Kofi Annan Africa has enormous potential as an economic giant. Its abundant human and natural resources have barely been tapped. Whether or not this potential is realized will depend on what happens with the peace agenda, how continuing political uncertainty in some of the larger economies is resolved and commitment to economic reform. Equally important, Africa' s prospects as we move into the next millennium will depend on how the continent responds to the challenge of globalization. While structural adjustment programs have had both positive and negative impacts, an important lesson learned from the economic reforms of the past decade and half is the realization that the state and the market have to be perceived as complementary vehicles for socio-economic transformation.
Economic performance varies considerably among African countries.
In those which are politically unstable, it has been impossible to uphold law and order, let alone maintain normal economic activity. It is such countries that pull down the GDP growth rate in Africa. In contrast, countries that are stable have fared better through implementation of economic reforms over the past decade or so. Botswana and Mauritius are the outstanding examples, both having enjoyed long periods of high growth with economic and social indicators better than those of most Sub-Saharan African countries. Exchange rates have been allowed to depreciate to more realistic levels, the most dramatic case occurring in January 1994 when the 14 member States of the Communaut Financi re Africaine devalued the CFA Franc against the French Franc by 50 per cent.