Introduction Angola Benin Burundi Democratic Republic of Congo Eritrea Ethiopia Ghana Guinea Kenya Liberia Madagascar Malawi Mali Mozambique Namibia Nigeria Rwanda Senegal Sierra Leone Somalia South Africa Sudan Tanzania Uganda Zambia Zimbabwe Regional Economic Development Service for East and Southern Africa & Greater Horn of Africa Initiative Initiative for Southern Africa West Africa Regional Africa Regional Summary Tables Program Summary Notified Levels for FY 2002 Notified Levels for FY 2003 Strategic Objective Summary Abbreviations and Acronyms Glossary Previous Years' Activities 2002, 2001, 2000, 1999, 1998, 1997 Last updated: Wednesday, 29-May-2002 18:51:21 EDT

U.S. National Interests

U.S. national interests in Africa include building regional stability, combating transnational security threats, promoting the continent's fuller integration into the global economy through free and fair trade, mitigating the devastating health and economic impacts of the HIV/AIDS pandemic, strengthening democratic institutions and preserving the environment. A growing African economy and regional stability enhance the economic prosperity and national security of the United States and the spread of democratic values.

U.S. interests are based on the premise that improved governance and higher living standards in Africa through broad-based economic growth foster political, environmental and social stability, promote better health, create opportunities for increased trade and investment, and enhance the region's ability to control the spread of terrorist activities. Promoting democracy and transparent governance, combating HIV/AIDS and other infectious diseases, and reducing poverty by enhancing opportunities for economic growth and investment reflect the most basic of American values. Improving the climate for free trade in Africa will open new markets for the export of U.S. goods, services and investment and will spur the growth of African exports within the region and with the United States.

Promoting indigenous African capacity to respond to complex man-made crises and natural disasters reduces the need for the United States to provide emergency humanitarian assistance. Transparent and accountable governance structures make it more difficult for potential terrorist networks to form and grow. Preserving the richness and diversity of Africa's natural environment and sound management of the continent's resource base are key to world-wide efforts to promote environmentally sound economic growth.

African leaders themselves must ultimately be responsible for improving the well-being of their peoples. The New Partnership for Africa's Development (NEPAD), launched in late 2001, represents a very positive step in Africans' efforts to take charge of their own destiny. The United States is well-positioned to support these efforts.

Development Challenges

Reducing Poverty through Broad-Based Economic Growth Sub-Saharan Africa remains the poorest region of the world and income disparities are substantial. Almost half of Africa's 675 million people live on less than 65 cents a day. The sub-continent experienced virtually no economic growth in the early 1990s. Growth increased significantly in the middle of the decade, reaching a high of 5% in 1996; however, continued high population growth rates coupled with the global economic slowdown and falling commodity prices, the debilitating effects of HIV/AIDS, natural disasters and conflict, meant that almost half of the countries in the region still had a lower GDP per capita at the beginning of the millennium than they did in 1980. To reach the Millennium Development Goal of reducing poverty levels in Africa by 50% by 2015 will require a 7% annual growth rate in GDP. Yet current estimates are that the continued global economic slowdown, exacerbated by the recent terrorist events, will see economic growth rates in Africa fall to just 3% in 2002. To reverse this situation, concerted action is required on multiple fronts: increasing agricultural productivity and trade; diversification of the economic base; building human capacity through improved educational opportunities, especially for girls; broadening and deepening the flow of information; strengthening African capacity to manage economic and natural resources; and enhancing the enabling environment for trade and investment.

Agriculture is the foundation of most African economies, supporting over 70% of the population and contributing an average of 30% of GDP. An increasing number of countries have begun to reform their economies by renewing their commitment to rural agriculture-led economic growth. Ethiopia, Mozambique and Guinea are examples of countries that have recently instituted policy changes resulting in significant improvements to the food security situation. Yet much more needs to be done to assure that Africans have adequate food resources. Africa is the only region of the world with absolutely no increase in average agricultural productivity per capita between 1980 and 2000. Increasing the productivity of agriculture is critical to reducing poverty and improving food security. Despite progress, serious constraints remain to increasing agricultural productivity in much of the region. The most significant include under-capitalization of farmers, low usage of improved technologies and information, uneconomic land use patterns and insecurity of tenure, poor infrastructure, and inappropriate policy and regulatory frameworks which create distortions in markets and disincentives for efficient production. To address these constraints, USAID plans to launch a major new initiative in FY 2003 called Cutting Hunger in Africa. The initiative will stress African ownership of programs, stronger regional trade links, and the opportunities offered by "new" science, such as biotechnology.

Growth in today's information-based global economy depends on an educated workforce that can take advantage of economic opportunities. Investment in people is perhaps the single most important determinant of economic growth. Africa continues to lag far behind the rest of the world in such investment. The region suffers from an average illiteracy rate of 41%. Even among those who complete secondary school, the quality of education is often relatively poor. Africa is the only region of the world where primary school enrollment rates have decreased during the past 20 years. Girls fare worse than boys. Across the continent, on average just 50% of girls are enrolled in primary school as compared to 70% of boys, with drop-out rates for girls considerably higher. The "digital divide" continues to widen despite the noteworthy achievements of the USAID Leland Initiative, which has enhanced internet connectivity in 20 countries. Key constraints to improving the spread and the quality of education include not only the lack of qualified teachers, equipment and materials but also the inefficient use of available resources. HIV/AIDS is also seriously reducing the number of qualified teachers. Systemic reform is essential to prepare Africa's children for the world of today. USAID continues to focus most of its efforts on improving primary and basic education because it has a relatively greater impact on economic and social development, especially for girls.

Africa has great potential to enhance its role as a trade and investment partner. The positive results since the Africa Growth and Opportunity Act (AGOA) became fully effective in early 2001 bear witness to this potential. AGOA has resulted in $4 billion in new trade and investment in the region. In the first six months of 2001, U.S. total trade with sub-Saharan Africa grew 17% compared to a year earlier. Yet sub-Saharan Africa continues to be a marginal player in international commerce. The region's share of world trade has shrunk from 3.5% in 1970 to just 1.1% in 2000. Africa accounts for less than one percent of U.S. exports and two percent of imports. Despite efforts to increase regional economic cooperation, intra-African trade has grown only very slowly, to $19 billion in 1999. Foreign direct investment in Africa increased from $1 billion to $7.3 billion from 1995-99. This still represents only 0.9% of the global total and 3.5% of flows to developing nations, and it was highly concentrated in just five countries and in a few extractive industries. If Africa is to significantly increase its presence in the world economy, it must create a more receptive and competitive environment to lower transaction costs for foreign trade and investment. USAID is contributing to this effort by promoting harmonization of trade and customs policies, more transparent and efficient finance and investment environments and business linkages. The newly launched Trade for African Development and Enterprise (TRADE) initiative will expand upon these efforts.

Sub-Saharan Africa has abundant natural resources but they are unevenly distributed, have been poorly managed and have degraded significantly. Africa contains 45% of global biodiversity yet has the highest rate of deforestation in the world. Rapid urbanization and industrialization also create new environmental challenges. Over the next 25 years, population growth rates of urban areas will be three times that of rural areas. The top down, command and control approach to natural resource management by many countries has resulted in inefficient exploitation and contributed to degradation while inequitable access to natural resources is often among the root causes of social instability. Nonetheless, there have recently been some positive signs. Policy changes supported by USAID in over 20 African countries have focused on community-based approaches to natural resource management.

Global Health In the last two decades, substantial progress has been made in reducing infant and child mortality, yet the health of most Africans remains unacceptably poor by any standard. Much remains to be done for children and their mothers. Four million children die in Africa every year due to acute respiratory infection, malaria, measles and neonatal tetanus. Malnutrition is an underlying cause in many of these deaths. Unlike any other region of the world, malnutrition rates are rising in Africa. Immunization coverage rates are increasing slowly yet the high effectiveness of preventing diseases through vaccination is undermined by limited access. A woman's risk of dying from maternal causes is 1 in 13 in Africa as compared to 1 in 157 in Latin America and 1 in over 4000 in industrialized countries. In addition to the high burden of diseases, many countries face the significant challenges of scarce public sector resources, limited staff, deterioration of health systems and decentralization. Despite these challenges, results in several countries demonstrate that improvements in child survival are possible when quality services are available with well-trained personnel and the necessary drugs. The inclusion of the community as a partner in health care also contributes to higher quality services and increased use of health facilities.

The continent's HIV/AIDS pandemic threatens to compromise economic, social and democratic gains. To date, almost 19 million Africans have died of complications resulting from AIDS, over 80% of whom were in their productive years. HIV prevalence rates remain above 8% in 18 of 41 African countries, approaching 25% in Zimbabwe and 35% in Botswana. There are over 13 million AIDS orphans. Particularly in southern Africa, average life expectancy will be reduced significantly over next decade and a shrinking labor pool will slow the continent's growth rate by as much as 2% a year.

Continued high population growth rates threaten to undermine the best efforts to improve the well-being and economic livelihood of Africans. There is a strong correlation between higher incomes, better female education, and modern family planning practices. Fertility rates have started to decline in some countries, particularly in those with relatively higher incomes, but the annual population growth rate of the continent is expected to remain over 2.5% through 2010, the highest in the world. By 2020 the population of the continent will swell from 675 million today to about 1 billion, despite the effects of AIDS and declining birth rates. Contraceptive prevalence rates remain under 15% in the region, although the majority of women say they desire fewer children.

Democracy, Conflict Prevention and Humanitarian Assistance Political stability and inclusiveness, rule of law, and accountability in government inhibit the growth of terrorist activity, foster the growth of civil society and promote a more equitable distribution of economic assets and access to social services. There are promising signs that democratic principles are indeed spreading across the African continent. Civil society organizations continue to gain strength, basic principles of democracy are more widely understood, and citizens are more aware of their basic human rights. Nevertheless, a controversial electoral process in Cote d'Ivoire, the Liberian government's refusal to address its people's needs and the virtual collapse of democracy in Zimbabwe are reminders that the process is still fragile.

Violent conflict and instability will remain a serious risk for almost half the countries in the region in the foreseeable future. In 2001, 21 countries in Africa were involved in armed conflict or natural disasters, displacing over three million people. These humanitarian crises and complex emergencies disrupt lives, jeopardize economic development and threaten progress in the social sectors. Terrorist organizations find more fertile soil for exploitation of vulnerable people where conflict or disaster disrupt normal life.

Debt Issues High external indebtedness continues to burden much of Africa, although the picture this year is brighter than it has been for those 34 countries participating in the IMF/IBRD Heavily Indebted Poor Countries (HIPC) Initiative. Through HIPC, external debt is reduced to sustainable levels if qualifying countries pledge to apply the savings towards poverty relief. Most countries are channeling savings to health and education. With the adoption of the enhanced HIPC Initiative in 1999 most of the participating countries have actually seen their debt burdens begin to shrink for the first time in many years. Twenty-four African countries have arrived at a decision point where debt flows have been relieved, while three African countries (Uganda, Mozambique and Tanzania) have reached the HIPC completion point where debt is forgiven. Debt service as a percentage of GDP is expected to fall from an average of 3.7% to about 2% in coming years.

Global Development Alliance (GDA) Through the GDA, USAID will be encouraging the formation of new alliances with the corporate sector, foundations, universities and private voluntary organizations. There is considerable potential for the formation of such alliances in Africa, particularly in agriculture, education, health, environment, and information technology.

Program and Management Challenges

Post September 11 Security Issues Six of 22 USAID Missions and two of three Regional Offices in sub-Saharan Africa exist in critical and high threat security situations, leaving USAID employees at risk. Of these eight facilities, funding and building solutions are currently in place for only three. USAID will address these deficiencies through the proposed Capital Investment Fund to be established in FY 2003.

Staffing and Operating Expenses USAID is rationalizing the utilization of its personnel to optimize performance. Direct-hire field staff levels in Africa will remain at 215. Washington-based Africa Bureau staff levels will decrease with the transfer of a number of positions to the central bureaus. This will achieve programming efficiencies and enhance the quality of technical support services to Africa.

Other Donors The United States moved up from third to second overall among bilateral donors, trailing only the United Kingdom, in Overseas Development Assistance (ODA) levels to sub-Saharan Africa in 2000, displacing France, and remaining ahead of Germany and Japan. By far the largest ODA levels to Africa are provided through the major multilateral donors in Africa. These include the World Bank Group, which lends almost exclusively through its concessional International Development Association (IDA) window, the European Union, the African Development Bank and the United Nations agencies.

FY 2003 Program

The United States is committed to supporting strategies that address the most pressing challenges facing Africa today. USAID strongly endorses the bold new African-led approach represented by the New Partnership for African Development (NEPAD). NEPAD is a significant step toward the creation of an African-initiated strategy that offers concrete approaches to address some of the continent's fundamental development issues. The core of USAID's program in support of NEPAD will focus on enhancing the effectiveness of economic and natural resource utilization, combating infectious diseases, strengthening democratic governance, improving food security, promoting greater access to quality education and creating an environment more conducive to increased trade and investment.

In FY 2003, USAID will increase funding for its core programs in agriculture, child survival and health, democracy and conflict mitigation in Africa. It will work to improve Africa's trade and investment environment by continuing the Trade for African Development and Enterprise (TRADE) initiative begun in FY 2002, and will launch new initiatives to improve education, increase agricultural productivity and address corruption.

Economic Growth and Agriculture and Trade Broad-based economic growth is critical if Africans are to enjoy higher standards of living and if the continent is not to be marginalized in the new global economy. Studies show that agriculture is the most cost-effective engine of economic growth in Africa. USAID expects to inaugurate a major new region-wide initiative called Cutting Hunger in Africa and increase its funding for agricultural programs by over 23% from FY 2002 to FY 2003. USAID will direct its assistance to countries where food insecurity is greatest and where governments are committed to improving the conditions for increasing growth and reducing poverty. Increased emphasis will be placed on programs to improve the use of modern technologies, expand credit to farmers, strengthen producer/cooperative associations, improve the functioning of markets and encourage policy change to provide economic incentives for farmers and small scale entrepreneurs. Related efforts will be made to promote private sector-led diversification of the economic base, such as agro-processing, and to increase exports. The TRADE Initiative will continue to focus on six broad areas: (1) promotion of U.S.-African business linkages; (2) enhanced competitiveness of African products; (3) mainstreaming of trade into the development agenda; (4) improved delivery of public services supporting trade (e.g. customs); (5) building capacity for trade policy analysis (e.g. WTO training); and (6) strengthening the business environment. The initiative will seek to mobilize a coalition of U.S. and host country partners drawing from both the government and the private sector around a field-driven, trade capacity building agenda. Selected field Missions will develop five-year trade and investment program proposals. USAID will establish three regional "Hubs for Global Competitiveness" in west, east and southern Africa that will coordinate the initiative and support country-based activities to facilitate national competitiveness in global markets.

USAID will continue to focus its efforts in the environmental area on policy changes and capacity building in support of community-based approaches to natural resources management. USAID will also contribute substantively to broader donor efforts to reduce long term threats to the global environment, particularly climate change and the loss of bio-diversity. Finally, USAID will develop new approaches to respond to the environmental issues caused by the growing urbanization of much of the region.

In accordance with President Bush's announcement that USAID will take measures to address the critical need to increase educational levels for the economic and social development of the region, in FY 2003 USAID will launch a new education initiative and will increase its funding for the education sector by 28% over its FY 2001 levels. The initiative will target improved access and quality of education through increased funding of scholarships, especially for girls, improved teacher training, enhanced use of new learning technologies, and increased community involvement in education. USAID will also continue to support bilateral programs that address country-level education system reform.

Global Health and Population USAID's efforts to improve the health of sub-Saharan Africans focus on increasing the availability, effectiveness and access to quality health care. USAID will continue to combat the leading causes of maternal and child mortality and morbidity including malaria, TB, malnutrition, respiratory diseases, diarrhea and vaccine-preventable illnesses. USAID programs will increase immunization coverage, strengthen surveillance, enhance the skills of health care professionals, improve community and household practices for prevention and management of childhood illnesses, and develop innovative health care financing strategies. USAID will continue to support a range of family planning programs, including public education and behavior change communications, advocacy and outreach through traditional community structures, community-based distribution and social marketing of contraceptives and encouragement of child spacing practices.

HIV/AIDS has moved beyond being just a health problem in many countries in the region, particularly in southern Africa. It is now a major development issue that threatens economic and social progress across a broad front. USAID plans a major 36% increase in its funding for HIV/AIDS in Africa from FY 2002 to FY 2003. Programs will build on earlier successful efforts in Uganda, Zambia and Senegal, which include voluntary counseling and testing, social marketing of condoms, and behavior change communications strategies. USAID will continue to enlist the support of community-based partners, including faith-based organizations. Programs to prevent maternal-to-child transmission of HIV and care and support activities for persons affected by AIDS will be expanded. USAID will work closely with the Centers for Disease Control (CDC) which is placing field staff in many countries in the region.

Democracy, Conflict Prevention and Humanitarian Response It is now widely recognized by the donor community and by African leaders themselves that good governance, political stability and economic development are closely intertwined. Africa's better-managed economies 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 civil society and respect for human rights. Particularly promising are efforts to build principles of participation and good governance into programs in other sectors, such as environment and natural resources, education, and health care in ways that reinforce both work in those sectors and progress in democracy and governance as a whole. In countries undertaking decentralization of governmental functions, USAID will promote policy dialogue between citizens and public officials at the local level.

USAID will increase its funding of democracy and conflict prevention programs in Africa by 53% in FY 2003 and leverage greater impact through linkages with other sectors. USAID will launch a new initiative to address one of the region's most insidious development challenges, corruption. USAID will also expand its efforts to research and disseminate the tools to help countries prevent and address conflict by better understanding its root causes and to assist them with post-conflict confidence building measures.

Humanitarian crises, whether man-made or natural disasters, continue to buffet Africa and show no signs of abating. These emergencies threaten lives, economic growth, democratic progress and regional stability. USAID will continue to support efforts to build African capacity to better cope with the effects of these humanitarian crises.