Department of Economics

Faculty of Economic and Management Sciences

Economic and Development Problems in

Sub-Saharan AfricaNicholas Spaull & Nico Katzke

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A little bit about me…• Nicholas Spaull• I love to Travel• Studied at UKZN / SUN / UCT• Economics by profession (PhD...)• Education by passion

• Office: Schumann 202• NicholasSpaull@gmail.com • NicSpaull• www.nicspaull.com

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AdminCourse information3 American credits; 6 ECTS credits

Venue: Wilcocks 3018Mondays 10:00 – 13:00Tuesdays 09:00 – 12:00

*NB – see lecture schedule for dates!___________________________Evaluation4 x MCQ tests 80%Class participation: 20%

There will be no exam.**The above is subject to change

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The aim of this course is to get you to think critically about some of the major developmental issues facing Sub-Saharan Africa today.

Some caveats:• This is not a typical course• I am only a graduate student, not

the Oracle at Delphi

But…• It will be interesting!• You will learn how to think and

you will learn about Africa

• More specifically…

What I want to accomplish in this course

Department of Economics

Faculty of Economic and Management Sciences

Economic and Development Problems in South Africa and Africa

Understanding Foreign Aid

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Aid – The ‘good’...

• Sachs • ‘Poverty trap’ • Firemen logic• Big push• Conclusion?

• BIG SOLUTIONHealth – Education - Infrastructure

Poverty

Living hand-to-mouth

No savingNo investment

No infrastructure. Capital,

tech

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Department of Economics

Faculty of Economic and Management Sciences

Economic and Development Problems in South Africa and Africa

Education in SA

?

Benefits of education

Improvements in productivity

Economic growth Reduction of inter-

generational cycles of poverty

Reductions in inequality

Lower fertility Improved child health Preventative health care Demographic transition

Improved human rights Empowerment of women Reduced societal

violence Promotion of a national

(as opposed to regional or ethnic) identity

Increased social cohesion

$Society Health Economy

Specific references: lower fertility (Glewwe, 2002), improved child health (Currie, 2009), reduced societal violence (Salmi, 2006), promotion of a national - as opposed to a regional or ethnic - identity (Glewwe, 2002), improved human rights (Salmi, 2006), increased social cohesion (Heyneman, 2003), Economic growth – see any decent Macro textbook, specifically for cognitive skills see (Hanushek & Woessman 2008)

EdHS

Ec

Atta

inm

ent

Qual

ityTy

pe

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High SES background

+ECDHigh quality primary school

High quality

secondaryschool

Low SES background

Low quality primary school

Low quality secondary

school

Unequal society

17%

Semi-Skilled (31%)

Unskilled(19%)

Unemployed

(Broad - 33%)

Labour MarketHigh productivity jobs

and incomes (17%)• Mainly professional,

managerial & skilled jobs• Requires graduates, good

quality matric or good vocational skills

• Historically mainly white

Low productivity jobs & incomes

• Often manual or low skill jobs

• Limited or low quality education

• Minimum wage can exceed productivity

University/FET

• Type of institution (FET or University)

• Quality of institution

• Type of qualification (diploma, degree etc.)

• Field of study (Engineering, Arts etc.)• Vocational training

• Affirmative actionMajority (80%)

Some motivated, lucky or talented students make the transition

Minority (20%)

- Big demand for good schools despite fees

- Some scholarships/bursaries

cf. Servaas van der Berg – QLFS 2011

Department of Economics

Faculty of Economic and Management Sciences

Economic and Development Problems in South Africa and Africa

Poverty and Inequality in SA

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Department of Economics

Faculty of Economic and Management Sciences

Economic and Development Problems in South Africa and Africa

Health in Africa

Translating expenditure into outcomes (2)Maternal mortality vs. total per capita healthcare expenditure, 161 countries - WHO, 2010 (maternal mortality) & 2011 (healthcare expenditure)

0 1000 2000 3000 4000 5000 60000

100

200

300

400

500

600

700

800

900

South Africa

Equitorial Guineau

US$

Links in the chain in translating expenditure into outcomes in developing countries (2)

Filmer, Hammer & Pritchett, 2000Expenditure

Choices

Incentives

Outcomes

1. Composition of expenditure, e.g. primary vs. secondary vs. tertiary care, HIV vs. TB, HIV vs. malaria, preventative vs. curative care

2. Output of the public sector: efficiency in translating inputs into outputs

3. Net impact of public sector supply on overall consumption: do people use more of the service simply because government is spending more? e.g. crowding-out of private services

4. Health production function: the impact of health inputs is mitigated by biological and medical facts, i.e. the effectiveness/appropriateness of certain treatments

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• Nico to teach the second half of the course

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• To think!!!!• To learn!

What do I expect from you??

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• Lectures• Readings• Podcasts (interviews and

videos)• Class discussion (!)

Instructional method?

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Lowest GDP per head ($, 2008)

1. Burundi 1402. Congo-Kinshasa 1803. Liberia 2204. Guinea-Bisau 2705. Malawi 2906. Somalia 3007. Zimbabwe 3108. Ethiopia 3209. Eritrea 34010. Sierra Leone 350

Fastest growing cities (Total growth, 2010-15, %)

1. Yamoussoukro, Cote d’Ivoire 43.8

2. Ouagadougou, Burkina Faso38.5

3. Lilongwe, Malawi28.9

4. Blantyre, Malawi28.8

5. Abuja, Nigeria28.4

6. Huambo, Angola26.1

7. Luanda, Angola26.0

Trivia• Longest river?• Biggest desert?• Top 8 countries most

economically dependent on agriculture (all African)

• Least literate, most AIDS deaths

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Questions ???