1. Africa’s Development Challenges ECON 3510 Jan 12, 2017

2. I. Africa’s Recent Development Experience
OK news: the 1960s, reasonable performance
Bad News: Economic Contraction, 1970s to late 1990s
Minus 0.9 % per capita per year,
27 countries with declining GDP pc,

3. Good News: Rapid Recovery, 2010 - 2016: + 4.4 % per year or about
Growth Recovery late 1990s to 2008
: % per year or about
+ 2.4 % per capita per year,
Mildly Negative News:
2009: caught in global recession
Rapid Recovery, :
+ 4.4 % per year or about
+ 2.2% per capita per year

4. GDP Map of the World, 2010
Source: The New Worldmapper

5. Population Map of the World, 2050
Source: The New Worldmapper

7. Result: Poverty levels decline; Personal & family incomes rise;
Tax revenues and social expenditures (health & education) rise
General improvement
But: problems remain;
- some countries are in trouble;
- peace and stability are tenuous in a too many cases.

8. Why has Africa’s Economic Performance Improved since +/- 2000 ?
A Conjuncture of Favourable Circumstances
1. Buoyant world economy promoted recovery
new drivers of growth:China and India.
2. Some debt reduction and relief from servicing the debt
3. Increased development assistance
4. Direct foreign investment increased;
5. Increasing “remittance” payment inflows
6. Reduced conflict in the region?
Declining, 1990s to early 2000s;
Now perhaps worsening: Boko Haram, in Mali, Chad, N. Nigeria, South Sudan,Somalia
7. Improving Governance? In some cases.
8. Improved public policy

9. Economic Prospects: Positive Elements 1.
Human resource development has been improving quickly and should continue with Sustainable Development Goals.
Entrepreneurship
Improved macroeconomic management in many countries;
Business climate indicators have been improving steadily,
Resource potential is significant
“Technological Backlog” should lead to productivity improvements in many areas
Africa is not ‘insulated’ from the crisis. but it is much better prepared than it once was 9

10. The Technological Backlog
Gershenkron: The Advantages of Being a Latecomer.
The “Technological Leaping” phenomenon
Rapid technological adoption:
example recently: the Cell Phone

12. Africa’s Human Capital
Rapid improvements during Millennium Development Goals era
Still a fair distance to go
To be continued under Sustainable Development Goals era, one hopes
One Abundant Resource: Entrepreneurship

13. Source: The Economist “Pocket World in Figures” (2016 p. 64)
Of the top 10 countries in the world for entrepreneurial activity, seven are in Africa:
[A listing of the countries according to the proportion of the population between 18 and 64 who are owner-managers of businesses.]
The Economist World Ranking of Entrepreneurial Activity
Country
Owner-Managers of Businesses
1. Nigeria
39.9%
Zambia
3. Cameroon
37.4%
Uganda
35.5%
Namibia
Botswana
9. Malawi
33.3
32.8
28.1
Source: The Economist “Pocket World in Figures” (2016 p. 64)

14. Economic Prospects: Positive Elements 2.
Increasing foreign investment inflows are probable;
Increasing Remittance payments as Diasporas expand;
Migration of Industry from China to Africa for international markets?
Africa is not ‘insulated’ from the crisis. but it is much better prepared than it once was 14

15. Economy Prospects: Negative Elements
Governance remains problematic in too many countries
Failed states continue;
Boko Haram-type civil disturbances may intensify;
Corruption has not been brought under control;
Civil disturbance continues and may intensify in some countries
Rapid population growth generates challenges
Pressures from rapid urbanization and rural to urban migration
Environmental Stresses will intensify
Climate change will worsen agricultural stresses;
Africa is not ‘insulated’ from the crisis. but it is much better prepared than it once was 15

16. In Summary: Africa’s Economic Prospects
Strong positive elements:
Human resources improvements,
Technological catch-up
International economic interaction
Improved Policy
Challenging negative elements:
Political;
Climactic;
Demographic
All elements will unfold and interact in unpredictable ways.
Africa’s Economic Future: OPTIMISTIC
hopeful, encouraging and positive but also
challenging, uneven, and confusing.