* African economic country trends

African Economics: Country Trends

African economics decolonization
Figure 1.--Much of Africa after decades of colonial control was granted independence. Many of the pople believed that independence woul mean a magical economic transformation. Many of the new leaders preachd a bright future in which socialist policies would quickly bring the kind of affluence enjoyed in the West. No one Aftrican leader embraced free market socialism. The result was economic failure on a phenomenal scale mixed with massive corruption.

We have begun to develop economic pages on African country. There are many common trends among these countries, but every individual country has its own unique story which we are only beginning to develop. Resource development, mining and oil drilling has played a major role in several countries. Africa may be the continent most gnrouly endowed with valuable mineral rsources. We find that many people believe that natural resources are critical to economic development. Africa has, however, shown in spectacular terms that natural resources while important are not central to economic development. And tragically very limited benenefits from these resources have flowed to the people of most of African countries. African leaders with limited economic knowledge and impresed with Soviet propaganda decided to persue socialist paths to development. They believed this was the key to rapid economic development. This is in part because of the popularity of socialism in the popular mind, but also elites are better able to profit from corruption from state agencies and companies. Many new African leaders triumpantly proclaimed the bright socialist future. Not a single leader in Africa embraced free market capitalism. State socialism besides being baced on falty Maxist economic theory also ofered opportunities for corruption on an unpredented scale. A major problem in many countries proved not only to be socialism and corruption, but a lack of support for agriculturea and rural areas and priorities given to urban areas. This often meant the various capitals, in part because here is where poltical threats are most dangerous to the elites and political leadership. As a result, in quite a number of countries, living standards have decline since independence despite massive economic aid from Europe and America. In recent years there has been improvements in some countries, primarily becuse of market reform.



Ethiopia is located at a stregic point--the Horn of Africa a crossing point between Africa and the Middle East. It is no accident that the Queen of Sheba with Yemeni/Ethiopian origins is mentioned in the Bible. The trading consequences are obvious. This for example is coffee which oruiginated in the highlands of Ethioia made it to Arabia and the world. Many other African products were transported over this route. In ancient times, Ethiopia had a largerly agrucultural economy, but African oproducts like gold, ivory, and hides were important. Ethiopia entered the 20th century with a traditional, stil largely agricultural economy. Land was primarily owned by the royal court's long-established aristocracy. Exports were primarily coffee, grains, hides, and gold. Ethiopia during the 20th century was one of poorest African countries. The poverty was the result of poor yields from the country's agricultural economy--the major economic sector. More than 80 percent of the population was involved in agriculture--high by even African standards. And Ethiopian agriculture was, perhaps the most backward in Africa. Here the country's medieval feudal system impeded any modernization. And because so many Ethiopian farmers lived in abject poverty, they had no ability to buy better tools and improve farming methods. Enviromental issues (droughts, overgrazing, deforestation , and locusts) were also issues, affecting yields. Ethiopia was a rare African country not colonized by Europeans. Not that the Europeans did not try. An Italian Army was defeated (1898). As a result, there were few connections with the modern world. There were few health care and educational facilities. After the Italian occupation and World War II, economic changes began. Tourism, banking, insurance, and transport began to make an economic contribuion. Land reform created many small holders. The Communist Derg dictatorship (1974-91) nationalized all means of production, including land, housing, farms, and industry. A famine resulted. The small land holder subsistence farmers were the backbone of Ethiopian agriculture were unsure what to plant because of Government policy and concern over land rights. Although land remained nationalized, conditions in rural Ethiopia have improved slightly, as the government attempted to promote rural development. Ethiopia was faced with revovring from the ecomomic wreckage left by the Deng--one of many socialist economic disasters. There has been economic reforms and progress since the fall of the Deng. Today Ethiopia is a land-locked country, closed off from the world by Eriteran War (1998-2000). Ethiopia qualified for debt relief under the Highly Indebted Poor Countries initiative of the International Monetary Fund (IMF) and World Bank (2001). Ethiopia was one of several countries that benefited from 100 percent debt relief of loans from the IMF, the World Bank, and the African Development Bank (2005). The land ownership issue has remained contentious and has meant that high productivity commercial agricultue has not developed. This is a serious issue in a country with a rapidly growing population. Even so, the country has had in the 21st century one of the fastest growth rates in Afriam which ahas began to imprive the pooverty situation. Industry, mostly construction, and services have been growing. Manufacturing is still limited. The Eritrean War was followed by a long hostile period. Ethiopia had tomuse neighboring Djibouti's main port for 2 decades. A permanent peace wasfinally areed (2018). Ethiopia is now set to resume accessing the Eritrean ports of Assab and Massawa for international trade.


Gabon has done better economically than many other African countries. Factors here are a relatively small population, abundant natural resources, and foreign assistance. As a result Gabon in African terms is relatively prosperous and stable. President El Hadj Omar Bongo has overseen an economy supported by oil exports. Thus has made Gabon one of the most properous in sub-Saharan Africa. Proven reserves have begun to decline. Government planners are seeking other areas in which Gabon can develop to diversify the economy. Some believe ecotourism can become an important economic sector.


There appears to have been maitime commerce with the Meditwrranean world during the ancient world with the Phonedians and Carthage. This was, however, limited and the Sahara was a formibavle barrier to trade. This only chnged with the introduction of the camnmel, allowung the development of trans-Saharan caravan (3rd century AD). The earliest known indigenous African empire was Ghana covering a large area of sub-Saharan West Africa beyond the boundaries of the modern country which bears its name. The origins of the Ghanian Empire are murky. It is known to have existed by the 4th century AD, but its origins probably pre-date the Christian era. The Arabs thus encountered a well-established African civilization in West Africa. The economy was built on agriculture, including gardents and date groves. Sheep and cattle were also raised. The agricultural economy was affected over time by droughts. Here the climate change appears to have been a factor. Trading was also important to the economy and the primary trading partner was with the north. In antiquity this meant the Roman Empire. After the fall of Rome this meant the Vandal kingdom of North Africa and than the Arabs who conquered North Africa. The most important town was Kumbi-Kumbi. Islamc gradually was accepted by the people and was pronounced by the 10th century. The Arab influence benefitted the economy and this allowed the Empire to expand. The Tunka converted to Islam (11th century). The increased power of the Empire was able to impose control over the trade routes. Ghana imported wheat, fruit, sugar, brass, pearls, and salt. They exported rubber, ivory, slaves, and gold. The Empire reached the peak of its power during the Sisse dynasty. A fanatical Muslim group, the Almoravides invaded the Empire (1076). They captured Kumbi-Kumbi and killed those who refused to convert to Islam. The ensuing religious strife and droughts resulted in the decline of the Empire (late-11th century). Invaders destroyed the Empire (12th-13th centuries). [Franlin, pp. 11-13.] The area of modern Ghana continued to be involved in long-distance trade, here gold was a powerful factor. The trans-Saharan trade, one of the most extensive trading networks before the Europen maritime outreach. European, North African, and Saharan commodities were taken southward and exchange for the products of the African savannas and forests, this included gold, kola nuts, and slaves. The trans-saharan trade was largely displaced by the arrival of Europeans and the beginning of maritime trade. What is now Ghana, was named the Gold Coast by the European traders. The area was an important source of the gold traded across the Sahara and this continued to be vimportant with the Europeans maritime traders. Impotant tribes like the Asante achieved a degree od centralized organization. They controlled gold prices by regulating production and marketing. Portuguese and later Dutch and English traders effectively circumvent the Saharan trade by sailing directly to its southernmost source on the West African coast (15th century). Pepper and ivory were other importt commodities.

Ivory Coast

There is not a great deal known about the people living in Ivory Coast during pre-history. For millenia, tribal groups living in what is now the Ivory Coast survived by hunting and gathering seeds and fruits. African agriculture is believed to have developed in what is now the heart of the Sahara Desert (about 5200 BC). The region at the time had substantial precipitation and was well populated. The poopulation domesticated a variety of native crops, including pearl millet, sorghum and cowpeas,crops which were spread through West Africa . The crops did not produce the calories needed which only limited surpluses. There is an indigenous rice species. Tubers were developed later and poved important in the better watered southern regions. Yams and casava were very important. The desertification process turned the Sahara into a barrier. Important trade routes with Arab North Africa began to develp across the Sahara (8th century AD). This meant exposure to other cultures afecting crops. The arrival of Europoeans along the coast brought significant changes to thge economy. Portuguses navigators began sailing south alonng the coast in search of a riute to the east. Along the way they began establishing trading posts (15th century). There was a minor interest in spreading Christianity, but a substanial commercial interst. This included ivoey, and gold. Slaves were especially important, but the lack of suitable ports limited the development of the slave trade. It is at this time new crops were introduced, including Asian rice, corn, and casava (16th century). France became the major Euyropean power dominating the trade. French planters began founding plantatiuoins producing cash crops (coffee, cocoa, and palm oil). Later bananas were added. The Ivory Coast was one of the African countries base on the colonial econonomy that had the brightest prospsects at the time of independence. Ivory Coast borders on Ghana, anothger agriucultural country with farmers focusing on similar crops. farmers for their own consumption raise millet, sorghum, maize (corn), groundnuts, and cowpeas in the north. Root crops such as cassava and yams dominate Sierra Leone, Ghana, Nigeria, and C�te d�Ivoire. Finally, tree crops such as cocoa, palm trees, or cashew trees are found in the Guineo-Congolian zone. Rice is also one of the most harvested crops, especiallt tomthwest of Ivory Coast. The country became indepensent with little actual pressure from the population, in contrast to Ghana. Ivory Coast developed a largely free market economy. A substantial part of the export oriented sector was based on foreign-owned plantations and estates nanaged by Government corporations. As a colony, the Ivory Coast depended on French aid and technicians. This continued after independence. The French population did not drop after independence. [Due] The Ivory Coast economy is stable and currently growing. This is a substantial improvement in the aftermath of political instability which plagued the country for years. The Ivory Coast is largely market-based economy and depends heavily on the agricultural sector. Some 70 percent of the Ivorian people are engaged in some form of agricultural activity The country was at independence had one of the strongest West African economies. The primary exports were all agricultural: coffee, cacao, and palm oil. The country also exports rice, wheat, plastic materials, rubber, and resins, agricultural chemicals, telecommunications, and oil and gas equipment. Despite its small size, the country is an important world exporter of these commodities. The economy suffered in the 1980s. This in part contributed to the destabalization of the political system. Despite the political turmoil, continued relations with France, a bountiful cocoa agricultural economy have created a more prosperous economy than many neighboring countries. This has attracted important foreign investment. The country today despite its size is one of the largest producers and exporters of coffee, cocoa beans, and palm oil. The gross domestic product (GDP/PPP) was about $37 billion (2010), some $1,680 per capita. Fishing and forestry are also of some importance.


Kenya was divided into tribl areas befire the arival of the British. Economic activity was mostly agriculture and livestock raising. The are was ravaged by the Arab slave trade which the Royal Navy worked for decades to end. European colonialism in East Afric came later than West Africa. There was interest in the port of Mombasa, but little penetration of the interior. The British established the East Africa Protectorate (1895) which after World War I became the Kenyan Colony (1920). The rich farm land an tmperate climate of the interior attracted British settlers who with the support of the colomial government acquired land from tribal areas. Native resistance inspired the Mau-Mau Rebellion (1950s). Britain granted independence (1963). The country's economy has done better than most of the newly independent African countries and is the East African success story. Kenya has reported generally positive with a few poor years since independence. Immediately after independence, Kenya reported impressive growth rates of about 6 percent (1960s) which gradully declined to viut 4 prcent (1970s-80s). Kenya then experienced wide fluctutions in growth rates (negative to 4 percent) (1990s). After the new century, we see some very high growth rates, peaking at 7 percent (2007). The global financial crisis combined with a diputed election, hit the economy. Exports and remitences were affected. Growth fell below 2 percent which was not as bad as many other countries experienced (2008). The economy quickly rebounded, resuming a healty growth rate. Kenya was soon reporting growth rates over 5 percent (2010-11) and most economists see generally positive prospects. The Islmicist violence in Somalia to the north has advrsely affected important industries like tourism. Kenya is on tract to become the first East African country to make the transition from low-income status to middle-income status. The per capita GDP is over $750. While low by European standards, it is an impresive achievement by African standards, especially as Kenya does not have any major exportable raw materils like oil.


The economy is based on farming and livestock. Lesotho hevily relied on remittances from miners employed in South Africa.There was what was called the Great Basuto Migration each year when the men went to South Africa to work in the mines. The number of these mineworkers has declined steadily in recent years. Customs duties from the Southern Africa Customs Union (a artifact of British rule) provided most of government revenue. The Government in recent years .has moved to strengthened its tax system so as not to be so dependent on customs duties. Lesotho completed a major hydropower facility (January 1998). This has made possible the sale of water to South Africa and generated royalties for Lesotho. Lesotho now produces about 90 percent of its electrical power needs. Small-scale manufacturing based on farm products is developing and supports the milling, canning, leather, and jute industries. There is also a growing apparel-assembly industry. This has benefitted from trade benefits through the Africa Growth and Opportunity Act. Despite the diversification in recent yeas, Lesotho's economy is still centered on subsistence agriculture, especially livestock. Drought has adversely affected the agricultural sector. The ecomomy continues to be aflicted by a concentration of wealth and inequality in the distribution of income.


Malawi is a basically agricultural country. Most Malawians make their living through subsistence farming. Important crops include peanuts, tobacco, tea, coffee, and cotton. There are rail links to Mozambique for exports. The economy is largely underdeveloped beyond basic agriculture. Malawi's single important natural resource is agricultural land. The land is, however, under severe pressure from steady population growth. Yield are, however, relatively low. The country's food supply is thus precarious. And the situation is aggrivated by periodic natural, both drought and torrential rainfalls. Thus there is the constant need for international food aid. The government's fertilizer subsidy program has suceesfully increased yields. And Malawi has for several years repoorted net food exports. A tangel of serious problems, including corruption, poverty and AIDs continue to impair development efforts. Under President Banda many state corporations were established. As elsewhere in Africa where socialist policies like state corporations were followed, the result was both coruption and economic stagnation. The state corporations were run inefficently and regularly generated sizeable losses. World financial bodies aiding Malawi have recommended that the state corporations be pivatized. President Mutharika instituted aseries of reforms (2005). One report suggests that Malawi has made some progress in achieving economic growth since 2007. Advances have been noted in healthcare, education, and environmental conditions. As a result, Malawi has needed less internbtional food aid then in previous years.


African countries in particular have not been able to develop vibrant economies. Some countries like Nigeria have oil income to help finance ecomomic development, but seem to have made only limited real progress. Nigeria in the 1970s became a major oil exporter. Oil as in many countries, however, has proven to be a mixed blessing in economic terms. The oil boom of the 1970s caused the Nigerian Government to neglect its agricultural sector which had been the cornerstone of the economy. Light manufacturing was also neglected. The country soon became heavily dependent on oil exports. The fall of oil prices in the l980s drastically affected Nigeria. There are no Nigerian manufacturing industries of any importance. Oil and gas exports accounted for more than 98 percent of export earnings and about 83 percent of the federal government's revenue (2002). The country has not used the oil income to diversify and modernize the economy. In fact, Nigerian has tended to increasing quantities of foreign food and manufactured goods rather than produce them donestically. This might be understood in the early days when Nigeria first began exporting oil, but there have been 40 years of substantial oil exports and there has been no development of important infustrial production or meeded modrnization of the agricultural sector. Percapita income is relatively high, but only because of high incomes from a small number of individuals involved in the oil industry or governmen officials and the military able to obtain a share of the income often through corrupt practices. Corruption is a major problem in Nigeria. There were enormous opportunities for graft and theft of state funds and a political legal system totally encapable of dealing with it. Incomes in the 2000s declined below pre-independence levels, although per capita income is highly variable depending on oil prices. The decline of the agricultural sector has caused a massive migration to the cities, creating enormous social problems and widespread poverty as well as a collapse of basic infrastructure and social services. Further probelms have been created by governments which have pursued policies involving a statist economic model. There has been a huge growth of the "informal" sector which now dominates the non-oil economy. A reader writes, "I lived in Nigeria for 3 years, 1996-99. I tutored a little boy with special needs. It was the only country I have lived in where there was a severe gas shortage. Kids sold it by the litre bottle on street corners. We did not travel far at the weekend because of this difficulty. All that oil and Nigeria had none for itself! The local populace is angry too about the exploitation and it is the cause for oil workers to be kidnapped from time to time. I walked from my apartment to the restaurant on a Friday night. That was considered very risky. My steward would advise me when it was not a particulary good idea. I then went by car."

South Africa

Africa was almost enturely divided up by the European powers in the 19th century. South Africa was the first Africa country to begin to emerge from European control, although under a white controlled government. After World War II, other African countries began to achieve independence. The high hopes of independence were dashed througout Africa by economic failure. Economic conditions fgor the most part declined throughout Africa the various countries achieved independence. Ironically, racist Apartheid South Africa proved to be the economic powehouse of the continent. It might be said that the economic success was achieved by exploiting black labor. But the fact that blacks in neigboring states vied to enter South Africa to work there demobstrates that more was involved than the exploitation of blacks. The racist South African economy generated European style lives for whites and living standards for blacks above that of most other African countries. The Apartheid re\gime was replaced with black majority rule (1994). There were high hopes both within and outside of the country for a bright multi-racial future. Those bright hopes have not been asvhieved. South Africa today, blacks and colored (mixed race) can now enter the middle class and live in nice neigborhoods, the great bulk of the black population has not benefitted greatly. Unemployment has risen from 17 percent in 1995 to 25 percent in 2009. The infrastructure inherited has deteriorated The state-owned energy compsny, Eskom, now has to implement rolling power outages. The responsibility for the economic decline lies at the feet of the governing African National Congress (ANC). [Johnson] Nelson Mandella was an inspiring figure in ending Apartheid, but his age and abilities were less suited to overseeing an economy. Mandela at a cabinent meeting asked who was a good economist? Trevor Manuel thought Mandella has asked, "Who is a good communist?" and raised his hand. Manuel did a reasonable job as Finance Minister (1996-2009), but it was blind luck. Most other South African ministers were incompetent or corrupt or both. And his sucessor Thabo Mbeki lacked Mandelas mora sruples without any reedeming managerial capabilities. Mbeki is best known for figfgting AIDs with garlic and potatoes. Under the ANC black revolutionary nationalism and rampant coruption, South Africa's once vibrant economy has declined. South Africa's new president, Jacob Zuma, has promised reforms, what will be achieved is an open question.


Zimbabwe is one of the African countries which has the natural resources as well as the potential for a bountiful agricultural output. It is a test case in Africa for the failure of socialism and the consequences of the lack of the rule of law. The Reserve Bank of Zimbabwe printed money without any reserves and contraints. There are also chrges of corruotion against the Reserve Bank managers. The result was that it took 1 trillion Zimbabwe dollars to buy a loaf of bread and the economy of this potentially rich country ground to a halt. The savings of anyone with bank deposits were destroyed. The Government was forced to abandon its own currenbcy and instead use the U.S. dollars. This tamed inflation and slowed investors from exiting the country. The result was a sudden increase in economic growth which reached about 8 percent in 2010. Zimbabweans now, however, have a deep-seated distrust of the Government and its economic policies. As a result, many Zimbaweans refused to put their dollars in local banks. And the Reserve Bank is unable to guarantee loans making banks hesitant to loan what funds they havce. This is significantly impeding the country's recovery. The banks without deposits can not make loans to fuel economic growth. The growth rate thus fell in both 201 and 2012 to only 2.5 percent (2012). Other government policies associated with the 'indigenization' efforts have affected the few foreign companies still operating in the country. And few new foreign investors are willing to take on the risks of doing business in the country.


Johnson, R.W. South Africa's Brave New World (Overlook: 2010), 702p.

Kokorev, Vladimir. "SMEs or NGOs: Who can salvage Africa's economy?" AfricaNews.com (October 28, 2010).


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Created: 4:40 AM 5/11/2015
Last updated: 3:59 AM 10/23/2020