Business
Is Africa Finally Rising?: Determining Myth or Reality
Challenges Facing the Continent
There are many challenges plaguing Africa. A 2011 World Bank report identified them as: undiversified production structure, low human capital, weak governance, state fragility, women’s empowerment, youth employment, and climate change. A finding by Global Financial Integrity notes that $358 billion flowed out of Africa between 2000 and 2008, due to corruption, trade mispricing, and other illicit activity.
Political violence is another challenge. In May 2011, following the elections Nigeria, a wave of violence left hundreds dead. Similar post-election violence occurred in the Ivory Coast and Kenya.
Africa’s brain drain is both a challenge and source of income for the continent. The loss of skilled workers impedes development, decreases productivity spill-over, and reduces the potential for home-grown creative businesses, amongst other problems. On the other hand, remittances to Africa quadrupled from 1990 to 2010, providing $40 billion in income in 2010 alone.
One source of problematic funding for the continent has been foreign aid. The national budgets of most sub-Saharan countries are now dependent on this aid and, for some countries, it accounts for more than 80 percent of the national budget. The World Bank estimates that about 30 percent of aid funding goes to corrupt officials. Furthermore, aid is often tied to the agenda of the giving country, therefore Africans are not setting the pace and direction of their own development.
