1. Economics – Africa

2. Q: How is a country’s economy determined?
A: By how involved its government is in its economic decisions

3. RESOURCES
First of all, ALL countries have resources: Water, lumber, oil, animals, coal, metals, and so on….

4. A Society Must Answer Three Basic Economic Questions:
1) What to produce?

5. 2) How to produce?

6. 3) For whom to produce?

7. There are four types of economies in the world:

8. I. Traditional Economy based on old traditions
simple, agricultural societies   
3. Very few choices
(Beans, squash, corn. Period.)
(Ex. - Many African countries)

9. Subsistence Farming: >Growing only what you can eat.
>Nothing left over to sell.

10. II. Command Economy Government owns the resources
Government plans the economy
Little consumer choice
Long lines to buy food      
Example: Cuba and North Korea

11. III. Free Market Economy
1.  Resources are privately owned.      
Making a profit is important.
3. Much competition.
4. Consumers have many choices.
5. Very little gov’t involvement

12. Example of competition in a free market economy:

13. In reality there are no pure market economies or command economies.
* In the US, the government plays a major role in the economy (examples: minimum wage laws and social security)
* In China, some private ownership of businesses is allowed, but the gov’t maintains control over business

14. IV. Mixed Economy
Private enterprise controls, but has some government involvement
Most common economic system today      Examples: UK, Israel, USA

15. Economies of 2 African Countries:

16. 1) South Africa sub-Saharan Africa’s strongest economy
struggling economy (very poor)
mixed economy

17. South Africa used to have apartheid laws which didn’t let its black citizens have full rights.

18. Apartheid
Discrimination based on race

19. S.A. was hurt by sanctions when other countries refused to trade with S.A.
These sanctions caused S.A. to abandon apartheid.

20. a trade penalty by other countries to get a country to change its laws
Sanction:
a trade penalty by other countries to get a country to change its laws

21. 2) Nigeria used to be wealthy b/c of its oil
did not plan for the future
now very poor
is now a mixed market economy

23. How are the economic systems of South Africa and Nigeria the same?
How are the economic systems of South Africa and Nigeria different?