Africa Economics Notes

1. Africa Economics Notes

2. SOUTH AFRICA!!!

3. WHAT TO PRODUCE?A large portion of South Africa’s GDP comes from a highly developed, privatized enterprise system rivaling many other developed economies. The private sector is based on mining, agriculture, services, and manufacturing. Due to large inequities established by apartheid era policies, the South African government operates a relatively large social services sector and maintains state-run enterprises in the areas of housing, business development, education, basic services, and healthcare.

4. HOW TO PRODUCE?In the developed sector, private businesses and consumers make production decisions based on market principles and international economic standards. The Reconstruction and Development Plan designed as a blueprint for providing social services is administered by a number of government ministries.

5. FOR WHOM TO PRODUCE?The private sector produces goods and services for domestic and international markets based on the market price system. The government social services sector produces public goods and services based upon the needs of the population throughout the country.Place on the continuum: South Africa is a strong market economy with some command characteristics.

6. NIGERIA!!!

7. WHAT TO PRODUCE?Nigeria’s major industry is petroleum production. This is followed by agriculture. Business development is difficult because of corruption and ineffective government oversight of markets. It is estimated that as much as 75% of Nigeria’s economy occurs in the informal sector and it not counted in GDP.

8. HOW TO PRODUCE?After years of government control, the country’s major industries are increasingly becoming privatized. This includes the petroleum industry and banking sector. Corruption, high tariffs on imported goods, and lack of infrastructure cause production inefficiencies.

9. FOR WHOM TO PRODUCE?46% of Nigeria’s daily oil production is exported to the United States. Due to an overvalued currency, Nigerians import many consumer goods. Many domestic manufacturers have been unable to compete with cheap imports and have closed. Place on the continuum: Nigeria is on the market side of the continuum, but is more toward the command end than South Africa.

10. GDP/Literacy Rate/Growth Rate South Africa* Years compulsory— Children ages 7 – 15 must attend school. Literacy Rate— 86.4% Real growth rate (2007): 2.5% South Africa’s literacy rate is up from 76% in 1980 according to the World Resources Institute’s EarthTrends at http://earthtrends.wri.org/pdf_library/country_profiles/pop_cou_710.pdf

11. GDP/Literacy Rate/Growth Rate Nigeria Years compulsory—No compulsory education Literacy Rate— est. between 39 – 51% Real growth rate (2006-2007): 5.9% (growth based on oil exports) Nigeria’s literacy rate is up from 33.5% in 1980 according to the World Resources Institute’s EarthTrends at http://earthtrends.wri.org/pdf_library/country_profiles/pop_cou_566.pdf

12. Africa Notes: Environmental Issues Most environmental issues in Africa are the result of climate and poverty, not industrialization. * Africa's Soil Foraging (hunting for food), grazing, and subsistence agriculture have leached Africa's soil and eroded its fertility. When colonial rule came, the Europeans began to export the raw materials such as rubber, ivory, palm oil, timber, and copper. This exporting of materials placed enormous pressure on the ecological systems in Africa. Today, the soil in Africa is less fertile than soil found on other continents.

13. *Deforestation Deforestation occurs when forests are cut to clear space for cultivation, grazing, or settlement, or when firewood or building materials are needed. Most of Africa's deforestation is a result of slash-and-burn agriculture. Forests are rarely replanted because people just move from place to place. Trees are essential for providing firewood, dyes, fruits, nuts, and building materials. Women depend upon the sale of firewood to increase family income. The fight against deforestation is being lost in some countries. Cote d'Ivoire has lost over 90% of their trees.

14. *Desertification More than one-third of Africa is threatened by desertification, which is the conversion of productive land into desert. Desertification is often induced by human mismanagement through overgrazing, overcultivation, deforestation, and over irrigation. Desertification is made worse by drought. Drought affects humans by causing famine and death. On the ecological side, the drought accelerated desertification.

15. *Water Quality Only 47% of sub-Saharan Africans have access to safe drinking water. However, unlike other regions of the world, industry is not the primary cause of water pollution in Africa. Natural causes, such as snails, worms, insect larvae, and other parasites, are the main factors affecting Africa's poor water quality. These organisms cause waterborne disease which reduce life expectancy, lessen the quality of life, and slow economic development. There are groups that are working to help improve the quality of drinking water in Africa. (Examples are UNICEF and WHO)

16. *Energy Extraction Oil extraction is very important to economies of countries such as Algeria, Egypt, Libya, Cameroon, Nigeria, Republic of Congo, and many others. In all of these places, oil extraction has caused serious environmental problems because of pipeline leaks, explosions from seismic surveys, improper disposal of drilling fluids and refining effluents, and oil-rig blowouts. *Toxic-Waste Disposal The disposal of toxic waste is another environmental issue with which Africa must cope. Even though there is limited industrialization, the industries that are there do not dispose of their toxic wastes appropriately. These toxic wastes leak into water sources, contaminating water, soil, and food.