Africa

The African continent remains by and large marginalized in the world economy, with over half of the population living on under US$1 a day per person. Its share of worldwide exports has fallen from 6.1 percent in 1960 to 2.4 percent in 2006. The portion of worldwide foreign direct investment inflows to Africa has also declined, from 9.4 percent in 1970 to 2.7 percent in 2006. The continent's labor force was about 370 million strong in 2006.

The continent has struggled to overcome widespread legacies of slavery, colonialism, ethnic tension, and war. Africa became a symbol of Third World underdevelopment as soon as its nations began gaining political independence. Recently, African countries have also been confronted by the challenges of globalization, raising the question of whether some of them could join the ranks of “emerging countries” and create a regional basis of development.

Some have questioned African adaptability to “modern business.” First, historians argue that the massive slave trade (more than 10 million people transported abroad from the 1600s to the 1830s in sub-Saharan Africa, but till the 1920s northward to Morocco or the Persian Gulf) deprived Africa of a demographic reserve and, in the long term, of a “normal” evolution of potential elites. Second, numerous northern academics and politicians have considered that the African way of life hindered “modern development.” The statutes of ground property remained vague because of collective or religious ownership of land, thus blocking individual intensive investment like in other areas; the social framework that privileged large family networks gave priority to immediate redistribution of income instead of savings that would favor accumulation of capital; the respective position of women and men may have fostered gender gaps; and ethnic and caste considerations added obstacles to social mobility. African wholesale traders seemed unable to rise from short- or middle-term commercial incomes to long-term industrial investments.

Recurrent ethnic tensions and civil war weakened African societies. Geography and demography were involved too, the first because of the influence of climate on development (either drought and deserts, or tropical and subtropical or Mediterranean floods), the second because lack of population or overpopulation conflicted as explanations of economic tensions. Analyses of the evolution of African business continue to stir endless arguments about the causes and duration of African underdevelopment.

Colonial Legacies

Africa's lagging economies have roots deep in the colonial period. One of the more lasting legacies has been the weakness of educational policies. Islands of training comprised mainly Christian missionary schools (Madagascar, Togo, Dahomey/Benin, Liberia) or Islamic schools (northern Africa), but no real comprehensive strategy of mass education took shape during the period. This led to a relatively low level of primary and professional education for Africans, with exceptions in local universities (such as in Egypt, Tunisia, Algeria, and South Africa) or abroad in Europe.

Another long-term policy shaped the framework for the evolution of Africa's economy: Europeans conceived of Africa as a potential reserve for commodities and enticed rural people to develop exports for Europe. That was the case in sub-Saharan Africa for groundnuts, oil palm, gum arabic, rubber trees, coffee, cocoa, and (in the Niger loop and in the Sahel) cotton. Native peasants and plantations owned by European companies became committed to such an expansion. The Lever group (Unilever since 1930) exemplified this approach as the owner of plantations and as an important transformer of commodities in its European manufactures.

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