Topic
Africa’s Quest for Investments
Instructions
Write a research paper detailing everything there is to know about Africa’s Quest for Investments
Answer Preview
According to IMF statistics, Africa has experienced two economic growth periods; between 1961 and 1975, and from 1995 to-date. These periods are characterised by economic stagnations resulting to low economic output of the continent as opposed to other countries of the world. Generally, Africa seems to prevail under low development progress. Different arguments have been put forward as the reasons for under-development; colonization, slave trade history and geographical conditions. The hypothesis is that the three factors served as the initial contributors to Africa’s’ low development.
However, Africa has not remained as destined to low economic growth. At the end of the 90’s, the relative political stability and resources led to significant comparison of Africa’s development prospects with other regions such as South-East Asia which was engulfed with economic failure, poverty and conflicts. Undeniably, Africa experienced significant growth of about 5% in the late 60’s and 70’s before the emergence of oil crisis (IMF, 2014). The increasing oil prices and high cost of credit for sovereign debt alleviated the fate of different African countries. One decade after the independence, African countries adopted industrialization under state ownership to substitute imports, but with low quality products, lack of competitiveness and low production. The economic instability in the 1980’s and 1990’s left most African countries in debt-amounting to $270 by 1990, borrowed from developed countries (Omotola & Saliu, 2009).
Al-Shammari & Masri (2015), hold that in rejoinder to these economic challenges, a number of political measures were adopted that renewed the economic growth. Among these included privatization of the state-owned companies, liberalization of major markets, opening of international business, debt reduction and improving the current trade balance. Among the countries with the most improved business environments in the world include Cote d’Ivoire, Benin, DRC Congo, Togo, Senegal Nigeria, Kenya and Ghana (Jerven (2011).
Africa entered an era of impressive and sustained growth in the beginning of the millennium. Most countries accounted for the larger proportion of the world’s fastest growing economies. The 2008 financial crisis presented minimal impact in Africa as continent demonstrated resilience due to improved fiscal situation and relatively little economic interconnectivity with other continents.
The recent exit of the UK from European Union raises anxiety on Africa ties with European countries which import most of Africa’s exports. The turbulence will possibly affect Kenya and Nigeria, where the bilateral trade in the next five years will require a downward revision. Over 0.3% of Kenya’s flower export depends on EU markets. Similarly, South Africa’s wine exports might register a shortfall as the British importers retract (Monks, 2016).
Word Count: 350,000