Nigeria, Kenya, and South Africa After Colonialism Ended, Most Countries in Africa Had a Hard Time Prospering
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African Economies: Nigeria, Kenya, and South Africa After colonialism ended, most countries in Africa had a hard time prospering. Many countries had an abundance of natural resources but found it difficult to become a power player in the global economy. While each country is different, many countries’ economies suffer from government corruption, inconsistent laws, and a lack of property rights. Nigeria Kenya Nigeria has a mixed economy with an Even though Kenya is a developing economic freedom score of 55%. Their GDP is country, it has one of the most developed $490 billion with a per capita GDP of $6,400. economies in Africa as well as the largest The economy is considered to be very weak for economy in East Africa. Kenya has a mixed many reasons including unclear laws and economy with an economic freedom score of widespread corruption. 57%. Their GDP is approximately $61 billion The government is very involved with with a per capita GDP of $6,400. the economy, with many confusing rules and Kenya’s economy has been growing with regulations. For example, it often can take up the help of modernized roads, railways, to a year to get permission to start a business. airports, and seaports. Kenya’s government is Nigeria has a relatively low tariff on imports, committed to encouraging economic growth but trade is expensive because of the need to and implementing business reforms; however, bribe dishonest officials. Most prices are set by corruption in the government makes continued the market, but the government does own economic growth more challenging. some businesses. Agriculture forms the largest part of the Nigeria depends heavily on oil and Kenyan economy, contributing to 25 percent of natural gas to support the economy. Oil the Gross Domestic Product (GDP). About 80 exports are over 90% of the GDP and over 80% percent of Kenyans work at least part-time in of the government income comes from oil. agriculture, which includes farming and herding However, violence in the region often disrupts animals. More than 75 percent of the production of oil. Most of the population is not agricultural output in Kenya is from small-scale involved in oil, but instead in agriculture, so few farms and livestock production, which means Nigerians benefit from oil wealth. there are very few large agriculture businesses. Nigeria wants more entrepreneurs to Even though Kenya’s economy is based in invest in the economy. However, there are a agriculture, it is still one of the fastest-growing lot of reasons why people don’t invest: crime, economies in the world. corruption, security concerns, weak Kenya exports about $5 billion worth of infrastructure (poor roads and communication), goods each year. Its top exports are tea, fresh and confusing government regulations. There cut flowers and buds, coffee, petroleum is also a lot of corruption and the courts do products, fish, and cement. The top export little to enforce contracts and protect property. partners of Kenya are Uganda, Tanzania, the No matter what the economic data says, Netherlands, the United Kingdom, and Pakistan. the biggest problem affecting the economy is Kenya allows most imports into the its strong connection to the corrupt country without restrictions, but the government. Many government officials are government has imposed tariffs that make constitutionally exempt from the law and these many imported foods more expensive. This is officials often have their hands on all aspects of designed to protect Kenyan farmers. the economy. Kenya is a member of the East African Community (EAC), which includes a free-trade zone for Kenya, Uganda, Rwanda, Burundi, and Tanzania. EAC member countries cannot place trade barriers on goods traded with each other. Entrepreneurs are important to the economy of Kenya, but starting a business isn’t easy. For instance, the cost of getting a business license is about twice the average annual income of the average Kenyan. Also, corrupt local officials sometimes steal land from business owners. South Africa South Africa is also a mixed economy, with an economic freedom score of 63%. The GDP is approximately $313 billion with a per capita GDP of $13,400. South Africa’s economy is considered one of the best in Sub-Saharan Africa, but there is still widespread poverty. The government has tried to increase land ownership by black South Africans since the end of apartheid to help reduce poverty and stimulate the economy, but corruption is widespread enough to have some impact on the economy. The government controls the economy in many ways although it is loosening control more and more as time progresses. The mining, services, manufacturing, and agricultural sectors are extremely strong. There are only 8 state owned businesses and all prices are set by the market except petroleum, coal, paraffin, and utilities. The government regulations still take time like in Nigeria, but the procedures are much clearer and most business owners are protected. South Africa also has a relatively low tariff on imports, but because of stringent standards and some government corruption it costs more money to trade. The government still has a monopoly on transportation and the electric utilities, but almost all other businesses are privately owned. Investment in business in South Africa is easier and safer than in Nigeria, but there is still some level of corruption that discourages investment from entrepreneurs. For people who do invest there are lots of restrictions and in some cases there needs to be government approval. Even though the government of South Africa has signed the UN Convention Against Corruption, dishonesty and fraud is still an issue in South Africa. Corruption is not as crippling in South Africa as it is in Nigeria which might have to do with the stable government. Overall, South Africa’s economy is steadily improving and could one day be used as a model for other African countries. .