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Economic Report on Africa 2002

Tracking Performance and Progress

image of Economic Report on Africa 2002

Africa was the only developing region to accelerate its growth in a turbulent year that saw the synchronized slowdown of all major economies and heightened uncertainty about prospects for the world’s largest economy. Yet Africa’s average annual GDP growth of 4.3% masks sharp disparities. This year’s report builds on the work of the two previous reports in laying out an agenda for Africa based on systematic benchmarking of economic performances. It begins with a discussion of broad economic trends in 2001 and prospects for 2002. It also reveals general improvements in policy. Finally, in a new feature, this report supplements the traditional region-wide analysis with seven in-depth country studies.

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Kenya—Weak Governance Hobbles Economy

Recent economic trends in Kenya have been disappointing, with GDP growth declining since the mid-1990s and falling substantially below the population growth rate, estimated at 2.4%. In 2000 real economic growth turned negative, dropping to –0.3%—its lowest level since independence—from 1.4% in 1999 and 1.8% in 1998. These rates are far below government targets of 2.7% for fiscal 2001, 3.5% for fiscal 2002, and 5.0% for fiscal 2003. Agriculture, which traditionally accounts for the largest share of GDP, shrank 2.4% in 2000, while real manufacturing output fell 1.5%. The balance of payments worsened, with current account and trade deficits increasing. Deteriorating economic and social conditions are also reflected in other key measures. Poverty has increased, and income inequality and social indicators show worrisome trends.

English

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