Economic Growth Without Development: Africa in Perspective

With trade liberalisation, one thing to expect is increase in output (i.e high level of production) cum consumption of goods. This is beneficial to both suppliers and consumers. According to Robert Reich (2021)   Globalization and Free trade do spur economic growth, and they lead to lower prices  prices  on many goods.

However, with this booming economic growth, it is possible for it to be without development. This is to say that there is a possibility of an increase in gross domestic product (GDP) without an increase in the standard of living of the African Populace.

For one, economic growth may benefit a few/small percentage of the populace.  One way to visualise this is to look at some African countries producing oil; with increase in oil production, there will be increase in gross domestic product (GDP). However, it’s possible that this oil is only owned by one or few firms and therefore, the average workers doesn’t really benefit.

On another vital note,  with the pervasion of  corruption, a country may experience high GDP but the benefits of growth may be siphoned into the bank account of few politicians.

There is also the risk of environmental problems, firms may be producing toxic chemicals as waste which will lead to an increase in GDP but without proper regulation, it can lead to environmental and health problems.

Furthermore, economic growth can lead to increase in congestion, leasing to increase in GDP but the living standards becomes low because the people spend more of their productive time in traffic jams.

Imagine if a state owned industry increase output, this is reflected in an increase in GDP, however, If the output is not used by anyone , then, it cause no actual increase in loving standards.

All these are practical examples where growth may lead to a decrease in living standards for many.

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