(EOA) Economic Growth in Africa Lesson

Economic Growth in Africa

Economic growth and prosperity are important for countries because they allow countries to have stable economies that are strong enough to support their populations. During this module, we will look at Nigeria, South Africa, and Kenya to evaluate the health of their economies and to determine if they are stabilized and growing. To determine this, we will look at literacy rates, education levels, training, type and use of natural resources, the amount of capital resources, and the role entrepreneurship plays in each of these countries. We will also consider and develop an understanding of how the countries prioritize these items. After investigating and gathering information about these economic indicators, we will evaluate the success of the economic growth.

How is Economic Growth Measured?

Economic growth in a country is measured by the country’s Gross Domestic Product (GDP) in one year

GDP = the total of goods and services produced in one year within a country

  • GDP is a domestic measurement because it measures only what has been produced within a country – this does not include products that are imported.
  • It is much better for the economy of a country to produce its own goods and services; this increases the country’s GDP.
  • Measuring GDP each year we can: Compare one country’s economy to another, check a country’s economic progress over time, and show if the economy is growing or not.

Economic Growth

There are 4 main factors that influence economic growth within a country:

  1. Land, natural resources, available
  2. Investment in Human Capital
  3. Investment in Physical Capital
  4. Entrepreneurship

The presence or absence of these 4 factors determine the country’s Gross Domestic Product for the year

Explore the economies of Kenya, Nigeria, and South Africa below.

Economies of Kenya, Nigeria, and South Africa

Kenya
  • Type of economy: Kenya has market-based with a few state-owned infrastructure enterprises. Kenya is described as Eastern and Central Africa's hub for Financial, Communication, and Transportation services.
  • Goods produced: Agriculture, petroleum-based items, and pharmaceuticals
  • Leading exports: Coffee and Petroleum products
  • GDP per capita: $ 1,507.81
  • Labor Force: agriculture: 61.1%, industry: 6.7%, services: 32.2%
  • Unemployment rate: 11.5%

Nigeria
  • Type of economy: Poorly organized economy after a long period of military dictatorship and corruption. They are now trying to reorganize with more private enterprise allowed. They want to be able to take advantage of a strong world oil market.
  • Goods produced: Oil and petrochemicals are the primary market goods. Nigeria once exported food and other agricultural products but now must import them.
  • Leading exports: Oil and petrochemical products
  • GDP per capita:$ 1,968.56
  • Labor Force: Agriculture – 70%, Industry – 10%, Services – 20%
  • Unemployment rate: 4.9%

South Africa
  • Type of economy: A technologically advanced market economy with some government control. One of the strongest economies in the region.
  • Goods produced: Mining (platinum, diamonds, and gold), automobile assembly, machinery, textiles, iron and steel, chemicals, fertilizer
  • Leading exports: Gold, diamonds, platinum, other minerals, machinery, and equipment
  • GDP per capita: $6,160.73
  • Labor Force: Agriculture – 4%, Industry – 24%, Services – 72%
  • Unemployment rate: 24%

Culture Challenge

Take Away

After looking at the factors influencing the economy of Kenya, Nigeria, and South Africa, it is possible to conclude that stabilized governments, encouraging democracy, with limited corruption, often lead to a country having a higher success in economic output. To fully understand the current state of Africa, an in-depth analysis of its history is important. The legacy of imperialism left many African nations finding their way in forms of stabilized government. They are just now industrializing and reaching modern economic ideas. The countries with larger natural resources and an educated workforce are seeing prosperity grow. Those without those items are continuing to see the rise of corruption and the stagnation of their economic hopes.

IMAGES CREATED BY GAVS