1. SS7E1: The student will analyze the different economic systems
Economics of Africa
SS7E1:
The student will analyze the different economic systems

2. Economic Systems All economic systems must answer 3 basic questions::-
What goods and services will be produced?
How will these goods and services be produced?
Who uses the goods and services that are produced?

3. Types of Economic Systems
Traditional Economy - economic decisions are made based on custom and habits, or traditions
Tradition – something passed down in a culture from one generation to the next
they trade or barter their goods/no money is used; problem is people need products that can’t be made or traded

4. Types of Economic Systems (continued…)
Command Economy – the government makes most of the economic decisions for the workers
government decides what will be bought and sold, and what the prices will be
No individual can decide to start a business without permission from the government

5. Types of Economic Systems (continued…)
Market Economy – economic decisions are made by individuals who decide what to produce and what to buy (the consumers and the market)
also called capitalism, free enterprise, or laissez-faire (French term meaning let them do as they please)
Individuals take financial risks when starting a new business

6. Mixed Economies
All modern economies today have characteristics of all three systems but mainly are a mix of both market and command economic systems; they are called mixed economies
Nearly all countries today have mixed economies because they are a combination of free enterprise and some government

7. Oil and other petrochemical products
Area of Comparison
South Africa
Nigeria
Type of Economy
Technologically advanced market economy with some government control; one of the strongest economies in the region
Poorly organized economy after a long period of military dictatorship and corruption; now trying to reorganize with more private enterprise allowed
Goods Produced
Mining (platinum, diamonds, gold), auto assembly, machinery, textiles, iron and steel chemicals, fertilizer
Oil and petrochemicals are the primary market goods; Nigeria once exported food and other agricultural products but now must import them
Leading Exports
Gold, diamonds, platinum, other minerals, machinery and other equipment
Oil and other petrochemical products
Per capita GDP
$ 9800
$ 2000
Labor Force
Agriculture – 9%
Industry – 26%
Services – 65%
Agriculture – 17%
Industry – 52%
Services – 30%
Unemployment
Rate
24%
4.9%

8. South Sudan
Widespread poverty due to several decades of civil war with Sudan
The majority are subsistence farmers; Has fertile soils and abundant water supplies
Very little infrastructure (about 37 miles of paved road)
Government spends large sums of money on a large army
Produces 75% of the former Sudan’s total oil output (98% of country’s revenues)
Working with China on a pipeline