Southern Africa's Other Story: Economies Roar

For many Americans, the abiding images of Africa are coups and mayhem, refugees and starvation. Horrors in Rwanda. Rebellion in the former Zaire. Marines intervening in Somalia and Liberia.

But there's another story - a renaissance in the continent's south. The region's economic engine is humming and may fuel a broader recovery throughout sub-Saharan Africa.

Sporting economic growth and political stability, the Southern African Development Community (headquartered in Gaborone, Botswana) is setting an encouraging example for the rest of the continent.

These 12 countries - Angola, Botswana, Lesotho, Namibia, Malawi, Mauritius, Mozambique, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe - are defying generations of pessimism about the world's poorest continent.

The economies of SADC's members grew by an average 6.5 percent last year - well above the 2.4 percent of the United States. For most SADC members, the budget deficit is less than 6 percent. And in all 12 countries, inflation is coming down. Civil conflict is now changing into wars on poverty.

"SADC is going to be a major force [for] change in Africa," said South African Finance Minister Trevor Manuel at a meeting of SADC ministers in July in Pretoria, South Africa, summing up a common view.

Part of the bright news is due to better agricultural yields, after several years of devastating drought. But there are other factors, including privatizations, greater political stability, and a liberalization of trade.

Local stock markets are growing, with some SADC members touted as among the best-performing emerging markets.

Arguably one of the most decisive factors that has turned decline into growth is the end of apartheid in South Africa in 1994. This ended the cross-border destabilization of South Africa's neighbors and opened up a new era of cooperation and more accountable government.

Since the early 1990s, wars have ended in Mozambique and Namibia. These two countries, as well as Malawi, Botswana, and Mauritius, now enjoy a semblance of multiparty rule.

This is not to say that all is completely well. It is still too early to indulge in talk of African lions who can compete with the Asian tigers.

Many of the countries suffer from infrastructure delapidated from years of neglect or war. Corruption is rife. Markets are still small, not helped by a low level of education and skills. Sustainable job creation overall remains elusive, as does high real per capita growth.

On the political front, while stability is becoming the norm, there have been some setbacks. Zambia has reversed its early shift to multiparty tolerance. Angola's 20-year civil war is not completely over.

Also, many governments worry about a spillover of unrest from nearby Congo, formerly Zaire. And the SADC has proved to be largely ineffectual in pressuring recalcitrant states to hasten democratic change.

Ironically, while postapartheid South Africa has inspired changes in the region, so has it inhibited progress in its neighbors. Many complain it swamps them with its exports, and that they can not possibly compete in trade.

There is a fair amount of skepticism about whether the SADC will achieve its aim for a free economic-trade zone by 2004, in which goods could cross borders without tariffs and taxes.

The consensus is that economic growth cannot come without some pain. Notes Botswana's vice president and finance minister, Festus Mogae: "It's the lemon which ripens first."

Angola. The country is blessed with an awesome array of natural wealth - diamonds, minerals, oil, fish. But, despite a shaky peace agreement, the shadow of war still looms over the country.

Angola is having difficulty attracting foreign investors. Infrastructure is ruined; land mines are sown in the rich agricultural land. And fighting continues between the government and rebels in the diamond area, where $500-million in revenue is siphoned off by insurgents yearly.

Botswana. Unlike Angola, diamonds are Botswana's best friend and accounted for last year's GDP growth of a whopping 7 percent. This modest country has long been an oasis of prosperity and political stability on the continent.

Lesotho. One wit listed the tiny mountain kingdom's resources as "people, water, and scenery." The underdeveloped economy is dependent on South Africa, which encircles it. Politically, however, Lesotho has settled down from a flurry of military and political unrest in the early 1990s.

Malawi. Greater political legitimacy has emerged since elections in May 1994 ended the quarter-century stranglehold on power by President for Life Kamuzu Banda. Economically it still has a way to go, remaining one of the world's poorest countries.

Mauritius. Like Botswana, Mauritius is one of Africa's great success stories. This relatively small island in the Indian Ocean enjoys stable politics and a well-managed economy. Unlike most African countries, it has an unusual economic diversity - manufactured goods, textiles, tourism, and offshore banking - which is not dependent on natural resources.

Mozambique. The country is still emerging from the ravages of 20 years of civil war. It has posted some extraordinary economic growth - a hefty 6.4 percent last year - but is still the most aid-dependent country on earth.

Despite gains, its leaders are having difficulty adjusting from a former socialist system to free market.

Namibia. The country has emerged from wars and colonial rule with little trauma. It quietly provides a stable environment and sound infrastructure. It has been weaning itself away from the South African economy but is still dominated by its neighbor and former ruler. The economy, which is dominated by mining - especially gem quality diamonds, is also continually hit by drought.

South Africa. The region's dominant economy has a GDP of some $125 billion. South Africa accounts for 76.8 percent of SADC market share.

Rampant violent crime is a deterrent to investors, but the recent lifting of exchange controls should help attract foreign interest. The country boasts almost first-world infrastructure and a relatively skilled workforce.

Swaziland. While the country is one of Africa's smallest states but posts one of its highest per capita incomes.

Its economy, however, is in the shadow of neighbor South Africa. Despite calls for democracy, the absolute monarchy still tenaciously holds on.

Tanzania. It still struggles under the legacy of failed socialist experiments that reduced it to the world's third-poorest country, after Mozambique and Sierra Leone. Recent pragmatic policies have pulled the country from the brink of collapse, but it is still struggling to embrace full-fledged democracy.

Zambia. It's privatization program presents a model for Africa and contributes to a rare budget surplus. But the revenue and mineral wealth don't trickle down to most of the population. Drug smuggling, high-level corruption, and crackdowns on dissent are worrying trends.

Zimbabwe. An early promise of prosperity and government accountability has evaporated with the increasingly demagogic tendencies of the president, Robert Mugabe. Corruption scandals, exchange controls, and threats to expropriate land owned by whites are not inspiring investor confidence.

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