Background to Migration: Africa's Informal Economy – Structural and Governance Issues

Background to Migration: Africa's Informal Economy – Structural and Governance Issues

Copyright: © 2019 |Pages: 22
DOI: 10.4018/978-1-5225-7631-0.ch002


Although the Sub-Saharan Africa (SSA) is not a monolithic entity but a collection of 48 independent states, the SSA's economy is analyzed as though it were a single unit in this chapter. This is because the SSA as a whole is confronted with a wide range of interlinked economic and socio-cultural problems that include high levels of unemployment and poor infrastructural challenges. Thus, this chapter evaluates issues of governance, institution, infrastructure, demography, capital flight, corruption, and the informal sector associated with economic growth and human development. These issues are deemed useful constructs to understand the “desperation” and “struggle” for emigration out of Africa by many Black Africans.
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Introduction: Background To Migration

There is a high mobility of people from the continent of Africa as illustrated in Ricca’s (1989) rhetorical observation that Africa people are perpetually on the move. Africans do migrate for a number of reasons including ecological disaster (famine, drought), political instability (war, violence), and economic decline (Adepoju, 1991). Focusing on the economic perspective, whilst the national economic experiences of various countries in the SSA are diverse, the economic history of the region can be roughly split into four sub-periods (UNECA, 2012). These periods, according to Iliffe (2007), span (1) 1960-1980 - when the growth of many African economies (i.e. annual GDP growth of 4.8%) equaled that in many other areas of the world. (2) 1980-2000 - when economic growth collapsed in many African countries as a result of the external shocks of oil price increases, declining terms of trade and increased real rates of interest (i.e. annual GDP growth of 2.1%). (3) 2000-2007 - when many African economies recorded reasonable economic growth (i.e. annual GDP growth of 3.9%) largely from the significant increase in the prices received for primary products. (4) 2008-present - when economic uncertainty returned with some decline in demand for raw materials with the slowdown in the European and American markets and reduced growth in the Chinese economy. A close interrogation of these periods in the literature (e.g. Adepoju, 1991; Hatton & Williamson, 2001) could reveal a pattern of direct relationship between economic decline and immigration; after all, Black Africans’ immigration often increases at the times of economic decline in Africa (Collier, 2013). On a similar note, Gonzalez-Garcia and Mlachila (2016) reported that the share of migrants that move outside the SSA region for economic reasons has increased steadily, growing six-fold between 1990 and 2013.

Nevertheless, studies (e.g. De Haas, 2010; Clemens, 2014) have shown that the conventional interpretations of African immigration being principally driven by poverty, violence and underdevelopment may not be wholly accurate. Flahaux and De Haas (2016) argue that mounting migration out of Africa seems rather driven by processes of development and social transformation which have increased Africans’ capabilities and aspirations to migrate.

Migration and Economic Issues

The Economist (2011) in a feature article declares that “over the past decade six of the world's ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan”. This optimistic outlook was based on the booming of commodities, rising incomes and an emerging middle class and the whiff of good governance in pockets of the SSA countries (e.g. Ghana and Tanzania). Although, this optimism has been debunked with the collapse of commodities’ prices and politically noxious governance in many countries in the SSA region (Gettleman, 2016), some opinions still hold on to the “African Rising” rhetoric (Coulibaly, 2017).

However, the reality is that the perennial crest and trough in commodity prices (e.g. oil, cocoa, gold) often affect many of the SSA countries; most of whom are unable to fashion a robust economic and development plan capable of coping with the exigencies of the global commodities prices’ regimes. For example, the IMF (2017) admitted that the deterioration of the SSAs’ economic growth is partly due to insufficient policy adjustment. In addition, the economic model of many SSA countries, many of which are mono product economies (Vanguard, 2013), “continues to be to dig stuff out of the ground and sell it to foreign companies” (Pilling, 2016), that is, no value addition to the primary products. In essence, the mishandling of many of the SSA countries’ economies led to poverty and lack of opportunities that led to the emigration of people out of the region to other ‘prosperous’ economies in the Western hemisphere.

Key Terms in this Chapter

Paradox of Plenty (or Resource Curse): Is defined as a process by which deep poverty of the vast majority of the population coexists with the abundance of valuable natural/mineral resources (e.g., oil, gas, gemstones, and scarce industrial minerals).

Dutch Disease: Refers to the negative consequences arising from large increases in the value of a country's currency due to increase in earnings from natural resources. However, this event has deleterious effects on other sectors of the economy (e.g., manufacturing).

Informal Economy: Is a broad term that refers to many aspects of a country’s economy that are not regulated by law, not taxed, or monitored tightly by government and are not included in the gross national product of the country.

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