Causes of poverty in Africa

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Created on: November 26, 2008   Last Updated: April 30, 2010

Despite all the wealthy resources in its possession, Africa is the world's poorest continent.

Poverty in Africa is caused by a number of factors. The leading causes are corruption and poor governance, limited employment opportunities, poor infrastructure, poor resource usage, wars and unending conflicts, poor World Bank and IMF policies, among others.

CORRUPTION AND POOR GOVERNANCE (coupled with dictatorial regimes). Poverty can only be fought in the presence of strong institutions, and equitable distribution of resources. This requires a non-corrupt government. However, in Africa, programs designed to fight poverty are not fully implemented because the funds end up in the hands of corrupt individuals, who pocket the majority. And because of poor governance, those in authority have failed to apprehend the corrupt. This creates an imbalance in society and leads to more poverty because you end up with a few influential and powerful individuals oppressing the poor (who are the majority).

POOR LAND UTILIZATION. In most African countries, people own large chunks of land that are underutilized or sometimes not even used at all. This is partly because they are either not educated on what to do with the land, or because some people are just stuck in their rudimentary ways of doing things. Some people just use the land to grow crops which are just enough for subsistence survival. Nothing goes to the market for sale.

CIVILS WARS AND UNENDING POLITICAL CONFLICTS. Africa is popular for its civil wars, either between neighboring countries or within the same country. Such incidences render war zones unproductive, in addition to scaring away investment that would otherwise help foster economic development and create employment, which would help people get out poverty.

POOR INFRASTRUCTURE. Africa has a very poor infrastructure set up. They have poor roads, railways, water systems, etc, yet these are some of the major drivers of economic development. As a result, only a few areas with better facilities (such as urban areas) have developed over the other (rural) areas, which are occupied by the largest percentage of the population.

DISEASES AND POOR HEALTH FACILITIES. Another leading cause of poverty in Africa is the prevalence of diseases (such as malaria, HIV/AIDS, TB etc). When a household is affected by any of the diseases, the little resources are spent on treating the sick. In a worst case scenario where the bread winner dies, those who are left behind have no resources to support themselves, thus leading a poor lifestyle. And the situation is worsened by poor health facilities.

THE WORLD BANK AND IMF POLICIES. The loans given out by the World Bank and IMF (the International Monetary Fund) have contributed to the poverty problem in Africa. Such loans come with strict conditions, which usually required governments to adjust some of their economic decisions. For instance, the requirement to reduce total government spending has affected major social sectors such as education, health and infrastructure, which are drivers of economic development.

In addition, the two institutions are controlled by the richer countries (USA, Germany, UK, etc) who maintain the majority of the voting rights. Therefore they, in a way, determine the decisions of poor countries. It should not be surprising to note that some of the economic decisions for poor countries are crafted in foreign lands. Most of these policies are not applicable to all countries, and this greatly undermines the local economies in Africa. For instance, reduced spending policies tend to reduce wage earnings for majority of the people. The result: less earning and more poverty

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Causes of poverty in Africa

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by Gerry Legister

Created on: April 07, 2011

The cases of poverty in Africa is almost systemic, borne by government ignorance, under girded by superstition and the lack of bravery in taking destiny into their own hands, they could have done a lot better for themselves. With the paradox of wealth and poverty, Africa owes its disconsolation to inbred corruption and continental depravity.

The cause of poverty in Africa is not the blame game, played out by leaders who lack vision, without a structure for growth, and a business plan for sustainability. Blaming others for their demise is not the answer to solve their position of plight.

Rather than being angry about being colonized, by their own admission, wars have led to injustices and democratic independence has become a long road upon which they have been traveling; advancement should be sought through education, and the desire for building character and trading links with the rest of the world.

Africa’s problems stems from their own undoing, because they have more natural resources, more than anywhere else in the world, they simply don’t know how to fund manage what they have and make reinvestment into different baskets.

Many other countries have had their fare share of been captured and taken into bondage, only later to see them rise out of obscurity and are now making headlines for all the right reasons.

So what is really stopping the African nations from piggy backing on the world stage? The answer lies within the term of integrity, and the immeasurable resources which lay dormant in their own back yard.

Some of the things that caused poverty came from neglected opportunities, not making right decisions at the right time, tribal wars and the lack of medical facilities and help people to recovery when they are ill.

The disincentives of corruption was the main reason western countries would not invest in Africa a decade ago, but now they are managing a very healthy economy.

Opportunities are being fuelled by the younger innovated generation, who are doing useful things at grass roots level, increasing future aspirations and driving the boom of rising commodities, to give the continent an abundance of resources, for the rest of the world to look at.

Positive thinking lies in the use of foreign investment with natural resources, is verve combined, it is difficult to see imperialism and colonialism coming back to take shape or form in Africa, those days of exploitation are gone.

What are the areas that need improvement?

What are the areas that have help to caused poverty in Africa? I can name quiet a few, and the lack of integrity when dealing with business also is a dilemma which has not gone away.

Africa needs Finance and foreign investment, improve infrastructure and environment, government enrollment in regulating a framework for tremendous improvement, consumer and technology, major changes that can bring about improvement and meet the condition for investors to have confidence.

An infrastructure where government co-operate to improve the environment, and one in which long term funding can take place, debt management could  be more willing to make investment into the framework to attract other investors.

The finance market should be looking to encourage the creation of credit, and improve financial education in the professionalism of savings and pension management. The commodity and bond markets are less developed, so we could see rational stock exchanges be integrated into a better developed bond market.

A consumer market, where money is transferred by goods and medical purchase, the need to improve taxes on mobile hand sets is paramount, giving affordability to all, and has the appropriate skills to oversee tariffs, to cut cost and set up dominant market which will not encourage abuse.

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