Africa 101
Agriculture accounts for one third of Africa's total GDP, two-thirds of its employment and 40% of its export revenues, but most of the continents foreign economic activity is still concentrated in the exploitation of the continents abundant mineral resources. However, foreign investors are increasingly becoming engaged in other sectors, with goods destined for export to the international market, where many African nations enjoy special duty free status.
Africa's prospects for economic growth have improved greatly over recent years due to reforms in macro-economic management and trade policy, as well as better governance. In the Africa Development Indicators 2007, The World Bank notes that "Many African economies appear to have turned the corner and moved to a path of faster and steadier economic growth." Economic performance in the decade until 2005 reversed the "collapses" of the decade ending in 1985, and the "stagnations" of the ensuing 10 years. The World Bank report continues, "For the first time in three decades African economies are growing with the rest of the world." Average growth in sub-Saharan eonomies was 5.4% in 2005 and 2006. The IMF's projection is 6.6% for 2007 and 5.8% for 2008.
Agriculture
Despite the importance of minerals, Africa's people remain largely dependent on farming for jobs and survival. In 2006 agriculture accounted for 14% of Africa's total output - slightly below its 17.2% share during the period from 1998-2000. The share of agriculture in indivisual economies range from 2.6% in Botswana to 58.7% in the Democratic Republic of Congo. Eleven countries recorded shares below 10% while five countries showed agriculture topping 50% of their GDP. Major food crops include casava, maize, millet, rice and sorghum. Prime exports are cocoa and coffee beans, palm oil, ground nuts, cotton, tea, sisal and tabacco. With food production steadily falling behind population growth during the past 30 years, Africa has become a net importer of food.
Trade
Over the past 10 years Africa's share of global exports and imports ranged between 2% and 3%. In 2005 China passed several of Africa's long-standing principal trading partners to take second place after the United States, ahead of the UK, France, Germany, Japan, Spain and Italy. Africa's merchandise exports increased by 20% in 2006 to almost $360 billion, showing a trade surplus of $72 billion.
U.S. total trade with sub-Saharan Africa (exports plus imports) continued to expand in 2006. According to the U.S. Department of Commerce total two-way trae in 2006 was $71 billion, up 17% from 2005. Exports, totaling $12 billion, were driven mainly by increases in machinery, aircraft, vehicles and parts, electrical machinery, and non-crude oil. U.S. imports, totaling $59.2 billion, were largely boosted by an increase in crude oil imports as well as platinum, diamonds, iron and steel.
Demand
Agricultural products find a ready market in most of Africa, with Egypt, Algeria, Morocco, Nigeria, South Africa and Ghana among the biggest buyers. The market for forest products in limited. The sale of chemicals and related products averages $1 billion per year, consisting of various organic chemicals used as feedstock, pharmaceuticals, and various finished chemical products such as soaps, detergents, cosmetics and toiletries. There is also demand for transportation equipment, consisting of construction and mining equipment, general aviation aircraft, motor vehicles and automotive parts. With the emphasis on infrastructure development there will be an increasing demand for construction equipment.
Regional Markets
The growing tendency in Africa to bolster markets by combining individual countries into regional groupings has been a boon to foreign exporters in recent years. By lovering or eliminating tariffs among the member states, these economic groupings facilitate crossborder marketing and distribution to an extended market. The Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the Economic Community of West African States (ECOWAS) are all in the process of becoming common markets. Intra-African trade is largely boosted by these regional entities.
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