1. African Economies November 17, 2014

2. Types of Economies Market Economy: An economic system in which business owners and consumers (people who buy stuff) make decisions about what to make, sell, or buy. Command Economy: An economy in which the government owns most of the industries and makes most of the economic decisions Traditional Economy: The exchange of goods or services based on custom and tradition

3. Mixed Economy An exchange of goods or services based on at least two other types of economic systems. In other words, it mixes command and market, or traditional and market, or command and traditional, etc. Most countries in the world have an economy that is somewhere between a pure market and pure command economy

4. Economy of South Africa mixed economy that is mostly market There is some government control, especially over the mining industries Very technologically advanced economy, with a heavy investment in human capital to work in the electronics and mining industries Their main exports are gold, diamonds, machinery, and other equipment

5. Gold mining in South Africa Because of South Africa’s mining industries, they have had to invest heavily in capital goods South Africa leads other African nations in the mining and sale of gold The government uses the profits from the gold to improve the country and help the people However, the unemployment rate in South Africa is 24%, one of the highest on the continent Most of the unemployed are native Africans who have not been able to recover from years of apartheid

6. Diamond mining in South Africa Diamonds are South Africa’s second largest mining industry While some African countries have had problems with their diamond mining, leading to conflict, South Africa’s is well-regulated The South African government earns a lot of money from the diamond industry and uses it to help the people

7. Economy of Nigeria Mixed economy that used to be very tightly controlled by the government but is moving toward market However, that economy was very chaotic so the current government is trying reorganize They should have a strong economy because of the oil industry and well-educated population Their largest export is oil They must import many food and agricultural products

8. Nigeria’s oil industry Nigeria has invested heavily in capital goods for its oil industry However, by spending so much money on the oil industry, the government has not supported the people of Nigeria and left many of them without proper food or housing Also, the government concentrates on the oil industry instead of agriculture, which leads to Nigeria having to import most of its food supply

9. Questions 1. What is a market economy? 2. What is a command economy? 3. What is a traditional economy? 4. What is a mixed economy? 5. What type of economy does South Africa have? 6. Why has South Africa invested heavily in human capital? 7. What are South Africa’s main exports? 8. Why did South Africa invest heavily in capital goods? 9. What does South Africa’s government use their gold mining profits for?

10. More Questions 10. What is South Africa’s second largest mining industry? 11. What type of economy does Nigeria have? 12. Why should Nigeria have a strong economy? 13. What is Nigeria’s largest export? 14. What must Nigeria import? 15. What does the government spend the oil money on instead of spending it on the Nigerian people? 16. Why does Nigeria have to import most of its food supply?