Economic Development in Africa

• Lecture covers culture, development, and economy, specifically focusing on the issue of exchange.
• The lecture will address the case of exchange, GDP and per capita income mismatches, and the resource curse.
• Corruption as a hindrance to development, cases of judgement debts, and judicial corruption will be examined.
• Transparency indices, the characteristics of gifts, gift taxation, bribery, and transformations of gift culture will also be discussed.

Culture, Development, and Economy

• The definition of culture or development is intertwined with the economy.
• The economy is implicitly included in the definition of culture.
• Necessities include food, shelter, and clothing, while luxury items are considered non-essentials.
• Production and consumption patterns are relevant.
• The MDGs (Millennium Development Goals) are equally concerned with economic issues, such as eradicating poverty and hunger.
• Some examples of MDGs are people needing to live with more than a dollar a day and employment guarantees.

Africa's Share of World Mineral Production (2005)

• Cobalt: 57% (DRC, Zambia, Morocco)
• Diamond: 53% (Botswana, DRC, South Africa, Angola, Namibia)
• Manganese: 39% (South Africa, Gabon, Ghana)
• Phosphate: 31% (Morocco, Tunisia, Egypt, South Africa, Senegal)
• Gold: 21% (South Africa, Ghana, Mali, Tanzania)
• Bauxite: 9% (Guinea, Sierra Leone, Ghana)
• Nickel: 7.5% (South Africa, Botswana, Zimbabwe)
• Copper: 5% (Zambia, DRC, South Africa)
• Data source: British and US Geological Services data

Other Estimates of African Natural Resources

• Global land space: 20.4%
• Cobalt: 90%
• Gold: 50%
• Platinum: 90%
• Tantalite: 70%
• Chromium: 98%
• Manganese: 64%
• Uranium: 33%
• Diamond: 60%
• Phosphate: 51%
• Proven Oil reserves: 12%
• Natural Gas: 10%

Agricultural Produce

• The continent's abundant land, rich vegetation, warm climate, and soils hold potential for agricultural production.
• Tropical food and cash crops such as cocoa, coffee, tee and rice.
• Timber and forest products exist there.
• Eco and cultural tourism contributes.

The Resource Curse

• Revenues from minerals and natural resources should fund development, they have instead been used for greed and corruption.
• The resource curse has fuelled conflicts and disputes, and environmental degradation.
• The resource curse has fuelled poverty and violence.
• Natural resources in Africa have largely been detrimental.

Comments on the African Resource Curse

• According to a World Bank Report, discovering oil and mineral resources does little to improve prospects for poor people.
• Resource-rich countries like Congo-Brazzaville, Gabon, and Angola have seen an increase in the percentage of the population living in extreme poverty.
• Countries with considerable mineral wealth are theaters of conflict, Nigeria, Congo, Liberia, and Sierra Leone.

Ghanaian Economy Features

• Gross Domestic Product (GDP) is $90.41 billion (2013 est.)
• GDP Per capita is $3,500 (2013 est.)
• Population below the poverty line is 28.5% (2007 est.)
• Agriculture sector: 21.5%
• Industry sector: 28.7%
• Services sector: 49.8% (2013 est.)
• Labor force in agriculture: 56%
• Labor force in industry: 15%
• Labor force in services: 29% (2005 est.)
• The unemployment rate is 11% (2000 est.)

Nigerian Economy Features

• GDP (ppp): $377.9 billion (2010 est.)
• GDP - per capita (PPP): $6,000 (2014 est.)
• Population below poverty line: 70% (2007 est.)
• Agriculture GDP composes 20.6%
• Industry GDP composes 25.6%
• Services GDP composes 53.8% (2014 est.)
• Labor force in Agriculture at 30%
• Labor force in Industry at 32%
• Labor force in Services at 38% (2010 est.)
• The unemployment rate is 23.9% (2011 est.)

Togo Economy Features

• GDP (ppp) is $10.14 billion (2014 est.)
• GDP - per capita is $1,400 (2014 est.)
• Population below poverty line: 32% (1989 est.)
• Agriculture GDP composes 27.6%
• Industry GDP composes 33.9%
• Services GDP composes 38.5% (2014 est.)
• Labor force population: 2.595 million (2007)
• Agriculture labor force is 65%
• Inudstry labor force is 5%
• Service labour force is 30% (1998 est.)

British Economy Features

• GDP is $2.387 trillion (2013 est)
• Per Capita GDP $37,300 (2013 est.)
• Population below poverty line is 16.2% (2011 est.)
• Agriculture GDP composes 0.7%
• Industry GDP composes 20.5%
• Services GDP composes 78.9% (2013 est.)
• Agriculture labour force is 1.4%
• Industry labour force is 18.2%
• Service labour force is 80.4% (2006 est.)

Statistics of Unequal Development

• A country can have a high GDP and per capita income, but many nationals live below the poverty line.
• Wealth distribution is often skewed.
• Many parents can't afford education for their children.
• Many people can't pay for health services/hospital treatment; the NHIS benefits the rich.
• Many people beg to survive on a daily basis and people are unemployed.

The Ghanaian CHRAJ Case

• The per capita GDP of a Ghanaian is $3,500 (2013 est.), but few Ghanaians earn this much.
• Many Ghanaians live on less than $3.10 per day or $1,131 per year.
• At the same time, the CHRAJ boss spends $4,500 per month or $54,000 a year on rent alone.

Corruption in Equatorial Guinea

• Equatorial Guinea is the third biggest oil producer in sub-Saharan Africa.
• Per capita national income it is among the world's richest countries.
• However, most of the population lives on a little than $1 per day.
• Average life expectancy barely reaches 55.
• President Obiang has been in power for 33 years and is building a new capital at Oyala.
• Teodorin, the President's son, has a six-story Paris mansion, 12 luxury cars, a home in Malibu, private jet, and $2 million worth of Michael Jackson memorabilia.
• Teodorin diverts tons of millions of dollars of state revenues into personal accounts.

The Resource Curse: Reasons for Poverty

• Gross inequalities negatively affect development, due to the mismanagement of the economy by Governments
• Policies don't favor income redistribution.
• High levels of unemployment exist, meaning many people are unemployed and do not earn reasonable incomes.

Reasons for Poverty

• Problems in the labor front, there is a lack of incentives for private and public production.
• Government priorities are misplaced.
• There are unreasonable consumption habits: craving for foreign luxury goods rather than local ones.
• Tax regimes are inadequate, and Govts not able to collect taxes for its programs.
• The rich and powerful are extorting wealth from the poor.
• State and private heavy corruption causes distortions.

The Issue of Corruption

• Anti-corruption campaigners argue that corruption impoverishes and kills.
• An estimated $1tn (£600bn) per year is taken out of poor countries and millions of lives are lost because of corruption.
• 3.6 million deaths yearly are blamed on corruption

Corruption: Meeting MDGs Targets

• The discourse on development needs to address corruption due to many reasons that account for failure to meet MDGs targets.
• Governments are to blame, and the citizens must also share blame for MDG failures.
• Also cited as a reason for not attaining the MDGs, is that the country is in the grip of a culture of corruption.

Corruption as an Everyday Issue

• Corruption is important because of remote and immediate effects on countries, communities, and individuals.
• There is talk of corruption everywhere, the British commission is concerned.
• Talk of ‘hand-go-hand-come', 'greasing the palms', 'seeing people in power, kalabule, judgement debts, causing financial loss to state.
• Corruption is a concern in African countries.

Opinion on Corruption: We Are All Guilty

• Corruption is the greatest problem in Ghana, it has become a way of life to most Ghanaians from top government officials to civil servant.
• Government officials' corruption is often because a junior cashier raises a bogus cheque and receives a paltry amount.
• That junior cashier has denied his family of access to quality education or good health care.

Definition of Corruption

• Corruption is malfeasance: an act lacking in transparency, a moral wrong, and a crime against the public, society, and individual.
• Corruption is proye implying that things have gone bad, concealing or putting something under the mat.
• Corruptions involves cheating or theft.
• It suggests things being given and received under cover of darkness.
• Corruption can also involve gifts being given at night, meaning that those involved do not wish to be found out.

Checkpoint Corruption

• The Government of Ghana has been losing a huge amount of money annually due to the corrupt practices of some uniformed officials at checkpoints along a specific corridor.

State Institutions Recently implicated

• SADA (Savannah Accelerated Development Authority)
• GYEEDA
• National Service Secretariat
• Judges caught on camera taking bribes
• CHRAJ (Commissioner spending on her personal comfort)
• Football Association
• DVLA and Photo-X: financial mismanagement

Faces of Corruption

• Demanding, giving, and taking of bribes occurs.
• Using laid down procedures to violate disbursement of public resources to pursue personal gain.
• Destruction of public assets to hide economic crimes.
• Favoritism/Nepotism.
• Embezzlement and/or misappropriation of public resources.
• Profiteering (kalabule), custom and trade malpractices (selling unwholesome goods) also corrupt.
• Journalists can also be deemed to corrupt as them demanding ‘soli' for news coverage is corrupt.

More Faces of Corruption

• Non-payment of taxes or duties, and causing final loss to the state through negligence.
• Incurring judge debts and involving themselves with electoral malpractices (rigging, multiple voting).
• Other misconducts such as exam malpractices, forgery, internet fraud, lateness to work, and not putting in a fair day's work while claiming salaries/wages is corrupt.

The Case of Judgement Debts

• A total amount of GH£687.65 million was paid in settlement of judgement debts by the state between 2009 and 2011 and this was equal to the budgetary allocation to agriculture in the three years.
• Out of judgement debt payments were awarded for breach of contract by government.

Judgement Debts Scenarios

• Ghana is troubled with 'judgement debts' and commission was set up to investigate the issue.
• Someone illegally claims money not owed to them Attorney Gen. Dept ought to debunk claim.
• However, a Dept willfully or carelessly does not defend the state which results in money is illegally paid out.

Abuse of Power

• Abuse of power happens for personal/political reasons, and govt. officials may refuse to settle a legitimate claim filed by an individual or corporation.
• Claimants may have refused to pay a bribe to officials prior to their claim being processed.
• Or claimants may be known to be not in good books of the government of the day.
• When a matter gets to court and the judgement is not in favour of claimant, then legal costs and interests will incur.

The Outcome of Corruption

• Serious destruction of resources, inefficiency, and a heavy sense of helplessness occurs.
• There is loss of human dignity and marginalisation, entrenchment of poverty, and capital flight
• Investors do not want to work with the corrupt.

Transperancy Indicators of Corruption

• Published yearly by Transparency International
• Scandinavian countries: Sweden, Denmark, Finland, Norway have CPI of 9+ African countries lie at bottom with scores of less than 4.

A Culture of Corruption

• When corruption is endemic it can be said to come into being.
• People feel that there is no other option than to partake in the corrupt system.
• Corruption is the norm, and those who choose not to partake get ridiculed.
• You may also be told that 'everybody eats in his or her place of work'.

Blaming African Culture

• African cultures have been blamed for corruption but in pre-colonial times the state domain was limited.
• With colonisation the concept of abandwuma came to the forefront, and people abused the public.
• It was not viewed as a crime or a moral wrongdoing as the colonial state was alien and illegitamate.

Kenya's Corrupt League Table

• The Police force is the most corrupt, followed by State corperations and Local Authorities.
• The Teachers Service Commission, the Prisons service, The Judiciary, and the Provincial Administration are also corrupt.
• Other mentionable organizations are the Ministry of Lands and the Ministry of Health.