Congress recognized the uniqueness of the continent's development challenges in establishing the Development Fund for Africa (DFA) in 1987. This bipartisan effort reflected the conviction that the United States has clear national interests in promoting broad-based, sustainable development in Africa; that aid to the continent is in keeping with America's national values; and that progress can be made as a consequence of a sustained effort.

Today, USAID's efforts are making a difference in the lives of millions of Africans. The Agency has focussed resources on the continent's most critical development problems and concentrated assistance in those countries committed to sound economic policies, good governance and democracy. As a consequence of new approaches and the political and economic reforms which have swept across Africa, USAID is achieving results. Just as investments in Latin America and Asia over the past three decades are now reaping returns, USAID's assistance to Africa today is laying the foundation for expansion of U.S. exports and economic growth in the 21st century. However, Africa's progress is fragile and could be reversed unless the United States is prepared to remain engaged on the continent over the coming decade.

The Administration is committed to maintaining resource levels to Africa that enable the United States to meet the challenges and seize the opportunities for sustainable development. The Administration's FY 1997 request includes reestablishment of the Development Fund for Africa appropriation to underscore the United States' commitment.

This aid -- which helps promote peace and prosperity for more than a half billion of the world's poorest people, prevents crises in the world's most volatile region, and fuels growth on a continent with tremendous potential -- costs each American less than a penny a day. It is a caring, cost- effective and forward-looking investment for Africa and for the United States.

DEVELOPMENT CHALLENGES -- Africa is the final frontier of development...

Africa faces the greatest development challenges of any region of the world. According to the 1995 World Development Report, 22 of the world's 30 poorest countries are in Africa. Great strides have been made in Africa in the past 25 years, but basic socio-economic indicators show that Africa's need for integrated development assistance is much greater than other continents.

There are numerous development challenges which make Africa unique.

U.S. INTERESTS AND PRIORITIES -- Why are we there? Why should we care?

Promoting Africa's development is in the U.S. national interest...

We must seize this opportunity for partnership with the countries of Africa because promoting trade and sustainable development in Africa is important for the United States as well as Africa..

President Bill Clinton, February 5, 1996

...USAID is making investments for the future...

Assisting Africa is in the national economic interest of the United States. USAID's investments in broad-based economic growth are helping grow markets for American goods and services. The United States is investing in its own economic future, as well as the future of Africa. Experience from both Asia and Latin America clearly demonstrates that the United States benefits directly from the economic expansion which American foreign aid helps fuel.

In fact, both the size of Africa's market and the U.S. share are expanding. In 1995, the United States exported goods valued at $5.4 billion to sub-Saharan Africa, a 22% increase over 1994. This level of trade supports about 100,000 American jobs. Over the past several years, U.S. exports to Africa have actually exceeded total American exports to the New Independent States by 20%. The growth of total African imports has been particularly robust -- averaging 11% per annum -- in countries that have pursued sound policies and realized economic growth. The business- oriented Financial Times (London) recently declared Africa to be the "final frontier of the world's emerging markets ...producing dramatic returns" for investors.

With a nascent but growing market and a population projected to grow to one billion by the year 2015, Africa has significant potential as a market for U.S. exports. These exports represent tangible benefits to Americans. At current growth rates, Africa would import U.S. goods and services worth $600 per American family in 2025. If the United States makes the investments Africa needs, and African governments continue to implement the kind of sound economic policies that have fueled growth in Asia and Latin America, the return to each American family could be as much as $2,000 annually. These are significant returns on the U.S.'s development assistance investment. They represent potentially millions of new jobs for American children and continued financial health for this nation.

...The United States is practicing preventive diplomacy...

The United States also has a strategic and financial interest in assisting Africa to prevent crises before they arise. Although firm foundations for economic growth are being laid, much of Africa is living on the edge. Food security and agricultural-led growth are made tenuous by adverse agro-climatic conditions and volatile world prices for exports of Africa's primary commodities. Ethnically diverse populations thrown together through the colonial occupation and limited experience with modern nation-building contribute to political instability.

Complex crises can quickly spiral out of control and cause tremendous suffering and loss of life. They can also spill across borders, igniting regional instability. These crises impose heavy burdens on the international community because of the high cost of emergency relief. For example:

Because Americans are a compassionate people, the United States will continue to respond with emergency aid to relieve human suffering and address the symptoms of crises. However, as custodians of taxpayers dollars, USAIDhas a responsibility to look beyond the crises and to invest in development programs that help redress the root causes of crises. To the extent USAID is successful in preventing crises or mitigating their destructive and costly impact, Africa can prosper and the United States saves money.

...and the United States is acting out its national values.

USAID's assistance program to Africa also reflects U.S. national values. Americans are a caring people, and this nation is premised on the philosophy that people should have the opportunity to make a better life for themselves. USAID's development assistance programs foster economic and political empowerment; the United States offers a helping hand, not a hand-out. Nowhere is the justification for foreign aid clearer and more compelling, in terms of U.S. national values, than Africa. It is a program that the American citizen can understand and support.

Finally, Africa matters to the United States because there are deep historical and cultural ties to the continent. With about 33 million Americans of African descent, as a nation the United States has a special interest in Africa's development.

USAID's assistance program to Africa mirrors U.S. foreign policy objectives.

The Administration has five foreign policy goals in Africa:

USAID's assistance program in Africa is one of the principal means of achieving these post-Cold War foreign policy goals.

Through the Development Fund for Africa (DFA), USAID has taken a longer-term approach to Africa's development, systematically addressing the root causes of underdevelopment -- economic, social and political. The Agency's sustainable development strategy represents an integrated approach to improve the well-being of the people of Africa, through:

ACHIEVING RESULTS -- IS USAID MAKING A DIFFERENCE? IS THERE ANY HOPE?

Absolutely. Good things are happening in Africa.

Political and economic changes have swept the continent in the last few years, enhancing the opportunities for growth and development. Nearly two-thirds of the countries in sub-Saharan Africa are consolidating their democracies after free and fair multi-party elections. Africa's new leaders are committed to broadening participation, and they are pursuing extensive economic restructuring programs, including privatization of state-owned enterprises, reducing government functions and budgets, stabilizing the economy, and deregulating so that the private sector can expand.

U.S. development assistance is critical to the successful political and economic transformations taking place across Africa. USAID is making a difference. Results are being achieved because American assistance is well focussedand well managed.

USAID is making progress in promoting broad-based economic growth...

...through smallholder agriculture...

In Ethiopia, USAID is creatively integrating development assistance (DA) and P.L. 480 Title III food resources to decontrol and unleash the rural economy. Transportation has been liberalized so that the private sector is now providing more transportation to market crops and at a lower price. As USAID also pushed for decontrolling fertilizer and expanded smallholder credit, fertilizer use has progressively increased, enabling small farmers to earn more money and helping Ethiopia produce its largest harvest in recent history. State monopolies on distribution and sale of basic food grains have also been eliminated, with the parastatal marketing board's market share declining from 40% to less than 4% and 83 retail stores privatized. Consequently, farmers are getting better prices for their products and consumer prices are more stable. Food security has increased significantly in Ethiopia through USAID's efforts.

USAID is providing critical assistance to increase rice production and marketing in Senegal, again combining DA and Title III to enhance impact. Through new technologies which USAID helped develop and introduce, land under rice cultivation expanded 20% and rice yields increased more than 20%. At the same time, some farmers have been able to start "double cropping" and others, especially women small farmers, are diversifying in higher value cash crops. USAID encouraged the Government of Senegal (GOS) to permit private importation and head-to-head competition with the rice marketing parastatal. Because the private sector was so much more efficient, the domestic retail price of rice declined and the GOS decided to liquidate all rice production and marketing parastatals.

Zambia, backed by USAID assistance, has liberalized its maize market, eliminated subsidies and decontrolled prices, resulting in new economic opportunities. One enterprising high school student started by buying one bag of maize from a surplus area and transporting it on his bicycle to a market in a drought area. He is now moving maize between districts, renting transport on large, 10-ton trucks. He has parlayed his initial investment of $8.50 into a total gross sales revenue of $574. As he has responded to free market incentives, this enterprising young Zambian increased his own income, while providing a valuable service to people in food-deficit areas.

As a direct result of USAID's Grain Marketing Reform Program in Zimbabwe, over 15,000 micro mills have sprung up, creating some 40,000 new jobs. At the same time, the price of corn, the country's staple, has dropped 20%; this directly benefits household food security and provides critical savings since poor Zimbabweans spend up to 70% of their income on food.

USAID's partnership with the International Rice Research Institute and the Malagasy Agricultural Research Institute in Madagascar has produced new rice varieties which double yields without fertilizer and which achieve 300%-400% increases with fertilizer. Nine new varieties of rice, suited for various situations, were released last year alone. Such advancements directly increase farmer income and improve both household and national food security.

...through small enterprises...

USAID's private sector projects encourage private investment and growth of the economy and generate income for Africans, typically through a combination of economic policy and financial sector reforms, provision of credit and business advisory services, and training of local entrepreneurs.

There has been an exciting expansion of microenterprises in Guinea through USAID support. Honey production has increased 800%, and onion marketing in 1995 jumped 1,300%. Two-thirds of the microenterprises that have received USAID-funded loans are owned and operated by women, and the repayment rate on loans is 100%. Most significantly, the program participants' assets have doubled, and they are generating thousands of new jobs as their small businesses expand.

In Guinea Bissau, in just two years, a vibrant market of cashew production and exportation has been developed with USAID help. Policy reforms have allowed a substantial increase in the number of small exporters, and USAID-funded technical assistance has improved domestic processing of cashews, with women being the primary beneficiaries.

USAID has achieved notable success in several countries in promoting non-traditional exports (NTEs) which benefit small producers and private enterprises, through policy reform and direct support. In Uganda, in just three years since inception, the flower industry is now exporting over $5 million annually and is poised for exponential growth. In Madagascar, exports of geranium oil, the key ingredient in the modern perfume industry, have doubled, and sales of other NTEs like spices and medicinal plants also are rising significantly. These investments are critical at several different levels, as they create new jobs, put money into poor people's pockets, and diversify African economies so that sustainable growth can be achieved.

...through rural infrastructure...

In Guinea, USAID is helping stimulate agriculture production and increase small farmer income through a highly successful rural roads program. More than 760 kilometers (about 475 miles) have been built, cutting in half the transport costs and transport time and expanding the availability of goods.

In Uganda, P.L. 480 Title III resources have helped rehabilitate 800 kilometers (about 500 miles) of rural feeder roads, similarly reducing transportation costs and time.

...and through human development...

Strengthening Africa's work force through improved health and better education is key to promoting broad-based economic growth.

Excellent progress has been made in improving child survival. Working in concert with the United Nations Children's Fund (UNICEF) and other donors to strengthen health service delivery systems, USAID support for expanded immunization and use of oral rehydration therapy is estimated to be saving the lives of 800,000 African children each year.

Just two years after project implementation, USAID's basic education program in Uganda has tackled the tough underlying constraints to rebuilding Uganda's shattered education system through policy conditionality and project assistance. Over two million children and 75,000 teachers have benefited by the reforms in primary education that came about as a result of USAID's program. The bloated teacher payroll has been reduced, and teachers' salaries are steadily improving. Implementation of staff controls has increased teacher accountability, improved school and classroom management, increased community participation, boosted student enrollment, and increased the proportion of trained teachers.

USAID has provided assistance to a program of interactive radio lessons in South Africa called "English in Action." The radio lessons and companion classroom materials are produced by the Open Learning Systems Educational Trust for pilot programs in four provinces. Students now using the daily lessons in these regions have tested significantly higher on skills tests than students in comparison groups. A teacher from Tsiitsibogo Public School speaks for her colleagues, saying: "In more than 30 years of teaching, I have never come across something so good as this."

USAID is making progress in stabilizing population growth.

Many African countries are on the brink of a demographic transition. As the leading donor in family planning, USAID has been instrumental in these changes. Probably one of the most dramatic examples of a demographic transition that has ever been recorded is happening in Kenya. Total fertility rates--the number of children a woman could be expected to bear in her lifetime--dropped from 8.1 in 1977 to 5.4 in 1993. This historic drop in fertility is due mainly to increased use of modern methods of contraception. Dramatic progress also has been made in Zimbabwe, where USAID is the largest donor by far in family planning; total fertility has decreased from 6.5 in 1984 to 5.5 in 1988 to 4.4 in 1994.

Even though infant, child and maternal mortality rates in Guinea are among the highest in the world, the population is rising rapidly with a fertility rate of 6.0 children per woman. As a result of USAID support for improved policies, the government has adopted a national population policy and developed a Family Code that promotes reduced fertility. USAID support for contraceptive marketing activities has led to a significant increase in the acceptance and use of family planning and HIV/AIDS prevention methods. Family planning services have been installed in two-thirds of the USAID-supported national health care centers and hospitals, providing over 30,000 couples with access to modern contraceptives.

USAID is making progress in protecting the environment.

Natural resources remain the foundation for economic growth in Africa. Across the region, USAID has invested heavily in innovative, community-based, natural resource management programs that raise rural incomes, protect the environment, and strengthen the role of communities in the economic and political life of their societies. USAID's support for community-based management of wildlife in Southern Africa, for example, has helped to shape a biodiversity conservation strategy with global applications.

Through demonstration activities and policy dialogue with the Government of Senegal, USAID has helped institute a new forestry code. As a result of the reforms, farmers now have the right to make forestry land management decisions, and an increasing number of communities have established woodlots for the sale of fuelwood and poles for construction. USAID also is promoting land reclamation through two very successful programs. In the south, anti- salt and water retention dikes have led to a 20% increase in cultivated land. In the north, encroaching sand dunes have been stabilized through tree-planting funded with Title III resources; other donors expanded on USAID's success so that, today, the entire northern coast covering 4,000 hectares has been reforested and is now Senegal's primary vegetable production zone.

Across the continent, USAID is developing African capacity to monitor environmental change and building famine early warning systems. In Malawi, to complement its agriculture diversification efforts, USAID helped developed a sophisticated geographic information system (GIS) so that the government could monitor, evaluate and mitigate, as necessary, the environmental impacts of new cropping patterns.

USAID is making progress in fostering democracy and participation.

During the past several years, promotion of good democratic governance has become an integral theme in the Agency's sustainable development programs throughout Africa. USAID has provided important assistance to the peaceful transition to and consolidation of democratic states and societies. While the sweeping political changes and democracy are an African phenomenon, coming from deep within a population tired of corrupt, dictatorial and ineffective authoritarian regimes, the United States has helped support the transformation. USAID has helped to empower ordinary Africans to add their voices to the process. Even in difficult circumstances, democracy is prevailing. Participatory approaches are paying dividends.

Mali has been steadfast in transforming itself into a stable democracy, even as other African countries have faltered. A March 1996 Washington Post article stated: "...Mali's move to permit the media free rein defies a trend throughout Africa,...Perhaps most important, Mali's government...has stepped away from oppressive economic policies employed by previous regimes." USAID has contributed to Mali's successes in democratic governance by funding civic education training and sponsoring seminars to improve financial management of municipalities, which helped one city to increase its revenues by 400%. USAID has helped Mali's President communicate his vision of a decentralized democratic system to the population. The first three administrative courts became functional with USAIDs help, and a media campaign has been launched to help Malians use the new courts effectively. USAID has supported, through the Human Rights Fund, activities by non-governmental organizations (NGOs) and associations in judicial reform, legal assistance, media professionalization, and the fight against female genital mutilation and discrimination against women.

After the horrific events of 1994 in Rwanda, there have been positive changes in the legal system which bode well for the future. Increased political will on the part of the government is now present to effect changes in the legal system. USAID and other donors have provided technical assistance to help Rwandans start to rebuild a non- functioning legal system and to develop strategies for the inquiry commissions to cope fairly with 50,000 genocide prisoners. These will permit genocide cases to be dealt with either by trial or plea-bargaining.

In Africa, USAID's focus on participatory approaches is paying dividends. In Zambia, USAID encouraged participation in a child health project design by requesting advice from all levels -- the Ministry of Health, other donors, NGOs, mothers and community health workers. Zambia's health sector reform is now at the forefront, prompting a high-level Ministry of Health official to state: "We are pleased with the participatory process. USAID has gone from not being involved at all in the health reform process to taking a leadership role."

In Uganda, USAID has supported the politically sensitive demobilization of 37,000 military personnel between 1992 and 1995, reducing the size of the army by approximately 40%.

In Ghana, USAID supported the registration of 9.1 million or 91% of the eligible voters for presidential and parliamentary elections to be held in November 1996.

Accountable, democratic governments are less likely to collapse into crisis. They are also less likely to be corrupt and more likely to pursue sound economic policies and broad-based, sustainable development. Similar to efforts here at home to reinvent government, USAID is helping Africa's new leaders make their governments smaller and more effective and give power back to the people, through: civil service reform and reductions; budget reductions and reallocations; privatization; deregulation; and decentralization.

And, USAID is making progress in preventing crises.

The United States has played an important role in averting natural disasters, facilitating peaceful political transitions and rebuilding countries decimated by civil war.

Several clear successes in averting natural disasters stand out. First, following the Sahel famine of the early 1970s, African states and donors organized a famine early warning system, developed more drought-resistant grains, and liberalized agricultural markets. These investments have helped avert disaster in the arid, drought-prone Sahel in the two decades since. Secondly, the drought that hit Southern Africa this past year may have been as bad as the 1991-92 drought when the U.S. provided over $800 million of emergency aid. In sharp contrast, this time around the countries of the region managed without emergency donor food aid because of new, drought-resistant varieties of maize, millet and sorghum developed with USAID support and more efficient and open agricultural markets promoted by USAID. Thirdly, in the Greater Horn of Africa last year, coordinated assessments and actions helped avert any major food shortages. The United States, with the host countries and major donors in the Horn, has developed a regional initiative to redress the root causes of food insecurity and instability.

The United States played a critical role in facilitating a number of peaceful political transitions which had the potential for political instability and crisis, including: South Africa, Malawi, Zambia, Benin and Mali.

Furthermore, Uganda, Mozambique and Ethiopia offer hope as countries which have been brought back from the brink of self-destruction through successful political transitions, economic stabilization, and initial growth which American efforts supported. The United States also has funded the demining of roads and the countryside in Angola to enable refugees to return home and to facilitate economic recovery.

Mozambique: A Transition Success Story

Ten years ago, Mozambique was a failed state, bankrupt, slipping into chaos and self-destruction as a consequence of civil war and Marxist policies. Today, that country has moved beyond crisis. Although daunting challenges remain, a fundamental political and economic transformation is taking place as a consequence of American leadership and effective assistance.

A decade ago, the situation in Mozambique was disastrous. The human suffering was almost incomprehensible. Countless thousands were dying as a result of the war. More than 1.6 million people had fled the country and nearly four million were displaced, fearful for their security and in search of food and survival. Overall life expectancy was and remains one of the lowest in the world (44 years). More than one child in four never reached the age of five. The protracted civil war had decimated the economy and food security. Per capita GNP declined 3.6% on average each year between 1980 and 1992, and food production per capita fell on average 2.1% annually.

Beginning in the late 1980s, the United States led a concerted effort to foster peace and stability and to start rebuilding the economic fabric and infrastructure of Mozambique. Working in concert with other governments, the U.S. provided leadership in forging a peace process, first a cessation of full-scale hostility, then the opening of a dialogue between the warring sides and, finally, the signing of peace accords in 1992. For years, the United States provided relief aid for refugees in surrounding countries, and USAID worked through a network of private voluntary organizations (PVOs) -- World Vision, CARE, Food for the Hungry, Caritas and many more -- to provide emergency aid to those suffering within Mozambique.

With the signing of the peace accords, USAID assistance was redirected toward rehabilitation and recovery and has made a significant contribution in the transition to democracy and development.

Clearly, Mozambique still has a long road to travel to achieve a full-fledged democracy, a completely open economy, and peace and prosperity. But the country is now on the right road. The political situation is stable, and growth has rebounded in the post-war period -- a solid 5.4% gross domestic product (GDP) growth in 1994. The government still faces key challenges in deepening democracy and strengthening economic policy-making. Nonetheless, the United States played an invaluable role in Mozambique's transformation.

Mozambique also illustrates that successful development saves money. Between 1987 and 1993, the United States provided a total of $373.3 million of humanitarian assistance to Mozambique, on average $53.3 million annually during that seven-year period. In FY 1994, this fell to $25 million; no non-food disaster assistance was required in FY 1995.

Botswana -- A Graduation Success Story

In September 1995, Botswana was "graduated" from U.S. development assistance -- the first African country to achieve a sustainable level of development. Over the course of 30 years, USAID made important contributions to the economic and social advancement of that country, including strengthening the voice of private enterprise, enhancing environmental management, slowing the population growth rate, and improving basic education and training.

The Agency believes this type of success story can be replicated elsewhere on the continent. Towards this end, USAID is formulating accelerated development strategies for several other African countries to enable them to graduate from U.S. assistance over the next 5-7 years.

However, progress is still fragile.

Progress, while significant, is still fragile. In supporting democratic transitions and preventing crises, there are setbacks along with the successes. Benin has just gone through a "second generation" democratic election and Malawi is consolidating its pluralistic democratic systems. Unfortunately, Niger's democratization process was undone by a military coup, and Nigeria human rights abuses continue to abound. Even as rehabilitation begins in Rwanda, ethnic tensions have flared in Burundi. The political transition in South Africa has been amazingly peaceful and stable and Angola has begun the process of national reconciliation and nation-building, but fighting and civil unrest continues in Liberia and Sudan.

PROGRAM AND MANAGEMENT CHALLENGES -- WHAT'S REALLY NEW OR DIFFERENT?

Africa -- the "cradle of reengineering"

Using the flexibility afforded by the DFA, USAID has been doing business very differently in Africa. The DFA's programs and approaches have been highly innovative. They are the "cradle of reengineering"; USAID's rich experience in Africa is guiding much of the Agency's broad reform efforts. Some of the fundamental principles put into practice under the DFA are USAID's core values under reengineering:

USAID continues to push the envelope to enhance the effectiveness of the Agency's aid program for Africa. Four of USAID's ten country experimental labs for reengineering were in Africa, and three of the six missions which will serve as learning laboratories in implementing the New Partnership Initiative (NPI) are in Africa.

Other areas of innovation being pursued in Africa include:

Managing for Results with New Programming and Budgeting Systems. USAID initiated the concept of performance "management contracts" in the Africa region in 1990. Field missions have formulated multi-year strategic plans which detail expected development impact, and USAID headquarters and the overseas mission then agree on a level of resources available to implement that strategy. Annual assessments of program impact have been conducted to monitor progress and enable USAID managers to make informed programming and budgeting decisions about what to replicate, reinforce or eliminate. These systems have greatly enhanced the effectiveness of USAID programs in Africa. Thus, as the Agency moved towards managing for results, it has modelled its new strategic planning and evaluation systems and the concept of "management contracts" under reengineering after these DFA systems.

USAID also developed a performance-based budget allocation system to direct funds to African countries undertaking sound economic policies and pursuing good democratic governance, since these conditions are critical to broad- based, sustainable development. The system also incorporates program performance criteria, measuring progress Missions are making towards their approved strategies, so that funds go where they are having a significant impact.

Enhanced Participation, Partnerships and African Leadership. A key principle of the DFA legislation was expanding participation of PVOs and Africans in program development and implementation. USAID has made significant progress in strengthening participation in the region, and these efforts have been deepened under the Agency's reengineering efforts.

USAID missions in Africa are making a concerted effort to expand participation and are contributing valuable lessons to the Agency as reengineering approaches are field tested. In fact, USAID is endeavoring to go beyond participation, to foster African ownership of the development process. This is critical both to maximize the impact of USAID assistance and to ensure the sustainability of U.S. development investments. As a consequence of viewing Africans as development partners rather than beneficiaries, USAID is doing business differently.

USAID has also begun systematically soliciting the views of non-governmental partners and organizations in the course of developing a U.S. position for consultative group (CG) meetings on African countries. For the Malawi CG, USAID convened a meeting in the field to discuss key development issues, such as increasing rural incomes, managing natural resources, improving the quality of primary education, especially for girls, and participatory democracy. For the Kenya CG, USAID met with U.S.-based groups concerned about human rights and democracy. In both cases, these consultations helped inform the U.S. position, providing valuable outside perspectives.

Reengineering also is changing the way USAID does business and enhances participation within USAID missions in Africa. USAID dismantled traditional office structures and staff relationships in the Senegal mission, adopting strategic objective teams as the cornerstone of its reengineered organizational culture. Wanting to focus more on achieving results and less on day-to-day processes, USAID mission staff realigned themselves into teams that for the first time could make decisions and were willing to be held accountable for them. The first result was a well- focused strategic objective that consolidated USAID's environmental and agricultural activities.

Donor Coordination. USAID also is strengthening partnerships with other donors through systematic coordination in a number of different but complementary fora:

These coordination mechanisms enable the U.S. to: influence the aid policies and programs of other donors; avoid duplication of assistance efforts; enhance the effectiveness of our aid; and leverage policy change from African governments. For example:

USAID's partners consider the Agency one of the pre-eminent leaders in the development community. Consequently, the U.S. exercises influence far beyond its resources. A separate development assistance appropriation for Africa has both practical and symbolic importance to U.S. development partners -- it says the United States continues to recognize Africa's unique challenges, that Africa still matters to the United States, and that the United States remains committed to supporting the African continent's economic, social and political transformation.

Crisis Prevention and the Disaster-to-Development Continuum. For too long, development investments and disaster responses were seen as distinct Agency programs, with little coordination and complementarity. USAID is now doing business differently so these resources work in tandem and are more effective. In the past two years, USAID's Bureauof Humanitarian Response and the Africa Bureau have coordinated closely in the provision of emergency relief and development assistance resources to move countries from disaster to development.

Rather than simply addressing the short-term emergency needs that are symptoms, USAID now uses humanitarian aid to attack the root causes. For example, U.S. PVOs that distribute food aid are incorporating this multi-purpose resource into a wider range of relief and development efforts, such as food-for-work programs in Ethiopia and Eritrea. At the same time, PVOs are strengthening the capacity of local institutions to undertake rehabilitation and development activities.

USAID also has expanded the programming of development assistance resources, using them to: establish crisis early warning systems; fund shorter-term recovery and rehabilitation activities; support democratic transitions; strengthen conflict resolution and mediation; and support military demobilization in those countries emerging from political crises, as in Uganda and Mozambique.

The focal point for this integrative approach will be the Greater Horn of Africa.

Regional Approaches and Initiatives. USAID is applying these new approaches in developing a long-term Greater Horn of Africa Initiative (GHAI). U.S. emergency aid and development assistance will be jointly programmed and integrated to help countries and the region make the transition from disaster to development. USAID will work with other donors and regional governments and institutions to address the underlying economic and political problems of the Greater Horn.

USAID will focus on achieving political stability and food security in the Horn, including:

Through the GHAI, USAID can help break the cycle of despair in this region.

As discussed in detail under their respective regional sections, USAID continues to support an Initiative for Southern Africa -- focused on enterprise development, democratization and conflict resolution, sustainable agriculture, and infrastructure -- and the Agency is developing regional activities to promote West Africa trade.

But USAID faces serious resource challenges.

Doing Less with Less

The Administration is strongly committed to promoting Africa's sustainable development. However, the key ingredients to achieving broad impact -- human resources critical to providing technical leadership and carrying on policy dialogue, and financial resources to develop new technologies and strengthen public and private institutional capacity -- are diminishing significantly. In response to the deep cuts this year in both program funding and operating expenses, programs in Africa were cut less than those in other geographic regions. Nonetheless, USAID is at the point where it must focus and concentrate resources in fewer countries, and possibly on a narrower set of development constraints with fewer interventions, in order to ensure that the Agency still achieves significant development results. In FY 1996, development aid to Africa is about 25% lower than in FY 1995 and, with the severe cuts in operating expenses, USAID will have fewer staff for overseas posts. Consequently, the Agency expects to maintain about a dozen full sustainable development programs, to accelerate graduation of several others, and to operate limited assistance programs in about eight other African countries.

Maintaining the Balance

An original intent of the DFA legislation was to provide greater flexibility in programming aid to Africa. Critical sectoral priorities were identified in the legislation, but the DFA was free of specific earmarks. However, since 1990, there has been a large increase in the proportion of social sector funding and a concomitant drop in aid for African agriculture and private enterprise development. This has been an incremental and evolutionary shift, as earmarks and targets increased and overall aid levels have declined. The situation in Africa clearly dictates that USAID provide substantial assistance to the social sectors. However, a balance must be maintained with productive sector investments. Even in the relatively more advanced Southern Africa region, a recent Southern Africa Development Community (SADC) meeting on poverty alleviation concluded that rapid growth in small-scale agriculture is essential for sustainable prosperity. It is only through growth in agriculture and small enterprises that broad economic growth and empowerment will occur in Africa, and only with such growth can advancements in environmental protection be maintained, health standards improved, family size decreased, and political stability achieved.

FY 1997 PROGRAM

Progress in Africa has been encouraging, but it is fragile; immense economic, social and political development challenges remain. USAID will continue to support integrated development programs with significant resources in African countries where many of the conditions for sustainable development are not yet in place but where we have good partnerships and effective programs. The Agency's investments and efforts are intended to help people and their societies prosper in the long-term and prevent costly crises in the short-term.

Encouraging Economic Growth Request: $343,600,000

Promoting broad-based economic growth is fundamental to the success of USAID's sustainable development strategy for Africa. American assistance must stimulate growth to move beyond dependency of individuals on the state and beyond dependency of African governments on donors. Thus, it is critical that USAID continue support for the twin pillars of African economies: smallholder agriculture and small and medium enterprises.

Agriculture remains the backbone of most African economies, affecting the well-being of virtually all Africans, in terms of household income and food security as well as the national economy. In FY 97, USAID's request will fund important agricultural development programs in most of the Greater Horn of Africa countries, including Eritrea, Ethiopia, Kenya, and Uganda, as well as major programs in Malawi, Mozambique, Zambia, Zimbabwe, Mali and Senegal. In addition, the ISA and GHAI will promote sustainable agriculture on a regional basis.

Because it is critical to diversify African economies, USAID will promote expansion of non-traditional exports and market liberalization in Ghana, Uganda and Guinea. With small and medium size enterprises serving as a dynamicsource of income and job creation, especially for women, USAID will support private sector expansion activities in Guinea Bissau, Kenya, Tanzania, Zambia and Zimbabwe. The new Southern African Enterprise Development Fund and infrastructure investments under ISA are critical to stimulating broad economic growth in the transitional region which could serve as an engine for growth and development model for other parts of the continent.

Finally, USAID is making important investments in human resource development which will reap long-term benefits. Requested funding will support on-going basic education programs, many of which target improving opportunities for girls, in Benin, Ethiopia, Ghana, Malawi, Mali, Namibia, South Africa and Uganda. Namibia and South Africa also have programs focussed on higher education needs, to redress the impact of years of apartheid and develop a cadre of highly skilled Africans for the public and private sectors.

Stabilizing Population and Improving Health Request: $228,000,000

Stemming Africa's high population growth rate is typically a strategic objective in USAID's full sustainable development country programs because there is great synergy with other USAID objectives: unchecked population erodes economic growth, undermines attainment of food security, exacerbates environmental degradation, and fuels instability. Thus, it is critical both to sustainable development and crisis prevention. Consequently, the request will fund family planning programs in Benin, Ethiopia, Ghana, Guinea, Kenya, Madagascar, Malawi, Mali, Mozambique Senegal, South Africa, Tanzania, Uganda, Zambia, Zimbabwe and a regional activity for West Africa.

Because infant and child mortality rates across Africa are still among the highest in the world, the Agency is continuing its significant assistance to strengthening health delivery systems and expanding immunization and oral rehydration therapy coverage to save lives. Again, most of USAID's full sustainable development programs include important efforts in child survival. Funding requested will benefit Angola, Benin, Eritrea, Ethiopia, Kenya, Malawi, Mozambique, Niger, Nigeria, South Africa, Tanzania and Zambia.

Finally, in this area, HIV/AIDS will remain a major problems in Africa for the forseeable future. In fact, in those countries hit hardest by the pandemic, infant and child mortality have begun to rise after falling for decades. USAID will continue its efforts to shift government policies towards active campaigns against HIV/AIDS and to increase public awareness of its causes and of the behavioral changes needed to prevent transmission of the disease. Requested funding will support critical efforts in Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia, Zimbabwe and a regional activity in West Africa.

USAID typically pursues an integrated approach in implementing these efforts in population, child survival and HIV/AIDS which serves to enhance impact and lessen management burden.

Protecting the Environment Request: $112,800,000

Because Africa's ecology is fragile, good stewardship of the natural resource base is vital to sustainable agriculture, and because agriculture is key to most African economies, sound natural resource management (NRM) is critical to sustainable development. Consequently, USAID programs which have an agricultural development objective are also commonly supporting development of sound NRM policies and host country institutional capacity to monitor environmental changes and early warning systems, as well developing and demonstrating new environmentally-sound technologies. Requested funding will support major NRM programs in Ethiopia, Malawi, Mali, Mozambique, Senegal, Tanzania and regional activities under ISA. The Agency will also fund critical biodiversity protection activities in Kenya, Madagascar, Uganda, Zimbabwe and innovative activities under the ISA.

Building Democracy Request: $66,300,000

The events of the past few years demonstrate that the African people want change -- they are demanding a role in shaping their political and economic destinies, and they expect their governments to be accountable and transparent. USAID support for democratization and civil society includes electoral support, strengthening democratic institutions such as a free press and independent legislatures and judiciary branches, developing non-governmentalorganizations, as well as promoting conflict resolution and demobilization of troops. USAID proposes funding for important democratic governance efforts in Angola, Burundi, Ethiopia, Ghana, Guinea, Kenya, Liberia, Malawi, Mali, Mozambique, Nigeria, Rwanda, South Africa, as well as regional activities under the GHAI and ISA.

The United States must reaffirm its commitment to Africa's sustainable development.

USAID has implemented high-impact programs which are directly improving the lives of millions of Africans. Innovative systems and approaches fostered under the DFA are serving as models for the rest of the Agency. The Administration is requesting reinstatement of a separate appropriations to underscore the United States' commitment to tackling Africa's complex development challenges in order to prevent crises and promote sustainable development. The $704 million requested for the DFA will be concentrated in those countries which are committed to sound economic policies and good democratic governance. At a penny a day per American, U.S. development aid to Africa is modest. Nonetheless, American assistance is providing hope for the future of this continent, and USAID is making investments which will benefit the United States -- reducing the likelihood of costly future humanitarian and disaster relief requirements and growing new markets for American exports. The proposed assistance for Africa is a critical and catalytic investment -- in improving the lives of millions of Africans, in strengthening the economic future of the United States, and in bettering the world we leave our children and grandchildren.