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Economics 3510 African Economic Development Spring 2010

Economics 3510 African Economic Development Spring 2010. Introduction Instructor: A. R. M. Ritter May 11, 2010. Agenda:. Introductory and Administrative Matters Africa’s Development Challenge III. Brief Geographical and Historical Overview Presentation based on maps; Geography;

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Economics 3510 African Economic Development Spring 2010

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  1. Economics 3510African Economic DevelopmentSpring 2010 Introduction Instructor: A. R. M. Ritter May 11, 2010

  2. Agenda: • Introductory and Administrative Matters • Africa’s Development Challenge III. Brief Geographical and Historical Overview Presentation based on maps; Geography; Political evolution Population Economy Literary presentation Pre-Colonial Epoch Colonialism and Independence IV. Recent Development Experience: A Quick Overview

  3. II. Africa’s Development Challenge

  4. II. Africa’s Development Challenge

  5. 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

  6. III. Brief Geographical and Historical Overview Presentation based on maps; Geography; Political evolution Population Economy

  7. Brief Geographical and Historical Overview Perspectives of Africa: Pre-Independence

  8. The World. Viewed from Space

  9. Major Rivers

  10. Ethnic Groups

  11. The Scramble for Africa: Berlin Conference of 1884-1885 to Divide Africa

  12. Islam in Africa

  13. African Petroleum Reserves and Production

  14. Population

  15. 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

  16. 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, with 3. Health Problems • HIV/AIDS epidemic in many countries (see chart) • Malaria etc. 4. “Poverty Traps” or Interacting Vicious Circles 5. Inappropriate economic policies: • Modern sector Industrial &Urban Bias • Trade protectionism; • Ineffective integrative schemes • Exchange rate dysfunction • Price Controls

  17. 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

  18. 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 debt 3. Increases in development assistance 4. Direct foreign investment has started up. 5. Reduced conflict in the region? (ambiguous) 6. Improved public policy 7. Improved governance

  19. 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.

  20. 2009: Renewed Contraction Central Causal Factors • Not banking & finance; • World Recession: affecting commodity prices and therefore • foreign exchange earnings, • tax revenues, • social expenditures, • family incomes • DFI slowdown

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