Poor Governance hindering Africa's Economic Development

The Political Economy of Sub Saharan Africa in particular and Africa in general has been affected by political instability and Africa has been lacking a voice at important groupings such as G8 and G20. Despite having some of the world’s huge reserves of natural resources such as gold ,diamonds, coal, steel, and oil. Sub Saharan Africa remains largely undeveloped and poverty stricken. The region’s population largely lives under poverty and foreign direct investment has been rather limited partly due to political violence, civil strife and wars. Some of the problems emanate from poor Governance and poorly developed National Institutions.

Sub Sahara Africa has seen massive interest from China and other Economic giants in a rush to exploit natural resources but the benefits of such a rush have been very difficult to quantify .The region lacks Financial muscle and clout to be a serious voice on important Global issues such as the Carbon reduction, recession fighting measures and reform at International Institutions such as IMF and World Bank. There a link between poor Economic performance and political instability and general lack of property and human rights. A contrast will be made on how political stability can attract investment and lead to economic growth and prosperity whilst political violence and instability leads to poor economic performance and possibly Economic meltdown .

Political and economic development has been hindered as the sub region has failed to get on to other Global trends such as the wide spread use of the Internet as a powerful communication tool. This has partly been a direct result of censorship attempts by the ruling class who have been actively restricting the use of for instance, the Internet and at times mobile phones.

Political instability has fostered the lack of democracy which is a direct result of undeveloped institutions and concentration of power in the hands of a few individuals has hindered the development of a middle class which normally provides a hub for Economic development. The high political risk has resulted in the sub region being by-passed in Global Financial markets as the region lacks properly developed Institutions or the necessary size to carry any weight in global affairs despite being home to significant amounts of natural resources. In several Sub Saharan Africa nations Property and human rights are regularly ignored which has served to increase political risk.

As a direct result of political instability Capital flight, brain drain has been a big problem for Sub Saharan Africa. A significant portion of educated people have migrated from the region to North America, Europe ,Australia and other nations offering security and hope of a prosperous future.

The brain drain and capital flight problem has created a vicious circle with the required skilled personnel leaving for greener pastures as they are the ones who can afford to leave. This in turn has created further shortages of capable and experienced people who are required to develop any Economy.

Political violence and intolerance of opposition has been common in the sub-region. This has affected the development of National Institutions which are supposed to check, balance and stop abuse of power and curtail corrupt leadership.
This article appears courtesy of GMRI CAPITAL – www.gmricapital.com . It is original content generated for 3MG MEDIA.

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