Over the past 15 years, growth performance has been relatively poor in Southern Africa, as the region experienced slow growth, with declining levels of GDP per capita. It is unlikely that most countries in the region will meet the 6% growth levels required to halve poverty by 2015. However, the structure of the regional economies was such that they were competitive, rather than complementary. The objective of this section is to determine the economic structures, and the growth performances among countries, in the SADC region.
The SADC countries fall into two broad groups over the long-term: those that rely on agriculture and those that are mineral-based (see Table 6.1). The primary economic activity of the DRC, Tanzania, Malawi and Mozambique centres on the agricultural sector (World Bank, 2006).
According to Chauvin and Gaulier (2002), the Mauritian economy has, for quite some time, been driven by the agricultural sector, though sometimes the manufacturing sector outweighs the sugar industry as the main pillar of the economy. The mainstay of the Seychelles economy is services, as a result of the relative importance of its tourism sector. The mining sector also continues to be one of the most important sectors for most of the SADC countries, including Namibia, Zimbabwe, South Africa, Botswana and Angola. According to Mayer and Thomas (1997), the structural characteristics of the regional economies were such that they were competitive rather than complementary, with countries producing a similar range of primary products and competing for export markets. Indeed, the lack of a diversified production structure in the SADC region is frequently cited as the main obstacle to the successful integration of, and economic development in, the region.
Table 6.1. Economic structures of the SADC countries (% share of GDP), 1980–2005
Agriculture, value added Industry, value added Manufacturing, value Services, value added Country (% of GDP) (% of GDP) added (% GDP) (% of GDP)
**1980 **1990 *2005 **1980 **1990 *2005 **1980 **1990 *2005 **1980 **1990 *2005 Angola n.a. 17.9 8.0 n.a. 40.8 66.0 n.a. 5.0 4.0 n.a. 41.2 26.0 Botswana 11.0 4.6 3.0 45.1 56.4 51.0 5.3 4.9 5.0 43.9 39.0 46.0 DRC 25.3 30.1 46.0 33.1 28.2 25.0 14.3 11.0 4.0 41.6 41.6 29.0
Lesotho 24.6 23.4 17.0 26.5 33.7 41.0 n.a. n.a. 19.0 48.9 42.9 41.0 Malawi 43.7 45.0 35.0 22.5 28.9 19.0 13.7 19.5 11.0 33.7 26.1 46.0
Mauritius 12.7 12.1 6.0 25.9 32.2 28.0 15.3 23.6 23.0 61.8 55.7 66.0 Mozambique 37.1 37.1 23.0 34.4 18.4 30.0 n.a 10.2 15.0 28.5 44.5 47.0 Namibia 11.6 11.8 10.0 57.6 38.3 32.0 9.4 13.9 12.0 30.8 49.9 58.0
Seychelles 6.8 4.8 3.0 15.6 16.3 28.0 7.4 10.1 20.0 77.5 78.9 69.0 South Africa 6.2 4.6 3.0 48.2 40.1 31.0 21.6 23.6 19.0 45.6 55.3 66.0
Swaziland 23.7 13.7 12.0 32.0 43.4 48.0 22.3 35.9 39.0 44.3 42.8 40.0
Tanzania n.a. 46.0 45.0 n.a. 17.7 18.0 n.a. 9.3 7.0 n.a. 36.4 38.0 Zambia 15.3 20.6 19.0 42.6 49.1 25.0 7.8 14.0 12.0 42.1 30.3 56.0
Zimbabwe 15.7 16.5 22.0 29.0 33.1 28.0 21.6 22.8 14.0 55.3 50.4 50.0 Note: n.a. = not available.
Source:
* World Development Indicators (2006). The World B.ank **World Development Indicators (2001). The World Bank.
According to McCord (2002), during the late 1990s, only Angola, Malawi, Mauritius and Mozambique attained the 5% growth floor estimated to be a prerequisite for preventing an increase in the number of their citizens living in poverty, while the other countries in the region fell below such a floor (see Table 6.2). Angola, Malawi and Mozambique also reached the 6% growth target estimated as the condition for reducing poverty by half by 2015. Growth rates for 2000 indicate that, within the region, only Botswana and Mauritius may be able to sustain their GDP growth above the 6% target in the near future. All other countries in the region were found to be facing low-growth scenarios, indicating a continuing fall in GDP per capita, with the SADC average for 2000 falling to 2,8% GDP growth, while in the same year the DRC and Zimbabwe experienced severe growth reductions, of 15,0 and 6,1% respectively. According to the World Bank (2006), while, in 2005, Angola (15%), Mozambique (8%) and the DRC (7%) experienced considerable growth, above that set as the growth target for the Millennium Development Goal, Zimbabwe was the only country in the region that remained with negative growth, due to political unrest and its disadvantageous macro-economic policy. The SADC average for 2005 increased to 4,3% GDP growth, which meant that the SADC was doing better, though it was still operating at below the target level of 6%.
Table 6.2. Basic economic growth data for Southern Africa, 1990–2005
SADC Population GDP US$ GDP per capita Average Annual Real Growth
**Lewis (2001, cited in McCord, 2002).
According to the United States Agency for International Development (USAID) (2003), the barriers
to growth within the SADC region have been found to be substantial, including:
1) macro-economic policy, characterised by a lack of internal macro-economic balance, overvalued currencies, and high rates of inflation (Jenkins & Thomas, 2000, cited in USAID, 2003);
2) taxation and fiscal adjustment, characterised by a lack of indirect and direct tax policy co-ordination and the persistence of capital controls (Leape, 2000, cited in USAID, 2003);
3) trade policy, characterised by overlapping membership and incoherent rules of origin and trade tariff treatment of SADC member countries in different preferential trade arrangements (Chauvin & Gaulier, 2002);
4) foreign direct investment, characterised by political and economic instability; pervasive inept bureaucracy and inefficiency; a lack of regulatory transparency; an underdeveloped private sector; restrictions on movements of persons; the underdevelopment of capital markets and the persistence of capital controls; the lack of regional product standards; shortages of skilled labour;
low productivity, and undue restrictions on land ownership (Hess, 2000, cited in USAID, 2003);
5) micro-economic considerations, characterised by supply-side constraints relating to the provision of physical infrastructure, education and training, and finance; the transfer of technology and information; market development activities; political concerns regarding potential job losses from integration, especially in ‘sensitive industries’, as identified in the SADC Protocol on Trade;
the lack of definition of priorities for launching private sector growth, especially in micro-, small, and medium-sized enterprises; concerns about predatory behaviour by local, regional and international firms; substantial labour market differentials between organised labour in South Africa and workers elsewhere in the region; and underdeveloped human resource capacities (Maasdorp, 2000, cited in USAID, 2003).
In conclusion, positive outcomes of the regional neo-liberal economic stance have been a general reduction of fiscal deficits throughout the region and a significant decrease in general inflation during the 1990s and 2000 (see Table 2.2). Nevertheless, economic growth in the SADC region was found to be lagging behind other economic blocs in the developing regions, and the region’s GDP growth, at the time of this study, was still far below the target of 6% defined in NEPAD as being a minimum requirement for sustained economic development; accordingly, its contribution to food security is still in doubt. In addition, the features of the regional economies were competitive rather than complementary. Thus, non-diversified production composition in the SADC region is commonly quoted as being the key obstacle to the development of integration and economic advancement in the region.