Economics 3510African Economic Development
Spring 2010
Introduction
Instructor: A. R. M. RitterMay 11, 2010
Agenda:I. Introductory and Administrative Matters
II. Africa’s Development Challenge
III. Brief Geographical and Historical OverviewPresentation based on maps;
Geography;
Political evolution
Population
Economy
Literary presentationPre-Colonial Epoch
Colonialism and Independence
IV. Recent Development Experience: A Quick Overview
II. Africa’s Development Challenge
Region GDPpc (PPP)
$US 2007
Life Expectancy 2007
M F
Child Mortality. Per
1000
Sub-Saharan Africa 1,869 50 52 125
East Asia & Pacific 4,969 70 74 56
Europe and Central Asia
11,262 65 74 49
Latin America & Caribbean
9,678 70 76 65
Middle East & N. Africa
5,402 68 72 77
Canada 35,500 78 83 06
Dimensions of the Challenge
• Economic– Poverty– Income Distribution– Policy problems– Economic disintegration– Infrastructure shortcomings
• Demographic• Health: AIDS/HIV; Malaria etc. • Political: • Civil Strife • Corruption• Environmental
III. Brief Geographical and Historical Overview
Presentation based on maps;Geography;
Political evolution
Population
Economy
Recent African Economic Experience: A Quick Overview
Bad News: Economic Contraction, 1970s to 1990s– minus 0.9 % per capita per year, 1975-2000– 27 countries with declining GDP pc, 1975-2000
Good News: Recent Growth Recovery late 1990s to 2010
1999-2007 + 4.7% per year or about 2.4% % per capita per year,
Bad News:2009:caught in global recession-
but not too deep or prolonged
Explanation of earlier contraction: A Conjuncture of Negative Circumstances 1. Problems of Governance
• Political instability• Civil war, • Weak Governance and Corruption;
2. Burgeoning population growth rates, with3. Health Problems
• HIV/AIDS epidemic in many countries (see chart)• Malaria etc.
4. “Poverty Traps” or Interacting Vicious Circles5. Inappropriate economic policies:
• Modern sector Industrial &Urban Bias• Trade protectionism; • Ineffective integrative schemes• Exchange rate dysfunction• Price Controls
5. External Factors;• Weak export commodities (see charts)• Protectionism vs. some products, esp. Cotton• New LDC competition (coffee)• Competition from China for all manufactures• “Resource (or Oil) Economy Syndrome”• Growing debt burdens• Falling aid volumes plus high aid dependence
(see chart)
6. Environmental problems• Desertification;• Soil depletion• Climate change
Renewed Economic Expansion, 1999-2008:
Explanation 1. Buoyant world economy promotes recovery
– primary commodity prices rise
– new drivers of growth such as increased economic relations with China and India.
2. Some debt reductions and relief from servicing the debt3. Increases in development assistance4. Direct foreign investment has started up.5. Reduced conflict in the region? (ambiguous)6. Improved public policy7. Improved governance
Result:• Poverty levels decline;• Personal & family incomes rise;• Tax revenues and social expenditures (health
& education) rise• General improvement
But: problems mentioned earlier remain; - some countries are in trouble; - peace and stability are tenuous in a few cases.