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

2. Agenda: I.Introductory and Administrative Matters II.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 RegionGDPpc (PPP) $US 2007 Life Expectancy 2007 M F Child Mortality. Per 1000 Sub-Saharan Africa1,86950 52125 East Asia & Pacific4,96970 7456 Europe and Central Asia 11,26265 7449 Latin America & Caribbean 9,67870 7665 Middle East & N. Africa 5,40268 7277 Canada35,50078 8306

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

8. The World. Viewed from Space

10. Major Rivers

12. Ethnic Groups

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

26. Islam in Africa

28. African Petroleum Reserves and Production

30. Population

31. 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

32. 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

33. 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

34. 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

35. 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.

36. 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