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DEVELOPING ECONOMIES Africa Institute of South Africa | Africa A-Z: Continental and Country Profiles 63 CHAPTER 4 Developing Economies Common Features Notwithstanding their great diversity, the economies of Africa have many features in common. African economies are comparatively small and heavily dependent on the production of a few agricultural or mineral products that are exported to the industrial countries of the northern hemisphere, mostly in unprocessed form and subject to the vagaries of international demand. All countries are struggling to overcome widespread poverty and destitution, including food shortages, unemployment, inadequate housing, stagnating or even falling standards of health and education, inadequate infrastructure, and escalating public indebtedness. Except for the extraction of oil and minerals, African economies have attracted little foreign investment. Even though South Africa and Egypt are far more developed and diversified industrially than the rest of the continent, they face these problems too. Elsewhere, agriculture (including forestry and fishing) and mining are the only relevant productive sectors. In most countries agriculture is the foremost source of employment. Growth Without Development With a few exceptions, African countries were dependencies of Britain, France, Portugal, Italy and Spain, administered with the interests of the colonial power foremost in mind. The economic development of countries and peoples hardly featured as colonial policy objectives. Upon gaining independence the new states accorded high priority to development and “catching up” with the developed world. Most of them saw the creation of their own manufacturing industries as essential to that end. An indigenous manufacturing sector was expected to lessen their overwhelming dependence on the sale of raw materials to the former metropolitan powers who were also their main source of manufactured products. Most of the new states were seriously short of indigenous technical, entrepreneurial and managerial skills, but at the same time they were deeply distrustful of foreign business and of market forces in general. They believed that the state had to shoulder the task of initiating and implementing industrial and other development. However, civil servants tend to be inept at running business ventures, and this was particularly true of the fledgling African bureaucracies, which had neither the skills nor the experience for the all-embracing management of an entire economy. Droves of foreign advisers could not make up for these deficiencies because all too often their expertise was not appro- priate to African conditions. Together with the ideologically inspired belief in centralised economic planning, this resulted in illconceived policies. Matters were made worse by declining administrative capabilities, largely on account of the profuse growth of state bureaucracies and the proliferation of politically rather than efficiency – orientated parastatals. Pervasive corruption lowered the ef- ficacy of the public sector even further. The emphasis on industry or, in some countries, over-reliance on oil or other minerals, AFRICA Total population (2011): 1.032 billion Total GDP (2009): US$1.184 Trillion Percentage of world GDP: 2% Gross National Income (GNI) per capita (2009): US$875 Sub-Saharan Africa (SSA) Total population (2010): 853 million Total GDP (2010): US$1.1 Trillion Percentage of Africa’s GDP: 50% Gross National Income (GNI) per capita (2010): US$1188 Total external debt (2010): US$195 billion Development aid received (2001): US$13.9 billion Total merchandise exports (2009): US$298 billion Total merchandise imports (2009): US$317.9 billion Life expectancy at birth (2010): 54 years Infant mortality (2009): 129 per 1 000 live births Adult literacy (2009): 67% DEVELOPING ECONOMIES 64 Africa A-Z: Continental and Country Profiles | Africa Institute of South Africa typically led to agriculture being neglected. This undermined the economic foundations by reducing export revenues, domestic food supplies, employment opportunities, and the supply of raw materials for local processing. Africa seems to be losing the ability to feed itself and is becoming increasingly dependent on food imports from overseas. These self-created economic problems were aggravated by factors over which governments have little or no influence, such as high population growth rates, drought, insect pests, political instability, intergroup conflict, declining international demand for raw materials, and shrinking economic support from the outside world. The oil crises of 1973 and the late 1970s had a particularly severe impact on African economies because the resulting global recession reduced demand for commodities, while steeply rising prices of mineral fuels and petroleum-based products further worsened the external payments position of oil-importing countries. This combination of adverse factors accounts for the economic decline that virtually all African countries have suffered, especially since the...

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