Coordinates : 13°30′S 34°00′E / 13.500°S 34.000°E
|Republic of Malawi Dziko la Malaŵi ( Chichewa ) Charu cha Malaŵi ( Chitumbuka )|
|Flag Coat of arms|
|Motto: “Unity and Freedom”|
|Anthem: Mlungu dalitsani Malaŵi (Chichewa) (English: “O God Bless Our Land of Malawi” ) 0:52|
|Location of Malawi (dark green) in southeast Africa|
|Capital and largest city||Lilongwe 13°57′S 33°42′E / 13.950°S 33.700°E|
|Recognised regional languages||
|Ethnic groups (2018 census )||
|Religion (2018 census)||
|Government||Unitary presidential republic|
|• President||Lazarus Chakwera|
|• Vice-President||Saulos Chilima|
|• House Speaker||Catherine Gotani Hara|
|• Chief Justice||Rizine Mzikamanda|
|Independence from the United Kingdom|
|• Dominion||6 July 1964|
|• Republic||6 July 1966|
|• Current constitution||18 May 1994|
|• Total||118,484 km 2 (45,747 sq mi) ( 99th )|
|• Water (%)||20.6%|
|• 2020 estimate||20,091,635 ( 62nd )|
|• 2018 census||17,563,749|
|• Density||153.1/km 2 (396.5/sq mi) ( 56th )|
|GDP ( PPP )||2021 estimate|
|• Total||$30.44 billion|
|• Per capita||$1,591|
|GDP (nominal)||2021 estimate|
|• Total||$11.9 billion|
|• Per capita||$625|
|Gini (2016)||44.7 medium|
|HDI (2021)||0.512 low · 169th|
|Currency||Malawian kwacha (D) ( MWK )|
|Time zone||UTC +2 ( CAT )|
|ISO 3166 code||MW|
| * Population estimates for this country explicitly take into account the effects of excess mortality due to AIDS ; this can result in lower life expectancy, higher infant mortality and death rates, lower population and growth rates, and changes in the distribution of population by age and sex than would otherwise be expected.
Information is drawn from the CIA The World Factbook unless otherwise noted.
Malawi (; Chewa : or ; Tumbuka : Malaŵi ), officially the Republic of Malawi, is a landlocked country in Southeastern Africa that was formerly known as Nyasaland, It is bordered by Zambia to the west, Tanzania to the north and northeast, and Mozambique to the east, south and southwest.
- Malawi spans over 118,484 km 2 (45,747 sq mi) and has an estimated population of 19,431,566 (as of January 2021).
- Malawi’s capital (and largest city) is Lilongwe,
- Its second-largest is Blantyre, its third-largest is Mzuzu and its fourth-largest is its former capital, Zomba,
- The name Malawi comes from the Maravi, an old name for the Chewa people who inhabit the area.
The country is nicknamed “The Warm Heart of Africa” because of the friendliness of its people. The part of Africa now known as Malawi was settled around the 10th century by migrating Bantu groups, Centuries later, in 1891, the area was colonised by the British and became a protectorate of the United Kingdom known as Nyasaland.
- In 1953, it became a protectorate within the semi-independent Federation of Rhodesia and Nyasaland,
- The Federation was dissolved in 1963.
- In 1964, the protectorate was ended: Nyasaland became an independent country under Queen Elizabeth II, and was renamed Malawi,
- Two years later it became a republic.
It gained full independence from the United Kingdom, and by 1970 had become a totalitarian one-party state under the presidency of Hastings Banda, who remained in this role until 1994. Today, Malawi has a democratic, multi-party republic headed by an elected president.
- Lazarus Chakwera of the Malawi Congress Party led the Tonse Alliance grouping of nine political parties and won the court-mandated Presidential Election rerun held on 23 June 2020 after the May 2019 Presidential Election was annulled due to massive electoral irregularities.
- The country’s military, the Malawian Defence Force, includes an army, a navy, and an air wing.
Malawi’s foreign policy is pro-Western, It maintains positive diplomatic relations with most countries, and participates in several international organisations, including the United Nations, the Commonwealth of Nations, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the African Union (AU).
- Malawi is one of the world’s least-developed countries,
- The economy is heavily based on agriculture, and it has a largely rural and rapidly growing population.
- The Malawian government depends heavily on outside aid to meet its development needs, although the amount needed (and the aid offered) has decreased since 2000.
The Malawian government faces challenges in its efforts to build and expand the economy, improve education, healthcare, and environmental protection, and become financially independent despite widespread unemployment. Since 2005, Malawi has developed several policies that focus on addressing these issues, and the country’s outlook appears to be improving: Key indicators of progress in the economy, education, and healthcare were seen in 2007 and 2008.
Malawi has a low life expectancy and high infant mortality, HIV/AIDS is highly prevalent, which both reduces the labour force and requires increased government expenditures. The country has a diverse population that includes native peoples, Asians, and Europeans, Several languages are spoken, and there is an array of religious beliefs.
Although in the past there was a periodic regional conflict fuelled in part by ethnic divisions, by 2008 this internal conflict had considerably diminished, and the idea of identifying with one’s Malawian nationality had reemerged.
Is Burundi the heart of Africa?
Topography – Burundi is a country mainly of mountains and plateaus, with a western range of mountains running north-south and continuing into Rwanda. The highest point is Mt. Heha at 2,670 m. The country is popularly known as the ‘ the heart of Africa ‘.
Why Burundi is called the heart of Africa?
Burundi is known as ‘ The Heart of Africa’ because of its shape and location within the continent. Hospitality was once very important in Burundi.
What is the largest country in the heart of Africa?
- In the heart of Africa, a country: the DRC
The Democratic Republic of Congo (DRC), sometimes called Congo-Kinshasa after its capital – as opposed to its north-western neighbour Congo-Brazzaville – is the largest French-speaking country in terms of surface area and the most populous before France. Its capital, with its undersized infrastructure, is home to 10 million people. Read more > The Democratic Republic of Congo in figures : The DRC is an LDC, the 8 th poorest country in the world. It has not achieved any of the Millennium Development Goals. Sixty percent covered by forests, the DRC has a gigantic hydroelectric potential (100,000 MW) – i.e. a third of the continent’s potential – totally under-exploited.
- Population : 95,784,841 inh. (2019)
- Population growth : 3.30 % / year
- Area : 2,345,410 km²
- Density : 40.84 inh. / km²
- GDP : 47.23 billion $USD
- GDP/capita : 562 $USD (2018)
- GDP growth : 5.80 % / year (2018)
- Life expectancy (rankings) : 60.40 years (2018)
- Birth-rate : 43.69 ‰ (2015)
- Fertility rate : 6.45 child. / women
- Mortality rate : 13.27 ‰ (2015)
- Child mortality rate : 88.62 ‰ (2015)
- Literacy rate : 63.82 % (2015)
The DRC is considered a real “geological scandal” because of its rich subsoil, which is full of mineral resources (copper, the leading producer in Africa; cobalt, the leading producer in the world; coltan, gold and diamonds). Its economy exemplifies the phenomenon of the ‘ resource curse ‘ : that of low economic development and persistent poverty despite the exploitation of its natural wealth. The hyper-dependence on raw materials, which account for 90% of exports, and the insufficient diversification of the Congolese economy make it very vulnerable to price fluctuations. > But this country cannot be summed up in these data alone. The following articles will enable you to appreciate all that makes it original and rich, whether it be geological, biological or cultural. There are no articles in this category. If subcategories display on this page, they may have articles.
Is Congo the heart of Africa?
The Democratic Republic of Congo (DRC) is strategically located in the heart of Africa, straddling the equator. The country is the size of Western Europe with an estimated 70 million inhabitants.
Which is the poor country in Africa?
The 10 Poorest Countries in Africa (by 2020 GNI per capita, Atlas method, current US$):** –
Burundi ($270) Somalia ($310) Mozambique ($460) Madagascar ($480) Sierra Leone ($490) Central African Republic ($510) Liberia ($530) Niger ($540) Democratic Republic of the Congo ($550) Malawi ($580)
** For comparison: United States 2019 ($65,910) Based on the per capita GDP and GNI values from 2020, Burundi ranks as the poorest country in not only Africa, but also the world. The second-poorest country in Africa, Somalia, holds the same distinction.
In fact, this pattern carries through much of the list. With the lone exception of the Asian country Afghanistan, whose GNI per capita of $500 would place it at #6 on the second list, Africa’s 10 poorest countries are also statistically the world’s 10 poorest. To be fair, this ranking comes with one significant caveat: It is possible that additional non-African countries—particularly North Korea, Syria, and/or Yemen —would appear in the bottom 10 if they openly shared their GDP/GNI data, but they typically decline to do so.
That said, African countries would still take up the majority of the list. It can be difficult to grasp the scale of Africa’s economic challenges when viewing the numbers in a vacuum. To add perspective, we can look at the GDP values of the wealthiest countries in the world,
According to 2020 data, the country with the highest GDP per capita (PPP int.$) is Luxembourg, with a value of $118,356—which is more than 150 times higher than Burundi’s $771. Similarly, Norway ‘s world-leading 2020 GNI per capita (Atlas method, current US$) of $78,250 seems almost modest—until one realizes that it’s a full 289 times higher than Burundi’s $270.
Africa’s economic situation may not always be so bleak. A few African countries have seen significant economic growth and development over the past two decades. If this progress can be sustained and expanded, many Africans may realize a more promising economic future.
Burundi – $270 Somalia – $310 Mozambique – $460 Madagascar – $480 Sierra Leone – $490 Eritrea – $510 Central African Republic – $510 Liberia – $530 Niger – $540 DR Congo – $550
What is Burundi famous for?
Although Burundi is a troubled and unstable country, it has a number of things for which it is famous. Its hospitality is legendary, as are its coffee and tea. However, Burundi’s most notable asset is its abundance of national parks and reserves.
Why Rwanda is heart of Africa?
KEY GEOGRAPHICAL UNIQUENESS – Rwanda, warmly known as “the land of a thousand hills” is situated in East – central Africa. It lies 121 Km South (75 miles) of the equator in the Tropic of Capricorn, 1416 kilometers (880Miles) west of the Indian Ocean and 1250Km (777Miles) east of the Atlantic Ocean – literally the heart of Africa.
Rwanda is bordered by Uganda to the north, Tanzania to the east, Burundi to the south and the Democratic Republic of Congo to the west. The country has a temperate climate, with two rainy seasons (February to April, November to January). Average temperatures range from 16-22 degree Celsius. Anyone visiting ‘the land of a thousand hills’ is in for a multitude of surprises First is the personal safety, peace, security and stability enjoyed by both citizens and visitors of the country.
Second there is the beauty of this nation. The landscapes in this green country are truly breathtaking. Many visitors to Rwanda have remarked that the physical beauty of the country is without an equal on the African continent. Rwanda has five volcanoes, twenty-three lakes and numerous rivers, some forming the source of River Nile.
Spectacular volcanoes and dense tropical forests dominate the north of the country, while gentle hills and valleys, calm lakes and turbulent rivers in both savannah and dense tropical vegetation dominate the rest of the country. The high altitude forests of the Virunga volcanic mountains, in northern Rwanda are home to the world’s largest number of endangered mountain gorillas.
Numbering in the hundreds, the gorillas live in protected areas, free from poachers. The gorillas can be viewed in their natural mountain habitats at a fairly close range.
What is Rwanda Africa known for?
10 reasons to see more of Rwanda than just the gorillas Rwanda is renowned for its rare mountain gorillas, and rightly so. Some 400 of our primate cousins roam the rainforests of Volcanoes National Park, with ten groups available for tracking. But this tiny country has so much more to see.
Known as the “Land of a Thousand Hills”, it’s rich with beautiful mountains, valleys and lakes, with a gleaming capital city, abundant wildlife and resilient and gracious people. Here are ten reasons to explore further. If you prefer two feet to two wheels, Rwanda offers some fabulous treks. Nyungwe Forest has an extensive network of trails covering over 130km that take between two hours to four days.
In Volcanoes National Park, head for Mount Bisoke with its beautiful crater lake at the summit or try the two-day trek of Mount Karisimbi, Rwanda’s highest peak at 4507m. Just beware the cold and the altitude.
Who has the strongest economy in Africa?
List of African countries by GDP (nominal)
|Rank||Country||Nominal GDP (Billion US$)|
Is Nigeria still the giant of Africa?
Has Nigeria’s place as Africa’s Giant been maintained? – Nigeria has been dubbed ” Africa’s Giant ” due to its population of almost 200 million people. Nigeria is Africa’s most populated country. It is also the world’s most populated black country, placing eighth among the world’s most populous countries. Why Is Nigeria Called the Giant of Africa Nigeria, however, is not one of these countries. The BRICS group, which includes Brazil, Russia, India, China, and South Africa, is made up of developing and newly industrialized countries. One thing that comes to mind while observing this relationship is that they are all densely populated nations.
- Asia’s most populous nations are China and India, South America’s most populous country is Brazil, and Europe’s most populous country is Russia.
- The issue then arises as to why Nigeria (Africa’s most populous country) is not included in this group; instead, South Africa is the only African country included in this group of fast-growing economies with major regional clout.
Also see: Best Presidents in the History of Nigeria Ever Corruption has grown throughout Nigeria like wildfire over the years, earning Nigeria the reputation of being one of the most corrupt countries on the planet. This reputation has harmed Nigeria’s image in the wider world, with references to or portrayals of Nigeria as a nation known for corruption and fraudulent operations appearing in TV shows like Suits, sitcoms like Blackish, and thriller novels like The Girl Who Kicked the Hornets’ Nest.
- This reputation has been detrimental to the country, to the point where PTO Lumumba blamed the country’s poverty on fraudulent actions in the public sector in a speech at an Anti-Corruption meeting in 2016.
- Nigerians’ connections with other countries have been harmed as a result of their reputation.
- Nigeria has clearly failed to live up to its reputation as Africa’s Giant.
As Nigerians, we must begin to ask ourselves what we are doing wrong in a country that was supposed to be the most successful black nation when it gained independence. Nigeria must strengthen its position and lead the continent’s transformation from an undeveloped to a developed continent if it is to be considered the unquestioned Giant of Africa.
- Recommended: Countries with the Most Handsome Men in the world Conclusion A common witticism goes, ” When the going gets tough, the tough get going.” Nigeria has had a tumultuous history.
- A civil war, coups and counter-coups, civic turmoil, and religious riots, but like the giant that we are, we withstood it all.
Whether it will preserve this colossus status or be ousted by another country is yet to unfold, but for now, it may still be recognized as Africa’s giant. Edeh Samuel Chukwuemeka ACMC, is a Law Student and a Certified Mediator/Conciliator in Nigeria. He is also a Developer with knowledge in HTML, CSS, JS, PHP and React Native. Samuel is bent on changing the legal profession by building Web and Mobile Apps that will make legal research a lot easier.
What is the biggest Africa in the world?
Algeria is the biggest country in Africa, with an area exceeding 2.38 million square kilometers as of 2020. The Democratic Republic of the Congo and Sudan follow with a total area of around 2.34 million and 1.88 million square kilometers, respectively.
Why is Congo famous for?
The Democratic Republic of Congo (DRC), about the size of Western Europe, is the largest country in Sub-Saharan Africa (SSA). DRC is endowed with exceptional natural resources, including minerals such as cobalt and copper, hydropower potential, significant arable land, immense biodiversity, and the world’s second-largest rainforest.
- Most people in DRC have not benefited from this wealth.
- A long history of conflict, political upheaval and instability, and authoritarian rule have led to a grave, ongoing humanitarian crisis.
- In addition, there has been forced displacement of populations.
- These features have not changed significantly since the end of the Congo Wars in 2003.
DRC is among the five poorest nations in the world. In 2021, nearly 64 % of Congolese, just under 60 million people, lived on less than $2.15 a day. About one out of six people living in extreme poverty in SSA lives in DRC. Political Context In 62 years of independence, DRC did not experience its first peaceful transition of power until January 2019.
Félix Antoine Tshisekedi Tshilombo, son of Etienne Tshisekedi, the country’s longstanding opposition leader, won the December 2018 presidential election and succeeded Joseph Kabila, who had led the country for 18 years. There are indications that a new social contract may be emerging between the state and its citizens, through the roll-out of free primary education, increased transparency and public sector reforms, and an emphasis on conflict prevention and stabilization in the East.
However, despite conflict prevention and stabilization efforts, pockets of insecurity still persist in the country, particularly in the eastern region. The country is preparing for the next general election which is slated for late 2023. The smooth running of this election could allow the country to continue on the path of political stability and to pursue the necessary reforms to enable most of its people to benefit from the enormous potential that the country abounds.
- Economic Situation Economic growth is estimated at 6.1% in 2022, keeping the strong momentum from 2021 (6.2%).
- Mining sector investment and exports remain the key drivers of growth supported by improved mineral prices and higher public investment.
- Non-mining sectors (particularly services) are likely to slow down to 4.1% in 2022, from 4.5% in 2021.
Higher metal prices are likely to offset higher food and oil prices and lead to improved terms of trade and a balanced current account (from -1.0% in 2021), thereby helping to build up reserves to an estimated 8.3 weeks of imports in 2022, from 6.3 weeks a year earlier, and limiting excessive exchange rate fluctuations.
- Higher global energy and food prices due to the ongoing war in Ukraine exert upward pressures on domestic inflation lifting the average inflation rate from 9.1% in 2021 to an estimated 9.5% in 2022.
- The fiscal deficit is projected to deteriorate to 3.0% in 2022 (from 1.0% in 2021) as improved revenue mobilization cannot fully offset higher capital and current transfer spending.
Revenues are estimated at 14.4% of GDP in 2022, owing to favorable commodity prices and digitalization of the revenue collection process, while expenditures (18.7% of GDP) are expected to increase due to wage adjustments and fuel subsidies. The medium-term outlook for DRC is favorable with growth estimated to accelerate to 6.4 % by 2024.
However, DRC’s economy remains vulnerable to commodity price swings and growth performance of major trading partners which might be disturbed by geopolitical conflicts and a COVID-19 pandemic resurgence. The economic consequences of the war in Ukraine, through rising global food costs and higher oil prices, could exert stronger pressure on fiscal deficit, on inflation and on households’ consumption thus exacerbating poverty and inequality.
Given persistent conflicts in the East, DRC’s immediate challenge is to strengthen security and maintain political and macroeconomic stability while stepping up ongoing reforms to ensure sustainable growth. Social Context DRC ranks 164 out of 174 countries on the 2020 Human Capital Index, reflecting decades of conflict and fragility, and constraining development.
DRC’s is 0.37 which is below the SSA average of 0.4. This means that a Congolese child born today can expect to achieve only 37% of their potential, compared to what would have been possible if they had benefited from a full, quality schooling experience and optimal health conditions. The main contributors to the low score are low child survival rates under age five, high child stunting, and low quality of education.
DRC has one of the highest stunting rates in SSA (42% of children under age five), and malnutrition is the underlying cause of almost half of the deaths of children under the age of five. Unlike other African countries, the prevalence of stunting in the DRC has not decreased over the past 20 years.
- Due to the very high fertility rate, the number of stunted children has increased by 1.5 million.
- Access to education has improved considerably over the past two decades, especially for girls and at earlier ages.
- Between 2000 and 2017, primary net enrollment increased by 50%, from 52 to 78%.
- However, the quality of education is extremely poor.
In terms of learning and achievement, the primary completion rate is only about 67 %, and an estimated 86% of 10-year-olds in DRC are in learning poverty, meaning they cannot read and understand simple text. Congolese women face significant barriers to economic opportunities and empowerment, including high rates of gender-based violence (GBV) and discrimination.
- Only 16.8 % of women have completed secondary school—about half of the rate of completion for men.
- Early marriage and high fertility rates represent a challenge, where women and girls without any education have a fertility rate twice that of women who complete secondary school (7.4 children compared to 2.9, DHS 2014).
Half of women report having experienced physical violence, and almost a third has experienced sexual violence, most commonly at the hands of an intimate partner (DHS 2013). Women’s labor force participation rate in the DRC is estimated at almost 62%, most of whom work in agriculture.
While participation is relatively high, women earn considerably less than men and own fewer assets. A 2021 DRC Gender Diagnostic Report identifies three major factor contributing to persistent and significant gender gaps: control over land, voice and agency, and risk and uncertainty including vulnerability to shocks and GBV.
DRC’s health care delivery has been greatly affected by the continued long-standing complex humanitarian crises in the world, exacerbated by recurrent disease outbreaks such as COVID-19, cholera, measles, and Ebola. There has been significant COVID-19 vaccine hesitancy in DRC and there is evidence that COVID-19 has had a negative impact on the utilization of health services since March 2020.
There has been a reduction in the number of antenatal care visits, an increase in the number of pregnancies, as well as increased incidence of sexual and GBV. Close to 23 million children missed out on routine vaccinations in 2020 due to the COVID-19 pandemic, the highest number in more than a decade, according to recent WHO/UNICEF data.
There is concern that the temporary interruption of basic health-care delivery may lead to a secondary health crisis. Last Updated: Oct 11, 2022 In February 2022, the World Bank Board of Executive Directors endorsed a new, The CPF promotes the stabilization and development of DRC, supporting strategic priorities and critical reforms to improve governance and deepen stabilization efforts, in particular in Eastern DRC.
The new CPF places a strong emphasis on human development, with a commitment to help DRC improve access to and quality of basic services such as education, health, and social protection. The CPF and forthcoming engagements supported under the framework will have a strong focus on addressing drivers of fragility, conflict, and violence.
There will also be a focus on mitigating impacts from COVID-19 and building resilience to shocks and climate change. Protecting DRC’s rainforest, the second largest in the world, is also at the forefront of the CPF. About 67% of the country is covered by forests, including 145 million hectares of rainforest, storing the equivalent of 85 billion tons of CO2.
- However, population growth, exploitation of natural resources, infrastructure development, and agriculture puts significant pressure on the forest.
- This loss has a significant adverse impact on rainfall patterns, water quality, and food security—in DRC and the wider Congo Basin.
- It is exacerbating climate change and presents a threat to biodiversity.
The World Bank Group (WBG) is proposing to engage through large, multi-sector projects that aim to achieve synergies and provide holistic development responses. The WBG will also support reform agendas in a new generation of infrastructure investment projects that aim to bring in the private sector.
- Investment operations will focus on two densely populated corridors that are conflict hotspots where many poor people live.
- This work includes critical infrastructure (roads, energy, connectivity), agriculture, and forestry.
- To support the implementation of this approach, the World Bank has opened liaison offices in Goma in North Kivu province, and in Kananga in the Kasaï Central province.
As of June 30, 2022, the World Bank portfolio in the DRC totaled $7.27 billion, with 21 national projects ($6.71 billion) and four regional projects ($565 million). Engagements span: economic management, governance, and private sector development; human capital (health, education, social protection); sustainable development (infrastructure and connectivity, agriculture and food security, access to electricity and water, urban development); women’s empowerment, and prevention and response to gender-based violence.
- The ongoing project supports the Government of DRC’s free primary education program and aims to lower the school fee burden on households, increase access to primary schooling in 10 provinces, and strengthen core governance systems in the education sector.
- Project results to date include:
- 2.5 million additional students enrolled in public primary schools in the 10 project provinces in 2021-2022 (or more than 3 million additional children enrolled, nationwide).
- Roughly 60,000 more primary teachers receive a regular salary; the revision and signature of enhanced Codes of Conduct addressing multiple forms of violence, including sexual exploitation, abuse and harassment, by approximately 183,000 teaching personnel and foreseeing sanctions for non-compliance.
- A grievance mechanism known as “Allo Ecole,” anchored in the Ministry of Education systems, helping to resolve conflicts/complaints and foster accountability, including by linking survivors of GBV to holistic services and complaint redress channels.
Social protection The ongoing is scaling-up the coverage of the social safety net programs. To date, more than 40,000 beneficiaries have been involved in productive economic activities to strengthen their economic autonomy. The unconditional cash transfers implemented in rural areas have been scaled up to 66,000 households, including the roll-out of the program in the North Ubangi province, targeting forcibly displaced populations.
In parallel, an emergency, large-scale, digital cash transfer program was implemented in Kinshasa to mitigate the negative socioeconomic impacts of the COVID-19 crisis. STEP-KIN ( Solidarité par Transferts Economiques contre la Pauvreté à Kinshasa ) was launched in March 2021 and has reached more than 270,000 direct beneficiaries becoming the largest social safety net program in urban areas.
The next phase of the program will target an estimated 250,000 people. Infrastructure The has reopened and maintained more than 3,000 kilometers of roads, reviving economic activity. The project also provided access to an all-weather road for more than 6 million rural residents.
It also contributed to strengthen forest conservation and protect indigenous peoples. The ongoing has improved border infrastructure and operating environment for small-scale traders at four locations in North and South Kivu, and supported associations for small-scale traders to continue to trade across borders during the COVID-19 pandemic.
Energy Under the ongoing , more than 1.3 million people have gained new or improved electricity service. Thanks to this project, over 13,550 households were equipped with solar home systems, as off-grid solar private operators start to roll out solar kits and lanterns, thanks to provided results-based subsidies.
- Under the (2008-2021), more than 88,000 new private connections and more than 450 community waterpoints were installed in Kinshasa, Lubumbashi, and Matadi, providing drinking water access to over 3 million people.
- The Kin Elenda Project has financed completion of the first phase of the Ozone Water Treatment Plant, which will boost water production in Kinshasa by 110,000 cubic meters per day.
Between 2013 and 2021, the improved connectivity and livability for about 390,000 persons in eight secondary urban centers through upgrading of more than 31 kilometers of roads. The project also financed investments to stop the advancement of gully erosion in Kananga.
A Kananga Emergency Urban Resilience Project is under preparation. It will continue the work of the Urban Development Project and lay the foundation to sustainably address the phenomenon of ‘mega gullies’ in several cities of the DRC. The Hydromet Project has supported the installation of meteorological equipment in 12 airports to improve forecasting.
It has also supported the implementation of a National Framework for Climate Services. Social Sustainability and Inclusion Approved in 2018, has reached more than 7 million beneficiaries, including survivors accessing direct holistic services, community members accessing livelihoods and literacy training, beneficiaries receiving dignity kits, community participation in discussion groups, service providers receiving trainings, and communities benefiting from large-scale awareness raising activities.
Under the same project, over 42,000 survivors have accessed holistic GBV services (psychosocial, medical, legal, case management) since the start of the project and over 12,000 beneficiaries have participated in community-level economic support interventions. Over 5,000 GBV survivors have received specialized mental health support utilizing Narrative Exposure Therapy (NET).
Rigorous impact evaluation of NET, led by the, found significant mental health improvements from the intervention, including reductions in post-traumatic stress disorder (PTSD), anxiety, and depression, as well as significant increases in self-esteem and local functioning.
- In addition to operational engagements on GBV prevention and response through the GBV Project in Eastern DRC, the World Bank is likewise providing significant support to the DRC government regarding the management of project-based risks associated with sexual exploitation and abuse and sexual harassment, such as those measures implemented through the Emergency Equity and System Strengthening in Education project described above.
- Forests and Climate Change
- The ongoing helped establish 22,000 hectares of agroforestry plantations on degraded lands in western DRC to provide the city of Kinshasa with more sustainable charcoal and agricultural commodities. The same project also resulted in:
- 172,000 hectares of enclosures established and maintained to protect land areas from bush fires and facilitate natural regeneration
- 110,000 people in forest and adjacent communities receiving monetary and non-monetary benefits, with $ 3 million in Payments for Ecosystem Services distributed to communities
- the distribution of 86,000 efficient cookstoves, contributing to better health as well as climate benefits for communities.
- 6.4 million tCO2eq emission were reduced through the above results
Through the, five Local Community Forest Concessions (CFCL) were established to secure the rights of Indigenous Peoples (IP). Last Updated: Sep 29, 2022 The World Bank is a member of the Donor Coordination Group that aims to harmonize development partner activities in the field.
It is working closely with the United Nations, the United Nations Population Fund (UNFPA), the United Nations Children’s Fund (UNICEF), the World Health Organization (WHO), the United States Agency for International Development (USAID), the Agence française de développement (AFD), the United Kingdom Foreign, Commonwealth and Development Office (FCDO), the German Agency for International Development (GIZ/KFW), and the Belgian Cooperation Agency.
In some areas, the World Bank collaborates with the African Development Bank. Last Updated: Sep 29, 2022 : Overview
Why is Congo so famous?
Congo is rich in natural resources. It boasts vast deposits of industrial diamonds, cobalt, and copper; one of the largest forest reserves in Africa; and about half of the hydroelectric potential of the continent.
Who is the God of Congo?
Creation Story – Bambuti mythology is the mythology of the African Mbuti (also known as Bambuti) Pygmies of Congo: The most important god of the Bambuti pantheon is Khonvoum (also Khonuum, Kmvoum, Chorum), a god of the hunt who wields a bow made from two snakes that together appear to humans as a rainbow.
After sunset every day, Khonvoum gathers fragments of the stars and throws them into the sun to revitalize it for the next day. He occasionally contacts mortals through Gor (a thunder god who is also an elephant) or a chameleon (similar to the divine messenger used by Orish-nla of Yoruba mythology). Khonvoum created mankind from clay.
Black people were made from black clay, white people came from white clay, and the Pygmies themselves came from red clay. He also creates the animals that are needed by hunters. Arebati is a lunar deity and Sky Father. In some sources, he was said to have created humanity from clay, instead of Khonvoum.
- Tore is a god of the forests who supplies animals to hunters.
- He is also a thunder god who appears as a storm and hides in rainbows.
- Most importantly, Tore appears as a leopard in initiation rites.
- The first Pygmies stole fire from Tore; he chased them but could not catch them, and when he returned home, his mother had died.
As punishment, he decreed that humans would also die, and he thus he became the death god.
Which African country is very famous?
Most Popular and Well Known Countries In Africa – Below are a list of 5 of the most Popular countries of Africa in no particular order: 1. Egypt: The land of the pharaohs, as it is popularly called is a country with so much fascinating history and culture recorded. Which are the Most Popular African Countries to Visit? This north east African country as at December 2021, had an estimated population of 102,674,145 people. It is the most populous country in the North of Africa and the Arab league of countries that make up the Middle East.
The official language of the country is Arabic and it is also an officially Islamic country with a significant Christian minority. The capital of Egypt is Cairo. Modern Egypt began as a monarchy. It is said to have begun in the year 1922 when the country gained its independence from the British Empire.
In 1952, after the revolution, the country merged with Syria to become a republic and later merged with Syria to form the United Arab Republic in 1958. An alliance that did not last long, as they parted ways in 1961. The government runs on a unitary semi-presidential republic as they have a President and a Prime Minister.
They also run a multiparty two legislative houses system of parliament (the Senate and House of Representatives). Egypt is one of the leading cultural and intellectual centres of the Arab world. It is home to the Nile River, where most of the population of the country reside and make their living. A large portion of the lands of Egypt has overtime turned to deserts with people sparsely living there.
It is also home to the Pyramids of Giza and the Sphinx – monuments that have lasted generations and keeps drawing tourists to the country, year in, year out. Egypt therefore is popular for its history, rich deposits of ancient technologies, arts and culture and its role as a leading power in the Arab, middle-east enclave. Top 5 most famous country in Africa South Africa, whose largest city is Johannesburg has a capital for each arm of its government; Pretoria for its Executive arm, Cape Town for its Legislative arm and Bloemfontein for its judicial arm. It runs a unitary dominant-party parliamentary republic with an executive office of the presidency.
South Africa is widely famous for the apartheid struggles that was institutionalized by the National party in 1948 till the 1980’s when the discriminatory laws started being repealed. It is also popular for being one of the world’s largest manufacturers of gem stones and precious metals. It is the world’s capital of Platinum as it produces and exports the largest amount of Platinum in the world and it also comes fourth in the world’s list of Diamond producers – coming in position after Botswana, Canada and Russia.
South Africa comes as Africa’s second leading tourist export after Morocco, as over 10 million tourists throng the many historical sites and beautiful cities of the country. South Africa is not called the party capital of Africa for nothing. The largest southern African country by land mass boasts of the most modern cities in Africa with beautiful Coastlines, wildlife Safari, national parks, historical sites like the cradle of Humankind in Guateng where there is a 2 million old fossil remains and much more.
The very beautiful country has also produced famous men like famous like Nelson Mandela, Desmond Tutu, Albert Luthuli and F.W. de Klerk who all played major roles in ending the apartheid government and are Nobel Peace Prize laureates. South Africa is popular for its Apartheid history, tourist attractions, an amazing culture, the beautiful array of wildlife and plants, the lifestyle they offer, important personalities, etc.
Recommended: Countries with the Most Handsome Men in Africa 3. Nigeria: The most populous country in Africa is as well the most populous black nation on earth. It is inhabited by over 211 million citizens, with over 525 different languages including the very common Nigerian pidgin and the official lingua franca, English. Most Well-Known Countries in Africa Nigeria gained its independence from Britain in 1960 and since then went through a civil war that lasted for 3 years between 1967 through 1970, a back-and-forth dictatorial military and civilian government that comprised a number of coups d’état up until 1999 – when an election ushered in a stable democratic system of government.
It runs a federal presidential republic with a two chambers legislative arm of government called the National Assembly (the Senate and the House of Representatives). Nigeria’s capital is Abuja and its largest and most populous city is Lagos, renowned as Africa’s big apple. Nigeria was is seen in Africa as a regional power and as one of the leading developing economies of the world.
It has the 25th largest economy in the world and the largest economy in Africa owing to its large deposit of natural resources such as Petroleum and natural gases and its large labour force. Often referred to as ” the giant of Africa ” and as an emerging market by the World Bank.
- Nigeria at some point was once referred to as one of the MINT (Mexico, Indonesia, Nigeria and Turkey) countries of the world.
- In Pre-colonial times, the geographical area now known as Nigeria had civilizations, states, kingdoms and settlements that lived and made their living on the lands that are now called Nigeria; notably, the Benin Kingdom, the Nok people of Jos, the kingdom of Ife and so on.
As such, Nigeria has a very rich and diverse cultural heritage. It plays host to several ceremonies and festivals that are elaborate, colourful and attracts a lot of tourists. It has a lot of nature to showcase to its visitors, as well as a lot of indigenous cuisines and a budding hospitality industry competing to satisfy.
- Nigeria is home to Nollywood, the world’s second largest producers of movies, only after Bollywood of India and ahead of Hollywood of the United States of America.
- Part of what makes Nigeria popular is that it has also produced African music exports that have gone on to serenade the world and sell their home country’s famous Afrobeat music Genre to a wider audience – off the shores of Africa.
It is worthy of note to state that the richest man in Africa according to Forbes, Aliko Dangote, is a national of Nigeria; so also, the Literary Nobel laureate, Professor Wole Soyinka and the Current Director-General World Trade Organisation (WTO), Ngozi Okonjo-Iweala. What are the 5 major countries in Africa? Kenya got its independence from the United Kingdom in 12 December 1963 and a year later, declared itself a Republic in 12 December 1964. It runs a presidential representative republic, where the people are represented by elected officials and the head of state is the president.
Its capital is Nairobi. Kenya is considered the 3rd largest economy in Sub-Saharan Africa, coming after Nigeria and South Africa. Kenya has a very rich history in music and artistic expressions such as traditional oral and written literature. It’s athletes – especially, those of the Massai Kalenjin tribe – go on to win marathons and endurance sports every year.
Kenya is famous for its world leading lush and beautiful safaris that boast the Big Five ( Lions, Elephants, Buffalos, black and white species of Rhinoceros and the Leopard), originally described in Africa as the hardest animals to hunt. In Kenya, you can also find the Massai Mara game reserve where annually, over a million wildebeest, zebra and antelope around the Serengeti-Masai Mara ecosystem migrate clockwise.
It has high snow-capped mountains that are scattered inland – one of them is the second largest mountains in Africa, Mount Kenya. Kenya is also known to be the birth home of: famous Hollywood actress, Lupita Nyong’o; Politicians, Raila Odinga and Uhuru Kenyatta; Prolific writer, Ngugi wa thiong’o; and the black man that broke the jinx in the Oval office of the USA, Barrack Obama.
Recommended: Countries with Best Education System in the world 5. Morocco: The state known officially as the Kingdom of Morocco is in the northwestern-most part of North Africa. It has an estimated population of 37,112, 080 people who speak Arabic as their official language and are 99% Muslims. What are the five most popular countries in Africa? What puts them on the map? Modern day Morocco gained its independence on 7th April 1956 from from France and Spain and unified its divided protectorate. Since then the country has remained some-what stable.
- It recent ratings, it has become the fifth-largest economy in Africa and controls very significant influence in both Africa and the Arab league of countries.
- It runs a unitary parliamentary semi-constitutional Monarchy.
- This simply means that they have a King, a prime minister and a double parliamentary chamber.
The capital of Morocco is Rabat and its largest City (a port city) is Casablanca. Morroco is famous for its deserts areas, mountains, lush forests, ancient cities and beautiful coastlines. Morocco developed a plan called Plan Azure. It apportioned tourist zones to six coastal areas.
- Each zone is themed to suit a particular tourist need such as sports, eco-tourism and culture.
- Morocco has been very successful in building its tourism sector as over 10 million people are attracted to their offers every year.
- One of Morocco’s most incredible features, the Atlas Mountains collects and stores rainwater and snowmelt, providing the verdant valleys that are below.
Morocco’s athletes have never missed any Olympics (both winter and Summer) since 1960 and this has added to their popularity all around the world. Recommended: Most profitable skills to learn in 2022 Conclusion There are still so many other popular countries in Africa such as : Ghana, Namibia, Liberia, Algeria, Congo and so forth, with different factors that make them so well known around the world. Edeh Samuel Chukwuemeka ACMC, is a Law Student and a Certified Mediator/Conciliator in Nigeria. He is also a Developer with knowledge in HTML, CSS, JS, PHP and React Native. Samuel is bent on changing the legal profession by building Web and Mobile Apps that will make legal research a lot easier.
Which country is the most peaceful in Africa?
Also read: Catalyst Fund raised US$3.5M to accelerate and scale pre-seed impact in Africa – The general crime rate in Mauritius is quite low, and the crimes that do take place are often of a minor and non-violent kind. Ghana has all the reasons to make it the most peaceful African countries 2022.
- This West African country is safer than a number of famous travel locations, such as France, Greece, Jamaica, Argentina, South Korea, and the US.
- Viewing animals and going on safaris are just two of the many activities you enjoy in Ghana.
- The country also features sun-drenched beaches, a thriving nightlife, and numerous cultural sites.
Where is the Most Peaceful Place to Live in Africa? Mauritius. The landmass that constitutes Africa has a huge number of smaller countries and a few larger ones. Beyond the most peaceful African countries 2022; if you’re thinking about moving to Africa, you’re probably curious about the finest areas to reside.
Which continent is the richest?
North America has the highest continental gdp per capita by both GDP Nominal and PPP in the world. With $46,160 in nominal terms, the per capita gdp of North America is 376% of the world GDP per capita, North America is closely followed by Oceania ($44,741).
- There is a large gap between 3rd ranked Europe ($31,589), and 4th ranked Asia ($8,034).
- Europe is at 2nd place, Oceania is at 3rd, and South America is at 4th position in ppp methods.
- Africa is the poorest continent in the world.
- GDP per capita of Asia, South America, and Africa are less than the global average.
Four subregions have figures above $50,000 as Northern America is the richest subregion, followed by Australia and New Zealand, Northern Europe, and Western Europe. In ppp terms too, these four occupy the top four positions, but the ranking is different as Western Europe is at 2nd spot, followed by Northern Europe and Australia and New Zealand.
GDP per capita of these four subregions are more than four times greater than the global per capita in nominal and almost three times greater in the ppp list. In the nominal list, the bottom three positions are occupied by African subregions. Australia and New Zealand would add $9,284 in 2021, followed by Northern Europe ($6,746), Northern America ($6,371), Western Europe ($4,847), and Southern Europe ($3,131).
Polynesia and Micronesia will see a decline in GDP per capita in both methods. Grouping of continents and subregions are as per United Nations Statistics Division.
Continent Sub region Nominal PPP
|Continent||GDP (Nominal per capita) ($)||GDP (PPP per capita) (Int. $)|
|2020||2021||Net change||% world||2020||2021||Net change||% world|
table> Continents by gdp per capita (UN)
table> Subregions by gdp per capita (IMF)
table> Subregions by gdp per capita (UN)
Is Africa a rich or poor?
نوع المستند: مقالات سیاسیة واقتصادیة The African continent is no doubt the most resource-abundant continent. Resources such as gold, diamond, oil, natural gas, copper, uranium, among others are mined in different parts of the continent. Almost every country in Africa has a deposit of natural resources, Africa is also the poorest continent in the world.
Per capita income in African countries is among the lowest in the world. This is evidenced by the failure to meet the Millenium Development Goals. The paper examines the phenomenon of the natural resource curse in Africa. Understanding the reason why a natural resource-rich continent like Africa is still grappling with extreme poverty, inequality, and underdevelopment is key to policymakers and researchers.
The paper also examines the effect of foreign aid on economic growth in Africa. The goal here is to contribute to the debate on whether the African continent benefits significantly from the flow of aid into the continent. 1-Introduction The African continent is no doubt the most resource-abundant continent.
- Resources such as gold, diamond, oil, natural gas, copper, uranium, among others are mined in different parts of the continent.
- Almost every country in Africa has a deposit of natural resources.
- The continent is endowed with about 97% of the world’s chromium, 90% of the world’s cobalt, 85% of the word’s platinum, 70% of the world’s cocoa, and 60% of the world’s coffee.
Despite the abundance of resources, Africa is also the poorest continent in the world. Per capita income in African countries is among the lowest in the world. According to the World Bank, Africa has the lowest GDP per capita with its per capita income representing only 3% of the word’s income.
Large populations in Africa still suffer from acute poverty. Life expectancy is the lowest in Africa compared to other continents. The continent also lags in other indicators of economic growth and development. The fight against poverty hasn’t been too successful in the continent. This is evidenced by the failure to meet the Millenium Development Goals (MDGs).
With such abundance in natural resources, Africa also lags in international trade. The continent controls only about 3% of international trade. This is despite the huge natural resource exports out of Africa. The continent has also recorded the most unstable democracies in the world.
Political conflicts are prevalent in some African countries. Some African countries such as Somalia have even been described as failed states because of the breakdown of their government systems. These and many other factors drag African countries further down the poverty line. This presents the biggest paradox of all; the richest resource continent has the poorest countries on the earth.
Theories such as the dependency theory highlight the disadvantaged position of developing countries with natural resource abundance in the world system. Much of the underdevelopment of countries such as African countries have been blamed on excessive dependence on the western world.
Capitalism has led to an unequal and exploitative international relationship between developed and developing countries, causing developed countries to dominate the developing countries. This has fueled the underdevelopment of most developing countries (Ghosh, 2019). Other authors blame the underdevelopment of Africa to colonialism and its attendant exploitation (Mizuno & Okazawa, 2009a).
Corruption and bad leadership have also been blamed for the lack of development of African countries. Other factors such as poor institutions and cross border conflicts have also been blamed for the underdevelopment of Africa, even in the face of natural resource abundance.
- This phenomenon in Africa is a reflection of what is mostly called the natural resource curse or the paradox of plenty.
- The continent has also been a recipient of foreign aid from developed country governments and international organizations.
- Generally, there is controversy about how beneficial foreign aid is to Africa.
According to a report by Conscience (2014), Africa receives about $133.7 billion each year from official aid, grants, loans to the private sector, remittances, etc. however, at the same time, some $191.9 billion is extracted from the continent in the form of debt repayments, multinational company profits, illicit financial flows, brain drain, illegal logging, and fishing, etc.
Therefore, Africa suffers a net loss of about $85 billion. Hence most authors often argue that the notion that the West is aiding Africa is wrong. They argue that it is Africa that is aiding the west. The goal of this paper, therefore, is to test the presence or otherwise of the natural resource curse in Africa.
The paper will also determine the effect of foreign aid on economic growth and also explore some transmission mechanisms associated with these relationships. This will aid in unraveling the dilemma of growth and underdevelopment in Africa.2-Literature Review 2.1 Theories of Underdevelopment.
Theorization of underdevelopment starts with the Rostow’s modernization theory of 1960. This theory establishes the state of underdevelopment as an original state for every economy. This is generally referred to as a traditional society. However, these traditional societies undergo modernization as they progress through the various stages of development until they become modernized states.
The theory defines 5 major stages of the growth and transformation of an economy. The first stage is the traditional society which is characterized by underdevelopment. The economy then moves to a stage of preconditions for takeoff as it accumulates the needed capital.
The economy then takes off into development and industrialization. This stage is characterized by rapid industrialization and economic growth. The society also undergoes significant modernization. The economy then moves to the stage of the drive to maturity and eventually to the state of high mass consumption Rostow (1971) This theory implies that every country starts from the original state of underdevelopment before it undergoes a structural transformation the sets it on a path to growth and development (Emeh, 2013).
Inequalities in development among countries simply imply that countries are at different stages in the development paradigm. The dependency theory is opposed to the view of the modernization theory. This theory was propounded by Andre Gunder Frank in 1966.
This theory sees the world as divided into wealthy nations and poor nations. Other authors refer to rich countries as the core and the poor countries as the periphery The theory posits that the poor countries are mostly dominated by rich countries. This establishes an exploitative relationship between poor and rich countries.
Poor countries provide natural resources and cheap labor without benefiting much from the system. The benefits from the system largely accrue to the rich countries as these resources flow from the poor countries to the rich countries. This situation further enriches the rich countries and impoverishes the poor countries.
Hence the gap between the rich and poor countries is further widened (Emeh, 2013). Dependency is seen as a situation whereby external factors significantly influence on domestic policies. This influence transcends dimensions such as economic, political, and cultural. This dependency is what generates dominance and divides the countries into dominant and periphery countries.
Hence, underdevelopment is mainly blamed on external factors. The relationship predicted by the dependency theory tends to reinforce itself, making poor countries poorer and rich countries richer. Cockcroft et al. (1972) argue that the dependency theory makes sense only within the framework of a capitalist system.
- Under the capitalist system, resources will flow from the periphery or satellite countries to the metropolises or the core countries.
- The underdeveloped countries have therefore remained underdeveloped as a result of being dominated by capitalist economies.
- Mizuno & Okazawa (2009) also link the underdevelopment of Africa to colonialism.
They argue that the indirect rule adopted by the colonial masters led to the division of the indigenous people into a privileged ruling group and the unprivileged ruled group. They argue that this system creates avenues for the colonial masters to exploit the ruled through the ruling group.
- This situation has left a history of division and distrust among the indigenous people which is not conducive for development.
- Nunn (2007) blames the underdevelopment on the extractive nature of the colonial rule in Africa.
- A multiple equilibria model is developed; One equilibrium is with secure property rights and high production, and a lower equilibrium with insecure property rights and low production.
The paper argues that extraction by external forces can cause a country that is at a high equilibrium point to fall to a low equilibrium point. Because of stability at any equilibrium, such a country can be trapped at the low equilibrium point for long.
The argument, therefore, is that the extractive nature of colonialism and slave trade has pushed African countries to a low equilibrium point, and they have been largely stuck in that low equilibrium for long.2.2 The Natural Resource Curse The paradox of plenty, otherwise called a resource curse as become more apparent in Africa.
For decades, it has generally been observed that countries that are rich in resources such as oil, diamonds, gold, and other minerals have not necessarily witnessed significant gains in economic growth and poverty reduction. Most African countries such as Nigeria, Congo, Niger, Ghana, etc have huge deposits of natural resources, yet economic growth in these countries is very limited and poverty and inequality are still very prevalent in these countries.
Ironically, countries that are not so natural resource-rich such as Japan and Singapore have experienced tremendous growth and poverty reduction. This generally is the idea of the paradox of plenty or the resource curse hypothesis (Frankel, 2010). Before the 1980s, the most commonly held view was that countries that were rich in natural resources would experience significant growth.
This view can be traced back to Adams Smith and David Ricardo. They posited that natural resources were a significant factor that enhances the economic development of countries as they undergo structural change over time. The Rostow stages of growth theory further establish the important role of natural resources in the economic transformation of an economy.
However, the emergence of the Dutch disease in the 1980s cast significant doubt on the widely held belief that natural resource endowment generally led to economic development (Badeeb et al., 2017). The findings of Gelb (1988) which came to be known as the Dutch disease show that oil-rich economies experienced a significant decline in the efficiency of their domestic capital compared to non-oil economies.
Hence, the discovery of oil leads to slower economic growth. This finding can be expanded to cover many other natural resources. The evidence of this resource curse in Africa is telling. The economic explanation for this phenomenon is the deindustrialization of other sectors due to the discovery and concentration of efforts in the extraction of a resource once it is discovered.
- A simple example of the resource curse is a popular Dutch disease.
- With an economy that starts from a full-employment point, a discovery of oil suddenly leads to an increase in the inflow of external funds as countries try to extract the oil.
- However, this inflow changes the relative prices in favor of nontraded goods such as construction and services, while affecting non-oil traded goods such as manufacturing and agriculture.
Hence, non-oil traded goods are crowded out of the market. Hence, in general, the market for nontradables expand and this generally appreciates the currency and further affects export competitiveness. This affects output and then employment, which then translates into poverty (Di John, 2010).
- Essentially, such countries experience deindustrialization in sectors such as manufacturing and agriculture.
- These sectors have historically been known to be growth-enhancing.
- Hence, a decline in such sectors affects the development of the country.
- Hausmann & Rigobon (2003) offer an alternative explanation to the resource curse by linking resource income volatilities to financial market imperfections.
They argue that the extent of price volatility generated from increased demand for non-tradable goods is small if the country has a large non-resource tradable sector. This is because the shock will cause labor movement reallocations between the sectors to eliminate the instabilities.
- However, if the non-resource tradable sector is significantly small, shocks to the demand for non-tradable goods that arise due to shocks in resource income will lead to expenditure-switching which causes relative price movements.
- They also argue that interest rates become dependent on price volatilities due to bankruptcy fears.
These effects lead to inefficient specialization towards non-tradable goods and away from non-resource tradable goods. This situation further fuels price volatility. Since this kind of specialization is inefficient, it reduces social welfare. Another explanation for this resource curse phenomenon is the fact the world prices of natural resources such as minerals and other agricultural resources are highly volatile.
- Hence when countries become heavily dependent on exports of these resources, their economies are vulnerable to world price shocks that affect the prices of these resources.
- Frankel, 2010).
- Any form of volatilities that cause unanticipated output growth has been identified by Van der Ploeg & Poelhekke (2009) as one of the major reasons for the natural resource curse.
They argue that market volatilities caused by natural resource growth have a negative impact on economic which exceeds the positive impacts of natural resource growth on economic growth. Under-developed financial markets have also been identified as the possible mechanisms through which natural resources can slow the growth of economies.
- Bhattacharyya & Hodler (2014) argue that natural resource revenues hinder financial development.
- They present a politico-economy model that links natural resource revenues to financial development through political institutions.
- Weak political institutions lead to poor contract enforcements which lead to poor financial sector development.
They make the case that natural resource-rich countries such as most African countries have poor institutions. Hence, their financial markets are not well developed even in the presence of increased natural resource revenues. An underdeveloped financial market slows economic growth and development.
- The quality of institutions in resource-rich countries has mostly been identified as the major hindrance to their development.
- Most of these countries are beset with corruption and rent-seeking activities which greatly hinder the proper mobilization of resource revenues.
- The rational-agency perspective argues that the abundance of natural resources generally leads to poor collective decision making by governments due to rents that accrue to them.
These rents lead governments into making politically and economically inefficient decisions that hamper growth and development (Stevens & Dietsche, 2008). Caselli & Cunningham (2009) focus on leader behavior as the key to determining the effect of resource abundance.
- They argue that increasing resource rents generally decreases total value added in the economy and hence slows growth.
- Increased resource revenues could induce leaders to make investments such as infrastructural investments that support other sectors of the economy.
- In this case, resource revenue will enhance economic growth.
However, if these resource revenues and their accompanying rents induce the leader to invest in staying in power or maximizing his survival function, the results will be catastrophic as resources are diverted from development-oriented projects. Hence, political instability and leader behavior are the major hindrances to development in resource-rich African countries.
Ojo (2016) blames the underdevelopment of Africa on the African leaders. He argues that irresponsible and irresponsive leaders, coupled with corruption, lack of respect for democratic ideals, insecurity, and civil wars are to blame for the underdevelopment of Africa. Awojobi, (2014) also blames Africa’s underdevelopment on corruption and calls for stringent policies to combat corruption in Africa.
Murshed (2004) also emphasizes intersectoral linkages as a key determinant of the resource curse. The political superstructure of these economies plays a significant role in ensuring proper intersectoral linkages. They argue that natural resource endowments retard democratic development which in turn impedes economic development.
- Othe authors such as North (1990) and Eggertsson et al (1990) also identify the role of strong institutions in economic development.
- Papyrakis & Gerlagh (2004) conduct an empirical study into the transmission mechanisms through which natural resources affect growth.
- With data covering about 39 countries, they find that natural resources impact economic growth indirectly through corruption, which proxies for institutional quality.
They show that natural resources increase corruption which in turn negatively affects economic growth. Their findings are in line with the argument of Sachs & Warner (1995). They provide evidence of a negative relationship between natural resource endowment and economic growth.
They found that countries that had relatively high ratios of natural resources to GDP in 1971, experienced slower growth during subsequent periods. This result held even after controlling for other determinants of economic growth. They argue that increased rent-seeking and corruption, state-led development agendas, and higher prices for non-traded goods are the main transmission mechanisms.
Atkinson & Hamilton (2003) also emphasizes that the resource curse may be as a result of the failure of governments of these countries to manage the large resource revenues sustainably. Torvik (2002) develops a model that identifies rent-seeking behavior resulting from natural resource abundance as causing inefficient specialization of economic agents.
They argue that natural resource abundance increases rent-seeking activities. More entrepreneurs are engaged in rent-seeking compared to those engaged in productive economic activities. The overall effect is a reduction in output and economic growth. In line with this, Mehlum et al. (2006) establish that poor institutions are the main problems of most resource-rich countries, especially in Africa.
They argue that when institutions are grabber friendly rather than producer friendly, natural resource abundance will limit economic growth opportunities. The drop in incomes from the effect of grabber friendly institutions outweighs the increase in incomes resulting from natural resources.
- The overall effect of this is a reduction in welfare.
- Auty & Gelb (2001) state that natural resource-abundance economies tend to undermine investment efficiency while resource-poor economies place more premium on efficiency.
- As a result, resource-poor countries industrialize faster, while resource-rich economies compete for rents generated from these resources.
This generates predatory states that distribute rents in ways that distort the economy. Again it is argued that most countries that are resource-rich are normally prone to conflicts which greatly hamper the growth and development of these countries (Bannon & Collier, 2003).
- Sala-i-Martin & Subramanian (2013) also highlight the role of corruption in the dutch disease of Nigeria.
- They propose that to address the resource curse, oil revenues should be directly distributed to the public.
- This they argue is a better solution compared to the status quo where the state manages the oil revenues.
This is due to the obvious corruption at state institutions. Venables (2016) argues that utilizing natural resource endowments is a multistaged economic and political problem. It involves private investments to discover and extract, good fiscal regimes that will mobilize the revenues, prudent spending and investment decisions, and effective policies to mitigate impacts of volatility and other adverse impacts on other sectors of the economy.
Economies that do not have any of these systems properly organized are going to face obvious difficulties in harnessing the benefits of resource endowments. African countries have obvious problems with these systems and this is an obvious explanation for their inability to harness the benefits of natural-resource endowments.2.3 Foreign Aid and Economic Growth in Africa.
Africa has been a recipient of foreign aid for decades now. The continent receives aid from developed country governments, multinational companies, and international organizations.The OECD reports that in 2017, net official development assistance to Africa was about $52800 million.
- ODA disbursements in Africa saw a 3.9% increase in 2017.
- While there is a large pool of literature that finds that foreign aid enhances economic growth and poverty reduction, other authors argue that Africa’s growth prospects have been significantly limited by the flow of foreign aid into the continent.
Levy (1988) studies aid and economic growth in sub-Saharan Africa. His results confirm that foreign aid is positively related to economic growth in the region. This finding is supported by Juselius et al. (2014). They study the long-run effect of ODAs on macroeconomic variables for a sample of 36 African countries.
- They find evidence of a positive effect of foreign aid on economic growth.
- Adams & Atsu, (2014) also find similar results for Ghana, in their study on aid dependence and economic growth.
- Qayyum & Haider (2012) also finds that for low-income countries, foreign aid is positively related to economic growth.
Younsi et al (2019) study the relationship between foreign aid and income inequality for a panel of 16 African countries. They find that foreign aid significantly reduces income inequality. The common argument these authors put forward is that foreign aid provides additional resources to support government budgetary needs and also fuels significant infrastructural developments in developing countries.
- Alvi & Senbeta (2012) study the effect of foreign aid on poverty for sub-Saharan Africa.
- They also find that foreign aid significantly reduces poverty as measured by the poverty gap and the poverty rate.
- They also argue that multilateral aid does a better job at reducing poverty than bilateral aid.
- Other authors however believe that reliance on foreign aid fuels corruption and inefficiency in developing countries.
As a result, foreign aid generally slows economic growth and poverty reduction. Mm (2016) finds a negative effect of foreign aid on economic for Tanzania by applying a dynamic ordinary least square model to a dataset ranging from 1976 to 2014. Asongu & Nnanna (2018) also study the long and short-run impact of foreign aid on economic growth for a sample of 53 African countries.
They find that in the short-run, foreign aid has a positive effect on economic growth. However, in the long-run, foreign aid hurts economic growth. Mlambo et al. (2019) also argue that economic growth does not appear to be increasing significantly in response to increased foreign aid flows into sub-Saharan Africa.
They further argue that foreign aid has worsened corruption and inefficiency in the region. Asongu (2012) also finds evidence to support the assertion that foreign aid fuels corruption in Africa. Ijaiya & Ijaiya (2004) also do not find any significant effect of foreign aid on poverty reduction in SSA.
They argue that weak economic management evidenced by corruption and bad governance in most of these countries is to blame for this situation. Asongu & Nwachukwu (2017) differentiate between different types of foreign aid and their effects on economic growth for a sample of 53 African countries. They find that foreign aid in areas such as social infrastructure, economic infrastructure, the productive sector, and multisector have a positive effect on economic growth.
Humanitarian aid, however, has a negative effect on economic growth.3-Empirical Methodology 3.1 Natural Resources and Economic Growth. To begin the analysis we specify a model to determine the effect of natural resources on the economic wellbeing of African countries.
The general form of the model is specified as: Gdpcap=f(govexp,inv,humancap,res,trade,fdi,faid,govern,L.govern) Where Gdpcap is GDP per capita, govexp is government expenditure as a percentage of GDP, inv is domestic investment as a percentage of GDP, humancap represents human capital measured by school enrolment, res represents the natural resources, trade represents trade openness, fdi represents foreign direct investments as a percentage of GDP, faid is foreign aid, govern represents an overall measure of governance, and L.govern is the one year lag of overall governance.
Six different iterations of this model are estimated. The first model is estimated with government expenditure, investment, human capital, resources, and overall governance as independent variables. Subsequent models are estimated with additional variables and the last model captures all the independent variables.
The models are specified as: 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+γ_i+δ_t+ε_it (1) 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+β_6 〖L.govern〗_it+γ_i+δ_t+ε_it (2) 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+β_6 〖fdi〗_it+γ_i+δ_t+ε_it (3) 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+β_6 〖top〗_it+γ_i+δ_t+ε_it (4) 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+β_6 〖faid〗_it+γ_i+δ_t+ε_it (5) 〖Gdpcap〗_it=β_0+β_1 〖govexp〗_it+β_2 〖inv〗_it+β_3 〖humancap〗_it+β_4 〖res〗_it+β_5 〖govern〗_it+β_6 〖fdi〗_it+β_7 〖top〗_it+β_7 〖faid〗_it+ γ_i+δ_t+ε_it (6) All variables are as previously defined.
it represents the country and time dimensions, γ_i represents the country fixed effects, δ_t represents the year fixed effects, and ε_it represents the random error term. The countries in the sample are grouped based on income levels into three groups namely; low-income countries, lower-middle-income countries, and upper-middle-income countries.
- All 6 models above are estimated for each of the income groupings.
- To estimate these models, fixed-effects and random-effects estimation techniques are adopted.
- Since the data is a panel data, country-specific heterogeneities become an important point of consideration in estimating the models.
- The use of ordinary least squares in the presence of country-specific heterogeneities will lead to biased estimates.
This is because the least-squares regression ignores these heterogeneities altogether and treats all countries as similar. The fixed-effects model is used when the country-specific time-invariant fixed effects exist and are correlated with the predictor variables.
- These effects are however unique and not correlated with each other (Torres-Reyna, 2007).
- The fixed-effects model transforms the model to eliminate the country-specific fixed effects.
- The random-effects model is used when the country-specific fixed effects are purely random and uncorrelated with the independent variables.
The important distinction between fixed and random effects is whether the country-specific characteristics contain elements that can be correlated with the predictor variables (Green, 2008, p.183) Since the difference between the two models is the relationship between the country-fixed effects and the regressors, the Hausman test is conducted to determine if these country-fixed effects are correlated with the regressors.
- The null hypothesis is that random-effects is preferred.
- A rejection of the null hypothesis leads to the adoption of the fixed-effects model.3.2 Natural Resources, Poverty, and Human Development.
- The next step in the analysis is to determine the effect of natural resources on poverty and human development.
A model is first estimated to determine the impact of natural resources on poverty. This model is specified as: 〖povhead〗_it= β_0+β_1 〖gdpcap〗_it+β_2 〖gcf〗_it+β_3 〖hexp〗_it+β_4 〖res〗_it+β_5 〖popgr〗_it+β_6 〖fdi〗_it+β_7 〖top〗_it+β_8 〖inf〗_it+β_9 〖res*corruptcr〗_it+ β_10 〖res*pstab〗_it+β_11 〖res*top〗_it+β_12 〖res*gdp〗_it+β_13 〖conflict〗_i+γ_i+δ_t+ε_it (7) Where 〖povhead〗_it represent the poverty headcount ratio, 〖gdpcap〗_it is GDP per capita, 〖gcf〗_it represents gross capital formation, 〖hexp〗_it represents health expenditure, 〖popgr〗_it is the population growth rate, 〖inf〗_it is the inflation rate, 〖res*corruptcr〗_it represents the interaction term of natural resources with the control of corruption, 〖res*pstab〗_it represents the interaction term of natural resources with political stability, 〖res*top〗_it represents the interaction term of natural resources with trade openness, 〖res*gdp〗_it represents the interaction term of natural resources with GDP, and 〖conflict〗_i is a dummy variable for the presence of conflicts.
- Other variables and parameters are as previously defined.
- To broaden the scope of the analysis, model 7 is re-estimated with much broader measures of human development.
- The goal here is to determine how natural resources affect human development in general.
- This model is specified below: y_jit= β_0+β_1 〖gdpcap〗_it+β_2 〖gcf〗_it+β_3 〖hexp〗_it+β_4 〖res〗_it+β_5 〖popgr〗_it+β_6 〖fdi〗_it+β_7 〖top〗_it+β_8 〖inf〗_it+β_9 〖res*corruptcr〗_it+ β_10 〖res*pstab〗_it+β_11 〖res*top〗_it+β_12 〖res*gdp〗_it+β_13 〖conflict〗_i+γ_i+δ_t+ε_it (8) Where y_jit represents the indicators of human development namely; life expectancy, school enrolment, and infant mortality rate.
The models in this section are also estimated by fixed-effects and random-effects techniques with the use of the Hausman test to choose between the two models.3.3 Foreign Aid and Economic Growth. In this section, we analyze the role of foreign aid on economic growth.
The African continent has been a recipient of foreign aid in diverse forms from countries and multinational organizations. The effect of foreign aid on the growth prospects of African countries has however been greatly questioned over the years. The model is specified as: gdpgrwth=β_0+β_1 〖popgr〗_it+β_2 〖inv_gdp〗_it+β_3 〖faid〗_it+β_4 〖〖faid〗^2〗_it+β_5 〖Gdp_ini〗_it+β_6 〖inf〗_it+ γ_i+δ_t+ε_it (9) Where gdpgrwth is the GDP growth rate, 〖popgr〗_it is the population growth rate, 〖inv_gdp〗_it represents investment as a percentage of GDP.
〖faid〗_it is foreign aid and 〖〖faid〗^2〗_it is its squared term. 〖Gdp_ini〗_it is the initial level of GDP, and 〖inf〗_it is the inflation rate. Other parameters are as previously defined. This model is again run separately for the three income groups. To trace the transmission mechanisms, interactive terms of foreign aid with natural resources and governance are added to the model.
Other interactions will also be added to further study the transmission channels.4-Estimation Results and Interpretation 4.1 Natural Resources and Economic Growth Table 1 presents the results of the underlying model for low-income countries. From model one, government expenditure is found to positively affect GDP per capita though not statistically significant.
Investment positively affects GDP per capita. A percentage point increase in investment results in about 0.0035 point increase in GDP per capita, other variables held constant. Human capital also has a significant positive effect on GDP per capita. The results show that GDP per capita increases by about 0.00095 points in response to a one-unit increase in human capital.
Natural resources have a positive but insignificant effect on GDP per capita. The overall governance index also has a significant positive effect on GDP per capita. On average, a one-unit increase in the governance index increases GDP per capita by about 0.164 units, other variables held constant. Model two includes a lag value of the overall governance index.
Investment and human capital still have significant positive effects on GDP per capita. The coefficient of natural resources is still positive. It is now statistically significant at 10%. Table 1: Low-Income Countries: Model is based on the Random Effect Cluster method and R squared within Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Government Expenditure 0.000103 0.000219 -0.0000756 0.00107 0.00131 0.000122 (0.00554) (0.00477) (0.00567) (0.00565) (0.00576) (0.00581) Investment 0.00351* 0.00348** 0.00278 0.00383** 0.00350** 0.00306* (0.00179) (0.00166) (0.00189) (0.00176) (0.00177) (0.00183) Human Capital 0.00095*** 0.00025*** 0.00011*** 0.00019*** 0.00011*** 0.00041*** (0.00153) (0.00142) (0.00147) (0.00173) (0.00161) (0.00172) Resources 0.00309 0.00036* 0.00272 0.00184 0.00246 0.000765 (0.00279) (0.00224) (0.00306) (0.00390) (0.00409) (0.00539) FDI 0.00155 0.00174 (0.00171) (0.00166) Trade Openness -0.000499 -0.000549 (0.000597) (0.000512) Foreign Aid 0.00005 0.00005 (0.0411) (0.0445) Overall governance 0.164*** – 0.177*** 0.161*** 0.168*** 0.175*** (0.0528) – (0.0540) (0.0523) (0.0557) (0.0575) One- Year Lag Overall Governance 0.145*** (0.0554) R2 0.619 0.589 0.632 0.623 0.620 0.638 Chi2 100.9*** 86.07*** 108.2*** 99.16*** 92.06*** 91.86*** The one-year lag of overall governance is found to positively affect GDP per capita.
- A unit increase in the one-year lag of overall governance results in about 0.145 units increase in GDP per capita, other variables held constant.
- This suggests a dynamic relationship between governance and economic growth.
- Model three adds foreign direct investment to model one.
- Only human capital and overall governance are found to be significant.
The coefficient for human capital reduces to 0.00011 while that of overall governance increases to 0.177. Foreign direct investment has a positive but insignificant effect on GDP per capita. Model four adds trade openness to model one. Trade openness has a negative but insignificant effect on GDP per capita.
The coefficient for investment is slightly bigger and is still statistically significant. Human capital is also statistically significant but the coefficient is much smaller. Overall governance is still positive and statistically significant. Model five adds foreign aid to the variables in model one. The coefficient of investment is still positive and statistically significant.
Human capital also maintains a positive and significant coefficient. The coefficient is however smaller. The overall governance index also maintains a positive and significant relationship. The coefficient is slightly larger. The rest of the coefficients are not statistically significant.
Model six includes all the covariates. The coefficient of government expenditure is still positive and not significant. The coefficient for investment is also positive but slightly smaller. The coefficient is significant at a ten percent level. Human capital is still positive and statistically significant but the coefficient is smaller.
Natural resources, foreign aid, and foreign direct investment have positive and insignificant coefficients. Trade openness has a negative and insignificant coefficient. The overall governance index is still found to increase GDP per capita significantly.
- The results suggest that for low-income countries, natural resources play no significant role in economic growth.
- This is due the fact that these countries choose to give the exploration and investment rights to foreign companies, which mostly cares about exploiting these resources regardless of the national interest of these countries.
On the other hand, investment, human capital, and good governance have the strongest influence on economic growth for low-income countries. Results also indicates a negative relation between economic growth and openness, which is mainly due a huge trade deficits in this group of countries.
Table 2: Lower Middle-Income Countries: Model is based on Fixed Effect Cluster method and R squared within Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Government Expenditure 0.00468 0.00352 0.00458 0.00553 0.00414 0.00441 (0.00376) (0.00315) (0.00379) (0.00351) (0.00425) (0.00405) Investment 0.00748*** 0.00691*** 0.00735*** 0.00849*** 0.00766*** 0.00877*** (0.00212) (0.00180) (0.00215) (0.00238) (0.00222) (0.00262) Human Capital 0.00077*** 0.00014*** 0.00076*** 0.00047*** 0.00075*** 0.00058*** (0.00128) (0.00115) (0.00127) (0.00136) (0.00132) (0.00138) Resources 0.00221 0.00019* 0.00216 0.00272 0.00224 0.00277 (0.00362) (0.0003) (0.00366) (0.00275) (0.00374) (0.00293) FDI 0.00133 0.00207 (0.00224) (0.00219) Trade Openness -0.00149 -0.00166* (0.000986) (0.000975) Foreign Aid 0.000010* 0.000018* (0.00001) (0.00001) Overall governance 0.337*** 0.336*** 0.325*** 0.338*** 0.323*** (0.0980) (0.0990) (0.109) (0.0970) (0.109) One- Year Lag Overall Governance 0.308*** (0.0826) R2 0.577 0.590 0.578 0.594 0.579 0.601 Chi2 20.49*** 22.50*** 18.37*** 16.97*** 17.49*** 13.12*** Table 2 presents the results for low middle-income countries.
Government expenditure still does not have any statistically significant effect on GDP per capita. This runs through all 6 models. Investment is again found to have a positive and statistically significant effect on GDP per capita in all six models. The coefficients are similar across all models.
- From model one, for example, a one-unit increase in investment results in a 0.0074 unit increase in GDP per capita, ceteris paribus.
- This change increases to 0.00877 in model six where all the covariates are added.
- Across all 6 models, human capital has a positive and statistically significant effect on GDP per capita.
From model one, a unit increase in human capital results in about 0.00077 increase in GDP per capita, other variables held constant. This decreases to 0.0058 in model six where all covariates are added. Natural resources again have no significant effect on GDP per capita in all six models.
- The coefficient for foreign direct investment is negative and insignificant in model three and model six.
- Trade openness has a negative coefficient in model four and a positive coefficient in model six.
- Both coefficients are however not statistically significant.
- Foreign aid does not also have a significant effect on GDP per capita for lower-middle-income countries.
Overall governance index again has a positive and statistically significant effect on GDP per capita across all models. From model one, a unit increase in overall governance increases GDP per capita by about 0.317 units, other variables held constant.
- In model six, the value reduces to 0.314.
- The coefficient for the lagged value of overall governance added in model two is positive and statistically significant The results are essentially not different from those for low-income countries in table one.
- Table 3 presents the results for upper-middle-income countries.
Increased government expenditure is found to negatively affect GDP per capita across all 6 models. All coefficients are however not statistically significant. Investment is again found to have a positive impact on GDP per capita across all 6 models. All coefficients are statistically significant.
- The coefficients are significantly larger than that of the low-income countries and middle-income countries.
- Human capital also has a positive effect on GDP per capita.
- However, the coefficient is only statistically significant in model two where the lagged of overall governance is added and in model three where FDI is added.
Table 3: Upper Middle-Income Countries: Model is based on the Random Effect Cluster method and R squared within Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Government Expenditure -0.0132 -0.0106 -0.0131 -0.0132 -0.0131 -0.0130 (0.0118) (0.0117) (0.0117) (0.0125) (0.0117) (0.0122) Investment 0.0137*** 0.0109*** 0.0141*** 0.0137*** 0.0139*** 0.0141*** (0.00411) (0.00347) (0.00430) (0.00433) (0.00414) (0.00448) Human Capital 0.00066 0.00033** 0.00042** 0.00066 0.00060 0.00063 (0.00232) (0.00212) (0.00229) (0.00219) (0.00222) (0.00212) Resources 0.00283 0.00345 0.00281 0.00283 0.00285 0.00283 (0.00981) (0.00737) (0.0101) (0.00995) (0.0102) (0.0105) FDI -0.00152 -0.00107 (0.00319) (0.00343) Trade Openness -0.00000145 0.0000694 (0.00150) (0.00150) Foreign Aid 0.000088 0.000059 (0.0398) (0.0385) Overall governance 0.317** 0.320** 0.316** 0.312** 0.314** (0.135) (0.137) (0.135) (0.123) (0.124) One-Year lag Overall governance 0.302*** (0.129) Constant 8.119*** 8.026*** 8.116*** 8.119*** 8.115*** 8.104*** (0.294) (0.220) (0.290) (0.309) (0.293) (0.306) R2 0.357 0.383 0.358 0.357 0.358 0.359 Chi2 46.18*** 71.17*** 46.64*** 51.54*** 71.35*** 77.29*** Natural resources still have no significant effect on GDP per capita.
- Foreign direct investment, foreign aid, and trade openness also have no significant effect on GDP per capita.
- Overall governance is again found to positively affect GDP per capita.
- All coefficients are statistically significant.
- The coefficients are almost the same size as those of the middle-income countries.
The one-year lag of overall governance still has a positive and significant effect on GDP per capita. The results imply that natural resource availability in Africa does not affect economic growth in any significant way. This runs through all the countries irrespective of their income levels.
- This highlights the basic problem of African countries.
- The natural resource curse does exist in Africa.
- The abundant natural resources in the continent have not been supportive of economic growth.
- The companies involved in the extraction of these natural resources in Africa are mostly foreign multi-billion-dollar businesses.
However, these countries get huge tax breaks, handouts, and subsidies from governments of African countries. These are mostly done to attract foreign investors since most African countries lack the capacity to extract their natural resources. Some countries also have to give up huge shares of the extracted resources to these companies in a bid to encourage exploration by foreign investors.
These factors, coupled with corruption, conflicts, and poor institutions can be blamed for the natural resource curse in Africa. It is also intriguing to find that trade openness does not significantly affect economic growth in Africa. This could suggest that African countries are not reaping significant benefits from opening their economies up for international trade.
Foreign direct investments are also not significantly affecting the growth of African countries. These findings could be due to the nature of institutions. Weak institutions are not conducive to economic growth. We see that the quality of governance has a positive effect on economic growth.
- Strengthening the governance framework in Africa will create the needed environment for countries to benefit from open trade and foreign direct investments.
- Hence, corruption and government inefficiencies should be reduced significantly to strengthen the governance framework and make it more conducive to economic growth.4.2 Poverty and Natural Resources.
This section presents the results for the regression to determine the effects of natural resource abundance on poverty. The poverty headcount ratio is the dependent variable. As expected GDP per capita is found to significantly reduce poverty. A unit increase in GDP per capita will result in a 0.29 point reduction in poverty headcount, other variables held constant.
Gross capital formation also significantly reduces poverty. A unit increase in gross capital formation reduces poverty by about 0.08 units on average, other variables held constant. Government health expenditure has a negative but insignificant effect on poverty. Natural resource abundance also significantly reduces poverty.
A unit increase in natural resources reduces poverty by about 0.032 points average decrease in poverty, other variables held constant. Table 4: Poverty Headcount and Natural Resources Independent Dependent: Poverty Headcount Constant -1.717 (5.735) (GDP per capita) -.293 (.126) ** Gross Capital Formation -.080 (.009) *** Health Expenditure -.081 (.094) Natural Resource -.032 (.013) ** Population,212 (.107) * FDI -.007 (.038) Trade Openness -.010 (.005) ** Inflation,027 (.009) *** (Natural Resource* control of corruption) -.486 (.145) *** (Natural Resource* political stability) -.037 (.061) (Natural Resource* Trade Openness) -.003 (.004) *** (Natural Resource* GDP),073 (.020) *** Conflict Dummy,242 (.144) * An increase in population is found to increase poverty as expected.
- A unit increase in population increases poverty by about 0.212 units on average, other variables held constant.
- Foreign direct investment has a negative but insignificant effect on poverty.
- Trade openness also significantly reduces poverty.
- A percentage point increase in trade openness reduces poverty on average by 0.01 units.
Inflation increases poverty as expected. A percentage point increase in inflation increases poverty by 0.027 units on average, other variables held constant. To further determine the effects of natural resources on poverty under given conditions, interaction terms of natural resources with other variables are added to the regression.
Natural resource interacted with corruption control is found to significantly reduce poverty. When corruption control measures are put in place, a unit increase in natural resources reduces poverty by about 0.486 on average, other variables held constant. This coefficient is higher than the earlier coefficient of natural resources.
This means that corruption has a significant influence on the extent to which African countries can benefit from natural resources. Natural resources interacted with political stability also produces a bigger coefficient. The coefficients are however not statistically significant.
- Natural resources interacted with trade openness also has a significant poverty reduction effect.
- In the presence of trade openness, a unit increase in natural resources reduces poverty by 0.003 units on average, other variables held constant.
- Natural resources interacted with GDP also produces a negative coefficient.
This is however statistically insignificant. A dummy variable for conflict is also added to the regression. As expected, the presence of conflict increases poverty by about 0.242 units compared to the absence of conflicts.4.3 Human Development Indicators and Natural Resources.
- To determine the impact of natural resource abundance on overall wellbeing, natural resources are regressed on broader measures of human development.
- Mainly, life expectancy, school enrolment, and infant mortality rates are used to measure the overall welfare of citizens.
- Table 5 presents the results.The results show that GDP per capita increases life expectancy and school enrolment but decreases infant mortality rate.
A unit increase in GDP per capita increases life expectancy on average by 0.039 units, school enrolment by 0.026 units, and reduces the infant mortality rate by about 0.524 units on average, other variables held constant. These relationships are as expected.
Table 5: HDI Indicators and Natural Resources Independent Life Expectancy Schooling IMR Constant 3.951 (.154) *** 4.298 (.109) *** 7.105 (.419) *** (GDP per capita),0391 (.004) ***,026 (.009) *** -.524 (.040) *** Gross Capital Formation,082 (.032) **,003 (.001) *** -.003 (.003) Health Expenditure,006 (.003) **,021 (.008) *** -.044 (.021) ** Natural Resources,001 (.025),006 (.07) -.002 (.003) Population -.004 (.002) ** -.012 (.004) **,046 (.024) * FDI -.002 (.001),005 (.003) -.014 (.011) Trade,003 (.002),006 (.002) ** -.122 (.041) *** Inflation -,007 (.006) -.001 (.14),036 (.029) (Natural Resource* control of corruption),005 (.003) *,028 (.008) *** -.084 (.026) ** (Natural Resource* Political Stability),4009 (.226) * 1.995 (.8475) ** -.827 (.858) (Natural Resource* Trade Openness) -.003 (.003),004 (.005) -.002 (.027) (Natural Resource* GDP),003 (.002),005 (.005) -.014 (.027) Conflict Dummy -2.16 (.824) *** -2.269 (1.866) 6.233 (3.03) ** As expected, gross capital formation increases life expectancy and school enrolment while decreasing infant mortality.
The effect on infant mortality rate is however not statistically significant. A unit increase in gross capital formation results in about 0.082 units increases in life expectancy and about 0.003 unit increase in school enrolment. Health expenditure is found to increase life expectancy and school enrolment while reducing infant mortality rate as expected.
- On average, a unit increase in health expenditure increases life expectancy by 0.006 units, school enrolment by 0.021 units, and reduces infant mortality by about 0.044 percentage points, other variables held constant.
- Natural resources do not have any statistically significant effects on life expectancy, school enrolment, and infant mortality rate.
Even though natural resources were found to reduce poverty in general, natural resources do not appear to have any significant effects on broader measures of human development. This is further evidence of the presence of the natural resource curse in Africa.
The population growth rate is found to reduce life expectancy and school enrolment while increasing infant mortality rate as expected. A percentage point increase in the population growth rate reduces life expectancy and school enrolment by 0.004 and 0.012 units respectively. Infant mortality is increased by 0.046 percentage points on average, in response to a one percentage point increase in the population growth rate.
Foreign direct investment and inflation have no significant effects on life expectancy, school enrolment, and infant mortality rate. A percentage point increase in trade openness results in about 0.006 unit increase in school enrolment and a 0.122 percentage point reduction in infant mortality rate.
The effect on life expectancy is not significant. Again natural resource variable is interacted with other policy variables to determine how the effect of natural resources will change under given conditions. Natural resources interacted with control of corruption increases life expectancy and school enrolment and reduces the infant mortality rate.
The coefficients are all statistically significant. This suggests that corruption is one of the major hindrances to African countries with respect to benefiting from natural resource abundance. Natural resources interacted with political stability also increase life expectancy and school enrolment and reduces infant mortality rate.
- Interacting natural resources with trade openness and GDP do not have any significant effects on human development measures.
- The presence of conflict reduces life expectancy and school enrolment while increasing infant mortality rate relative to the absence of conflicts.
- Other variables held constant, the presence of conflicts reduces life expectancy by 2.16 relative to the absence of conflicts.
Also, infant mortality increases by about 6.23 percentage points when there are conflicts, relative to the absence of conflicts.4.4 Foreign Aid and Economic Growth. In this section, we analyze the impact of foreign aid on economic growth. Separate regressions are estimated for low-income countries, lower-middle-income countries, and upper-middle-income countries in Africa.
Table 6 presents these results. Population growth has a positive but insignificant effect across all income groups. Investment also has a positive effect on economic growth. However, some coefficients for lower-income countries is statistically significant. A percentage point increase in investment to GDP increases GDP growth rate by 8.753 percentage points on average for lower-income countries.
Foreign aid has a positive effect on economic growth. However, only the coefficient for lower-middle-income countries is statistically significant. The coefficients are however extremely small and can be approximated to zero. The square of foreign is added to determine if any nonlinearities exist.
The coefficient for the squared term is negative for low-income and lower-middle-income countries. This implies that even though foreign aid has a positive effect on economic growth, there is a threshold point of foreign aid after which the effects become negative. Initial GDP is found to reduce economic growth for lower-income and lower-middle-income countries while increasing economic growth for middle-income countries.
However, only the coefficient for lower-middle-income countries is significant. Inflation is found to reduce economic growth. A percentage point increase in inflation reduces economic growth by about 0.0004 percentage points for lower-income countries and 0.056 percentage points for lower-middle-income countries.The coefficient for upper-middle-income countries is not statistically significant.
We see from the results that foreign aid has not been very beneficial to African countries as one would expect. This lends credence to the argument that foreign aid to Africa has been detrimental to the economic growth of countries. Aid is not merely one source of financing among others. It serves to make the extraction of wealth from Africa possible.
Today’s neoliberal era is characterized by the commodification of nature, the privatization of public goods and services, the liberalization of markets, and the licensing of looting and environmental destruction by transnational corporations. Aid uses public funds to subsidize and encourage the implementation of neoliberal policies that have resulted in the growing impoverishment of the majority, and the obscene accumulation of wealth by national elites who are among its main beneficiaries.
Table 6: Economic Growth and Foreign Aid Low-Income Countries Lower-Middle Income Countries Upper-Middle Income Countries Popg 0.0359 0.308 0.259 (0.17) (0.74) (0.31) Inv_Gdp 8.753*** 0.395 0.155 (7.81) (0.67) (0.36) FAid 0.00000000352 0.00000000157** 0.00000000457 (0.93) (2.61) (0.43) (FAid)2 -17.88*** -9.661** 69.63 (-7.54) (-2.32) (-1.73) Gdp_Ini -0.0216 -0.187* 0.107 (-0.72) (-2.34) (0.15) Inflation -0.0004136* -0.0565459* -0.0694722 (-1.81) (-1.93) (-0.94) _Cons -0.414 -0.133 0.321 (-0.64) (-0.14) -0.18 R2 0.58 0.45 0.61 z statistics in parentheses ***1%, **5% and *10% significance level Table 7 presents the results for various transmission mechanisms.
These are estimated for the full sample only. We see that natural resources interacted with foreign aid negatively affect economic growth. This implies that foreign aid to Africa is not conducive to the attempts by governments to reap the benefits of natural resources.
- This is finding is not surprising.
- Foreign aid flows to African countries will create an environment that allows developed country governments and corporations to dominate and control developing countries.
- This can lead to the adoption of policies related to natural resource extraction and trade that are detrimental to the growth prospects of African countries, while only benefiting developed country governments and corporations.
Table 7: Transmission Channels Resources*Foreign Aid -0.00202* (0.000158) Governance*Resources 0.00533* (0.00055) Governance*Foreign Aid 0.00513* (0.00300) Education*Governance 0.00137* (0.00150) Governance interacted with natural resources has a positive and statistically significant effect on economic growth.
This means that good governance creates an environment that enables African countries to benefit from natural resources. Good governance, evidenced by low corruption and rent-seeking activities will ensure that appropriate measures are put in place to ensure the efficient exploration of the natural resources and the management of resource revenues in ways that will stimulate economic growth.
Good governance interacted with foreign aid also has a positive effect on economic growth. Good governance will ensure the proper utilization of resources from foreign aid which will spur economic growth. Education interacted with good governance also has a positive effect on economic growth as expected.
Table 8: Governance Indicators Voice & Accountability 0.0876** (0.0405) Politic Stability 0.0643** (0.0292) Government Effectiveness 0.0828** (0.0260) Regularity Quality 0.0584 (0.0840) Rule of Law 0.171** (0.0680) Control of Corruption 0.0568** (0.0295) Table 8 presents the results for governance indicators.
These variables are employed to emphasize the role of good governance in spurring economic growth. Good governance transcends diverse areas including accountability, rule of law, corruption control, government effectiveness, quality regulations, and political stability.
The results show that voice and accountability enhance economic growth. A one-point increase in the voice and accountability index increases economic growth by about 0.088 percentage points on average, other variables held constant. Political stability also enhances economic growth. A one-point increase in the political stability index increases economic growth by about 0.064 percentage points on average.
Government effectiveness also enhances economic growth. Other variables held constant, a one-point increase in the government effectiveness index leads to about 0.083 percentage point increase in economic growth. Regulatory quality has no statistically significant effect on economic growth.
- As expected the rule of law has a strong effect on the economic growth of African countries.
- Other variables held constant, a one-point increase in the rule of law index increases economic growth by about 0.171 percentage points on average.
- The control of corruption also enhances economic growth.
- Other variables held constant, economic growth increases by about 0.057 units on average, in response to a one-point increase in the index corruption control.
The results show clearly the important role that good governance plays in the economic growth prospects of African countries. Bad governance is a common occurrence in African countries. most countries in Africa have weak democracies that are confounded with corruption and other forms of bad governance.
This is significantly hampering on development in Africa. Conclusion: The paper examines the phenomenon of the natural resource curse in Africa. Understanding the reason why a natural resource-rich continent like Africa is still grappling with extreme poverty, inequality, and underdevelopment is key to policymakers and researchers.
The paper also examines the effect of foreign aid on economic growth in Africa. The goal here is to contribute to the debate on whether the African continent benefits significantly from the flow of aid into the continent. The following conclusions can be arrived at from the analysis; The natural resource curse exists in Africa.
- Natural resource abundance was found to have no significant effect on economic growth in Africa.
- Low quality of institions and governance is the major obstacle son they can benefit from their wealth.
- Although the results indicate that natural resources wealth can help in lowering poverty, it has no impact on people’s well-being in terms of education and health care.
Education has no significant effect on economic growth. This calls for the need not only to restructure the educational systems in African countries, but also the labor markets, noitably for skilled labor in order to lower brain drain. There is interdependence between foreign aid and natural resources.
Foreign aid creates avenues for exploitation of African countries by developed country governments. African countries that rely soo much on foreign aid lose control over the exploitation of their natural resources which hampers economic growth and development. The quality of institutions is very important in the development of Africa.
Several governance indicators are found to enhance economic growth in Africa. Good governance should be encouraged. State institutions and the entire structure should be strengthened. Corruption should be controlled and accountability and rule of law should be encouraged.
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Why is Africa called poor?
Africa is considered the poorest continent on Earth. Almost every second person living in the states of sub-Saharan Africa lives below the poverty line. Particularly affected by poverty in Africa are the weakest members of society, their children and women.
What is Burundi best known for?
Although Burundi is a troubled and unstable country, it has a number of things for which it is famous. Its hospitality is legendary, as are its coffee and tea. However, Burundi’s most notable asset is its abundance of national parks and reserves.
What did Burundi used to be called?
Independence – Independence Square and monument in Bujumbura. On 20 January 1959, Burundi’s ruler Mwami Mwambutsa IV requested Burundi’s independence from Belgium and dissolution of the Ruanda-Urundi union. In the following months, Burundian political parties began to advocate for the end of Belgian colonial rule and the separation of Rwanda and Burundi.
- The first and largest of these political parties was the Union for National Progress (UPRONA).
- Burundi’s push for independence was influenced by the Rwandan Revolution and the accompanying instability and ethnic conflict that occurred there.
- As a result of the Rwandan Revolution, many Rwandan Tutsi refugees arrived in Burundi during the period from 1959 to 1961.
Burundi’s first elections took place on 8 September 1961 and UPRONA, a multi-ethnic unity party led by Prince Louis Rwagasore won just over 80% of the electorate’s votes. In the wake of the elections, on 13 October, the 29-year-old Prince Rwagasore was assassinated, robbing Burundi of its most popular and well-known nationalists.
The country claimed independence on 1 July 1962, and legally changed its name from Ruanda-Urundi to Burundi. Burundi became a constitutional monarchy with Mwami Mwambutsa IV, Prince Rwagasore’s father, serving as the country’s king. On 18 September 1962 Burundi joined the United Nations, In 1963, King Mwambutsa appointed a Hutu prime minister, Pierre Ngendandumwe, but he was assassinated on 15 January 1965 by a Rwandan Tutsi employed by the US Embassy.
The assassination occurred in the broader context of the Congo Crisis during which Western anti-communist countries were confronting the communist People’s Republic of China as it attempted to make Burundi a logistics base for communist insurgents battling in Congo.
Parliamentary elections in May 1965 brought a majority of Hutu into the parliament, but when King Mwambutsa appointed a Tutsi prime minister, some Hutu felt this was unjust and ethnic tensions were further increased. In October 1965, an attempted coup d’état led by the Hutu-dominated police was carried out but failed.
The Tutsi dominated army, then led by Tutsi officer Captain Michel Micombero purged Hutu from their ranks and carried out reprisal attacks which ultimately claimed the lives of up to 5,000 people in a precursor to the 1972 Burundian Genocide, King Mwambutsa, who had fled the country during the October coup of 1965, was deposed by a coup in July 1966 and his teenage son, Prince Ntare V, claimed the throne.
In November that same year, the Tutsi Prime Minister, then-Captain Michel Micombero, carried out another coup, this time deposing Ntare, abolishing the monarchy and declaring the nation a republic, though his one-party government was effectively a military dictatorship, As president, Micombero became an advocate of African socialism and received support from the People’s Republic of China.
He imposed a staunch regime of law and order and sharply repressed Hutu militarism.
What was Burundi formerly known as?
2007 Schools Wikipedia Selection, Related subjects: African Countries ; Countries –
|Republika y’u Burundi République du Burundi Republic of Burundi|
Burundi ( IPA: /bəˈɹʊndɪ/ ), officially the Republic of Burundi, is a small country in the Great Lakes region of Africa, The former name was Urundi-Ubrundi-Bruwanda, Urundi is the shortened form of “Urundi Rwanda” (“The other Rwanda”), as the Belgian colonial powers formerly referred to the territory.
It is bordered by Rwanda on the north, Tanzania on the south and east, and the Democratic Republic of the Congo on the west. Although the country is landlocked, much of its western border is adjacent to Lake Tanganyika, The country’s modern name is derived from its Bantu language, Kirundi. Geographically isolated, facing population pressures and having sparse resources, Burundi is one of the poorest and most conflict-ridden countries in Africa and in the world.
Its small size belies the magnitude of the problems it faces in reconciling the claims of the Tutsi minority with the Hutu majority.
Why is Burundi a third world country?
Burundi is a densely populated country with a high population growth rate, factors that, combined with land scarcity and poverty, put a large portion of the population at risk of food insecurity. About 90% of the population relies on subsistence agriculture.