THE ECONOMY OF AFRICA

The economy of Africa consists of the trade, industry, and resources of the people of Africa. As of 2006, approximately 922 million people were living in 54 different countries. Africa is by far the world's poorest inhabited continent. Though parts of the continent have made significant gains over the last few years, of the 175 countries reviewed in the United Nations' Human Development Report 2003, 25 African nations ranked lowest amongst the nations of the world. This is partly due to its turbulent history. The decolonization of Africa was fraught with instability aggravated by cold war conflict. Since the mid-20th century, the Cold War and increased corruption and despotism have also contributed to Africa's poor economy. The biggest contrast in terms of development has been between Africa and the economy of Europe. The African Economic Outlook report specifically mentions that Africas trade with China has multiplied by 10 since 2001, reaching over USD 100 billion in 2008. The economies of China and India have grown rapidly, while Latin America has also experienced moderate growth, lifting millions above subsistence living. By contrast, much of Africa has stagnated and even regressed in terms of foreign trade, investment, per capita income, and other economic growth measures.[ Poverty has had widespread effects, including low life expectancy, violence, and instability, which in turn have perpetuated the continent's growth problems. Over the decades, there have been many unsuccessful attempts to improve the economies of individual African countries. However, in recent years this has begun to change in many countries. Data suggest some parts of the continent are now experiencing fast growth. The World Bank reports the economy of Sub-Saharan African countries grew at rates that match global rates. The economies of the fastest growing African nations experienced growth significantly above the global average rates. The top nations in 2007 include Mauritania with growth at 19.8%, Angola at 17.6%, Sudan at 9.6%, Mozambique at 7.9% and Malawi at 7.8%. Many international agencies are gaining increasing interest in emerging modernizing African economies, especially as Africa continues to maintain high economic growth despite current global economic recession. While no African nation has joined the ranks of the developed nations in the Organization for Economic Co-operation and Development (OECD) yet, the entire continent is not utterly impoverished and there is considerable variation in its wealth. North Africa has long been closely linked to the economies of Europe and the Middle East. South Africa is by far the continent's wealthiest state in total GDP, accounting for 30% of the continent's GDP in nominal terms and 24% by PPP. The small but oil-rich states of Gabon and Equatorial Guinea round out the list of the ten wealthiest states in Africa. The temperate northern and southern ends of the continent are wealthier than tropical subSaharan Africa. Within the tropics, East Africa, with its long pre-colonial history of trade and development, has tended to be wealthier and more stable than elsewhere. Islands such as the Seychelles, Runion, Mauritius, and Cape Verde have remained wealthier than the continental nations, although the unstable Comoros remains poor.The poorest states are those engaged in or just emerging from civil wars. These include the Democratic Republic of the Congo, Sierra Leone, and Burundi. In recent times, the poorest region has been the Horn of Africa, although it had historically been one of the wealthiest regions of sub-Saharan Africa. Ethiopia in particular

had a long and successful history. The poverty of the region, and the associated famines and wars, have been a problem for decades. There is considerable internal variation within countries. Urban areas, especially capital cities, are generally wealthier than rural zones. Inequality is pronounced in most African countries; the upper class has a much higher income than the majority of the population.It is through the sectors of Africa's work industry that the economy can be maintained. Most of this is contributed to exporting of goods. This is due to the smaller amount of secondary industries available in the continent. In 2009, 87% of Africa's economy was from exportation alone.

Agriculture
Around 60 percent of African workers are employed by the agricultural sectors, with about threefifths of African farmers being subsistence farmers. Subsistence farms provide a source of food and a relatively small income for the family, but generally fail to produce enough to make reinvestment possible. Larger farms tend to grow cash crops such as coffee, cotton, cocoa, and rubber. These farms, normally operated by large corporations, cover tens of square kilometres and employ large numbers of labourers.The situation whereby African nations export crops to the West while millions on the continent starve has been blamed on developed countries including Japan, the European Union and the United States. These countries protect their own agricultural sectors with high import tariffs and offer subsidies to their farmers, which many contend leads the overproduction of such commodities as grain, cotton and milk. The result of this is that the global price of such products is continually reduced until Africans are unable to compete, except for cash crops that do not grow easily in a northern climate Because of these market forces, in Africa excess capacity is devoted to growing crops for export. Thus, when civil unrest or a bad harvest occurs, there is often very little food saved and many starve. Ironically, excess foodstuffs grown in developed nations are regularly destroyed, as it is not economically viable to transport it across the oceans to a market poor in capital. Although cash crops can expand a nation's wealth, there is often a risk that focusing on them rather than staples will lead to food shortages and hunger. In modern years countries such as Brazil, which has experienced great progress in agricultural production, have agreed to share technology with Africa to greatly increase agricultural production in the continent to make it a more viable trade partner Increased investment in African agricultural technology in general has the potential to greatly decrease poverty in AfricaThe demand market for African cocoa is currently experiencing an enjoyable price boom. The South African[ and Ugandan governments have targeted policies to take advantage of the increased demand for certain agricultural products and plan to stimulate agricultural sectors. The African Union has plans to heavily invest in African agriculture [ and the situation is closely monitored by the UN

Mining and drilling

Main article: Mineral industry of Africa Africa's most valuable exports are minerals and petroleum. A few countries possess and export the vast majority of these resources. The southern nations have large reserves of gold, diamonds, and copper. Petroleum is concentrated in Nigeria, Angola, its neighbors, and Libya.While mining and drilling produce most of Africa's revenues each year, these industries only employ about two million people, a tiny fraction of the continent's population. Profits normally go either to large corporations or to the governments. Both have been known to squander this money on luxuries for the elite or on mega-projects that return little value[ In some cases, these resources have turned out to be detrimental to economic development. Although DR Congo is rich in minerals, the country remains one of the poorest countries in the world. This is historically due to ownership fights over these minerals, tracing back to the early 1900s. After DR Congo's independence from Belgium, the colonial government hesitated to leave behind these resources.DR Congo solicited UN help against Belgium, but that turned out to be a bad idea.[clarification needed] In an attempt to get out of the quagmire, DR Congo sought Soviet assistance. This led the country into deeper trouble, as the country separated into two and a long proxy war between the West and East began. However, countries such as Angolaand Uganda are experiencing booms in drilling and oil drilling and manufacture.

Manufacturing
Africa is the least industrialized continent; only South Africa, Egypt, Morocco and Tunisia in general have substantial manufacturing sectors. Despite readily available cheap labour, nearly all of the continent's natural resources are exported for secondary refining and manufacturing. According to the AFDB, about 15% of workers are employed in the industrial sector. The multinational corporations that control most of the world's major industries and their financiers require political stability before erecting an expensive factory and risk losing that investment through nationalization. An educated populace, good infrastructure and a stable source of electricity are essential to investments. These factors are rare in most countries in Africa. Other developing regions of the world such as India and China have been more attractive to companies looking to build a new factory or invest in a local enterprise. Many African states used to limit foreign investment to ensure local majority ownership. Close governmental control over industry further discouraged international investment. Attempts to foster local industry have been hampered by insufficient technology, training, and investment money. The paucity of local markets and the difficulty of transporting goods from major African centres to world markets contribute to the lack of manufacturing outside of South Africa and Egypt. Both the African Union and the United Nations have outline plans in modern years on how Africa can help itself industrialize and develop significant manufacturing sectors to levels proportional to the African economy in the 1960s with 21st century technology. This focus on growth and diversification of manufacturing and industrial production, as well as diversification

of agricultural production, has fueled hopes that the 21st century will prove to be a century of economic and technological growth for Africa. This hope coupled with the rise of new leaders in Africa in the future inspired the term "the African Century" referring to the 21st century potentially being the century when Africa's vast untapped labor, capital and resource potentials might become a world player. This hope in manufacturing and industry is helped by the boom in communications technology and local mining industry[28] in much of sub-Saharan Africa. Namibia has attracted industrial investments in recent years[29] and South Africa has begun offering tax incentives to attract foreign direct investment projects in manufacturing. Countries such as Mauritius have plans for developing new "green technology" for manufacturing. Developments such as this have huge potential to open new markets for African countries as the demand for alternative "green" and clean technology is predicted to soar in the future as global oil reserves dry up and fossil fuel-based technology becomes more economically unviable