Chapter I: Gross domestic product

(1)

f UNITED NATIONS

AFRICAN INSTITUTE FOR ECONOMIC DEVELOPMENT AND PLANNING

CS/2796

DAKAR

C H A P T E R I

CROSS DOMESTIC PRODUCT

APRIL. 1976

(2)

OS/27.96

Pago 1—1»

GROSS DOMESTIC PRODUCT

This chapter will deal with three aspects of the gross domestic product.

(a)

Growth and Structural Transformation of GDP.

(h)

Use of GDP, Consumption and Savings.

(c)

Gross Investment Ratio and Allocation of Capital Investment Introduction

Over the quarter of a century from the end of the second world war II mcil

thnousr3y..}19p|rI "the prevailing interantional economic order

t&cught unprecedented expansion and .prosperity to the developed

market economies. This period witnessed a phénoménal rise in the productive capacity of.these countries, in their real incomes and

in their levels of consumption. Over the same period, however, the experience of the "developing" market economies, provides a

disquieting contrast. Taking the 20 ^years from 1952 to 1972 the

total gross product of the developed market economies rose from

$1,250 "billion to about $3,070, in terms of 1973 prices, the

($1,820 billion)

being three-and-a-half times the aggregate gross

product of the developing countries in 1972

(.$520 >illion).

In terms of per capita real incomes the contrast is even

greater. Real income in the developed market-economy countries

rose by $2,000 per head of population

(valued

at 1973

prices)

from 1952 to 1972 to a figure of almost $4,000 in the latter. The corresponding real per. capita income for the developing countries

in 1972 was about $300 per head,the increase since 1952 being

only

$125. Thus the increment in real per capita income over

this'^gsejrt.od

in the developed market economies amounted to about 7 times the

avantage per capita real incomesin the developing

market economies

in 1972 at 1973

prices.1

Tue ' Atii1g-'—j-v'i-iMgff-R.' frvo o*;' "Orow.tr 'ci Tot^.1 ^and ^jl ^.._ ^«sad

1. UNCT/P IV. Report of the

General Secretary 1976 Nairobi.

(3)

* '

—y

■i

cs/27 96

Page 2-1e

The Annual Average Ra-0es of Growth of Total and por Capita Real Gross Domestic Producta.

Over the period

1950-''960

the average annual rate of growth of real domestic product at market prices of developing Africa1.: amounted to 4«5 percentf a little bit higher than that achieved by the developed

market economies of 4#1 percenta It was

lower'than

the. average rate

of growth of real GBP in the centrally "percent and

the developing countries and territories of 4»7 percent over the samè period» During the second decado

1960—1970» the

average

annual

rate

of growth of real domestic product was 4*7 percent and

tliije

was,

lower

r than what had huen achieved by the centrally planned economios

6.7

•

percent, the

developing countries of 5*2 percent and the developed

market economies of

5°'

percent» Between

1970 and 1974 the corresponding

rates of growth were

6.,6

percent in thocentrally

planned economies 6.4

percent in the developing countries axd.

territories, 4*2 percent in

the developed market economies and 5«■: percent in

developing

Africa»

The average annual rate of growth of real por

capita

income

was 2»3 percent between

I95G-6O,

2 percent

during I96O—70 and 2«5

percent during

1970^74®

These rates

of growth of

^per

capite, real

income were the lowest among the world economic groups and

regions

as shown in Table

(1 »1)a

Widening Gap in Per

Capital Income

As a result of these uneven developments the degree of global

income inequality has widened even

further. Between i960 and 1970

the average per capita income

increased from $1,5°0, in $2,980 in

the developed market economies and

from $133

to

$170 in Afrioa at

current market prices,- The average per capita

income in the developed

market economies was 11 times that of Africa in

I96O

and

increased to

I7.5 times in

1970

(4)

06/ 2/9o Page 3-1,

According to Bhagwati- and Feiner estimates, the rationwill

increase to 21.1 by the year 2,000. See Table I.2.

As a consequence of all this, today the developed market economies with 20 percent of world population, enjoy ahout two thirds of total world income. By contrast, the developing countries

(excluding China),

with almost 50 percent of world population receive only one eighth

of world income. Africa, with almost 9 percent of world population

receive 3 percent of world income.

The widening of the income gap between developed and developing

countries over the past 20 years or more, as indicated by the real income figures, can also be traced more concretely in terms of th..

TABLE 1.2.

estimates of per capita income for 1960, 1965, 1970, AND 2,000 IN U.S. s

- - . i: - 1960

1965

(fe)

1965

(b)

1970 ²⁰⁰⁰

(a)

2000

(»)

Developing Market

Economies 130 145 135 ²¹⁰ 388 325

Africa 133 144 141 170 281 277

Asia 97 ¹¹⁸ 114 348 324 302

South Jtosrôoc. 330 379 357 560 928 695

Developed Market 1,500

Economies

1,729

1,675 2,980 6,126

5,775

Enrope 1,060 1/377

1,364

2,270

5,087

5,055

Japan 458 ⁸⁶⁶ 857 8,656 8,590

N. America 2,750 3,023

2,632

4,760 7,921 6,255

Oceana. 1,320 1,641 2,000 2,540 3,344 4,310

World Market

Economies 550 646 631 980 1,769 1,696

Sourcesi The figures for 1960 and 1970 for all groups except Africa is- taken

from the ET.A. Statistics of the United Nations Vol.Ill 1973. The estimates

are at current market prices. The data for Africa is calculated from Survey of

Economic Conditions in Africa 1973 -EGA. The estimates are at current market pricess For

1965

ana 2000, are taken from Economics and ForIdCtoiax from the

1970s to 1990s.tThe key Issues by JAN.' Bhagwati. The Macmillan Company

London 1972.

ija)

Bhagwati estimates,

(b)

Kan Feiner estimates.

(5)

'TABLE 1.1

AVERAGE ANNUAL GROWTH RATES OF TOTAL AND PER CAPITA. REAL GROSS DOMESTIC PRODUCT.AT MARKET- PRICES BY REGIONS 1950-1960. 1960-1970.

1970-74. 1970-71, 1971-1972, 1972-75. 1975-1974 In percent.

03/27 96

Pago 4-1*

!

í TOTAL REAL PRODUCT PER CAPITA REAL PRODUCT "

i

[ 1950-

1960

1960- 1970

1970- ! 1974 j

1970- 1971

1971- 1972

1972- 1973

1973- 1974

1950- 1960

1960- 1970

1970-i

1974 i

1970-

1

1971

1971- 1972

1972- 1973

1973- 1974 Developed Market

i Economies 4*1 5.1

ij j

/ - '

4*^ i 3.8 5.7 6.0 -0.1 2.8 4.1 2.3 4.6

'

5.0 ^-1.1

; Developing Countries

i And Territories

? *

4.7 5.2

!

6.4

1

^5.0 ^5.7 ^7.4 ^7.2 ^2.4 ^2.6 ^3*8 ^2.5 ^3.1 ^4.8 ^4.6

.

i 2

j Socialist Countries

of Eastern Europe 9.6 6.7 6.6

j

.

5.9 „ 8.5 6.4 ^8.0 ^5.8 5.7 5.0 4.4 7.6 5.5

,

■ Africa (excluding

'

South

Africa)

f

L_

4.5 4*7

Í

5.2

j

^4.6

;

5*5 4.6 6.5 2.3 2.0 2.5 1.9 ^2.8 1.9 3.7

(1)

Growth Rates for the periods

1960-70

and 1970-74 have been in general

calculated from an

exponential

trend. In all other cases estimates

refer to compound average annual growth rates based ou terminal year

(.?)

Excluding Albania*

Sourcesï UNCTADs Handbook of International Trade and Development Statistics

1976. Geneva*

(6)

the consumption of basic foods, clòthing, housing and essential services, such as health care and educational provision. In many of these elements making up the individuals' standard of living,

it would seem only marginal progress has been achieved in a

considerable number of developing countries. Moreover, the under¬

lying problems of hunger and malnutrition, even famine, of un¬

employment, of rural poverty and urban degradation, are even more pressing today than they were a quarter of a century ago at the beginning of the phase of rapid economic expansion in the developed

countries.

The fact that the developing countries did not share adequately

in the prosperity of the developed countries when the latter were

experiencing remarkably rapid expansion indicates the existence of

basic weaknesses in the mechanisms which link the economic of the two groups of countries. These mechanisms have evolved from the

historical relationship between the developing and the developed countries, a relationship in which the developing countries were essentially providers of primary commodities in exchange for the supply of investment capital, technological know-how and manufactured goods from the developed countries. Though the character of this relationship has been undergoing much change, particularly with the

progress of industrialisation in many third-world countries, it still

dominates the structure of their mutual economic relationships.

(2)

The Rates of Growth of Total and Per Capital GDP among African Countries.

The annual _average rates of growth of total and per capita real

GDP for independent Africa over the period

1950-1974f OQiWK&euL" 1

behind them, wide variations between countries and groups of

countries and consequently do not reflect the growth of total and

per capita GDP in most of the AfpicanGGcumtries. Some countries experienced negative rates of growth of ^per capita GDP as low as 50 percent.per annum as in the case of Burundi, while a country

2)

^UNCTADjff Keport of the General Secretary 1976 Nairobi.

(7)

fc&iifs->-

111

TABLE 1,3

Annual averagegrowthrates®

j

^,

1950:1960,

1960-1970, 1970-1974, 1970-197!, 1971-1972,.

GS/2796

p-ge

6-1,

Totalrealproduct Produit réel lotai-

AfricanStaresassociated with theEEC

Benin'4 Burundi

'

Ch:id Madagascar Rwanda Somalia Togo Zaire CEUCA

Central AfricanRepublic Congo

Gabon

United Rep.of Cameroun

WestAfrican Economic Community IvoryCoast

Mali -•.Mauritania

Niger Senegal UpperVolta

EastAfrican Communit_y .

keina

Uganda

iantedRep.ol Tanzania

OtherAfrica

. ^Angola

Botswana ...

EquatorialGuinea ^. Ethiopia

Gambia Ghana

...

Guinea-Bissau ^. ^. ^. „

Lesotho Liberia

Malawi ,

Mauritius Mozambique ^. ^. ^. Nigeria

Reunion

Sierra Leone . .

SouthernRhodesia

Svyàittand.

* Zâmbia ^>^. ^.

3.2

3.6 4.1 3.0 3.4

4.3' 2.5 2.9

>73.7

4.8

5.7' 4.4 10.5 4.8"

1.8 3.1 4,1 3.6 64*

%.38 4.2 7.9 0.3 8.1 5.3 1.0 4.9

7.1 8.2 5.3 7.8

4.5 4.6 5.6 3.3

, 4.3

4.2 2.3 1.3 4.3 3.0 5.2 4.8 1.9 3.7 5.2 11.1 6-9 4.6 7.6 8.3

3.2 7.5

■ 2.3

3.1 3.2 0.3 2.8

2.S 5.5 1.9 .3.6

■6.2 3.9"

24.7 -4.9 3.6 7.1 6.5 3.8 1.2 3.1 4.2 9.1 7.9 4.5"

8.2 4.8"

-■•3.9 8.0 ' 5.4

3-M_Jt

Percapita real product Produit reelparhabitant

1970- 1971- 1972- 1973- 1950- 1960- 1970- 1970- 1971- 1972- 1973- 1971 1972 1973 1974* 1960 1970 1974 1971 1972 1973 1974*

4.6

F

^5.5 ^4.6 6.5 2.3 2.0 2.5 1.9 2.8 1.9 3.7

2.1 7.1 4.7 7.5 2.8 2 2 2.6 -0.7 4.2 1.9' 4.6 2.3 12.7 3.8 6.3 1.5 -0.3 3.2 0.9 9.2 0.5 2.9

-1.8 17.0 6.5 4.8 6.0 0.8 3.8 -5.1 13.1 2.9 1.3

4.7 5.1 1.6 6.7 0.8 0.5 " 0.8 1.3 1.6 -1.7 3.2

9.7 19.6 0.3 9.9 1.3 1.9 7.3 7.3 17.0 1.8 7.6

3.9 0.8 2.4 5.9 2.9 2.3 0.8 1.7 1.3 0.3 3.7

7.1 7.6 13.5 23.3 1.1 21.0 5.8 9.9 4.4 10.1 19.6

10.3 3.0 4.0 -6.6 2.0'° ^- 1.0 -0.4 7.0 -0.1 0.9 -9.4

3.0 3.3 3.0 6.6 0.3 1.1 1.3 0.5 0.8 0.5 4.1

6.2 3.4 2.2 5.3 1.7 1.5 ' 3.7 1.0 ^- 0.2 2.8

10.2 3.7 5.3 1.5 -3.4 5.0 2.5 7,6 1.3 2.8 -0.9

0.6 10.3 -0.5 9.0 _2.4 -3.8 -1.7 12.4 -2.8 6.4

3.0 1.6 1.7 3.4 0.0 1.0 -1.0 0.7 3.8 -0.6 1.1

6.0 1.0 4.0 -2.0 -2.0 1.4 0.9 2.7 -2.1 0.8 -5.1

5.5 7.9 3.8 4.1 -0.4 ^• 3.2 3.3 ^■ 5.7 1.7 1.9

4.3 . -5.2 9.3 6.4 6.5 0.4 1.4 -7.7 6.3 3.5

4.8 5.1 6.8 6.6 2.1 -0.1 3.2 2.1 2.4 4.1 3.9

2.6 l.S 7.0 6.8 -0.5 3.0 2.3 0.4 -0.2 4.8 4.6

0.2 3.0 3.5 1.1 -1.0 -0.1 2.0 0.7 1.2 ^- 1.2

1.3 0.1 14.9 7.6 3.5 3.7 -0.9 2,1 12.4 5.2

5.4 2.4 10.6 4.3 4.9 4.7 _4.4 1.4 9,5 3.3

2.4 1.8 4.7 8.6 -0.5 3.3 ■ 2.0 0.3 ^- 0.3 2.5 6.4

1.2 5.8 ' -1.4 8.4 1.3 1.7 0.7 1.3 3.3 -3.8 5.8

6.3 9.3 4.3 11.0 5.0 4.6 3.4 6.3 1.4 8.0

3.7 12.5 1.5 6.9 1.3 2.0 4.6 1.3 14.5 -3.8 4.4

2.8 _0.7 3.7 6,1 5.7 0.7 0.5 _1.6 1.3 3.7

2.7 12 -12.0 7.7 2.2 -6.0 5.5 4.1 14.6 4,6

-10.22.0 18.15.3 !1.20.6 5.35.0 _1.42.9 0.82.0 12.30.0 15.33.2 13.32.5 2.82.9

4.46.52.3_3.9 5.45.03.87.3 3.16.71.2 14.42.93.5 0.41.11.1 4.14212.4 -4.5-0.12.1 -0.51.43.1 2.4_1.71.0 0.13.33.9 -5.616.70.2

-..-iSS..—,.—

2.7 _0.5

r_L±

^5.0 ^0.9 ^1.2 ^4.4 ^{0 0} ^-3.1

8.1 43J 5.5 7.3 1.7 1.9 3.5 5.4 2.3. 2.9 4.6

4.4 2.6 5.2 1.0 2.5 1.8" 2.2 0.5 3.0

59.8 12.8 15.1 27.3 0.1 3.6 22.2 56.7 10.6 12.9 24.8

-8.4 -13.4 1.0 3.9 2.0 -6.1 -9.5 -14.5 -0.3 2.5

4.5 4.8 2.7 2.6 2.1 1.5 0.8 1.6 1.9 0.1 -0.2

10.8 1.5 3.9 17.5 2.1; ^5.0 ^8.6 ^-0.4 1.9 15.2

9.8 7.5 5.2 3.7 2.4 -0.8 3.3 6.5 4.3 2.0 0.6

-0.2 -0.4 7.1 9.7 -1.0 1.5 -2.4 -2.7 4.7 7.2

-1.0 -0.8 2.9 3.8 5.5' ^' 3.4 0.3 -1.9 -1.7 2.0 2.9

7.5 -4.4 6.3 5.9 2.3 1.0 1.1 5.4 -6.3 4.2 3.8

5.1 3.6 3.9 5.0 9.0 1.8 0.8 1.6 0.2 0.4 1.5

14.2 10.5 7.7 4.2 1.7s 2.1 6.3 11.3 7.7 5.0 1.6

11.0 18.0 6.3 -6.3 0.0 0.5 6.5 9.5 16.4 4.9 -7.5

2.7 5.9 4.7 1.8 1.4 2.3" 0.4 3.6 2.4

11.8 3.7 7.9 12.2 2.1 2.7 5.7 •9.1 1.3 5.4 9.6

-2,9 10.6 5.1 8.6 2.4" -5,0 8.2 2.7

4.7 2.8 4.1 4.3 2.5 4.5 1.5 2.4 0.4 1.7 1.9

13.0 8.3 3.4 9.7 2.9 1.1 4.3 9.2 4.7 -0.1 6.0

9.5 5.0 2.6 6.2 5.2 4.5 2.3 6.3 2.0 -0.3 3.1

4.9 3-}' ^>.2 ^4.9 ^3.3s ^.5.2 0.9 2.0 0.1 .0.3 1.9

SptjToesj Bindhook of InteToftioril av><4 "Uo-p-pi otintonf Sfqt.i^t/ioo 1976 T1FCTAh Opvova.

(8)

TABLE 1.4

Population,area, density and gross nationalproduct (total andpercapita) by region andcountry. 1973

CS/2796

Eage 7-1o

Population, superficie, densitéet produit

national brut (total et par habitant) par

régionsetpays. 1973

-

Population

—*— 1

Area

-

Superficie

Density Densité 1173

Gross nationalproduct Produit national brut

!9?3 Total

W?3

Average annualrate

«ifjoowih Taux d'accroisse¬

mentannuel

<1970-1973) ^Total

Per capita Par habitant

_■-"RàtMflstup.i y s

'

lri thousands En milliers

In per cent Hn pourcentage

Km-

Inhabitants, perkm"

Habitants parkm-

Millions ofS U.S.

Ln millions dedollarsdes

Etats-Unis

SU.S.

Dollars des Etats-Unis

.155400 2,6 29098 300 12 87 500 250 AFRIOUt

12300 ^•> ⁷ S25%700 ¹¹ 32100 360 AfriqueOuSorti

. 37 000 3.2 2991 900 13 15 300 410 Maghreb

-5 7 7 "r 3 2 2 3S t 741 ⁷ 7730 504 Algérie

! 6.>09 3.4 446550 37 5012 286 Marne

5509 24 ib3610 34 2515 459 Tunisie

35619 2.2 1 001 449 36 9100 259 Fgyptc

2161 3.7 1759540 1 6230 2984 Republique arabe libyenne

16901 2.5 ^• 2505 813 ⁷ 2 300 135 Soudan

Etats africains associés

S3 :oo 2.4 II1Í5500 S 14100 170 à laCEE

2 91 2 2.7 112622 26 348 122 Bénin"

3600 2.4 27834 129 284 74 Burundi

3868 2.0 î284000 3 350 38 Tchad

7232 2.3 587 041 12 1258 174 Madagascar

3984 2.7 26 3 38 151 280 71 Rwanda

3003 2.5 637657 5 236 79 Somalie

2 117 2.4 56000 38 393 185 Togo

23563 2.8 2345 409 to 3 129 147 Zaire ...

9400 19 1 708 100 6 2800 300 I'D! AC

! 710 2.3 622 984 ;» 302 176 République centrafricaine

1004 2 4 342000 3 425 423 Congo

515 i.i 267667 ^a 634 1 248 Gabon

République-!'niedu

6 167 1 9 475442 13 1 418 232' Cameroun

Couilimitaiitééconomique

2.3300 2.3 4330600 6 50OO 200 Je1Afrique Jel'Ouest

4641 2.5 322463 14 2393 511 Cole dIvoire

5576 2 1 1 240 000 4 397 73 Mali

1 257 2.7 1030 700 1 245 196 Mauritanie

4304 23 !267 000 3 525 125 Niger

4227 2.5 1% 192 22 1014 252 Sénégal

5737 2.1 274 20(1 21 450 79 Haute- Volla

CommunautéJe

37 700 3.2 1 763 SOO 21 5SOO 150 ! AfriqueJel'Est

12482 3 6 582046 21 2249 ⁵ 172 Kenya

Restionsand countries

liiSSf**?!.' '* ^•

iMtanStalesa »,irait-J .euh rhelélC

lianui"

Burundi

Chad ^. ^. .

Madagascar Ruanda Somalia i.)gk>

/.me auA

CentralAfricanRepublic Cuneo- ^... ...

Gabon

Inihil Republic of

I -iinoroin) ^. ^.

H>.;,(.• .dJl'fc'

Í•miliuitlilI' .

hurvCoast Mail ^. . .

Mauritania.

V;ci Since.il t pperVolta

commue

fust !i'rican Ounniuniiv ^.

Kenta . .

£

'

i

1

(9)

nw>» Ttfi fh?.p;

(If/070<

■p.-jr» "~T„

«

Lganjli'i ^- IÛ810 3.3 236036 46 1 715 161 Ouganda

i United Rep. ofTanzania ^. ^. 14377 2.7 945 087 ^• 15 1 834 127 Rcp.-UniedeTanzanie

OtherAfrita 1-10200 2.5 ⁷960300 IS 34 SOU 2.50 _Autrespay:J'Afriuite

Angola 6O60 2.1 1246 700 5 2980 492 Angola

Botswana - 646 3.7 600 372 1 184" 284'' Botswana

CapeVerde 284 1.8 4033 70 98" 336" Cap-Vert

Comoros 291 2.4 2171 134 40s 170s Comores

EquatorialGuinea 298 1.5 28051 11 89'' 290" Guinéeequatorial;' Ethiopia "... 26 076 1.9 1 221900 21 2 240 83 Ethiopie

FrenchTerritoryof the _Territoirefrançaisdes

A tarsand theIssas 101 2.1 22 000 5 160s 1 580s Afarsetdes Usas

Gambia 493 2.2 11295 44 62 163 ^.Gambie

Ghana 9 355 2.7 238 537 39 2 857 287 Ghana

Guinea ₄208 2.4 245 857 17 575 137 Guinée ^•

Guinea-Bissau ₅₀₉ _1.4 _{36 125} ₁₄ _158' _275" Guinée-Bissau

Lesotho .... 994 2.2 30 355 33 97 99 lesotho

Liberia 1659 2.9 1 11369 15 417 248 Libéria

Malawi 4791 2.6 118484 40 535 112 Malawi

Mauritius ^. ^. ₈₆₈ _1.3 _{2 045} ₄₂₄ ₃₄₇ ₃₉₉

Maurice

Mozambique ^. , 8823 2.3 783 030 11 2905 334 Mozambique

Namibia 673 2.1 824 292 1 .Namibie

Nigeria_Reunion 59607 2.7 923 768 65 14 802 250 Nigéria

474 2.1 2510 189 570s 1210' Réunion

Sâo Tome andPrincipe . . . 78 2.0 964 81 40s 3iHr SaoTomc-et-Prindpe

Seychelles ₅₆ _2.6 ₃₇₆ ₁₄₉

20s 370s. Seychelles

Sierra Leone .... 2667 1.5 71 740 37 455 162 Sierra Leone

Southern Rhodesia 5900 3.6 390 580 15 2 493 406 RhodésieduSud

! Swaziland ₄₆₃ _4.3 _{17 363} ₂₇

140 310 Souaziland

Western Sahara 127 -1.4 32 3969 70 590 Saltara occidental

Zambia

■

4635 3.5 752614 6 2425 503 Zambie -. .

SOURCE» HANDBOOK OP INTERNATIONAL TRADE AND DEVELOPMENT STATISTICS 1976, IJNCTAD, GENEVA.

1

(10)

Page 8-1.

like Libya achieved, ^a corresponding rate of growth 21.0 peroent over the same period 1960-70»

Eleven African countries witnessed a negative average annual rate of growth of GDP percapita between

1968-19701 Algeria,

Sudan, Burundi,

Chad, Somalia,

Zaire, Central African

Republic, Mali, Riger, Ghana, Guinea,

and another eleven countries achieved a positive average annual rate of growth of per capital GDP of less than the average of Africa .of 2 percent

between 2 and 4 percent.

African countries vary widely with regard to the level of per

capita income as shown in Table

(l#5)«

^In 1973 in 14 countries the

average per capita income tias less than U.S. $>'.

150,

and

in

another

15

. countries it was between U.S. $150 and U.S.

$300,

and between U.S.

$300

and U.S. $500 in the remaining countries except Libya and Gabon where

„it was U.S. $3396 end U.S. $1063 respectively.

These figures of average per capita kraatarb, and its

annual

rate

of growth in the majority of African countries,

reveal the important

point, that the actual gap between the per capita

income

in

the

developed market economies, and the majority of African countries

is even higher than, what is shown by the ^average for the whole of

the developing Africa. The same applies to the average rates of growth

of per capita GDP.

STRUCTURAL TRANSFORMATION OF THE GDP.

By economio development and structural transformation is meant the

economic and social processes and changes by which a dependent, underdeveloped economy is transformed into an independent developed

economy. JSx issaprocess during which the lack of integration of the

economic sectors, is eliminated.the forward and backward

inter and

intersectoral linkages are strengthened end consolidated. This will

be achieved by industrialisation and the development of the

agricultural,sootor on the bacis of oaccirtially internally-oriented development. During this process this manufacturing emerges as the

(11)

CS/27%~

Phge 9~1,

Table I. 5

The average PercCapita ^Income ⁱⁿ African Couri'es in U.S. S in 1973^•

Libyan. Arab Republic 3396 Togo . ..r 19$

Gabon 1061 C.A. Republic ^coon

Ivory Coast 553 Kenya ^CO

Angola 49-5 Madagascar 179

Congo 477 Gambia 158

Tunisia 461 Uganda 154

Algeria ^. 457 ^Sudan 154

Zambia 444 ^Zaire. .136

Mauritius \

411

^Benin ¹³³

Mozambique 374 ^Tanzania 127

Guinea Bissau 341 ^Somalia ¹¹⁸

Morocco 306 Guinea 113

Cameroon 303 Niger ¹¹¹

Boitétwanav 298 ^Malawi ¹¹⁰

Eqliâtoral Guinea 296 ^Burundi ⁵³

Ghana 296 'Ethiopia ⁹²

Liberia 288 Lesotho 90

Senegal ^... ^.. ^. ^... 260 Chad 8?

Mauritania. 260 Upper Volta 84

Egypt ²⁵¹ ^Rwanda 83

Nigeria ²²⁷ ^Mali ⁶⁰

Source: UNCTAD: Handbook of Internation Trade And Development

Statistics 1976. Geneva.

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CS/2796

Page 10-I,

leading sector in the economy, thus gradually decreasing the dependence of the economy on foreign trade, by exporting primary products and importing, capital goods, technology -and expertise.

All these changes in the composition of the output and the strengthening of the inter and intra sectoral linkages can only he attained if the _necessary transformation in the productive forces

takes place. The composition of the labour force changes in

favour of that section of it who is engaged in manufacturing and

modern effective production oriented infrastructure. Overall labour productivity uses partly became the labour force works

more effectively, partly because of the -

improved technology and partly because of the better training of

worker ana more effective management.

Economic development is not simply an increase in the productive capacity but involves in addition basic changes in the socio

political structurettwhich represent " on the rate of change. Political and institutional changes in the nature of the political system, in the ownership of the factors of production

in the distribution of income and wealth, in the management of

the economy, are . —- —

development.

.Industrial origin of the GDP.

Between i960 and 1972, the industrial origin of the GDP in independent. Africa as a whole has witnessed some change. The

share cf agricultural!sector declined from 41.5 percent to 30 percent. The industrial sector increased fr-m 20.2 percent to 31 percent and the share of the services sector increased from

38.3 percent to 38.6 percent. The decline in the share of the agricultural sector and the rise in share cf industry, howevert

should by no means imply that Africa, has successfuly embarked on the road of economic development and structural change which necessarily bring with it changes in the industrial origin of

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Sable 1,6.

GS/2796

B&g®

Percentage distribution, of GIP by industrial origin at constant 1970

factor cost, i960» 1971 aM 1972

Agriculture industry ^cervices

19-60 1971 1972 I960 1971 1972 I960 1971 1972 North., Africa

Algeria 21.4 12.2 11.9

28.5

42.5 44.6 50.1 45.3 43.5

;

.. ugypi^- '• 29.S 28.5 ^28.3

28.1

28.8 28.6 45.4 42.7 43.1

/-Libyan^:Arab Bepublic 15.5 ^2.2 ^2.6 ^18.8 71.8 68.7 65.8 25.9 28.7 :

■ Morocco 32.2 31.0 30.7 24.0 25.2 26.8 43.8 43.8 43.5

Sudan .

cr c,

J1 •A 38.9 38.2 15.4 ^16.6 I6.9 27.1 44.5 44.9

Tunisia' 24 «-9 19.3 21.2 25.3 25.9 26.3 49.8 54.8 52.5

Total Borth" Africa ■30.0 21.5 ^-1¹^♦^r>id. 24.6 37.0 37.2 45.4 41.5 41.

'test Africa

Uahoœey 45*1 39.7 38.7 9.3 14.5 15.5 45.1 45.9 45.9

Gambia■ 57.9 54.4 50.0 ^. 1.9 3.5 4.1 40.2 42.1 ' 45.9

Ghana 48.6 47.5 45.7 14.0 19.2 ^20.0 37.5 33.2 34-3

Guinea 42.7 34.0 29.1 18,4 24.2 25.5 38.9 41.8 45Õ

Ivory Coast 48.8 ^33.2 33.5 14.9 21,8 ^21.2 36.3 45.0 45»3

Liberia 30.7 13.0 12.1 31.0 44.3 44.6

'

38.3 42.7 43.3

■Mali 56.3 44.5 36.5 ^11.6 17.5 20.5 32.2 38.0 43.O

Mauritania s6.6 32.4 31.9 21.4 44.4 42.I 21.9 23.1 26.0

Kiger 65*4

58.0

57.7 11.6 9.4 10.3 23.0 32.6 32.I

Bigeria 62.9 40.7 38.2 ^11.1 33.8 ^36.0 25.5 25.5 25.7 Senegal 34*8 2C>,6 26,8 ^lo^.1 18.8 20.9 49.1""56.6 ^.50,3 !

■ Sierra.Leone 39*7 29.9 29.5 25.9 26.4 25.4 34.4 43.7 45.1 ,

Togo 58.1 45.0 40.6 12.9 24.2 25.4 ^. 29.O 30.9 34.0>■

Upper Volta 64.9 42.6 38.4. 13.1 18.2 19.3 32.0 39.1 42.2 Total Vest .Africa 54.2 39.5 37.6 13.6 28.2 29.8 ^* 32.2 32.2 32.6

!

>

(14)

T.6.' (Aie '

Prrr® "11—T,

Central.Africa

Burundi 75» 9 73.2 74.0 7.4 7.8 7.0 16.7 ^19.1 19.0

Cameroon 36.4 37.2 36."5 19.4 ^21.0 21.9 ^42,2 41.8 ^41.6

Central African .Re;p. 46.8 ^35.4 ^34.9 ^12.6 ^22.5 ^24.7 ³^8.6 ^42.I ^40.4

Chad 55»! 55»G 46.0 12.2 8.9 ^10.6 ^32.7 ^36.1 ^43.4

Congo ^19.4 ^21.9 ^20.3 21.5 23.4 24.7 59.2 54.7 55.1

Equatorial Guinea ^■ 70.6 61.7 60.3 8.8 9.9 ^10.4 ^20.6 28.3 29.4

Galon 30.8 ^18.0 13.8 32.6 45.4 54.1 36.6 36.6 32.2

.Rwanda 81.0 54.3 52.3 ^6.6 ^20.2 ^21.6 ^12.3 25.5 ^26.1

Zaire 30.0 19.7 18.8 26.8 34.5 35.3 4i»2 45.8 45.9

. Total Central

Africa ^- •• 39.7 31.3 29.5 21.4 27.2 28.9 88.9 41. 5 41.6 East África

Botswana 57.6 ^32.7 28.3 ^11.9 33.9 41.1 30.5 33* 5 30.⁶ Ethiopia 64.7 54-6 54-4 12.3 15.8 ^16.1 23.0 29.^•7i 29.5

*; ■ Eenya ^■ ^u ^.A ^40.0 32.6 34.2 14.8 20.1 19.7 43.2 47.^<r.^O 46.²

. Leu ~.tho 73.1 41.5 32.1 ^- 6.2 8.7 ²^*^j.⁹ 52.5 59.^{^}^V⁽

Madagascar 40.7 33.5 34-9 10.7 19.8 17.5 48.6 46.8 47.7

■Malawi 57.5 51.5 49 .0 ^11.1 19.8 ¹⁹ .9 31.4 ²<3.r7 91.2

Mauritius '22.4 24.8 27-9 ^26.8 25.8 25.7 50.9 49.3 a.6.4

00vãalia 44-7 36.2 33.7 16.4

2Ó.3

^. ^20.1 36.9 43-5 aó.2

•Swaziland 32.4 38.1 33.0 23.4 26.8 .5.9 44⁰ 41.: 41.1

j-ancana a 61.1 3?. 5 40.2 8.9 17.9 17.3 30.0 42.0 423

Uganda 61.3 53.9

~O T

J<- • \ 11.8 12.6 11.7 26.9 33.5 33.6

i~-i3, 11.4 8.0 8.2 65.0 46.3 47.8 23." À"-^*. 44,.1 ^'1ⁱ

Total ./ast africa 46.9 37.6 37-6 2C.9 22.3 u'j. %4 ^j^. ⁷^*^O^<~ 40.0 43.0 ^•4

••^

fo't^I 41 independent developing African

. -ccul^ 41.5 30.4 vJ.O 20.2 30.7 31.4 3* .3 .vi.4 38.6

ocuroe« EGA secretariat.

-1

^-

A

f-

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es/2796

Page 12-1

the OP? as has been the case in the developed countries during the period of economic development. A necessary precondition for the industrial development of many of these countries was the progress

they made in agricultural production, expressed in rising crop

yields per cent increased form labour productivity. Improvement

in yields and labour productivity allow a smaller propotion of the economically active population to produce the needs of the entire population for agricultural commodities, Moreover with the rise

of per capita income above a certain level the income elasticity

of demand for food falls and consequently the share of GDP spent

on agricultural commodities fall.

As the same time,the transformation of the economy meant, the increasing role of manufacturing industries, spread #f technology

and rise in productivity and ^per capita* income. All these factors

led to the decline in the share of agrioulture in the GDP of the developed countries.

In the case of Africa however there has beenbneither progress in agricultural production nor effective industrial development nor therefore a concommitant rise in the _average _per capita income,

are of the ma,in reasons for the decline share of agricultural pro¬

duction in C-DP was the stagnation in the agricultural production in

most African countries. The rise in the share of industrial _pro¬

duction was mainly due to the spectacular increase in mineral

production in Libya, Algeria, Figeria, Zambia, Gabon and Mauritania.

The manufacturing industries, which unlike the mining industries,

have strong forward and backward linkages did not achieve a

substantial _progress.

The changes in the industrial origin of the GDP will be

discussed in more details in the relevant chapters of this survey.

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CS/2796

Page 13-I*

With regard to the dependent role of Africa in the international divison of labour no significant change has taken place. This

natural enough as long as the main features of the African

economies have remained unchanged during the period under study.

On the whole, it can be concluded that the majority of African countries, have not achieved either substantial économie growth

or embarked on the road of economic deveopment and transformation

over the period

1960-1975»

• * »

*

« ♦

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es/2796

EagO 14-1.

USE OF DOMESTIC RESOURCES AMD ITS IMPACT OF ECONOMIC DEVELOPMENT OF AFRICAN COUNTRIES

INTRODUCTION

In _any country particularly the less developed countries, the appropriation of the gross domestic product, its allocation between consumption and investment expenditures, the nature and pattern of

b»th types *f expenditures have a profound impact an the ability of

countries to achieve substantial growth and transf«^rmation of

their economies. In this section the appropriation of the GDP and

its allocation between consumption and savings will be dealt with,

while the problems of - sise and allocation of capital investment

in African countries will be dealt with in the next sections.

THE ROLE OF CAPITAL INVESTMENT IP ECONOMIC DEVELOPMENT

Before the distribution of national income between consumption and

. _ .-> - .economic

wisdom about the crucial role of capital in economic development

and the importance of mobilising internal resources ftr increasing

the share of savings and investment in the GDP. Capital investment

plays a central r»le in the process of economic development and growth.

The recognition of the important role of capital in this process is

a renewal and not a new discovery of the last 2-3 decades, which

witnessed a growing interest in the problems of development. A

central part in the classical theory of development is played by capital. To Adam Smith, D. Ricardo, K. Marx and their