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How diverse are some of Africa's economies? I ask because a diverse economy should be the goal of more countries. This provides for more employment for the population and better economic policies coming from the government.
Although Africa comprises 54 countries, all with their unique challenges and opportunities, the legacy of colonialism persists: many of Africa’s economies are highly dependent on extractive industries. This makes them vulnerable to shocks when commodity prices fluctuate. However, diversification is taking root in these extractive industries.
Equatorial Guinea (EG) has a really high GDP per capita. It hit 36,000 in 2010. Still, half of the population is illiterate. The reason why EG show so high GDP is because they found oil in 1996. Around 95 percent of their exports are crude petroleum and gas. What I understand they seek finish their infrastructure-plan in 2020. I don’t think they will succeed. They waste billions of dollars on junk instead of reinvesting it. Now when the oil price is in the toilet who will know what will happen to them. Other African countries with some kind of economical progress are for example Seychelles which has a catholic “mulatto-population” (about 70 percent). Just as Cape Verde and Mauritius it is a bit outside African politics, culture and economics. Both are more Asian or mixed than Sub-Saharan African. Gabon, Botswana, Mauritius, Angola, Ghana, Zambia, South Africa and Namibia are also pretty stable and have a high HDI-index. The truth is that Western Civilization is much worse than Africa. Africa have some kind of future while the West have no future at all.
Equatorial Guinea (EG) has a really high GDP per capita. It hit 36,000 in 2010. Still, half of the population is illiterate. The reason why EG show so high GDP is because they found oil in 1996. Around 95 percent of their exports are crude petroleum and gas. What I understand they seek finish their infrastructure-plan in 2020. I don’t think they will succeed. They waste billions of dollars on junk instead of reinvesting it. Now when the oil price is in the toilet who will know what will happen to them.
Yeah that family that runs EG is very corrupt. Maybe the drop in oil prices will make the governments of EG,Angola and Nigeria see the need to adopt polices that will bring about more diversification of their economies.
Botswana has made progress but still relies heavily on gems.
Botswana has been one of the better managed African economies since gaining independence. But they do have a very high unemployment rate that's connected to their lack of diversity with their economy. I've been kinda following their attempts at diversifying their economy the past few years.
I believe every government in Africa is trying to do more to diversify. It is however easier said then done considering the circumstances. In order to diversify you need resources across the board. You need education to train workers for different economic sectors, you also need infrastructure to support a system that can transition, you also need improved medical services and healthcare so people do not fall ill and can work. To do all this, you need money. Where does your income come from if you are in charge of an African country? Your one or two commodities.
It is a hard curse to break out of, especially when colonists geared all of the existing infrastructure to export raw commodities and materials. In order for Africa to diversify, much more public and private investment are needed within the region. Even when not accounting for money laundering and corruption, the potential for money from existing resources will not fund the needed resources if we expect Africa to diversify. More external aid and resources should be provided for the continent through transparent and multilateral organizations (Such as the UN) in order to help foster economic productivity.
That may all have some merit but it's just that Africa's new post colonial leaders didn't help matters by going the state socialism route which brings on too many regulations.
Quote:
In the same year, Nkrumah visited the Soviet Union and returned much impressed at the pace of industrialization there. He came back with a rigid Seven-Year Plan. "We must try and establish factories in large numbers at great speed," he argued. State-owned companies and public authorities mushroomed in all fields. So did mismanagement and graft. The price was most painfully felt in the countryside as Nkrumah used cocoa revenues, controlled by the official marketing board, to cover the growing losses of public companies. The imposition of unrealistically low cocoa prices on farmers, combined with the bloated organization of the marketing board, devastated the industry. Many farmers switched crops altogether; others found ways to smuggle their cocoa through neighboring countries, where better prices were offered. Commanding Heights : Kwame Nkrumah | on PBS
This legacy is still with Africa because too many African governments are hampering business progress through over regulation.
That may all have some merit but it's just that Africa's new post colonial leaders didn't help matters by going the state socialism route which brings on too many regulations.
This legacy is still with Africa because too many African governments are hampering business progress through over regulation.
Promoting "pro business" climate does not mean that business will suddenly flourish in the continent.
Most countries have very poor levels of infrastructure. To think they will magically spawn an economy with legislation and reduced regulations is naive and western biased.
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