G8 mulls Africa's economy

West Africa is one of the poorest regions of the world

The world's leaders are meeting in Canada to discuss the prospects for Africa's development this week. News Online looks at the economic situation in Africa and the plans to tackle its poverty.

Sub-Saharan Africa is one of the poorest region's of the world, and produces only 1% of the world's gross domestic product despite being home to 10% of its population.

Trade, aid and debt will be given priority in the discussions taking place in Nigeria, Ghana, Sierra Leone and Senegal.

Africa key facts

1% of world's GDP

2% of world's trade

10% of world's population

Mr Blair's tour prepares for Friday's meeting of the New Partnership for Africa's Development (Nepad) - an initiative of 15 African countries to tackle issues of poverty, corruption and the introduction of good economic governance.

Nepad is modelled on the US Marshall Plan - which rebuilt Europe after World War II - and targets annual investment of $64bn.

Desperate for investment

Africa has suffered severely from the global economic slowdown, since many foreign firms have cut back on investment overseas.

Foreign investment is desperately needed to develop infrastructure, telecommunications and exploit natural resources such as oil, gas and valuable metals.

Tony Blair wants to open dialogue with African nations

But the Organisation for Economic Cooperation and Development (OECD) still predicts that growth in Africa this year will be at least two percentage points higher than in rich industrialised nations.

Africa's average growth rate is expected to fall slightly to 3.2% in 2002, according to the OECD. But high population growth means that this is a contraction in real terms.

Nepad says that an annual growth rate of 7% is needed in order to reverse the economic decline in Africa.

International Development secretary Clare Short, who is travelling with Mr Blair, highlighted the fast economic growth seen in countries such as Mozambique and Uganda.

And she stressed that global funding bodies, such as the International Monetary Fund and the World Bank, have been changing to ensure that poor countries take a key role in establishing their own development agendas.

Cancelling debt

Britain has already taken a lead in trying to relieve the continent's international debt.

Since 1997, Chancellor Gordon Brown has pressed fellow finance minister to write-off debts that cripple the poorest nations.

OECD growth forecasts for 2002

South Africa 3.1%

Ghana 5.8%

Zimbabwe -5.5%

All Africa 3.2%

He is expected to continue this drive at a meeting of G7 - the world's economic heavyweights - in Canada at the weekend.

And British aid to Africa has been steadily increasing.

Between April 1999 and 2000, Britain channelled about £500m into Africa through its international development department.

The flow of aid is expected to increase again in the 2000-01 year.

Mr Blair's trip is being heralded as somewhat of an ice-breaker, rather than a vehicle through which to forge actual agreements or trade pacts.

"It's about opening a conversation," said Mr Blair's spokesman, adding that the trip was not about grabbing deals.

And Mr Blair warned that the Western world faced renewed threats of terrorism unless it successfully tackled poverty issues.