Transcript Economics and Africa

Warm-up for Tuesday, March 3rd
1. What is a republic?
2. List ONE social, economic or political
reason why South Sudan wanted its
independence from Sudan.
3. What does it mean for a government to be
stable?
4. Why are HIV/AIDS and famine such a
huge problem in Africa?
Africa’s Economic
Systems
SS7E1-3
SS7E1,5, and 8a Comparing traditional, market and
command economies and how they answer the
economic questions
Economy What to Produce?
Traditional
Command
Market
How to
Produce?
For Whom to
Produce?
The people decide
Farming, hunting, Make their own
based on their needs gathering, etc.
products & barter with
each other
Whatever the
however the
Class reward system
government decides government
(government decides
decides
everything)
What people want to Determined by
Determined by
buy and sell
cost
demand for products
analysis…what is
the most effective
method to
produce a profit
SS7E1b Explain how countries have a mixed economy located on a
continuum between pure market and pure command
SS7E1c Compare and contrast the economic systems found in Nigeria
and South Africa
Country
Type of
Economy
Growing or
struggling?
Government
controlled
South Africa
Wealth is unequally divided
between whites/ blacks(effect of apartheid)
Mixed
(transitioning
from command
to market after
apartheid)
Growing*strongest economy
in sub-Saharan Africa,
gone from mostly
mining, fishing
agriculture to
manufacturing and
service industries
Oil, gas, postal &
some of the
telecommunications
Nigeria
*was wealthy from oil in the
70’s economy when oil
prices fell.
***(government has
neglected agriculture sector
of the economy)
Mixed (moving
more toward
market
economy)
Struggling –
*most Nigerians are
poor,
*most are in
agriculture,
*public schools
crumbling
Post office,
schools, 2 of 3 TV
stations
South African Economy
Area of Comparison
South Africa
Type of economy
A technologically advanced market economy with some
government control. One of the strongest economy in
the region.
Goods produced
Mining (platinum, diamonds, and gold), automobile
assembly, machinery, textiles, iron and steel,
chemicals, fertilizer
Leading exports
Gold, diamonds, platinum, other minerals, machinery
and equipment
GDP per capita
$9,800
Labor Force
Agriculture – 9%, Industry – 26%, Services – 65%
Unemployment rate
24%
Nigerian Economy
Area of Comparison
Nigeria
Type of economy
Poorly organized economy after a long period of military
dictatorship and corruption. They are now trying to
reorganize with more private enterprise allowed. They
want to be able to take advantage of a strong world oil
market.
Goods produced
Oil and petrochemicals are the primary market goods.
Nigeria once exported food and other agricultural products
but now must import them.
Leading exports
Oil and petrochemical products
GDP per capita
$2,400
Labor Force
Agriculture – 17%, Industry – 52%, Services – 30%
Unemployment rate
4.9%
Turn and Talk
Economic Systems
SOUTH AFRICA
NIGERIA
Economic Systems
SOUTH AFRICA
MIXED with more of a MARKET
ECONOMY
Natural Resources
Gold and Diamonds
GOV’T CONTROLS
BASIC SERVICES
MODERN
INFRASTRUCTURE
MODERATE
ENTREPRENEURSHIP
APARTHEID STRUGGLES
COMMERCIAL FARMING
NIGERIA
•MIXED with elements of COMMAND and
MARKET ECONOMIES
• NATURAL
RESOURCES
• HIGH
UNEMPLOYMENT
• PAST
CONFLICTS
•Oil and Natural Gas Resources
•GOV’T CONTROLS OIL INDUSTRY AND
OTHER SERVICES
•SUBSISTENCE FARMING
•POOR INFRASTRUCTURE
•GOV’T INSTABILITY (Civil War and
Corruption)
•LIMITED ENTREPRENEURSHIP
SS7E2a Explain how specialization encourages
trade between countries. Compare and contrast
different types of trade barriers such as tariffs,
quotas and embargos. TRADE!
 Specialization countries specialize in what they do best. It is an
efficient way to work and costs less to produce items. A country gets
what it needs at the lowest cost when produced by someone who
specializes in that item
 Voluntary trade-both parties expect to gain from the trade
Most of Africa’s trade is with countries outside of Africa.
 Tariffs- high tariffs between African countries because they have
many of the same products. Tariffs keep competition out.
 Quotas-limit put on number of cheap Chinese textiles imported to
South Africa. This was to give South African clothing businesses a
chance to compete.
 Embargo on Liberia against diamonds because money from the
diamonds was used to fund wars in Africa Known as conflict diamonds
(AKA Blood Diamonds).
Be able to identify examples!
SS7E2b Explain why international trade
requires a system for exchanging currencies
between nations.
Exchanging Money-International trade
requires a system of exchanging currencies
between nations. Money from one country
must be converted to the currency of another
to pay for goods in that country.
Exchange rate-How much is one currency
worth in terms of the other. S.A – rand,
Nigeria-naira
A little practice:
Examples- ONE DOLLAR= 8 South African rands or 120
Nigerian naira
 Taylor has $10.00. She wants to buy a CD in South
Africa that costs 80 rands. Once she exchanges her
American money for rands will she have enough money
to buy the CD?________________________
 Michael wants to buy a soccer ball that costs 1300 in
Nigerian naira. He has $15.00 After he makes the
currency exchange, will he have enough to buy the
ball?______________________________
 Oba has $25.00. She wants to buy a shirt in Nigeria that
costs 2500 naira. Does she have enough money to buy
it once she makes the currency
exchange?_________________________________
SS7E3 Describe factors that influence economic
growth and examine their presence in Nigeria and
South Africa
Factors that influence Economic growth:
 Human capital-people who perform labor. Invest in health
care, education, training.
 Capital Goods-factories or machinery
 Natural resources -things that come from nature like
minerals or trees
 Entrepreneurship a person with an idea or product who
takes a risk to start a business
 GDP (Gross Domestic Product) - total market value of
goods and services produced by an economy during a
period of time.
SS7E3 a. explain investment in
human capital and GDP
 A country needs to invest in HUMAN CAPITAL.
Investing in education and skills training will help to
increase the country’s GDP. A smarter, more
productive workforce leads to economic growth.
 South Africa invests a lot in education. They realized
they needed to improve their workforce. This is
paying off! SA GDP has been growing yearly.
 Nigeria has very little in their budget for education so
human capital growth is difficult. They relied so much
on oil that they ignored education and training in
other areas. The oil wealth belongs to a small group
of people.
SS7E3. explain investment in capital
and GDP
South Africa has also invested in capital growth.
Electrical output, to help the transportation of
goods-they invested in railways and ports.
HOWEVER-50% still lives below the poverty
line.
The Nigerian government has not spent money
wisely. It has little money to invest in capital
resources.
SS7E3 explain how the distribution of gold
diamonds uranium and oil affects the
economic development of Africa
UNEVEN DISTRIBUTION OF WEALTH
Should a country rich in natural resources be wealthy?
You would think the answer should be yes. However,
government instability plays a part in this! (AGAIN!)
 Half of the world’s diamonds are found in Africa.
Botswana has used this wealth towards its economy to
build infrastructure. BUT rebels in other unstable
countries have stolen diamonds and used the money to
support their wars.
 South Africa has half of the world’s gold. It is the basis
for its strong economy. But other countries that have
gold are not as strong.
Oil and Uranium
Oil
In Nigeria- it has caused serious pollution problems. oil
money goes directly to corrupt politicians. Most Nigerians are
very poor. They rely on foreign investment to help with
infrastructure and China sends workers that take Nigerian
jobs along with its investment money. They also import
cheap Chinese goods that wipe out local competition.
URANIUM
This is a radioactive element used to produce nuclear power
and make weapons. Many African countries have uranium. It
is easy to mine as it is close to the surface. This is bringing in
jobs as well as money. This holds a lot of promise for African
nations as the world turns to alternative resources of power.
FIRST CAUSE
Nigeria is rich in oil:
SECOND CAUSE
Different countries
want that oil
EFFECTS
Countries become involved in Nigeria’s
economy.
International energy companies spend
money for hospitals and schools
China aids economy, but Chinese
workers take jobs from Africans.
Cheap Chinese goods wipe out
competition and cause unemployment.
SS7E3d describe the role of
entrepreneurship
ENTREPRENEURSHIP
Nigeria could use some good new ideas but
banks won’t lend money. International
companies are trying to invest so they help the
entrepreneurs.
South Africa has many small businesses. 98%
of the firms in the country are small. Colleges
are investing in teaching people how to run a
business.
ECONOMIC CONTINUUM
Where do the economies of South Africa and
Nigeria fall on an economic continuum?
?
PURE MARKET
ECONOMY
?
MIXED ECONOMY
PURE COMMAND
ECONOMY
Turn and Talk
Where did you place South Africa
and Nigeria on the economic
spectrum?
What was your thought process
and what evidence did you use to
make your choices?
Does the government structure
play a role in a country’s economic
system?
ECONOMIC CONTINUUM
Where do the economies of
South Africa and Nigeria fall on an
economic continuum?
South
Africa
PURE MARKET
ECONOMY
Nigeria
MIXED
ECONOMY
PURE COMMAND
ECONOMY
SSIN Activity: You be the
Teacher
Create a minimum of 10
question quiz. Questions must
be a combination of multiple
choice and fill in the blank. You
must also have 1 constructed
response that is text based.