Economic Growth and Diversification Fuelling Development in Africa
The question as to whether economic growth reduces poverty and inequality is a highly debatable and controversial topic in Africa. Much of the African population still earns their living in the primary sectors and the traditional economy, while GDP growth is mainly attributed to oil and mineral extraction, and dependence on these commodities makes many African countries susceptible to boom or bust cycles. This chapter describes the necessity for economic transformation, normally driven by government, that promotes diversified production and export competitiveness, and which should facilitate social well-being through more equal income distribution, skills development and employment. Kenya and Nigeria are evaluated to determine the impact China has had on these regional ‘powerhouses’ in East and West Africa, and some of the conclusions drawn are the following: China’s funding of strategic road and railway links is creating an enabling environment for growth and diversification; skills transfer is not occurring at a satisfactory level due to the respective governments not providing the capacity and structures for the transfer of those skills; government inefficiency and corruption, safety and security remain a barrier to investment and growth; China’s investment in Nigeria has boosted the extractive sector at the expense of the agricultural sector; the trade deficit in favour of China is a concern; and these African governments need to introduce more effective industrial and other policies to direct investment in priority areas.
- Adeyeye, A. 28 July 2016. SEZ’s and the Industrialisation Drive in Africa. AfricaBusiness.Com. [Online]. Available from: http://www.africabusiness.com/2016/07/28/sezs-and-the-industrial-drive-in-Africa/ (accessed: 11 Feb 2017).
- African Economic Outlook. 2015. AFDB, OECD, UNDP, page 75. [Online]. Available from: http://www.africaneconomicoutlook.org/sites/default/files/content_pdf/AE2015_ENpdf (accessed: 24 June 2017).
- Africa Infrastructure Development Index. 2013. [Online]. Available from: http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Economicbrief (accessed: 24 June 2017).
- African Tourism Monitor. 2014. AFDB, OECD, UNDP, ANECA, 2014 page 58. [Online]. Available from: http://www.afdb.org (accessed: 24 March 2017).
- Chen, Y., Sun, I., Ukaejiofo, R., Tang, X. and Bräutigam, D. 2016. Learning from China? Manufacturing, Investment and Technology Transfer in Nigeria. IFPRI Discussion Paper 1565. Washington, DC: International Food Policy Research Institute. Reproduced with permission from the International Food Policy Research Institute www.ifpri.org. The original text is available online at: http://www.ifpri.org/publication/learning-china-manufacturing-investment-and-technology-transfer-nigeria.
- Economic Diversification in Africa: A Review of Selected Countries. 2011. [Online]. OECD. Available from: http://www.oecd.org/daf/inv/economicdiversificationinafricaareviewofselectedcountries.htm (accessed: 27 March 2017).
- Izuchukwu, O. and Ofori, D. 2014. ‘Why South-South FDI Is Booming: Case Study of China FDI in Nigeria’, Asia Economic and Financial Review, 4 (3): 361–376.Google Scholar
- Kim, Y. 2015. What Africa Can Learn from China’s Special Economic Zones. [Online]. Available from: http://www.The conversation.com/what-africa-can-learn-from-china’s-special-zones-5157 (accessed: 15 Feb 2017).
- Leke, A., Lund, S., Roxburgh, C. and Van Wamelen, A. June 2010. Excerpted from “What’s Driving Africa’s Growth”, McKinsey & Company, www.mckinsey.com. Copyright © 2017 McKinsey & Company. All rights reserved. Reprinted with permission.
- Mulinge, E. An Analyses of China—Kenya Bilateral Relations on Infrastructure Development. The Kenya Institute for Public Policy Research and Analysis Discussion Paper no 34, 2012. 3 (5): 529–537. [Online]. Available from: http://www.kippra.or.ke/index.php?option+com_docman&task+doc_view&gid+275&itemid+ (accessed: 28 March 2017).
- Ogunkola, E., Bankole, A. and Adewuyi, A. 2008. China-Nigeria Economic Relations. African Economic Research Consortium (AERC).Google Scholar
- Sanghi, A. and Johnson, D. 2016. Deal or No Deal: Strictly Business for China in Kenya? World Bank Policy Research Working Paper 7614. © World Bank. Accessed from: http://documents.worldbank.org/curated/en/801581468195561492/pdf/WPS7614.pdf (accessed: 17 February 2017). License: Creative Commons Attribution License (CC BY 3.0 IGO). (http://creativecommons.org/licenses/by/3.0/igo/).
- Zamfir, L. 2016. Africa’s Economic Growth: Taking Off or Slowing Down. European Parliament Research Service Blog 2016. [Online]. Available from: https://www.epthinktank.eu/2016/0106/africas-economic-growth-taking-off-or-slowing-down/ (accessed: 4 March 2017).