What did IMF and World Bank structural adjustment programs promote from the early 1980s?
Privatization and deregulation to expand business freedom and market flexibility.
What growth threshold did Sub-Saharan Africa exceed from 2003?
3%.
How did Sub-Saharan Africa's international economic position change despite growth above 3%?
It became increasingly marginalized internationally.
What share of Sub-Saharan Africa's export revenues came from raw materials?
More than 80%.
What does the Keynesian approach accept about state intervention in the economy?
It accepts state intervention as a center for economic direction and regulation.
Which author and reference are associated with the post-independence use of African public enterprises?
Hugon, 1999.
What roles did African public enterprises serve after independence?
They replaced colonial power, provided public services, addressed weak domestic private business, and supported national development.
What forms did state intervention take in African mixed economies?
Production, planning, and regulation of factor incomes and prices.
Which causes of public-enterprise losses does the text identify?
Mistaken investment, excessive staffing, poor management, and state policy toward the public sector.
What fiscal changes led to stabilization policies?
Interrupted external financing and falling commodity prices enlarged budget deficits.
What does the Laffer effect claim about tax increases beyond a threshold?
They reduce tax revenue by discouraging taxable work and shifting activity into the informal economy.
How did stabilization policies target the state's role as a producer?
They promoted privatization of goods and services production and deregulation of regulation production.
Which author is associated with structural adjustment reforms to restore coherent price signals?
Hugon.
What was price liberalization intended to precede?
Privatization.
Why was price liberalization intended to precede privatization?
State-determined margins and operating results made firms less attractive to investors.
What has made capital and goods easier to move between continents?
Globalization and lower transport and telecommunications costs.
What activities does the primary sector include?
Activities that exploit the natural environment, such as agriculture, fishing, and forestry.
What does the secondary sector include, and what does it do?
Industry, construction, and public works that transform materials and products.
What does the tertiary sector mainly comprise?
Services, including administration, banking, insurance, commerce, transport, tourism, communications, real estate, education, and personal and business services.
What constrains agricultural and industrial performance in the section?
Weak extension services and labor, agro-climatic and technical problems, poor roads, and marketing difficulties.
Which industrial branches are concentrated in African industry?
Profitable, capital-intensive branches.
What weakens connections within African industry?
Firms often lack complete production chains and depend on distant imports.
What sequence describes the low-income cycle?
Low income leads to low saving, low investment, low productivity, and then low income.
What three elements interact to drive industrial progress?
Incentives, productive capacities, and institutions.
How can the state protect the conditions for private-sector growth?
By protecting property rights and rationalizing taxation.
How can the state improve financial support for private-sector growth?
By reforming banking and regulating financial institutions and credit risks.
How can the state help firms compete and export?
By organizing competition and providing export information.
Which sectors does the text recommend promoting for higher value added?
Forestry, fishing, agriculture, mining, and tourism.
Which author and year are cited for African firms’ product and innovation strategy?
Uzunidis, 2005.
What should African firms develop for their markets, according to Uzunidis, 2005?
Products suited to African markets.
How should African firms acquire new technical knowledge, according to Uzunidis, 2005?
Through research and development and technological innovation.
Which investment barriers does the text identify?
Corruption, bureaucratic delays, weak judicial systems, inadequate infrastructure, skilled-labor shortages, limited portfolio investment, conflicts, and political instability.
How many Sub-Saharan African countries are classified as least developed?
Nearly 33 countries.
How did Sub-Saharan Africa's average annual growth compare with Asia's?
It was half Asia's rate.
What happened to Sub-Saharan Africa's GDP per capita?
It fell.
What share of world trade did Sub-Saharan Africa hold?
A very small share.
How many employees did Gabon's parapublic sector have in 1994?
14,742 employees.
What turnover did Gabon's parapublic sector record in 1994?
About 498 billion CFA francs.
What were Gabonese parapublic-sector personnel costs and their share of value added?
86.931 billion CFA francs, or 52.4% of value added.
What net result did Gabon's parapublic sector record before privatization?
Minus 43.210 billion CFA francs.
Which trade barriers did trade liberalization reduce or remove?
Customs duties, quotas, and import licenses.
What monetary measures did restrictive policy use to curb inflation?
Limiting money supply and credit and raising interest rates.
What was a consequence of restrictive monetary policy besides curbing inflation?
It slowed economic activity without significantly increasing saving.
What did structural adjustment programs prioritize to earn foreign currency?
Agricultural exports.
When could investment incentives be treated as approved under investment codes?
When the administration did not object within a specified period.
What factors tend to attract investors to a location?
Suitable infrastructure, skilled labor, technology, legislation, subsidies, and exemptions from social charges.
What travel barriers keep most African countries outside global tourism?
Difficult and costly air travel between African capitals.
What infrastructure barriers keep most African countries outside global tourism?
Inadequate infrastructure or expensive access.
What made mobile phones commonplace for Africans?
Telecommunications deregulation multiplied operators and exposed the sector to strong competition.
What types of crops does African agriculture produce?
Food crops, market-garden crops, and cash crops.
What remains elusive for African agriculture despite progress and stronger production in Burkina Faso and Cameroon?
Food self-sufficiency.
What three roles can industrial production perform?
Assembling products, manufacturing components, and acting as an order-giver that creates concepts and brands.
Which industries and activities does the secondary sector include?
Agro-food processing, beverages and tobacco, sugar, edible oils, cocoa and coffee processing, milling, mining and quarrying, chemicals, hydrocarbons, textiles, wood, paper, and clothing.
What share of rice or sugar costs can transport over 700 kilometers account for?
About 80% of the total cost.
What characterizes the small local firms in dualistic African economies?
They often operate at the margins of the legal framework.
What characterizes the few large private firms in dualistic African economies?
They are foreign firms or multinational affiliates.
How can competitive markets correct imbalances after shocks?
By adjusting supply and demand.
How do competitive markets signal the allocation of production factors?
Through price changes.
What long-term effect can competitive markets have on average production costs?
They can lower average production costs.
What factors may make an environment attractive to investment?
Strong growth, industrial and technological capacities, capable local firms, an expanding middle class, a well-trained workforce, and openness to foreign investment.
What return did foreign companies earn on African investments during the 1990s, according to UNCTAD?
An average return of 29%.
What conditions does the text present as making Africa more attractive to long-term investment?
Peace, security, greater regional integration, and expanded markets.
Answer 25 questions on African Economic Reform and Investment.
1. A government adopts reforms promoted by the IMF and World Bank in the early 1980s to increase business freedom and market flexibility. Which policy combination fits those reforms?
2. From 2003 onward, a region records economic growth above 3% but becomes increasingly marginalized internationally. Which description matches this combination?
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