The economic situation in Africa at the beginning of 1992

Abstract

At the beginning of 1991, our forecasts for that year reflected a definite optimism. The quick end of the Gulf war without an explosion of oil prices, the portends of a good agricultural year after the poor 1990 one, and the prospects of an early end to the recession in industrialized countries were factors in our forecast of a 3.3 per cent growth of the African economy in 1991. After a decade during which growth has averaged a mere 2.1 per cent, this meant that the region was probably starting on the way of recovery. In the event, the expected recovery in industrialized countries failed to materialize and the recession there appeared to be stronger than previously thought. In fact, according to DIESA, developed market economies (the "old" ones), did not grow at all in 1991, and according to the OECD secretariat, OECD economies as a group grew by 1.1 per cent only in 1991, the United States experiencing a 0.5 per cent drop in real GNP. These trends had a direct effect on world trade and on commodity prices. While world trade volume grew by 5.2 per cent in 1990, it increased by only 3.3 per cent in 1991, according to the OECD secretariat. Oil prices remained weak throughout 1991 at barely $20 a barrel and non fuel commodity prices fell to historical lows.