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Many analysts were initially optimistic that the impact of the global financial crisis on Sub- Saharan Africa would be negligible. Many African economies are among the least exposed to the global financial system, and African banks hold few of the “toxic assets” that helped spark the crisis. However, as the financial crisis has deepened into a global recession, most agree that Africa will be strongly affected. The International Monetary Fund (IMF) estimates that average economic growth in Africa will slow from an average of over 6% per year over the past five years to 1.5% in 2009. As a region, Sub-Saharan Africa is not projected to undergo a recession in 2009. However, most African countries are thought to require high rates of economic growth in order to outpace population growth and make progress in alleviating poverty. The mechanisms through which the crisis is affecting Africa include a contraction in global trade and a related collapse in primary commodity exports, on which many countries are dependent. Foreign investment and migrant worker remittances are also expected to decrease significantly, and some analysts predict cuts in foreign aid in the medium term if the crisis persists. Africa’s most powerful economies have proven particularly vulnerable to the downturn: South Africa is experiencing a recession for the first time in nearly two decades, and Nigeria and Angola have reported significant revenue shortfalls due to the fall in global oil prices. Among the many African countries seeking multilateral assistance are those seen as having relatively solid macroeconomic governance, such as Botswana, Ghana, Kenya, and Tanzania. The 111th Congress has monitored the impact of the global economic crisis worldwide. The FY2009 Supplemental Appropriations legislation (P.L. 111-32) provided $255.6 million for assistance to vulnerable populations in developing countries affected by the crisis. While an initial House report indicated several countries, including five in Africa, should receive priority consideration, the subsequent conference report did not specify recipients. More broadly, U.S. policy responses to the impact of the crisis overseas have focused on supporting the policies of multilateral organizations, including the IMF, the World Bank, and the African Development Bank (AfDB). These organizations have increased their lending commitments and created new facilities to help mitigate the impact of the global crisis on emerging market and developing countries worldwide. However, the U.S. government has not formulated bilateral efforts to mitigate the impact of the crisis in Africa specifically. This report analyzes Africa’s vulnerability to the global crisis and potential implications for economic growth, poverty alleviation, fiscal balances, and political stability. The report describes channels through which the crisis is affecting Africa, and provides information on international efforts to address the impact, including U.S. policies and those of multilateral institutions in which the United States plays a major role. It will be updated as events warrant. For further background and analysis, see CRS Report RL34742, The Global Financial Crisis: Analysis and Policy Implications, coordinated by Dick K. Nanto [ABSTRACT FROM AUTHOR]

Following the end of the apartheid era in South Africa in the early 1990s, the United States sought to increase economic relations with Sub-Saharan Africa. President Clinton instituted several measures that dealt with investment, debt relief, and trade. Congress required the President to develop a trade and development policy for Africa. The economic challenges facing Africa today are serious. Unlike the period from 1960 to 1973, when economic growth in Sub-Saharan Africa was relatively strong, since 1973 the countries of Sub-Saharan Africa have grown at rates well below other developing countries. There are some signs of improvement, but problems such as HIV/AIDS and the debt burden are constraining African economic growth. In May 2000, Congress approved a new U.S. trade and investment policy for Sub-Saharan Africa in the African Growth and Opportunity Act (AGOA; Title I, P.L. 106-200). U.S. trade with and investment in Sub-Saharan Africa have comprised only 1%-2% of U.S. totals for the world. AGOA extends preferential treatment to imports from eligible countries that are pursuing market reform measures. Data show that U.S. imports under AGOA are mostly energy products, but imports to date of other products have grown. AGOA mandated that U.S. officials meet regularly with their counterparts in Sub-Saharan Africa, and six of these meetings have been held. AGOA also directed the President to provide U.S. government technical assistance and trade capacity support to AGOA beneficiary countries. Government agencies that have roles in this effort include the U.S. Agency for International Development, the Assistant U.S. Trade Representative for Africa (established by statute under AGOA), the Overseas Private Investment Corporation, the Export-Import Bank, the U.S. and Foreign Commercial Service, and the Trade and Development Agency. In addition to bilateral programs, the United States is a member of several multilateral institutions that provide trade capacity building. In AGOA, Congress declared that free-trade agreements should be negotiated, where feasible, with interested Sub-Saharan African countries. Related to this provision, negotiations on a freetrade agreement with the Southern African Customs Union, which includes South Africa and four other countries, began in June 2003, but were suspended in April 2006. Several topics may be important to the 111th Congress in the oversight of AGOA and in potential legislation amending the act. First, S. 1141 (Feinstein, introduced May 21, 2009, the TRADE Act of 2009) seeks to establish a trade preference program for least-developed countries such as Afghanistan, Bangladesh, and Yemen. Second, an emerging area of concern for Sub-Saharan African countries is growing interest in Congress over reforming trade preference programs by combining existing programs, some of which are due to expire by the end of 2009, into a unified package. Some African leaders have expressed concern that a preference program giving trade benefits similar to those enjoyed by AGOA countries, or creating one trade preference program for all developing countries, would lead to erosion of the preferences granted to African countries under AGOA, and place them in direct competition for U.S. market share and investment with other developing and least-developed countries such as Bangladesh and Cambodia. [ABSTRACT FROM AUTHOR]

South Africa: Current Issues and U.S. Relations Congressional Research Service Summary Over a decade after the South African majority gained its independence from white minority rule under apartheid, a system of racial segregation, the Republic of South Africa is firmly established as a regional power. With Africas largest Gross Domestic Product (GDP), a diverse economy, and a government that has played an active role in the promotion of regional peace and stability, South Africa is poised to have a substantial impact on the economic and political future of Africa. The country is twice the size of Texas and has a population of almost 50 million, of which about 80% is African and 10% white. Its political system is regarded as stable, but South Africa faces serious long-term challenges arising from poverty, unemployment, and AIDS. President Thabo Mbeki resigned in September 2008 and was replaced by interim President Kgalema Motlanthe. South Africas next elections are scheduled for April 22, 2009. The African National Congress (ANC), which led the struggle against apartheid, has dominated the political scene since the end of apartheid, controlling the presidency, over two-thirds of the National Assembly, all nine provinces, and five of the nations six largest cities. Jacob Zuma, elected as head of the ANC in December 2007, is expected to be the partys choice for president after the 2009 national elections, despite a series of unresolved corruption charges. While the ANC continues to enjoy widespread support in South Africa, the partys dominance may be tested in the upcoming elections by the emergence of a breakaway party, the Congress of the People (COPE), which was created in response to the ANCs inter-party divisions that led to Mbekis resignation. South Africa has the largest HIV/AIDS population in the world, with almost six million South Africans reportedly HIV positive. The former Mbeki Administrations policy on HIV/AIDS was controversial. The country has weathered a series of corruption scandals, and continues to struggle with high crime and unemployment rates. Mounting social tensions related to the competition for jobs, resources, and social services led to an eruption of xenophobic violence against immigrants in mid-2008. The government and the private sector have undertaken a wide variety of construction and infrastructure projects in preparation for the upcoming 2010 soccer World Cup. South Africa has benefitted from steady economic growth in recent years, although economists predict weaker growth prospects for the near future. South Africa is considered to be one of the United States two strategic partners on the continent, along with Nigeria. Bilateral relations are cordial, however, the U.S. and South African administrations have expressed differences with respect to the situations in Zimbabwe, Iran, and Iraq, and U.S. officials have articulated frustration with the South African government on positions it took while serving on the United Nations Security Council. This report will be updated as events warrant. [ABSTRACT FROM AUTHOR]