Is Africa Awakening?
June 20, 1997
For years the International Monetary Fund has imposed economic austerity on African countries by encouraging currency devaulations, high tax rates and other measures that stifle growth, say experts. But recently there have been signs that some African countries are adopting market-oriented policies and beginning to benefit from them.
- From 1988 through 1994, at least seven African countries achieved asset privatizations exceeding 5 percent of industrial production per year, and this year 800 significant privatizations are expected in 17 African countries.
- In 1991, the average top tax rate in Africa exceeded 50 percent, but in recent years this has declined by nearly 8 percentage points, and the rate of taxation on average per-capita income has fallen by 7 percentage points.
- Adapting the annual Freedom House ranking of countries' freedom into a 100-point scale, the Alexis de Tocqueville Institution reports that the average African country has moved up the scale from 16 points in 1985 to nearly 40 points today.
- Data from Salomon Brothers indicate Africa's debt defaults are no worse than those of other developing regions.
Corporate consultant Michael Johns reports that African profit margins for major Western corporations are now running close to 25 percent.
Although many African countries still have problems that should not be minimized, analysts say that leaders there want greater trade, which they hope will lead to an economic boom. Congress has before it a bipartisan bill, supported by the White House, which would liberalize trade between Africa and the U.S. It is sponsored by Congressmen Phil Crane (R-IL) and Charles Rangel (D-NY).
Source: Jack Kemp (Alexis de Tocqueville Institution) and Rep. Donald M. Payne (D-NJ), "Africa Is Getting on the Growth Track," Investor's Business Daily, June 20, 1997.
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