Economic History 1960 to 2012

7/30/2019 Economic History 1960 to 2012

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The Economic Historyof sub-Saharan Africa

since Independence

Andy Wynne

100 Years of Trades Unionism In Nigeria, Conference, December 2012


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Developing inequalities

In 1820, the average European workerearned about three times what theaverage African did. Now, the average

European earns around twenty times whatthe average African does

Over two thirds of Africans exist on less

than $2 (N$16)


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Rich Africans

Aliko Dangote (Nigeria) is richer thaneveryone in Britain

Nicky Oppenheimer and Johann Rupert ofSouth Africa are richer than all but twopeople in Britain

South Africa and Nigeria now form aroundtwo thirds of the economy of sub-SaharanAfrica


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Changing pace of development

19601980 - growth of many Africaneconomies equalled many other areas ofthe world

19802000 - economic growth collapsed

20002007- boom in prices of primary

products provides reasonable economicgrowth

2008 to present - economic uncertaintyreturns


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: Gross Domestic Product ofAfrica 1960 2010


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Great hopes at independence


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Borrow to develop

US Federal debt reached over 120% ofGDP in 1946

UK Government debt peaked at nearly250% of GDP at end of 1940s

Many African governments were

ambivalent borrowers who had to becoached and encouraged by IFIs

But external events turned against them


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Declining terms of trade


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Declining terms of trade

1975 a tractor cost 8 metric tons ofAfrican coffee

1990 - the same tractor cost 40 metrictons


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For Nigeria oil price


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And resulting per capita GDP:


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Hike in Interest Rates


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Booming debt


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Debt burden

1970 - 2002 sub-Saharan Africa received$294 billion in loans

Paid back $268 billion

But debts still $210 billion (UNCTAD2004)

1980s debt service payments averaged16 percent of African governmentexpenditure compared to 12 percent oneducation and 4 percent of health


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Structural Adjustment Programmes

reduced government spending andgreater fiscal discipline

removing import controls and restrictionson foreign investment

privatisation of state enterprises

devaluation of the currency

making labour more flexible by reducinglegal protection, food subsidies and

minimum wages


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IMF riots

1990 to 1994 popular protest movementsand strikes brought down more thanthirty African regimes


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Lost decade of the 1980s


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Declining wages

a sharp fall in real wages an average

30 percent decline between 1980 and1986 In several countries the average

rate has dropped 10% every year


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1990s another lost decade

HIV/AIDS

2009 1.8 million more people became

infected and 1.3 million people died ofAIDS related deaths


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Capital flight and brain drain

Capital flight

1970-2008 $735 billion (external debt less

than $200 billion

Brain drain

Graduates:27 percent for West Africa,18 per cent for East Africa


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Recent growth

Over half economic growth due toincreased commodity revenue


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Challenges

Property booms

Land grabbing

Food price increases

Unemployment

Climate change


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Uncertain future

China slow down for 11 months

Increasing recession in Europe

Unemployment increasing in US

Growth in South Africa reduced for this

year and next (2.6% and 3.4%)


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Thank you!

Questions or comments!

Documents

Economic History 1960 to 2012