Ironically, a continent rich in natural resources is poverty-stricken. Africa is reportedly the poorest continent globally, developing at a very slow pace while the rest of the continent is making giant strides. As a result of Africa’s snail-pace development, the International Monetary Fund (IMF) projected in 2021 that Sub-Saharan Africa would be the slowest region in the world.
Although development in the world is measured by economic growth and human development, Africa’s human development increased as of May 2021 to over 1.37 billion. But the economy is lagging, reflecting on the people’s standard of living.
Here are the reasons Africa is developing at a slow pace compared to the rest of the continent.
This is one of the reasons development is slow in Africa. Modernised colonialism has crippled and harmed Africa’s economic growth and development. Colonialism is the act of exercising complete or partial authority over-dependent area or people.
The fundamental goal is to control and plunder the territory’s natural riches to prevent economic growth. This is evident in how the world power relates with African countries.
According to Tom Burgis, author of The Looting Machine, this is done indirectly. He said, “Europe and the Cold War superpowers have given way to a new form of dominion over the continent. They do not control the countries directly, but through alliances with unaccountable African rulers, thus governing through shadow states and middlemen who connect them to the global resource economy, and multinational companies from the West and the East that cloak their corruption in corporate secrecy.”
In compensation, they give African countries foreign aid and economic assistance. They do this to maintain the status quo. However, the support to Africa is little compared to the worth of exploited resources moving oppositely.
Burgis further wrote, “Outsiders often think of Africa as a significant drain of philanthropy, a continent that guzzles aid to no avail and contributes little to the global economy in return. But look more closely at the resource industry, and the relationship between Africa and the rest of the world looks somewhat different.
In 2010, fuel and mineral exports from Africa were worth $333 billion, more than seven times the aid value that went in the opposite direction. This excludes the vast sums spirited out of the continent through corruption and tax fiddles.”
At the root of Africa’s underdevelopment is corruption. African leaders amass the commonwealth and consequently deny their country and its people access to dignified life – amenities as basic essential as clean water, healthcare, power, and good food is a luxury. Over time, the gap between the rich and poor has widened. Corruption is prevalent at practically all levels of Africa’s political system.
For instance, Eduardo Dos Santos, the ex-president of Angola, allegedly became wealthy by looting public funds while 70% of the country’s population is poor. He also empowered her first daughter, Isabel Dos Santos, to further plunder Angol’s national treasury until she emerged as Africa’s richest woman, with a net worth of over $3.5 billion.
Increase in foreign debt
In certain nations, public debt has stayed high and is still rising. This is because many African governments rely on loans to fund their programs far too heavily. The region’s public debt sustainability may be jeopardised further by vulnerability to weaker currencies and higher interest rates linked with the shifting composition of debt. Fiscal deterioration, wars, and weather shocks are among the other internal threats.
According to the World Bank report, the debt of low- and middle-income countries in Sub-Saharan Africa reached a new high of $702 billion in 2020. This is the highest level of debt in a decade for the area.
“As of 2021, the total external public debt in West Africa amounted to around 164 billion U.S. dollars. Nigeria and Ghana recorded the highest debt levels in the region, at approximately 79.54 billion U.S. dollars and 21.91 billion U.S. dollars, respectively. On the other hand, Gambia and Guinea-Bissau registered the lowest values, at 823 million U.S. dollars and 381 million U.S. dollars, respectively,” the report said.
According to Carnegie Endowment for International Peace, between 2000 to 2019, “Chinese financiers made 1,141 loan contracts with African governments and their state-owned firms.” The country also lent $143 billion to African governments and state-owned companies between 2000 and 2017.
According to economists, African countries economies are generally weak. This can be seen through the following: weak Gross Domestic Product (GDP), the exports of primary products and agricultural products getting smaller, low level of using modern industrial machines, and terrible national debt to richer countries.
This economic cycle has largely engulfed Africa. This is a basic inequity in international commerce, and it is difficult to remove once it has been established. Europe imposed an uneven commercial system on Africa from the mid-fifteenth century onwards. This uneven trade system exists today in some form or another. Through this, African countries have never been able to amass sufficient national capital to invest in infrastructure and industry, preventing them from fully developing as nations.
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