Development Association (IDA) window. The European Community (EC), the African
Development Bank (AfDB) and the United Nations (UN) agencies are also significant
multilateral donors to Africa. Major areas of focus are education, governance,
economic growth and diversification, health and agricultural development. USAID
collaborates closely with other donors using the framework of country Poverty
Reduction Strategies to assure synergies of its programs with those of other
donors.
FY 2004 Program
In FY 2004 USAID will continue to support African-led efforts to address the
most pressing challenges facing the continent today. To assure sustainability,
USAID will design and implement its programs through effective partnerships
with African governments, and with local, regional, national and international
public, private, and non-governmental organizations. USAID strongly endorses
the bold new approaches advocated by the NEPAD, particularly its focus on the
need for African ownership of and full participation in development initiatives,
and on the peer review process to encourage good economic and governance performance. The centerpieces of USAID’s FY 2004 program will be four Administration Initiatives, of which the first two are Presidential:
the Africa Education Initiative; the Trade for African Development and Enterprise
(TRADE) Initiative; the Initiative to End Hunger in Africa; and the Congo Basin
Forest Partnership. Other key elements will be an Anti-Corruption Initiative;
an increased emphasis on conflict mitigation and management; a significant
scaling up of HIV/AIDS related programs, including participation in the Presidential
Mother-to-Child Transmission Initiative; and continued implementation of the
Leland Initiative to promote better access to and use of emerging information
and communications technologies.
Economic Growth and Agriculture and Trade Increasing agricultural
productivity is central to accelerating economic growth and to improving the
health and well being of the people of Africa. The cornerstone of USAID’s
economic growth and agriculture programs is the Administration’s Initiative
to End Hunger in Africa, launched in 2002, which will fulfill the U.S. pledge
towards a global effort to cut hunger in the region in half by 2015. Through
this initiative, USAID will channel significant additional resources to those
high-performing countries that have committed themselves to promoting broad-based
and equitable growth in the agricultural sector. The initiative will promote
the use of modern technologies, expand credit to farmers, strengthen producer
associations, provide better market information to farmers and traders, and
enhance the economic incentives for farmers and small-scale entrepreneurs.
The initiative will target crops, livestock, and environmental goods and services
where African farmers have a competitive advantage. Related efforts will be
made to promote private sector-led diversification of the economy, such as
agro-processing, and to increase agricultural exports.
The TRADE Initiative focuses on six broad areas: (1) promoting U.S.-Africa
business linkages; (2) enhancing competitiveness of African products; (3) expanding
the role of trade in African poverty reduction strategies; (4) improving the
delivery of public services supporting trade (e.g. customs procedures); (5)
building African capacity for trade policy analysis; and (6) strengthening
the enabling environment for African businesses. In partnership with other
U.S. government agencies, including the U.S. Department of Commerce, the Office
of the U.S. Trade Representative, and the U.S. Department of Agriculture, USAID
is providing technical assistance, economic analysis, and training to countries
throughout the continent by supporting experts in three regional "Hubs
for Global Competitiveness." These hubs -- one each in west, east, and
southern Africa -- all opened for business during the past year. In FY 2004,
USAID resource levels for the economic growth and agricultural sectors will
total $223 million.
USAID’s focus in the environmental sector will be on policy changes and
capacity building in support of community-based approaches to natural resources
management. USAID programs also contribute to international efforts to reduce
long-term threats to the environment, particularly global climate change and
the loss of bio-diversity. Finally, the U.S. pledged at the World Summit on
Sustainable Development (WSSD) in Johannesburg, South Africa, in September
2002, to support a major new environmental initiative in central Africa, the
Congo Basin Forest Partnership (CBFP). CBFP builds upon USAID’s successful
Central African Regional Program for the Environment (CARPE), a 20 year effort
launched in 1995. This partnership will promote economic development, poverty
alleviation, improved governance, and natural resource conservation in six
countries through support to a network of national parks and protected areas,
well-managed forestry concessions, and assistance to communities that depend
on natural resources for their livelihood. USAID funding for environmental
programs in Africa will total $82.2 million in FY 2004.
The centerpiece of USAID’s efforts to improve basic education in sub-Saharan
Africa is the five-year Africa Education Initiative, launched by President
Bush in FY 2002. This initiative will increase access to and quality of basic
education through improved teacher training and curriculum development, the
development and distribution of textbooks and other learning tools, greater
use of information technology, and the increased involvement of parents and
communities in their children’s education. At the same time, USAID will
continue its long-term programs that address country-level education system
reform throughout the continent. USAID’s planned FY 2004 funding for
basic education in Africa is $121.5 million.
Global Health and Population
Global Health 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 funding for these activities will total $136.9 million in FY 2004.
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 reproductive health
programs will total $80 million in FY 2004.
HIV/AIDS is the major health priority for USAID in Africa. USAID will maintain
its focus on primary prevention and expand its coverage of services, including
those for orphans and vulnerable children. Pilot care and treatment programs
will be introduced in several of the most-affected countries. USAID will also
assist countries to access the Global Fund to Fight AIDS, TB and Malaria. Reflecting
the continuing spread and deepening impact of HIV/AIDS on economic and social
development in the region, USAID plans a major increase in funding in FY 2004
for HIV/AIDS-related programs, to $325 million, 77% higher than the FY 2002
level. HIV/AIDS programs represent 31% of all USAID development assistance
funding in Africa. Programs will build on successful activities in Uganda,
Senegal, and Zambia, which include voluntary counseling and testing, social
marketing of condoms, programs designed to encourage people to adopt lifestyle
changes that will better protect them from HIV/AIDS infection, and care and
support for orphans and other vulnerable children. Programs to prevent mother-to-child
transmission of HIV and care and support activities for persons affected by
AIDS will be expanded. HIV/AIDS prevention activities are an integral part
of USAID programs in economic growth and education programs throughout the
region. In its efforts to slow the spread of HIV/AIDS, USAID will continue
to enlist the support of community-based partners, including faith-based organizations.
Democracy, Conflict Prevention and Humanitarian Response President
Bush has stated: "The world’s help must encourage developing countries
to make the right choices for their own people. Good governance is an essential
condition of development." Indeed, Africa’s better-managed countries
have also made the greatest gains in political rights and civil liberties.
USAID supports the application of democratic principles and good governance
by promoting representative political processes and institutions, the rule
of law, the growth of a vibrant civil society and respect for human rights.
In many countries in the region, USAID has closely integrated the principles
of participation, transparency, and sound governance throughout their development
portfolios in addition to supporting discrete democracy, governance, and conflict
prevention and mitigation programs. Funding for these programs will total $67.8
million in FY 2004.
In FY 2003, USAID will begin implementing a new initiative to address one
of the region’s most insidious development challenges, corruption. The
Africa region will also be a full participant in the Agency-wide conflict prevention
program. Regional and bilateral programs will emphasize conflict mitigation
and management; community reintegration; promotion of African networks and
capacities to identify and respond to potential crises; information sharing;
and research and pilot efforts to address cross-border, resource-based, and
other types of conflict.
For a printable version of this section, from the Congressional Budget Justification FY 2004, please click here. (Note: This file is in pdf format.)
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