Why is Africa so poor?

edited February 2015 in Politics

Why is Africa so poor and what are the underlying historical, social, and political factors that have wrought such remarkable material inequity between regions of the world? Africa exists in such poverty compared to the West. Why has this happened?

From a cultural point of view

Looking at the African cultural structures sometime I questioned whether been colonized centuries ago was really a good thing. The people in Africa are not really poor by their own standards.

Looking back in history you may find that they were at social and ecological balance with their life styles, which to the western colonials were not "civilized" and in term of economics not very "rich". And as the colonization spread across the continent the balance was broken and Africans were forced to adapt in to new ways that till today hasn't shown much good results yet (sorry).

If you read the first part of Nelson Mandela's autobiography Long Walk to Freedom you will see that in his childhood as a Xhosa boy his society was balanced, just productive enough to accommodate the people in it, and that judging by any economic standard is not rich.

So perhaps it's not why Africa is not rich we should be asking ourselves, what we should find out is Africa's own natural ways that was in place before the colonization. I had the pleasure to travel to some local villages, not "civilized" I have say, but life is satisfying with careful preservation of natural resources.

From an economical point of view

One factor not mentioned in other answers is lack of unity. Independence left Africa fragmented into over 40 countries even not counting North Africa and islands. An egregious example is France which had two large, contiguous units, French West Africa and French Equatorial Africa, but still divided them for independence.

Small countries with no external checks and balances aggravated the effects of the human capital and infrastructure weaknesses listed in other answers. A continent-wide state or federation would have had no ethnic group larger than a few percent, avoiding even a situation like Nigeria's civil war.

The US, Soviet Union, China, and India all have benefited from the stabilizing effects of continent-sized markets, talent pools, and political balances of power. Brazil is doing better than fragmented Spanish-speaking America. India is doing better than Pakistan, Bangladesh, and the other small South Asian countries. Europe has embraced political integration recently and always had a good deal of integration. Southeast Asia may be the only example of a region that is divided but has developed successfully in recent decades.

From a business environment point of view

To understand why (much of) Africa is poor you must first understand why rich countries are rich.

Rich countries have an economic and political system with the following attributes:

1) Strong enforcement of property rights and contracts.

2) Rule of law..... An independent judiciary that quickly and consistently upholds the law without interference from the legislative and executive branches of Government.

These two are necessary conditions for wealth creation... Other factors which are also important are:

3) A stable currency which is a reliable store of value over the short term. This is usually impossible to achieve without an independent central bank (or better still, backed by a commodity) because the temptation to extract seignior age gain is too large for politicians.

4) A regulatory framework that makes it easy to start a business without requiring favors from politicians/bureaucrats in most areas of the economy.

5) Free trade within the nation and (typically) low tariffs on international trade.

All of this encourages capital accumulation and division of labor, which leads to higher productivity, which is the basis of the higher standards of living that are enjoyed by people in these countries.

Countries are poor to the extent that their political and economic systems lack these attributes. Most countries in sub-saharan Africa lack these as do the poor countries in Asia.

African countries like Botswana which have adopted these attributes in the last few decades are markedly richer than their neighbors (with similar demographics and climate) which haven't.


Sign In or Register to comment.