The African economy and its role in the world economy

After a period of failing per capita incomes that started in the 1970s, Africa finally saw a turn-around from about 1995, with initially modest increases in per capita incomes in Africa grow by above 3% on average, partly due to the resource boom, but also du to improved economic policies. Sub-Saharan Africa is a very small player in the global economy. At current exchange rates, sub-Saharan Africa produced only 1,4% of global GDP in 2005 and had an average per capita income that was 1/41 of that of the high income countries. Adjusting for differences in purchasing power, the gap shrinks to 1/16, which is still enormous. In PPP terms, Africa is clearly the poorest region in the world. The growth experiences vary considerably across countries and over time. The countries that receive much Swedish aid today generally did badly in the 1980s, somewhat better in the 1990s and many have been doing very well since the turn of the century. The average for the main recipients of Swedish aid in 2001-05 is 2.2% growth in per capita income per year., which is slightly better than the sub-Saharan African average of 2.0%. Civil war has been an important cause of bad economic performance in several countries in Africa, and the elimination of remaining conflicts as well as the maintenance of peace is very important for progress in poverty reduction. The industrial sector, including manufacturing, has not been able to expand as hoped for at independence or as it has done in Asia. The import-subscription policy that was pursued to support manufacturing growth in Africa achieved some results in the 1960s, but the policies did no lead to the creation of a manufacturing sector that could compete internationally. In 19609, sub-Sahara Africa supplied .2% of world exports, but by the turn of the century this has shrunk to only 1.4%. By 2005, however, Africa has increased its global market share somewhat due to the boom in natural resources such as oil, and this is, of course, also one of the reasons for the growth acceleration. The bulk of African exports are raw materials, agricultural products and also tourism services. There is still no breakthrough in terms of manufacturing exports. Even if Africa is of marginal importance in world trade, African economies are more dependent on the world market than are those of high income countries. Africa is not only the poorest region in the world, but it also has an increasing share of the world's population. The population growth rate is declining in Africa as in other regions, but since the region is lagging economically, it has not come as far as the other regions in the demographic transition process. The result of this is that the sub-Sahara African share of the world population has increased from 7,4% to 11,5% over a 45 year period.