Lecture notes
EC104 notes: africa from 2000
- Module
- EC104. World Economy
- Institution
- The University Of Warwick (UoW)
Revision notes with content from lectures and seminars for EC104 topic 20: africa from 2000
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Africa from 2000The Nigerian economy since 1999
Macro reforms
● Okonjo-Iweala (2014) was Abasanjo’s Finance minister and implemented
major reforms
○ Oil price-based fiscal rule - government budgeting based on a 10 year
average of the oil price
○ Policy support instrument - reduce fiscal deficit to 3% under the IMF
○ Fiscal responsibility act (2007) - commit all levels of government to the
OPFR and be more transparent in budgeting
● Caused more saving, less volatile government expenditure, less foreign debt
and inflation, growth of 8.1% per year and decreased interest rates
Privatisation, deregulation and liberalisation
● Obasanjo administration inherited state involvement in electric power (NEPA),
oil and gas (NNPC), ports and telecommunications (NITEL)
● Privatisation Act (1999) had several methods for privatisation
○ Transfer to core investor, public officer, asset sales and liquidation,
commercialisation
○ 170 companies privatised
● Privatising NITEL was unsuccessful
○ PRivate companies received licenses and mobile phone use expands
● Removing the subsidy on petrol at the pump unsuccessful
○ Politically impossible - rising oil prices
● NEPA reorganised into PHCN and opened to competition in 2005
Corruption
● Economic and Financial Crimes Commission - 28/36 governors under
investigation for corruption (2005)
○ 5 arrested and charged once
● Swiss authorities repatriated money taken by Abacha, his family and
associated between 1993-98
○ Up to $5 billion - 34% of the Federal budget
○ Via laundering and contract inflation
● Some private foreign companies (Siemens) admitted to corrupt payments to
officials
● Fought back by maintaining political will, focusing on the most damaging
forms, having measurable indicators and withstanding intimidation
, Conflict
● Fetzer and Kyburz (2018) - “Nigeria is in a state of low-intensity conflict”
● Abidoye and Cali (2015) - are 4 geographies
○ North - Islamist group Boko Haram led to state of emergency in 3 NE
states
○ Niger Delta (oil producing) - reduced after 2009. Amnesty to local
militants, non-violence training and $410 monthly subsidy taken by
26,000 militants
○ Middle Belt - communal violence due to access to land
○ Urban areas - political demonstrations on fuel subsidies and corruption
(Abuja and Laos)
● Fetzer and Kyburz *2018) - small-scale violence are contests between
political groups over the local government.
○ Higher revenue disbursements = more conflict
● State governors have suspended local elections
○ Local councils are appointed bodies
○ Increases the link between government revenue and violence
The South African economy since Apartheid
Challenges for the economy
Fourie (2017) - 2013 National Development Fund identified challenges as:
● Few jobs
● Poor education and healthcare quality
● Limited infrastructure
● Resource intensive growth
● Poor performance of public services and corruption
● Divisions within society
● Spatial challenges
The Apartheid legacy
● Limited ability of post-Apartheid government due to the state of the economy
○ Needed to reduce inflation and deficits to satisfy investors and
international institutions
● Integration into the global economy increased pressure to cut costs
○ Shed unskilled and semi-skilled workers
○ Increased labour productivity
○ More inequality between those with and without formal sector work
● Poverty fell slowly (5pp 1995-2005)
○ SA more unequal now than in the Apartheid (Piketty, 2015)
● Extensive security system - helped poverty reduction
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