Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

AFRICA

FY 1998 Development Fund for Africa . . . . . . . . . . . . . . . . . $700,000,000
FY 1998 P.L. 480 Title II . . . . . . . . . . . . . . . . . $262,147,000
FY 1998 P.L. 480 Title III . . . . . . . . . . . . . . . . . $19,900,000
FY 1998 Economic Support Funds . . . . . . . . . . . . . . . . . $25,000,000

"When we speak about Africa, we must of course recognize its great diversity. But many African nations have this in common: they are at a crossroads ... much of Africa is at a fragile mid-point, the point at which good leadership, sound policies, and steady international support and engagement can make the greatest difference. That's where the opportunity lies."

--Former Secretary of State, Warren Christopher

Introduction

Opportunities exist today in Africa that haven't existed before: increasingly, Africans define the solutions to their economic and political problems, chart routes to become full-members of the world economy, and strive, across the continent, to realize the potential of their people and their resources. Africa is changing because Africans are changing; and the United States, as USAID, is with them as partners in this change. Thus, despite the challenges facing the region and despite the seemingly inescapable crises confronting many African countries, great gains are being made in Africa, and being made at an increasing pace: This opportunity is unprecedented, but opportunity alone does not guarantee success. Wise leadership and thoughtful investments transform these opportunities into successes. Several phases of investment may be necessary to achieve that transformation, but the rewards -- to those whose lives are changed and to those for whom change makes real the dream of peace and growth -- are tremendous and give hope and inspiration to a continent.

The Development Challenge in Africa

In Africa, the overall economic outlook is improving, but daunting problems of debt, strife, environmental stress and inadequate investment remain.

It is in our interest to help the region's leaders overcome these problems and to build an Africa that is more prosperous, democratic and stable.

We know, however, that the primary impetus for development here, as elsewhere, must come from the private sector.

It is encouraging, therefore, that many African governments are facilitating growth through policies that allow private enterprise to take hold, while investing public resources wisely in education, health and measures that expand opportunities for women.

[If confirmed], I will place great emphasis on working with Africa's democratic leaders to broaden and deepen these trends.

-- Secretary of State, Madeleine K. Albright, January 8, 1997

Despite the opportunities, problems remain. The development challenges facing Africa are legion:

Africa's Needs Are Greatest

Socio-Economic Indicator

GNP per Capita

Life Expectancy (years)

Infant Mortality (/1000)

Adult Literacy (%)

Primary School Enrollment (%)

female

male

Total Fertility Rate

Annual Population Growth Rate

Africa

$460

52

92

57

64

77

5.9

2.7

Latin America

$3340

65

51

69

104

115

2.8

1.6

Asia

$639

68

41

87

105

108

2.9

1.8

Africa Matters -- to our self interest, to our foreign policy, and to our human compassion

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

"Today, Africa needs the support of all its many friends ... The United States will do its part, not only because it is right, but because it is in our national interest to help Africa succeed."

Former Secretary of State Warren Christopher, October 12, 1996

Africa shares its produce and people, skills and ideas with the United States everyday in important ways. The U.S. imports 15% of its total oil imports from Africa, with the world's largest oil reserves recently discovered in Angola and likely to further increase U.S. imports from that country. The largest gas fields in the world have just been discovered in Mozambique. Non-ferrous metals are imported from Africa, as are diamonds, cocoa, and coffee. Even small flowers are important: In 1960, a child with leukemia had a one in five chance of surviving; today, that child has a four in five chance of survival, thanks to the Rosy Periwinkle -- a wild flower of Madagascar's rapidly disappearing rainforest. African grain varieties are being used by agronomists today to strengthen U.S. wheat and corn seed, making them more disease and drought resistant. Beyond commodities and crops, Africa also brings us ideas. In her address to a USAID-sponsored "Lessons Without Borders" Conference in Baltimore last September, First Lady Hillary Rodham Clinton noted:

"here in Baltimore, we are seeing how grassroots strategies pioneered [by USAID] in Nairobi, Kenya, can be used to improve childhood immunization rates and encourage economic development in America. As you may know,Baltimore has increased its childhood immunization rates from 62 to 95% by adopting [these] simple strategies."

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

All USAID programming represents investment for the future -- for the independent and sustainable well-being of African partners. For FY1998, the Administration has announced a major new initiative to focus directly on enhancing the region's food security.

The Administration's Initiative "Promoting Food Security: Africa and Beyond" is a FY1998 budget request, designed to address a growing food and poverty crisis in Africa. Several recent projections all point to a major food gap emerging in Africa unless current trends -- rapid population growth, stagnant food production, and only modest income growth -- change. Some African countries are now beginning to change and are starting to provide the incentives and policy environment needed to get agriculture and food production moving. Elsewhere, civil strife, poor policies, and lack of investment mean continued stagnation and declining per capita production and nutrition. Striking statistics point to sharply increased numbers of malnourished children unless a concerted effort is made by both Africans and donors to turn things around. USAID has a strong track record and has traditionally been a leader in addressing food security issues (much of the hard-won success in several countries is due to USAID's past investments), but in recent years has been rapidly losing the resources needed for lasting results: the evidence of increasing malnutrition is particularly worrisome. USAID also remains committed to improving child survival and health in Africa. This new Initiative is innovative in its combination of health and agricultural resources to promote sustainable improvements in the health of Africa's children.

Agriculture and rural development are inseparable from economic growth in Africa -- in most countries, over 85% of the population earns its livelihood from the agricultural sector. By addressing major bottlenecks in agricultural policy, technology and rural infrastructure in several key African countries, this Initiative will support rural growth which in turn will enhance rural food security and rural health. It will also more tightly link food aid and development assistance resources, and focus on African "ownership" of programs and better sectoral coordination. In addition, the initiative will explicitly address the linkages between better nutrition and agricultural growth in selected countries. The Initiative will begin with a relatively modest pilot phase, focussed on the most promising countries in each region; the pilot will expand as USAID gains experience and begins to demonstrate results.

The cost of not acting now is high, and there is good evidence to demonstrate that investments made today are a win-win situation for both Africa and the U.S. economy. Past investments in international agriculture have brought exceptionally high returns to the United States in the form of increased exports and genetic improvements to U.S. crops.

Beyond investing for the future of Africa, the United States is also investing for the future well-being of Americans. Americans are not an isolationist people nor does America have an isolated national economy. U.S. businesses import from the developing world and export to the developing world -- American jobs depend on international trade. In addition, American, and European and Japanese, experience has repeatedly demonstrated that investments in broad-based growth in the developing world help develop markets for goods and services. American experience around the world demonstrates that the United States benefits directly from the expansion that American foreign aid helps fuel. But it requires American involvement.

This argument has been proven in Latin America and for Asia, but is it relevant to Africa? Yes. Not only is Africa's market growing, the U.S. share of that market is growing rapidly as well. Africa's market has been dubbed the "final frontier of the world's emerging markets ... producing dramatic returns for investors." With nearly $6 billion in exports to Africa, U.S. exports to sub-Saharan Africa continue to grow rapidly and continue to outdistance those to the states of the former Soviet Union. This level of trade supports more than 100,000 American jobs today -- but the implications of export growth are even more impressive.

... the United States is practicing preventive diplomacy ...

"[USAID] programs promote free market reform, privatization, job creation, democracy, the environment, the advancement of women and peace -- all of which contribute to American interests and reflect our values ... Measures to prevent famine, deter violence, and help people solve their own problems generally provide a greater dollar-for-dollar payoff than the contribution of relief funds after a crisis has occurred."

-- Secretary of State, Madeleine K. Albright

Practicing preventive diplomacy makes strategic sense, and it also makes economic sense: USAID estimates that nearly $300 was spent per Rwandan refugee during last year's crisis. While costs could have been higher had military intervention proved necessary, they could also have been much lower -- total U.S. development assistance to those countries with full USAID programs in place averages about $1.50 per person. Clearly, it is in the U.S. national interest to help avert these crises from both a humanitarian and a financial perspective.

The roots of these crises lie in poverty: inadequate incomes and nutrition, inadequate access to health and educational facilities, food insecurity exacerbated by fragile lands and drought. Such problems have been heightened by the political use of ethnicity across the continent and the historical failure of colonial, and many independent, governments to use the positive contributions of ethnic diversity in building strong nations and strong economies.

The risks of failure in this area are great, as are the benefits of success. Somalia, Liberia, and Rwanda stand as the most strident reminders of what is at risk. Yet Rwanda also offers hope: the end of 1996 did not see that nation torn apart again, but saw instead an amazing expression of faith in the new government as a million refugees returned home -- frightened at first, but peaceful and willing. The destiny of other nations, such as Angola, Sudan, and Zaire, are not yet clear. What is clear is that waiting for crisis to erupt is the most costly route -- for Africans and for Americans.

... and the United States is demonstrating its national values.

USAID's assistance program to Africa also reflects national values. Americans are a caring and compassionate 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 in Africa. It is a program that American citizens can understand and support.

Beyond compassion, Africa matters to the United States because there are deep historical and cultural ties to the continent. With nearly 15% of Americans of African descent, as a nation we have a special interest in Africa's development.

"We cannot and we will not walk away from Africa."

-- Former Secretary of State, Warren Christopher

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

The Administration retains five foreign policy goals in Africa:

USAID manages the foreign assistance program in Africa to achieve these post-Cold War foreign policy objectives. USAID has taken a long-term perspective on Africa's development objectives, to systematically address the root causes of its poverty and to lay the foundation for long-lasting improvements in average lives. The Agency uses investments in economic growth and social equity to achieve these long-lasting improvements, by: Achieving Results -- USAID has Changed, is Making a Difference, and there is Hope

USAID has changed and continues to learn ...

USAID programs in Africa continue to emphasize results, teamwork, and partnerships with Africans in the execution of U.S. development programs.

To improve the impact of the funds USAID manages, missions reorganized to focus more financial and human resources on the strategic objectives of USAID country programs. Program design and implementation more clearly emphasize results, and engage more and earlier participation of counterparts in defining and assessing results. Finally, program funds and staff are formally and increasingly being allocated on the basis of demonstrated results.

Reorganization, reductions in force, and reduced staff movement within the Africa region have all been dictated by tight operating budgets. This has placed increased urgency on USAID's efforts and technological capacity to work in teams within the Agency and with development partners -- utilizing technologies such as e-mail and video-conferencing to supplement USAID field presence with additional Washington-based expertise.

USAID has achieved this by making more and better use of regional offices and missions to provide leadership and an increasing array of technical and administrative support to bilateral USAID missions. At the same time, these regional resources have increased USAID's flexibility in the field by providing administrative coverage which has facilitated opening new USAID missions, such as Angola, closing out other USAID missions, and by assuming management of regional initiatives such as the Initiative for Southern Africa and the Greater Horn of Africa Initiative.

Teams have reached across and outside USAID to strengthen relationships with African partners. USAID looks to Africans to drive the decision-making process on how to best achieve joint objectives in Africa. The Greater Horn Initiative is the hallmark of a partnership effort, with President Isaias of Eritrea the most outspoken advocate for this approach and the success of USAID as its pioneer. Similarly, USAID's New Partnerships Initiative (NPI) has set new standards for collaboration with indigenous community organizations in Guinea and Kenya, and USAID and the U.S. PVO community continue working to improve collaboration and cooperation between institutions.

Together, these changes increase USAID's capacity to achieve results in Africa.

Changing Resources in Africa

Core Missions

US Direct Hire Employees

Development Assistance Funds

1993

23

382

$822 million

1996

13

250

$675 million

1998

12

228

$700 million

... USAID programs are making a difference in ...

Encouraging Broad-Based Economic Growth ...

"'Aid then Trade' is how it works in the real world . And why is this important to the United States? Foreign assistance creates trade opportunities and jobs and protects the public well-being here in the United States. One could conservatively estimate that our investment in foreign aid brings a return of at least $2 for every dollar of assistance."

-- J. Brian Atwood, Administrator, USAID, January 15, 1997

Investments in the productive capacity of African nations increase their ability to become self-sufficient in food grains, to market crops, to begin and grow small businesses, and to generate the incomes which lead to increased imports from the rest of the world. As incomes grow, nations and people begin to buy U.S. grains and tractors, U.S. pharmaceuticals and airplanes, U.S. cars and computers. Without production and productivity gains, incomes cannot grow and the capacity to import stagnates and declines. Thus, USAID begins with aid productively and equitably invested.

... in agriculture ...

By helping US universities and the International Rice Research Institute develop new varieties of grains, and by helping African countries adopt those technologies within an environment thatencourages private trading, Mali's grain production increased by 44% and Senegal's rice yields increased by 20% without fertilizers -- important steps toward food self-sufficiency.

In Malawi, agricultural marketing reforms continue to have significant impact on a growing number of rural Malawian families. The number of farm families actively participating in the program expanded to over 90,000 by last year, producing a variety of export and non-maize domestic crops for sale. Administrative controls on agricultural trade have been eliminated, and the Government has given up its previous monopoly trade position on smallholder crops. Incomes have increased, and families are sending their children to school, buying bicycles and radios, and fertility and infant deaths have declined.

Throughout the region, USAID's regional programs are working to improve the efficiency of African National Agricultural Research Systems to conduct research in staple crops and improve food security -- in one example, support to the potato network in East Africa since the 1980s made important contributions to the 40% increase in potato yield.

The Government of Mali privatized its four largest rice mills and allowed a private Malian to develop 7500 hectares of irrigated rice land -- thus opening the rice sector to competitive forces and large-scale private initiative for the first time. In addition, the value of non-traditional agricultural exports, including vegetable and flower exports to Europe, increased by 61% last year.

Trade in livestock, and important agricultural commodity in the Sahel, was increased, and profitability to producers and traders rose by as much as $10 million in 1995. This came about through agreements among several states in West Africa to eliminate trade barriers such as export taxes. USAID brought together representatives of the three countries' private sectors and policy decision-makers to define and implement the steps necessary to eliminate these barriers.

... in business ...

USAID's private sector activities encourage private sector investment and growth in the economy to generate jobs and income for Africans. Depending on local needs and opportunities, activities supported by USAID funding include economic or financial sector reforms, credit and business advisory services, or training of local entrepreneurs.

USAID/ Mozambique noted that "the sine qua non for both rapid economic growth and democratization is focussed development assistance interventions that are supported by policy reform." The U.S. business community engaged in active investment in Africa has told us exactly the same thing -- that reforms which control inflation and stabilize monetary variables are among the most important to U.S. firms doing business in Africa. Thus, it is significant that inflation has been reduced from 45% in 1995 to 20% in 1996, that commercial banks have been privatized, that over 700 state-owned firms have been sold to the private sector, and that the customs and tax sectors are undergoing reform with U.S. assistance. Such reforms set the stage businesses need to create Mozambican jobs.

The micro-enterprise program in Guinea has delivered nearly 33,000 loans of an average $240 to rural entrepreneurs, two-thirds of whom are women. With an overall repayment rate of over 98%, these funds primarily have been used to increase rural agricultural trade. Borrowers under this program have seen the value of their assets double.

Through the Leland Initiative, USAID is supporting the linking of researchers and other policy-makers across Africa through the Internet and other electronic communications systems. In nine African countries, including Ghana, Mali, Madagascar, Mozambique, and Guinea, theregional program is supporting the restructuring of telecommunications policy to promote sustainable, low-cost internet availability.

In Uganda, USAID has made crucial contributions to improving the agriculture and business environment and farmers and entrepreneurs are responding. Over 100,000 new small and micro-businesses began business in the past five years. In addition, over 6500 kms of rural feeder roads were rehabilitated with proceeds from P.L. 480 resources, helping expand internal and regional grain markets.

The Southern Africa Enterprise Development Fund is poised to begin disbursements to support indigenous small and medium scale business development, and has received support from participating countries through the recent signing of a Trade Protocol to establish a free trade area among 11 of the 12 countries in the region. The first six loans for small business development in the region -- accounting for over $1 million and including Namibia, Zimbabwe, and Angola -- are scheduled for presentation to the Board of Directors in February 1997.

The West Africa Enterprise Network (WAEN), an organization of second-generation African entrepreneurs, was created with USAID technical and financial support. In 1995, the WAEN began a service of monthly flash bulletins to its members in 11 West African countries to circulate information on trade flows, supplies, prices, volumes and transport costs. It also held a regional meeting in Ghana where it directly engaged with several banks on cross-currency transactions, signed an agreement with the French Development Bank for access to business loans, agreed on the analysis of transportation regulation to present to the heads of state of the Economic Community of West African States (ECOWAS) and scheduled a meeting with Air Afrique on dismantling the airline's virtual monopoly on freight transport in the region.

... in infrastructure ...

Transportation is critical to agricultural marketing and access to quality social services. Through USAID support in Mozambique, over 1200 miles of rural access roads, as well as a strategic bridge, have been demined and repaired, linking the north and south of this vast country and allowing local capacity to move surplus food stocks to food-deficit areas.

In Guinea, the rehabilitation of nearly 600 miles of critical rural roads has resulted in a one-third reduction in the cost of transporting agricultural commodities, including basic foodstuffs, within the country, has nearly cut in half transportation times, and increased trade in more valuable crops, such as tomatoes, by almost 40%.

... in basic education ...

Recent efforts, including donor coordination, policy reform, and grass-roots community development, all supported by USAID, are reaping dramatic gains in basic education -- gains which help remove impediments to foreign and domestic investment and continued economic growth on the continent: for the first time Malawi's drop-out rate for girls is lower than that for boys, the number of years it takes to complete primary school has declined in Benin, the Government of Guinea doubled its financial commitment to primary education, and the number of girls attending school continues to increase in Guinea (by over 60%).

In Ethiopia, USAID is helping rebuild the devastated basic education system. USAID contributed to improved quality and equity of primary education by providing support to the teacher training facilities and supporting increased numbers of women trainees.

In Uganda, four years of support to Government-led efforts to reform primary education have yielded significant results: 8,000 principals, teachers, and tutors -- representing 11% of theprimary teaching force -- enrolled in USAID-sponsored in-service training programs; policy dialogue with the Government tripled its support to primary education; primary school teachers now earn a wage they can live on ($72 per month); and, the Government monopoly on text book production and acquisition has been dissolved, resulting in a vibrant local industry and individual schools having control over their choice of instructional materials.

In Mali, USAID has supported efforts to promote community-managed and community-financed schools which contributed to increasing primary school enrollment rates from 22% in 1989 to 42% in 1995 and by another 9% last year, including increases in girls' enrollment from 16 to 34% over this same time period.

USAID regional programs highlighted the basic education problem in Africa, and now, through research and information-sharing, enhance the effectiveness of programming by supporting USAID efforts to build more effective and financially sustainable education systems, and to leverage an increasing level of country financing for primary schooling.

In Malawi, USAID encouragement and support has increased primary school enrollment by more than 50%, and its particular and insistent focus on girls' education has increased the numbers and proportions of girls in primary, secondary, and tertiary school levels.

Stabilizing World Population Growth and Protecting Human Health ...

Africa's population growth rate today is the highest of any region in the world at any time in history. Unless slowed, sub-Saharan Africa's population of 600 million will reach one billion by 2015 and 1.2 billion by 2020. Neither the land nor the governments nor the economies of the continent will be capable of supporting this level of growth or the resulting population level.

But there is cause to hope. Almost all African nations now have policies and programs supporting family planning. As a result of persistent effort coupled with broad donor support and coordination, growth rates have declined in Kenya, Zimbabwe, Botswana, and South Africa. Ghana, Tanzania, and parts of Nigeria, Africa's most populous nation, are showing promise of fertility declines.

USAID has provided the intellectual and financial leadership on these issues for over twenty years, and has been instrumental in the successes that are turning the tide on population growth in Africa.

In Ghana, the family planning program has succeeded in lowering the fertility rate by one child per woman, down from an average 6.4 to 5.5 children per woman between 1988 and 1993. This dramatic change in a remarkably short time frame is due to a doubling of the use of modern contraceptives; USAID expects HIV infection also to fall.

In Madagascar, as a direct result of USAID efforts to increase the number of health centers offering quality family planning and child survival services, the use of modern contraceptives more than doubled in one year, from 5% in 1995 to 11% in 1996.

In Benin, USAID has supported HIV/AIDS prevention activities primarily through the social marketing of condoms, community education campaigns, and institutional strengthening of the national AIDS Control Program. This emphasis saw condom sales expand seven-fold between 1990 to 1995, from 355,000 to 2.2 million. Child survival efforts have also increased through the social marketing of oral rehydration salts (ORS), training village health volunteers in diarrhea prevention and management, and through a grant to UNICEF to support related activities. As a result, ORS use in target regions increased three times, from 10 to 30% of the target population.

USAID remains particularly committed to reducing infant and child deaths and improving child survival. The infant mortality rate declined from an average of 113 deaths per 1000 live births prior to the Development Fund for Africa (DFA) in 1988, to 102 in 1993 and 100 in 1995 -- with reductions despite the negative effect of the HIV pandemic on child mortality. Seven African countries, including Kenya and Zimbabwe had infant mortality rates in 1993 below the international target of 75 deaths per 1000 live births.

In five Southern African countries, the infant mortality (IMR) and under-5 mortality rates (U5MR) have shown sustained long term declines: from an approximate regional average IMR of 135/1000 live births in 1970 to 100 in 1995 and from a regional average U5MR of 225 deaths/1000 live births to 150 in 1995, a decline of one-third. The same pattern holds for the West Africa region.

One common indicator of how well USAID is doing to improve child health is the use of oral rehydration therapy -- a sugar-salt clean water preparation designed to avert death by dehydration, particularly in young children suffering from diarrhea. In Malawi, the use of this therapy by families rose from 63% in 1992 to 78% in 1995.

In Mali, USAID support for full immunization coverage led to a dramatic rise from 5% in 1987 to 58% of all children in 1994.

... in mitigating the devastation of HIV/AIDS ...

In Africa, USAID is emphasizing a strategy of HIV/AIDS prevention and mitigation. Concurrent with implementing health sector programs aimed at preventing transmission of HIV, other development sector activities (e.g., human resource development, private enterprise, education, agriculture) are attempting to mitigate the adverse consequences, on society and the economy, of the premature adult deaths due to AIDS. The framework for HIV/AIDS activities are to increase the awareness of policy-makers of the impact of HIV/AIDS on their societies, focus on prevention of the infection, create sustainable programs, and emphasize continual program monitoring and evaluation. The strategic approaches of the Agency's HIV/AIDS prevention activities focus on reducing the sexual transmission of HIV, concentrating resources in key countries, developing public-private sector partnerships, conducting community-based approaches/interventions, expanding knowledge about sexual behavior and applying that knowledge toward the design of more effective interventions.

A major constraint is that investments in HIV/AIDS control are limited by the interests and policies of African governments. Other constraints include government absorptive capacities for preventive health and competing public health priorities. USAID has tailored its response to specific country situations, emphasizing interventions ranging from heightening the awareness and commitment of governments to combat HIV/AIDS to increasing the use of condoms and changing sexual behavior. USAID has emphasized community-based education programs focused on changing attitudes and behavior. Other activities include monitoring HIV/AIDS, increasing government and public awareness, assisting African countries with the development/implementation of AIDS prevention programs, and conducting applied research to improve preventive measures.

Preventing Crises and Building Peace and Democracy ...

"[The] hopeful trend toward freedom and democracy is neither inevitable, nor irreversible, nor has it extended to the real lives of hundreds of millions of people across the globe ... we must continue to stand up for the proposition that all people ... should have a chance to live up to their potential."

-- President Bill Clinton, December, 1996

GHAI works closely with the Intergovernmental Authority on Development (IGAD) in the Greater Horn of Africa, supporting their leadership in addressing pressing regional problems such as food insecurity, crisis prevention, post-crisis rehabilitation, and development. With GHAI support, IGAD has revitalized itself to take on a broader role in regional consensus building and cooperation regarding these issues. The IGAD charter has been expanded to include conflict, and the governing structure and secretariat have been reorganized to create greater efficiency in operations and increasing responsiveness to regional crises.

In Angola, U.S. national interest and natural compassion combine. Currently, seven percent of U.S. petroleum imports come from this troubled country where U.S. firms have investments worth some $3 billion. U.S. interests are growing, with petroleum imports scheduled to increase to 15% of the total within five years. Yet the country has been savaged by civil war. U.S. efforts to establish a lasting peace between factions has been supported by an emergency food aid and medical interventions program estimated to have saved hundreds of thousands of lives. In addition, USAID has helped resettle 215,000 internally displaced Angolans with food, seeds, tools, resettlement kits, and some agricultural training. Nearly 1,000 Kms have been demined along with thousands of acres of agricultural lands. USAID's support to Angola evolved considerably in 1996 with the opening of a resident mission and through the expansion of the program to strengthen civil society -- with a focus on human rights and civic education.

Last year, South Africa solidified its transition to a pluralistic democracy: a new constitution and bill of rights were drafted, local elections were successfully held with local and provincial governments becoming more organized, non-governmental organizations are remaining active in political debate, the judiciary is being reformed, human rights are being promoted, and freedom of expression is a reality.

In Rwanda, the achievements of the post-1995 crisis period have been remarkable. The USAID/Rwanda has defined the principal challenges facing a transition from crisis to development; they are promoting social stability, gaining increased confidence in judicial processes and democratic governance, promoting resettlement and reintegration into the economy of all Rwandans, and seeking and supporting African-led efforts to extend stability and return to development. When recent conflict in Zaire precipitated the return of nearly one million refugees to Rwanda, the strength and resilience of the Government of Rwanda was tested; the world prepared for disaster. Rather than nightly broadcasts of resumed fighting, however, the world saw cautious but continuous streams of refugees returning to Rwanda. That nearly one million returned is testimony to Rwandan willingness to trust the newly strengthened judicial and democratic systems -- systems strengthened under the guidance of African partners with USAID assistance. USAID assistance also helped reunite over 5,500 children with their families, and increase agricultural production to nearly 4/5 of its pre-war level. But the peace remains fragile and susceptible to unrest in Zaire.

Ghana saw successful general elections which strengthened the country's efforts to consolidate democracy and increase participatory development. Non-governmental institutions, including public policy and research institutions, are numerous and actively engaged in raising awareness and encouraging public debate on all aspects of economic, political, and social issues facing Ghanaian society. The private media, particularly print media and radio, have expanded significantly over the past few years, offering alternative views, including criticism of government, on a wide range of policy issues.

In Ethiopia, USAID-supported legislative and executive elections at the regional and federal level were lauded as effective by the international community. The newly elected Parliament will help resolve inter-regional disputes and facilitate efficient and effective appropriation of funds to regional and federal activities. In addition, the last year has seen increased resources flow to strengthen the institutional capacities of local NGOs and to improve their legislative and regulatory rules.

Protecting the Environment ...

The international community identified Madagascar as "the single highest biodiversity priority in the world" due to the combination of the great variety of species found nowhere beyond this island and the tremendous threat to the existence of plants and animals posed by human poverty and public mismanagement. To protect these resources, USAID has supported activities to increase the stake local community residents have in the maintenance of their natural resources -- local community groups now retain half of park-entry fees and a share of rising forest-cutting fees. Land protected has increased, tourism has increased 108%, and local revenues increased 44%. Developed with assistance from USAID, this last year saw the first environmental impact law adopted.

Community-based management of the environment and natural resources has been the hallmark of USAID's program in Zimbabwe. As USAID country program heads toward graduation, increasing attention has been paid to ensuring that a durable policy and operational framework is in place for the long-term protection of these resources. Thus, it is especially encouraging that Zimbabwe's widely regarded and community-based CAMPFIRE program has more than doubled the number of districts in which it works -- now covering some 57 districts representing most of the country. The CAMPFIRE program gives local community residents a financial stake in maintaining the long-term usefulness -- while improving the actual management -- of its natural resources. At current levels, CAMPFIRE is now shifting more than $1 million per year to local groups while at the same time reducing poaching in Zimbabwe's parks.

The Central African Regional Program for the Environment (CARPE) is an example from the environment sector of USAID working successfully with other donors to achieve significant results. Together with the EC and the World Bank, USAID is creating an international awareness and developing a strategy to address the issues of deforestation and loss of biodiversity in the second largest rainforest in the world located in the Congo Basin, thus ensuring that this valuable resource is managed in a more sustainable manner.

and Providing Humanitarian and Emergency Assistance ...

For 1996, USAID provided some $436,000 in humanitarian and emergency assistance -- Title II and Title III Food Aid plus OFDA and OTI resources -- to 13 countries in Africa. The major recipients of these resources were Rwanda, Ethiopia, Liberia, Angola, and Sudan. With the world's highest numbers of refugees, funds were provided primarily to assist in refugee camps and with resettlement efforts.

Building Peace and Making Peace Work -- the Uganda Transition story

Too often, development seems a series of discrete actions and abstract numbers -- a growing proportion of the population using oral rehydration therapy, greater non-traditional agricultural exports, or more girls in school. It can be difficult to see in the accumulation of these actions and numbers a success that fundamentally transforms a society, moving it from decades of domestic turmoil to a land of hope and promise for its people and the people of its region. The Uganda example helps tell that story.

Just 11 years ago, Yoweri Museveni became Uganda's President, presaging a period of peace and prosperity for this small nation. After the new government's troops swept through Kampala and its agricultural lands, families returned to their fertile farms in Luwero. Pyramids of bones and skulls stood in mute testimony to the suffering of family members; yet people returned -- the land was fertile, the future held a tangible hope of growth through rehabilitation.

The North was different -- as lands of former oppressors Amin, Obote, and Okello, retreating armies were pursued aggressively; as productive cotton and sesame farms supporting state-owned processing facilities, productive capacity was decimated by neglect; and as the region closest to Sudan, a thriving regional trade was disrupted and replaced by a staging ground for mountains of relief supplies en route to southern Sudan. Empty fields and dilapidated processing plants stood their own testimony to neglect. People did not return -- they had never left their impoverished lands. The future shouted its challenge of basic and broad-based economic development to give the North an equal stake in a prosperous and stable Uganda.

Museveni inherited little beyond the determination of the Ugandan people: a nation needed to be rebuilt, the infrastructure developed over half a century, and destroyed during decades of war and neglect, needed to be recreated, and a people ravaged by war had found a new scourge -- AIDS. One of only a few bilateral donors present at the end of hostilities and active when the World Bank was just moving in, USAID began to work in close partnership with Ugandans to build their peace and make it work. Early efforts facilitated return of displaced Ugandans, seeds and tools were provided to returning soldiers and credit to returning farmers. USAID worked with the IMF, World Bank, and other donors to stabilize the economy and rehabilitate financial institutions as well as key economic infrastructure such as roads and bridges. USAID worked with the people to help heal the wounds of AIDS and war.

As the peace became established, USAID's program shifted to help Ugandans make the peace work by increasing access to and investment in a thriving economy and prosperous future. Over the last five years, USAID has made crucial contributions to improving the agriculture and business climate in the country, and farmers and entrepreneurs are responding. More than 100,000 new small and micro-businesses have been established in the last five years, and agricultural sector growth has exceeded 5% a year since 1991. Coffee exports, principally produced by smallholders, grew by 16% last year,with high value non-traditional crops, such as flowers and vanilla (grown by women), showing 26% growth per year. Total annual agricultural exports -- to the region and beyond -- grew four-fold between 1990 and 1995, with maize and bean exports enhancing regional food security. Infrastructure remains critical, and P.L. 480 Title III resources financed the rehabilitation of over 6,500 kilometers of rural feeder roads.

At the same time, USAID investments have emphasized social equity. Thus, investments in primary education have achieved significant results for ensuring future participation in economic growth by all: 11% of the primary school labor force -- teachers, principals, and tutors -- have been trained with USAID support; Government of Uganda resources for primary education tripled, and primary school teachers are now paid a living wage -- up from $8 per month to $72 per month. Books and materials are now competitively purchased at a lower cost, and can be selected directly by schools to meet their needs. After years of few students or teachers, fewer schools, and no materials, Uganda has created a professional cadre of primary school teachers committed to students and equipped with 1.5 million text books purchased last year alone. Gross enrollment of the school-aged population increased from 55% to 73% by last year. USAID is continuing to work with Ugandans to expand this ratio to 85% by 2002, and to make this investment level financially sustainable.

USAID has also worked closely with Ugandans on issues of maternal and reproductive health, HIV/AIDS and sexually transmitted disease, and fertility. Important gains have been made, though much remains to be done. USAID has worked with Ugandans in developing major and continuing initiatives to upgrade the skills of health care providers in family planning and maternal health, mass-media communications, community education, contraceptive social marketing, and HIV testing and counseling. Although cause and effect are difficult to establish, it appears that USAID's efforts have had an impact on reducing fertility by nearly 10%, infant and child mortality by 20 and 17% respectively, and stabilized or reduced sero-positive cases among women visiting ante-natal clinics in Kampala -- and it appears that this may be the result of reducing high-risk sexual behavior.

Reflecting on the schism between north and south 11 years ago, it is the gains in the political arena that speak most strongly to national reconciliation. From dictatorship and coup, the country moved to establish democratic principles and test them over the last two years. In 1995, a new constitution establishing Uganda as a representative democracy was adopted. In 1996, successful democratic elections were held at the presidential and parliamentary levels.

Thus, a democratic transition coupled with pro-business monetary and economic policies and pro-equity social investments have led to increased security, renewed investor confidence, and supported robust economic growth (nearly nine percent last year). But much remains to be done, and a durable peace is still in the making:

Continued investments in the democratic sector, in economic growth and the social sectors, and in the environment are required to make the peace hold and give everyone a stake in a stable future.

... Thus, though the progress is fragile, there is reason to Hope -- not only in Uganda, but throughout the Greater Horn of Africa and beyond.

The FY 1998 Budget Proposal

Progress in Africa, and performance of USAID programs in Africa, is real and encouraging. But challenges remain, and investments in economic growth combined with increased social equity and improved democratic participation are required to ensure that the gains remain real and sustained. Such investments will serve to help people help themselves and prosper over the long-term and avoid costly relief efforts in the short-term.

Encouraging Broad-Based Economic Growth Request $ 335,900,000

Promoting broad-based economic growth is fundamental to the success of USAID's sustainable development strategy in Africa. American assistance must stimulate growth to move beyond dependency of individuals upon the state and of states upon donors. Thus, it is critical that USAID continue support for those sectors that promote the health and independence 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 and the national economy. Small and medium scale enterprises are also vital to the health of African economies because this is the source of job growth and diversification of production. Thus, USAID will support the expansion of non-traditional export and market liberalization and small and medium enterprise development.

For FY1998 USAID requests Development Funds for Africa and Economic Support Funds to support agricultural and small and medium scale enterprise development in Angola, Benin, Eritrea, Ethiopia, Ghana, Guinea, Malawi, Mali, Mozambique, Namibia, Senegal, South Africa, Uganda, and through regional programs in the Greater Horn of Africa (GHAI), the Initiative for Southern Africa (ISA), and the regional support program. In addition, USAID expects to provide an additional $19,900,000 in P.L. 480 Title III assistance to Eritrea, Ethiopia, and Mozambique.

Food Security Initiative: ($25,000,000)

Not requested as a separate account, but significant in its intent and potential impact, USAID is proposing a new Food Security Initiative in Africa. Recognizing the increasing threat to food security in the region posed by trends in agricultural production and population growth, the new initiative will underscore policy, technology, and infrastructure constraints to enhancing food production and marketing. In this pilot year of a ten-year effort, USAID will highlight programs in Ethiopia, Uganda, Malawi, Mozambique, and Mali to increase attention and resources on these constraints. At the same time, these resources and programs will be supplemented by activities proven to enhance child survival. USAID's goal for this program over the ten-year period is to increase child survival by increasing access to food and other services so as to reduce child survival rates in a sustainable manner.

Stabilizing World Population Growth and Protecting Human Health $241,300,000

Stemming Africa's high population growth rate is a typical strategic objective in USAID's full sustainable development country programs, because there id great synergy with other USAID objectives: unchecked

population growth erodes economic growth, undermines the ability to reach food security, exacerbates environmental degradation, and fuels political instability. Thus, it is critical both to sustainable development and crisis prevention.

Infant and Child mortality rates in Africa remain the highest in the world, and USAID will continue its significant assistance to strengthening health delivery systems and expanding immunization and oral rehydration therapy coverage. Of increasing importance, however, is the positive relationship between food security and child survival. Therefore, those countries selected to participate in the new Food Security Initiative are those where need and opportunity combine to suggest that important gains in child survival can be gained -- USAID will be watching performance in these countries closely. Since child survival is so important, USAID programs in this area are extensive.

Finally, HIV/AIDS is and will remain a major health and economic problem in Africa for the foreseeable future. USAID will continue its efforts to increase public awareness of its causes and of the behavioral changes needed to prevent transmission of this disease.

In population, child health, and AIDS/HIV area programming, USAID's FY1998 request will support activities in Angola, Benin, Eritrea, Ethiopia, Ghana, Guinea, Kenya, Madagascar, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia, Zimbabwe, and through regional support programs for Africa and West Africa. Of the total funding requested, $86.6 million is planned for population activities and $154.7 million is planned for health activities.

Protecting the Environment Request: $100,500,000

Africa's lands are fragile and subject to uncertain rains and drought, yet it remains a continent of vast but still-untold natural resource wealth. Thus, managing the natural resources (NRM) of this immense continent is vital to sustainable agricultural production and far beyond. USAID programs that have agricultural development as an objective are also commonly supporting development of sound NRM policies and host country capacity to monitor environmental changes and early warning systems. Such programs also develop and demonstrate environmentally sound production and processing techniques. For FY1998, USAID proposes funding major NRM programs in Ethiopia, Ghana, Madagascar, Malawi, Mali, Mozambique, Senegal, South Africa, Tanzania, Uganda, Zimbabwe, and in regional programs such as the GHAI and ISA.

Building Democracy Request: $67,200,000

Africa is changing. No longer a continent of dictatorship and authoritarian regime, Africa's people are demanding increased transparency, accountability, participation in national economies and government and governments are becoming increasingly free and democratic. USAID support for democratization and civil society includes electoral support, strengthening democratic institutions such as free press and independent legislatures and judiciary branches, developing NGOs, as well as promoting conflict resolution and demobilization of troops. For FY1998, USAID proposes funding for important democratic governance efforts in Angola, Burundi, Ethiopia, Kenya, Liberia, Madagascar, Malawi, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and through regional programs such as the GHAI and ISA.

Humanitarian Assistance: $262,147,000

USAID plans to provide $262,147,000 in P.L. 480 Title II assistance to Angola, Benin, Eritrea, Ethiopia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Madagascar, Mozambique, Rwanda, Somalia, and Uganda. The emergency component of these resources cannot be predicted at this time.

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