Africa is one of the richest continents, given its rich fertile ground, natural resources, bio-diversity, and precious minerals. Yet many African residents live in abject poverty. In this article, we’ll discuss 5 reasons for African countries’ economic growth challenges.
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Limited Access to Capital
African countries don’t have a well-established financial system. Many of the financial institutions in Africa don’t offer the credit services to the citizens because of the citizens’ inability to:
- Assess and manage their risk profiles.
- Match up with the high transaction costs.
- Provide needed financial documentation and collateral.
One major way African countries can strengthen their economy is to implement policies that allow their citizens to have access to funding. This will encourage the African people to pursue entrepreneurship and create job opportunities. If you’re an entrepreneur in Africa, you find guides on Amazon that’ll teach you how to raise money for your business.
People Also Read: How Does Education and Training Affect People and the Economy of the African Continent?
Unemployment
Lack of jobs is among the core reasons for African countries economic growth challenges. Over the years, lack of jobs has impacted the African continent negatively. It has led to poor standard of living, fueled migration out of the continent, and contributed to conflicts within the African borders.
Jobless youth are easily recruited by greedy politicians and warlords who use them to do their dirty biddings. For example, during elections, politicians use the unemployed youths to cause chaos and to snatch ballot boxes.
However, we also encourage Africans not to depend solely on the government for jobs. You can learn digital skills on Youtube or by simply getting a guide on Amazon.
Lack of Good Infrastructure
Adequate and good infrastructures drive economic growth. But many African countries still lack modern infrastructures. Investing in adequate infrastructures like the internet, electricity, efficient transport system, and water will allow citizens to do businesses.
When businesses are thriving and foreigners are coming in to invest, the continent will generate more revenues that can be used to fund other developmental projects.
War and Insecurity
The destruction of available infrastructure, loss of human life, and political instability has hindered African countries economic growth. And most foreign investors don’t want to invest in African countries because they don’t feel safe.
For example, from the beginning of 2023 the West Africa region has been battling with a new period of insecurity, following the coups d’état in Mali, Burkina Faso, and Guinea.
Besides the coupes in the West, there has been continuous conflict in the Sahel region, where violence displaced over 2 million persons and was estimated to have killed 8,000 people in 2022.
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Previously peaceful regions like Togo and Benin experienced deadly attacks in 2021 and 2022 as well. All of these are hindering business growth and driving investors away from the continent.
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Bad Governance
An important element of governance is the protection and promotion of the common good of its citizens. When formulating policies and implementing laws, leaders need to consider its effects on their citizens.
Both laws and those in authority must be accountable and transparent to permit enough civil societal involvement in the governing process. But that’s not the case in most African countries. Most leaders in Africa only formulate and implement laws that favor them and their loyalists.
They’re not accountable to the people that voted them into power. Plus, they see themselves as people who are above the law. Bad governance has contributed greatly to lack of jobs, adequate infrastructures, and all the reasons for African countries economic growth challenges. On Amazon, you can find books that cover Africa countries’ style of government extensively.
Africa is a blessed continent with plenty of resources and human capacity. However, the continent has underperformed economically because of the five challenges that we have covered here. Africa has a lot to offer the world if things can be done differently.
People Also Read: Which African Country Is The Most Developed?
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