Africa

Africa is the world's second-largest continent and second most populous after Asia. At about 30,244,050 km² (11,677,240 mi²) including its adjacent islands, it covers 20.3 percent of the total land area on Earth. With over 800 million human inhabitants in 54 countries, it accounts for about one seventh of the world human population.

Economy

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Main article: Economy of Africa

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Africa is by far the world's poorest inhabited continent, and more saliently it is on average poorer than it was 25 years ago.

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The United Nations' Human Development Report 2003 (of 175 countries) found that positions 151 (Gambia) to 175 (Sierra Leone) were taken up entirely by African nations.

Related Topics:
United Nation - 2003 - Gambia - Sierra Leone

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It has had (and in some ways is still having) a shaky and uncertain transition from colonialism, with the ensuing Cold War and increases in corruption and despotism being major contributing factors to its poor economic situation. While rapid growth in China and now India, and moderate growth in South America, has lifted millions beyond subsistence living, Africa has stagnated, even going backwards in terms of foreign trade, investment, and per capita income. This poverty has widespread effects, including low life expectancy, violence, and instability - factors intertwined with the continent's poverty. Over the decades a number of solutions have been proposed and many attempted, but no improvement scheme has shown much success.

Related Topics:
Colonialism - Cold War - Corruption - Despotism - China - India - South America - Trade - Investment - Per capita - Income - Poverty - Life expectancy - Violence - Instability - Decade

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Part of the problem is that foreign aid has generally been used to encourage the cultivation of cash crops such as cotton, cocoa and coffee in place of subsistence farming. However, at the same time, industrialized nations have pursued policies that drive down the prices of those commodities. For example, the real cost of producing cotton in West Africa is far less than half of that of producing it in the United States, thanks to lower labor costs. However, American cotton sells for less than African cotton as the cultivation of cotton is heavily subsidized in the United States. As a result, the prices of these commodities is about the same now as they were in the 1960s.

Related Topics:
Foreign aid - Cash crops - Cotton - Cocoa - Coffee - Subsistence farming - Industrialized nations - United States - Subsidized - 1960s

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Africa also suffers from sustained capital flight. Generally, any income coming into African nations goes right out again, either because the assets sold were foreign owned (oil being a good example) and the money coming in is sent to the foreign owners, or the money is used to repay loans to industrial nations or the World Bank. It has been estimated that Africa could cease its dependence on foreign aid merely by insisting that all profits earned in an African country be invested in the region for at least twelve months.

Related Topics:
Capital flight - Oil - World Bank

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Botswana, which is the one poor nation in Africa that has not submitted to controls suggested by the World Bank or the IMF, has been one of the exceptions to the general rule of African economic stagnation, and has sustained healthy growth over recent years despite the lack of foreign investment, free flow of capital or trade liberalization.

Related Topics:
Botswana - IMF - Foreign investment - Capital - Trade liberalization

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The major economic success is South Africa, which is as industrially and economically developed as any industrialized European or American nation, to the extent that it has its own mature stock exchange. This is partly due to its amazing wealth of natural resources, being the world's leading producer of both gold and diamonds. It is also due to its relatively large settler European population, giving South Africa access to capital, markets and know how and relatively little capital flight.

Related Topics:
South Africa - Stock exchange - Natural resource - Gold - Diamond

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Although Nigeria sits on one of the largest proven oil reserves in the world, it also has the highest population of any nation in Africa, and one of the fastest growing. Moreover, most of the oil industry is foreign owned, and the industry is rife with corruption at the national level so that very little oil money stays in the country, and what does goes to a very small percentage of the population.

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