African Economic Development

Steven Langdon, Archibald R.M. Ritter, Yiagadeesen Samy

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781317427308
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Sub-Saharan Africa is at a turning point. The barriers to economic growth seen in the 1980-2000 era are disappearing and new optimism is spreading. However, difficult goals of eliminating poverty, achieving equity and overcoming environmental threats continue. This much-needed and insightful textbook has been written to help us understand this combination of emerging improvements and significant challenges.

Opening with an analysis of the main theories relating to development in Sub-Saharan Africa, the book explores all the key issues, including:

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• Human development;

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• Rapid urbanization;

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• Structural and gender dimensions;

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• Sustainable development and environmental issues; and

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• Africa's role in the world economy.

The authors use economic tools and concepts throughout, in a way that makes them accessible to students without an economics background. Readers are also aided by a wide range of case studies, on-the-ground examples and statistical information, which provide a detailed analysis of each topic. This text is also accompanied by an e-resource, featuring additional sources for students and instructors.

African Economic Development is a clear and comprehensive textbook suitable for courses on African economic development, development economics, African studies and development studies.

Part I

ANALYZING THE AFRICAN EXPERIENCE

Chapter 1

Dimensions of Development: Geography, Ecology, History

Key Concepts

Archaeology, Stratigraphy and Association

Backward, Forward and Final Demand Linkages

Backwash Impact of Slave Trade

Biomes and Ecological Zones

Carbon 14 Dating

Enclave Economies

Fiscal and Monetary Autonomy

Import Substitution Industrialization

Long-distance Trade

Metal-working and African State Formation

Northern Triangular and Southern Slave Trades

Regression Analysis and Economic History

Staple Theory of Economic Development

Vent for Surplus and African Export Growth

I. Introduction

“Poverty,” Nelson Mandela has said, “is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings.” This book about economic development is focused around that goal.

In the effort to analyze and counter human poverty, Africa looms large in the contemporary world. The continent’s size and growing population underline its significance. Covering an area of over 30 million square kilometers, Africa is larger than either North or South America, and could comprise within it all of Europe, China and the United States. Africa’s population is over 1.184 billion in 2015, up by 242 million since 2006, an increase of 25.7 percent in the period (AfDB, 2016). This represents slightly more than 16 percent of the world population of 7.347 billion, a higher proportion than the 8.6 percent in Latin America and the Caribbean, though a lower proportion than in Asia where population density is much greater; there is an average of 366 people per square kilometer in South Asia in 2015, compared to the Sub-Saharan African rate of 42 people and the Latin American/Caribbean rate of 32 (World Bank, 2017). Africa’s population is also relatively young, with 43 percent under 15 years of age, compared to 30 percent in South Asia and 26 percent in Latin America and the Caribbean.

Figure 1.1 African GDP Growth Rate, 2007–2015.

Source: Data from African Development Bank, 2016, p. 52.

As Chapter 2 reviews in detail, Africa is especially important in an anti-poverty context because it has been less successful than other areas in meeting the Millennium Development Goals that developing countries set for themselves over 2000–2015. African countries committed to decrease under–5 child mortality rates from 165.9 per 1000 births in 1990 to 55.3, yet reached a level of only 76 as of 2015 (AfDB, 2016). Primary school enrollment too missed its target, set at 100 percent for 2015, with only a 79.5 percent start level (and 56 percent completion level) as of 2015. The most recent data also show 50 percent of Africa’s rising urban population living in slums, and 28 percent without access to an improved water source. This shortfall in meeting anti-poverty goals is evident despite a better overall economic performance in Africa in recent years. Figure 1.1 shows the positive changes in real GDP in Africa over the 2007–2015 period.

This overall profile of Africa is relevant, but what is most striking about contemporary Africa, especially south of the Sahara, is the differentiation and variety across country conditions and experience. There are 48 countries on the continent itself and a further six nations that are offshore islands, and immense differences exist among them in geographic size, population, climate, resource endowments and income patterns.

The six North African countries are seen by the World Bank as more connected to Arab countries of the Middle East in their economic structure and dynamics – and are treated by the Bank in analytic terms in conjunction with those nations rather than with Sub-Saharan African countries. Sub-Saharan Africa, the focus of this book, shows further distinctions in terms of economic structure and average per capita incomes. There is: (a) a set of petro-states where, despite oil price decreases in 2015, national incomes have soared and economic systems have been reshaped by large-scale oil and gas exports – including Gabon (national income of $18,880 per capita in 2015), Angola ($6470), Equatorial Guinea ($27,200), Nigeria ($5810) and Congo ($6320) – measuring national income in terms of Purchasing Power Parity (PPP) in US$ (World Bank, 2017 – for more on PPP measurement, see Chapter 2). At the other extreme is: (b) a group of conflict countries where long-term domestic struggles have taken place, state structures have been under stress and economic uncertainty has prevailed; poverty has usually worsened, income per capita levels are low and evidence of economic improvement is missing. Examples include Burundi (per capita income $730 in 2015), the Central African Republic ($620), Democratic Republic of Congo (DRC) ($720) and South Sudan ($1630).

Outside these groupings, there is: (c) another set of economic growth countries where economic changes in recent years have been less volatile and more positive in terms of poverty concerns. One is the large nation of Ethiopia, with 99.4 million people and a 6.9 percent growth rate in GDP per capita in 2015; others have roughly the same level of per capita income, but are medium sized, like Tanzania (53.5 million people in 2015), Ghana (27.4 million), Uganda (39 million), Kenya (46.1 million) and Mozambique (28 million); smaller examples include Benin (2015 population 10.9 million), Rwanda (11.6 million) and Senegal (15.1 million). In a category of its own is: (d) diversified South Africa with its more complex economy, long-term race-based inequalities, sizeable population of 55 million and significantly higher average per capita income ($12,870 in 2015, measured in terms of Purchasing Power Parity, compared to $1620 in Ethiopia).

It is within a sub-set of these middle-size and larger Sub-Saharan countries that the economic performance of Africa has improved significantly in recent years, compared to the Asian nations that have been seen in the past as successful models to emulate. Some of this African improvement is driven by price increases for important export commodities besides petroleum, and these gains are vulnerable to changing world economic circumstances, but the pattern of African economic improvement has been diversified and cumulative enough to suggest deeper factors at work.

Figure 1.2 summarizes the 2005–2015 GDP growth rates of the six countries in this grouping that have considerable populations and relatively low per capita incomes (Ethiopia, Ghana, Kenya, Mozambique, Tanzania and Uganda). Their economic growth has been solid, often marked in its rate of advance, and generally quite consistent over the whole period (usually over 6 percent annually in real terms), even as overall African growth rates slowed in 2015. As a comparison, in key Asian economies, growth rates have been declining; China showed annual GDP growth of 13 percent in 1994, declining to 10 percent in 2004, and then to 6.9 percent in 2015; Indonesia declined from a rate of 8 percent in 1994 to 5 percent in 2004 and 4.8 percent in 2015 (World Bank, 2017).

Beyond these groupings are further variations. There are: (e) mineral extraction countries with smaller populations where high average per capita GDP levels reflect major mineral export earnings – as with Botswana (per capita income of $15,510 in PPP terms in 2015) and Namibia ($10,380) with their diamond production, and to a lesser extent Zambia with its copper ($3640 per capita) and Mauritania with its iron ore ($3710 per capita). There are also: (f) the six island nations, some with high average incomes, such as Mauritius (per capita income of $19,940 for its 1.3 million people in 2015) and Seychelles ($25,670 for its 0.1 million people), others much less well-off, including Madagascar ($1410) and Comoros ($1490). Lastly, it is useful to identify a set of: (g) high poverty countries where national incomes are especially low, poverty indicators are prominently evident and recent economic growth has been weak; examples include Malawi (with average per capita income of $1140 and negative per capita GDP growth of 0.3 percent in 2015), Liberia ($720 and –2.4 percent GDP growth) and Niger ($950 and –0.5 percent GDP growth) (World Bank, 2013, 2017).

Figure 1.2 Real Economic Growth in Selected African Countries, 2005–2015.

Source: Data from African Development Bank, African Statistical Yearbook, 2014, 2016. Growth rate averages not weighted by population.

Within Africa’s differing economic situations, there are further social divisions. Analysts have identified 835 ethno-linguistic groupings in the 54 countries, with a concentration of high numbers along the Niger River and in the interior of Tanzania (Grant, 2015). Combined with linguistic differences among colonial experiences and religious divisions, this means Africa speaks with many voices, from many separate perspectives.

Gender inequality is important to stress in Africa. Chapter 2 discusses this more fully, but the evidence deserves emphasis at the start. Women, detailed studies have shown, are central to understanding and addressing poverty in Africa. Yet they are discriminated against in many rural and urban situations in Sub-Saharan Africa, and have not seen their needs emphasized in practice in many anti-poverty strategies. Women are often prevented from improving resource usage on land they farm by limits on their control of that land; inheritance laws sometimes prevent property going to widows; poor local infrastructure forces women into excessive time allocations to obtain water and firewood; women are under-represented in decision-making institutions; and access to education is lower than for men (Morna and Makaya-Magarangoma, 2013).

The female labor force participation rate (62.7 percent in 2015) is, however, up from 1990, higher than the overall world rate of 49.6 percent and much higher than the female participation rate in South Asia (28.9 percent) (World Bank, 2017). In 1996 UNICEF stressed this higher participation rate of women in economic activities outside the home to help explain why African women and their children did not suffer as much from malnutrition and disease as their female Asian counterparts (UNICEF, 1996). This underlines the dynamism of women’s organizations and leaders in Africa who have been working to overcome gender inequalities.

With so many contrasts and divisions on the continent, it may seem reasonable to question the study of overall African economic development. Approaches to understanding poverty, however, can be built on a careful recognition of variations. Individual national economic situations are also the outcome of a broad set of continental/regional factors that have been at work. These ecological, geographic and historical dimensions shape the African present.

II. Geography and Ecology of Africa

Much of the variety in African economic situations reflects contrasts in geography and environment across the continent. Covering so much latitude, the intensity of the sun varies, especially at the northern and southern extremes of the African land mass. The influence of seas, oceans and large interior lakes is also important in shaping the climate, and marked differences exist in elevation. Mountains have been shaped by volcanic activity, highland plateaus have been formed and the Great Rift Valley dissects the continent from the Red Sea, 5500 km. south to Mozambique. Eight large river systems also form valleys and deltas as they flow from the interior to the sea. The four most powerful in shaping the continent’s geography are the Nile (starting from Lake Victoria and from the mountains of Ethiopia), the Zambezi (starting from Lake Nyasa in Malawi and from Zambia and Angola), the Congo (covering a massive tract of central Africa with its tributaries) and the Niger (moving in its broad circular flow from Guinea south of the Sahel to Niger, then on through Nigeria).

Map 1.1 African Biome Areas.

Source: UNEP (2008), p. 10.

The combinations of elevation, river systems, influence of the sea, variations in intensity of the sun and soil variations have shaped eight separate biomes in Africa (see Map 1.1). A biome, says Grant (2015), “is def...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Illustrations
• List of Tables
• List of Boxes
• Acknowledgments
• Introduction: Africa in Changing Perspective
• Part I Analyzing the African Experience
• Part II Human Resources in Africa
• Part III Sustaining African Economic Development
• Part IV Africa and the International Economy
• Index of Names
• Subject Index