Factors Hindering Growth of Economy in Africa
There are several factors hindering growth of economy of Africa. Economic growth refers to an increase in the capability or capacity of the economy to produce services and goods as compared between time periods. Economic growth is usually measured in nominal terms such as inflation or the real terms that can be adjusted for the inflation. GNP per capita or GDP is used in comparing economic growth between countries because these consider the differences in population between countries. In Africa, economic growth is hindered by several factors. They include technological capabilities’ limitation, over-dependence on aids, poor infrastructure, and poor economic structures among others.
Major factors hindering growth of economy of Africa
- Over-dependence on foreign aids
In Africa, many countries depend 100 percent on development partners to finance their development projects. According to estimates, 80 percent of the inputs into education, health and agriculture come from foreign development partners. Although foreign aids are good, over-relying on them, leads to the stagnation of the economy of a country. Many African countries now have large percentages of their budgets financed by foreign donations. This ought not to be the case because instead of engaging in activities that will facilitate economic growth, these countries wait for aids in order to enhance their education and infrastructure. Africans ought to engage in activities that will generate revenue instead of budgeting for foreign aids.
- Technology limitations
It is disheartening to see that African countries are yet to understand that technological capability is the main difference between the developed countries in Europe, Asia and American and the underdeveloped countries in Africa. This can be seen from how countries access and create as well as use ICT and science in solving socio-economic issues. Today, the world is becoming increasingly driven by the latest technological innovations. Agriculture, medicine, and transportation among other sectors depend on ICT and science. This means that to be successful, African countries should invest in technology because limitation in technology capabilities is among the factors that hinder economic growth in Africa.
- Poor structures of the economy
Since African countries are reluctant in adopting the latest technology, most of them are yet to change economic structures from the time of independence. Most of them are still exporting raw materials that include cocoa, diamond, gold, bauxite and gold in their raw forms. Thus, they do not add value to raw materials as a way of increasing their earnings in a global platform. African countries are still importing items like toys, computers, matches, and toothpicks among other products from the west. This implies that the inability of Africa to manufacture such items will continue to hinder its economic growth until African countries take the initiative to embrace technology in their manufacturing sector and establish better economic structures.
- Poor education
Education is very important for the development of a country because it promotes entrepreneurship by producing a skilled workforce. The African populace will get the right knowledge and skills for manufacturing items from quality education. This means that the current education that the African countries are offering to students is yet to produce graduates that can take up the task of growing the African economy.
How factors hindering growth of economy of Africa can be addressed
To address the factors that hinder economic growth in Africa, African leaders need to avoid over-relying on donations. Instead, they should take initiatives that will enable African countries to fund their budgets. Africa should also embrace technology because this is what will enhance the growth of the economy especially in the manufacturing sector. It is only by embracing modern technology that the African countries will stop importing products that they can produce and start adding value to raw materials before exporting them. The structures of the economy should also be designed in a way that favors sectors that are important for the growth of the economy such as the industrial or manufacturing sectors. African education system should be changed to equip students with the right information so that they can participate in global market activities.
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Sources
http://www.investopedia.com/terms/e/economicgrowth.asp
http://www.ghanaweb.com/GhanaHomePage/features/Factors-Hindering-Africa-s-Development-229892
http://www.hope-project.org/africa/factors-that-hinder-development-in-africa/