Gulf War Deepens Economic Troubles for African States
AFRICA'S economies, already deeply in trouble from high debts and lower world market prices for their exports, could be hard hit by the Gulf war. Even without the Gulf crisis on the world economy, a difficult external environment points to ``a dim prospect for African socioeconomic progress in 1991,'' says economist Adebayo Adedeji, executive secretary of the United Nation's economic commission for Africa.
As the Gulf crisis has worsened, oil prices in African oil-importing countries have risen, pushing up the price of local transportation, food (tied to transportation), and even the cost of manufactured goods, since most factories rely on oil.
In the face of oil shortages, Sudan, previously supplied by its ally, Iraq, recently doubled the price of gasoline. On the other hand, oil-producers have gleaned unexpected profits.
``The Gulf crisis [is] bringing higher costs and other economic difficulties to the majority of African countries that do not produce oil, as well as windfall earnings to Africa's few oil-exporting countries,'' Professor Adedeji says.
Oil import bills for Africa shot up by $2.7 billion last year, as the effect of the Gulf crisis set in, Adedeji said in his annual report on Africa's economy, released on Jan. 14.
But Africa's seven major oil exporters earned $10.5 billion more in 1990, of which almost half went to Nigeria.
Adedeji notes that many African nations are losing income from their citizens who had been working in the Gulf nations, including Iraq and Kuwait, but who have been forced to leave. It will cost these African governments to resettle their workers and absorb them into the local job market.
Countries such as Kenya and neighboring Tanzania, two main travel spots in Africa, also stand to loose millions of tourist dollars this year.
``People are afraid to travel,'' says Patrick Karani, a Kenyan economist for a private research firm.
As many as 10 to 35 percent of the expected tourists to Kenya this season had already canceled as the war approached, according to estimates by tourist industry officials here. Now, fearing possible terrorist attacks on airlines, many more travelers are expected to cancel.
In Kenya and Tanzania, the tourist industry is a main employer and source of foreign exchange used to pay off international development loans and to import many goods not locally made.
``How the average guy survives, I don't know,'' says a Kenyan tourism official.
A local restaurant manager laments that with the loss of tourists, ``competition would be tough'' as businesses like his scramble to attract more local residents.
But T. C. I. Ryan, a senior economist with the government here, says Kenya might be able to recoup some of its lost income from tourism if military personnel from the Gulf take furloughs in Kenya. Mr. Ryan also suggests that if the war drags on and further weakens Western economies, Africans could suffer.
Oil prices will be a key point, he says.