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International Studies - Leiden University Campus the Hague
Economy: Africa
2022
Economy: Africa Study Notes
Table of Contents
Week One Notes: The Weight of History on African Economics 2
Reading Notes 2
Reading 1: The Colonial Legacy 2
Reading 2: Capitalism in Egypt, Not Egyptian Capitalism 4
Lecture 1: The Weight of History on African Economies
Week Two Notes: Development Theories 16
Reading Notes 16
Reading 1: Classic Theories of Economic Growth and Development 16
Lecture 2: Classic Theories of Economic Growth and Development 17
Week Three Notes: African Economic Growth 25
Reading Notes 25
Reading 1: Growth and Transformation 25
Reading 2: The P.E. of Africa’s Economic Growth and Development Experience 31
Lecture Three Notes: Growth and Transformation 45
Week Four Notes: African Economic Policies 54
Reading Notes 54
Reading 1: The Political Economy of Policy Reform 54
Reading 2: Economic policy: from state control to decay and corruption 57
Reading 3: Political Economy of Arab Revolutions: Analysis and Prospects for North African
Countries 58
Lecture Four Notes: The Political Economy of Policy Reform 60
Week Five Notes: Development Aid and Cooperation Industry 72
Reading Notes 72
Reading 1: The International Aid System 83
Reading 2: Aid for development 83
Reader Report Reading: ‘The Trouble with Aid’ 87
Lecture Five Notes: The Aid Industry 102
Week 6 Notes: Debt, Finance, and Banking in Africa 106
Reading Notes 106
Reading 1: Debt… and Déjà Vu? 106
Reading 2: Reforming the Financial System in Sub-Saharan Africa: The (Long) Way Ahead 112
Lecture Six Notes: African Finance 128
, 1
Week One Notes: The Weight of History on African Economics
Reading Notes
Reading 1: The Colonial Legacy
SOURCE: T.J. Moss and D. Resnick, ch. 2 “The Colonial Legacy” in African Development: Making Sense
of Issues and Actors, Rienner (2017) pp. 23-40.
SUMMARY: Summarizes 16 pages into ~6 pages. Very helpful historical overview, mildly related to
economic aspects but helpful in refreshing historical, political, and economic events.
Despite being the original cradle of humankind, Africa has undoubtedly had an unlucky history that
severely affects its development progress today
- Borders, local authority → altering the evolutions of political institutions, etc
At the same time, however, colonialism is often used as a scapegoat for the failings of current leaders.
Pre-Colonial Political Organization
Africa's early history was far from static:
➔ Large waves of migration and long-distance trading
➔ Politically many Africans lived in smaller clans or family-based units with varying degrees of
central authorities
➔ Also had a number of significant complex, centralized, large kingdoms or empires
◆ The Monomotapa Empire, The Buganda Kingdom, Ashanti Kingdom, The Songhai
Kingdom, The Axum Kingdom, Zulu Kingdom.
European Arrivals
● The Portuguese were likely the first Europeans to arrive in sub-Saharan Africa
○ Bartholomeu Dias rounded the Cape of Good Hope around 1487
○ Subsequently set up small military posts
● The French began expanding along the West African coast, establishing a post in 1624 in
Senegal
● The Dutch represented the first real European attempt to settle in Africa
○ Landed in Cape Town and started the Cape Colony in 1624 (Dutch East India Company)
● By the end of the nineteenth century, European explorers had found the sources of the great
rivers → the Nile, the Niger, the Congo, and the Zambezi.
● Growing economic and military competition among European powers, combined with
technological advancements in transportation, communication, and weaponry, helped to spark
the subsequent “scramble for Africa”.
The Scramble for Africa
● In 1884 German chancellor Otto von Bismarck convened a conference in Berlin for the major
powers to divide up the continent.
○ Any territory could be claimed as long as it was nominally occupied and the other
countries were notified.
○ “humanitarian terms” but actually the purpose was to establish rules for conquest and to
avoid intra-European conflict over territory in Africa
● Britain: Cecil Rhodes’s dream was to link British colonies right across the continent “from the
Cape to Cairo”.
, 2
● France: was seeking to build an east-west empire to connect its holdings in Senegal across the
Sahara to the Niger River and on to the Nile and as far as Djibouti on the Red Sea
The British Empire
● In general, the British Empire in Africa used two models of colonization:
○ In most places it implemented indirect rule, placing a British administrator on top of
local chiefs or other existing political structures.
■ Sought to extract resources where possible and to assert its imperial power, but
not to create wholly new societies.
○ In settler states, British citizens were encouraged to immigrate and settle, especially after
World War II when African land was sometimes given to veterans.
■ British policy was more guided as serving the minority settler population
■ Kenya and Zimbabwe each saw much greater investment in infrastructure and
better-quality schooling, and at independence each had much more advanced and
diversified economies.
● Two important legacies: English language and English law in former colonies.
● Power handover: In general, the British handover of power to local nationalists was orderly and
the disengagement was more complete, at least relative to that of the French
French Colonialism
● In French Africa, a much closer relationship existed between the colonies and Paris.
● Direct rule and were more aggressive in trying to remake African societies in their image,
including a policy of encouraging and accepting small numbers of évolués, or educated black
African elites who were considered (almost) French.
● Power handover: despite this closeness, France also realized that independence was coming and
quickly arranged independence for its colonies.
○ In a single year, 1960, no fewer than fourteen former French colonies gained
independence
○ Much closer ties post-independence: local currencies in Africa tied to French franc or
Euro (controlled by Paris), involvement in national policy making and security matters in
West Africa
Portuguese Colonialism
● The Portuguese colonies fared the worst, at least partly because Portugal itself was poor and run
by fascist dictators Antonio de Oliveira Salazar and Marcelo Caetano (1968-1974).
● Least interested in development → fewest investments for infrastructure, school or health
● Power handover: no preparations made by Portuguese
Other European Colonists
Germany:
● Enthusiastic colonizer → Berlin conference
● Taking control in the late nineteenth century of Southwest Africa (later Namibia), Tanganyika
(later mainland Tanzania), Togo, Cameroon, Rwanda, and Burundi.
● Among harshest colonization, attempted genocide against Herero and Nama in Namibia
● After WWI, Germany lost its overseas colonies:
● Belgium: Which had assumed sovereign control of the Congo from the king in 1908 after
revelations of atrocities was granted Rwanda and Burundi
, 3
● France: took Togo and Cameroon
● Britain: controlled Tanganyika
Spain
● Spain had a single colony in Africa, Equatorial Guinea
Italy
● Controlled Eritrea and a small part of what is n,cw Somalia from 1885 to 1941
● Briefly occupied Ethiopia during WWII but never colonized.
Non-Colonies
● Ethiopia: centralized political empire, defeated Italy in Battle of Adwa in 1896
Liberia: 1822 → Americo-Liberian settlers, did not re-integrate in African societies but set up an
“American” settler state. 1841 → declared independence.
South Africa’s “independence”
● Dutch settlers slowly expanded their territory throughout the eighteenth century, occasionally
clashing with the indigenous Xhosa.
● Britain seized the Cape of Good Hope area in 1797 during the Fourth Anglo-Dutch War and
formally annexed the Cape Colony in 1805
● The descendants of the Dutch and other early European settlers known as Afrikaners/Boers-a
name that means “farmers” in Dutch grew increasingly resentful of new British rule.
○ “Great Trek” → The Afrikaners set up their own states, the Boer Republics of the
Transvaal and the Orange Free State.
○ Diamond and gold discovery encouraged the British to take a new interest in the Boer
republics
○ The Afrikaners held the British off during the First Boer War of 1880-1881 using
guerrilla tactics. But they could not do it again in the Second Boer War of 1899-1902,
using brutal tactics (including the world’s first concentration camps).
● The Union of South Africa, incorporating the Cape and Natal Colonies and the two Boer
Republics, was established in 1910.
○ Explicitly left out the Bechuanaland Protectorate (Botswana), Basutoland (Lesotho),
and Swaziland (Eswatini), allowing those three countries to remain independent and
eventually become sovereign states.
● The right-wing National Party won power in 1948 and quickly began to implement a policy of
segregating the races, known as “apartheid”.
● African National Congress (ANC) → the fight for greater rights by Africans in the 20th
century. Two key events:
○ Sharpesville massacre: sixty-nine people were killed in Sharpeville by police in 1960,
during a protest against requirements that all Africans carry passes.
○ Riots in Soweto in 1976, sparked by rules forcing Africans to learn Afrikaans instead of
English.
● Anti-apartheid protests grew in the mid-1980s, as did international isolation through sanctions.
○ In 1990 ANC ban was lifted and Nelson Mandela released from prison.
○ In South Africa’s first free elections in April 1994, the ANC won by an overwhelming
majority, and Mandela was elected president.
lndependence Arrives
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