Case A: You sleep in your house, someone pumps oil in your backyard, sells it, and credits you $10 million at the end of the month. The economic activity for the production of the “finished goods”, in this case, crude oil at this phase, is $1 million. That $1m is the GDP – value added, created through the production of goods and services.
Case B: Another person cultivates palm trees, employs many people to weed, trim, harvest, process to palm oil, soaps, sells, ships, etc. The person deposits $2 million at the end of the month. But the economic activity for that translation is worth $5 million because many things are done within the area, generating massive economic activities. Here, there are jobs.
Have that in mind as you look at the GDP map of countries. Africa could be making money on natural resources but we are missing a lot on the economic activities. That explains why our GDP remains very small. We belong to Case A and account for a small component of the global economy.
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We have been on that Case A for decades, and that is where the illusion of being wealthy and full of potential is coming from, now we want to build a framework that can launch us into Case B, turning the potential into real economic powerhouse.
So much work ahead.
Bravo,a well analysis on the economy system of the continent in relation with the test of the world. You see the world economics of today are in a cycle,I like to call the “toxic cycle of trade”. To know more about what I mean simply give me a feedback or reply me.
Please I’m interested in knowing more about ‘the toxic circle of trade’ you referred to. The Case A presented has really been out albatross all the while.
Ok,I am currently writing about it and it is going to be long so that you can understand how geopolitics and ecosystem really affects us but you will have to wait till maybe tomorrow as soon as I am done,I will send it to you.
.The most painful part is that we then import back the “oil” after it has been refined.
We need leaders who will be serious about creating the enabling environment for production to thrive:security, electricity etc