Progress Report: Economic Growth and Trade in Africa

11.15.07

Fast Facts

• The percentage of Africans living on less than $1 per day dropped from 47% to 41% between 1990 and 2005. Rates have been dropping over the past 10 years in countries such as Senegal, Mozambique, Burkina Faso, Uganda, Ghana, Cameroon and Cape Verde.
• Twenty African economies are growing individually at 5% or more, the most sustained economic growth in decades; Africa’s star economic performers are now on par with fast-growing Asian economies like Vietnam and India.
• 18 non-oil producing African countries have averaged growth of 5.5% over the past 10 years.
• A new wave of foreign investment injected more than $17 billion dollars into African countries in 2005, up from $6.4 billion in 2000.
• Inflation in sub-Saharan Africa decreased from 18% in 2000 to approximately 10% in 2006.
• Ghana and Kenya are among the top ten business climate reformers in the world.
  

Rwanda - Aid for Trade Promotes Coffee Exports

Private sector and USAID funding helped coffee producers in Rwanda to organize cooperatives, build washing stations, and meet coffee buyers. The investment resulted in Starbucks buying Rwandan Blue Bourbon coffee and highlighting it in 5,000 of its stores nationwide. In 2006, approximately 1,000 metric tons of fully washed Rwandan coffee was sold into U.S. specialty and gourmet markets at prices averaging $2.00 per pound. Commodity coffee - the kind that Rwanda used to produce - sells for just $0.60-0.75 per pound.

Lesotho - AGOA Spurs Trade, Investment and Infrastructure

The African Growth and Opportunity Act (AGOA) has given Lesotho the opportunity to export more than $300 million each year in clothing to the U.S. duty-free. As a result, the Lesotho apparel industry has grown to employ 45,000 people and has attracted foreign investment. Development assistance is also playing a role as the government is working with the Millennium Challenge Corporation to increase access to clean water in Lesotho’s industrial region and expand into production of fabrics.

Kenya - Cell Phones Improve Efficiency for Farmers

A new effort in Kenya is using cell technology to enhance profitability of rural farmers. Mobile phone subscribers have increased from 1 per 1,000 people in 1999 to 135 per 1,000 in 2005 in Kenya. The Kenyan Agricultural Commodity Exchange (KACE) has linked up with Safaricom, Kenya’s largest cell phone company, to equip farmers with up-to-date commodity market prices over their phones. For about $0.20, farmers can access commodity prices at markets throughout Kenya, allowing them to reduce transaction costs and bypass middlemen, who often charge below market rates.

Learn more about economic growth and trade in Africa 

• Microfinance for Africa's Future
• Trade's Individual Impact
• Woodhouse Furniture Factory in Accra, Ghana - Creating Jobs, Changing Communties
• Why Trade is Important for Africa
• The DATA Report 2007 Trade Chapter