AFRICA’S LOW ECONOMIC PERFORMANCE: An Analysis of the Potential Causes of Africa’s Low Economic Performance

Abstract

Many development specialists, policy makers, aid donors and recipient institutions have tried, with little or no success, to curb poverty in Africa. Though the continent is the poorest on the globe (more than half of its population still live below the poverty line of 1.25 dollar per day), considerable variations exist in income level among the various countries. Some countries (especially those in the North and South) have been observed to have good living standard and higher GDP per capita than other countries (primarily those at the Center). What then accounts for the difference in income levels among these countries? Reasons like poor institutions, historical slavery, culture, diseases, foreign aid, geography, unfair trade policies, have been used by researchers to explain why some countries are richer than others. This study seeks to investigate and depict the potential causes of Africa’s poor economic performance, and why there are different in income levels among the African countries. The thesis’ objective is thus to investigate if the following three explanatory strands: malaria, institutions, and foreign aid are responsible for the low economic performance in Africa. If yes which of the variable exerts the highest adverse impact on the continent economically, and how could the situation be mitigated? Using the multiple ordinary least square regression method, this study’s findings underpin the view of Jeffery Sachs that malaria is the main cause of low economic performance in Africa. Countries with endemic malaria and good institutions were observed to be poorer than the non endemic ones with poor institutions. However, the results do not fully support Sachs’ approach to alleviate poverty in the continent using financial aid (mainly provision of money by donors) because though malaria was observed to be the main cause, financial aid also significantly affects the economy negatively. However I still maintain that Africa needs foreign assistance to develop. Perhaps, assistance in the form of educational and technological development would be better than financial aid. I conclude this study by proposing measures by which malaria could be control so as to foster economic development.