Africa has often been slated as the world's basket case. It had largely remained underdeveloped in every sense of the term due to failure of national governments to effectively implement active developmental measures. Aid from international organizations such as World Bank and International Monetary Fund (IMF) have fallen through due to insipid and corrupt governments. The only bright spot has been Botswana which has been able to achieve sustainable development and economic prosperity maintaining political stability and a good governance.
But in the last decade we have seen some distinct improvements. The scourge of corruption and ineffeciency is being brought under control, notably in Ghana and Rwanda. Investment from non-traditional sources, particularly China, but also Israel and Iran, are spurring new economic development. And this in turn is helping Africans themselves to push for more change.
Political economy can be defined as politics of economic relations between countries. It is widely referred to as the political and economic terms among countries whereby governments’ or polities’ frame national policies along the lines of political and economic considerations. Needless to mention, various economic policies such as fiscal and monetary policies are made keeping in mind political dimensions.
Political economy studies in the context of African or African Political Economy focuses on a wide range of issues from the politics of imperialism, the post independence policy, developmental issues, agrarian economy perspectives, popular and democratic struggles, the socio-economic aspects of class and gender with the rising menace of AIDS and economic crises like external debt plaguing many African countries. Political economy or the International Political Economy (IPE), a marriage between International Relations and Political Economy, as it is widely known today encompasses issues effectively and leads to a comprehensive study of the national and international issues. African political economy has assumed even more importance today with rising population growth, unemployment, crime rate and urbanization affecting many economies. This decline in the social and economic sphere started way back in the 1970’s and the 1980’s and had continued in the 90’s mainly due to the bad governance problem. Thus many economists label the 1980’s as Africa’s 'lost decade'.
The southern African country of Botswana is one of the most prosperous countries in Africa with per capita GDP reaching to $ 11,400 in 2006 measured on a per capita basis. After gaining independence from the British in 1966, the country achieved high growth rates of over 5% with growth rates slightly slowing down to about 4.7% in 2006. As mentioned, progressive economic reforms set the pace of development with diamond mining fuelling most of the change accounting for 70%-80% of the export earnings. But issues such as rising inflation rates and growing unemployment remain the major concerns which were at 11% and 23.5% respectively for the year 2006.
East or Central African countries such as Somalia, Sudan, Ivory Coast and Nigeria are still coping up with the changes in the modern globalized economy. The prevalence of armed conflicts in countries such as Senegal and further away in Sudan is claiming many lives and is putting a severe halt to economic development of the nations. The recent incidents of oil supply pipe blasts in the oil-rich nation of Sudan due to ethnic tensions bears testimony to the issue. Further, the issue which is gaining momentum in these regions is the prevalence of Small Arms and Light Weapons (SALW) which is being supplied by the developed nations to fuel tensions in the region.