Africa- The Oldest Economy

Africa has the oldest economic activity in the world, logically so because it is where mankind originated. This economic activity includes crop production, domesticated animals, tool making, hunting, fishing, traditional markets, and creating specialized economic activity communities such as fishing villages, to mention but a few. 

The continent boasts of some of the greatest civilizations in the world and the spread of civilization on the continent led to the rise of cities and empires which boosted trade with each other, evidenced by the trade routes that in some cases were also migratory routes. 
Looking back at pre-colonial Africa, agriculture is believed to have been practiced mostly along rivers, because there were not many advanced tools for clearing forests to make room for agriculture. Both simple and advanced ideas and technologies were continuously implemented and spread through the continent, and eventually immigrants from Africa spread some practices and skills to the other parts of the world. Of course as humankind migrated within and out of the continent, they introduced different products to their new settlements.
Image: Wikipedia
During the era of industrialization, western empires and countries sought to find cheap raw materials and labor, which led to the colonization of Africa. At the time, many African communities were practicing subsistence agriculture, and had little need for modern currency. Barter trade was the most common form currency. With time, “money” was introduced in the shape of cowry shells, gold and other currencies.  To integrate colonies into imperial trade networks and the world economy, colonial governments needed local citizens to engage in market activity.

One way to force participation in the large economy was the levying of taxes, with the requirement that they be paid in official colonial or imperial currency.  Producers were thus forced to sell at least some of any surplus in the market, to obtain the currency needed for payment of taxes. This led to wage employment and dependence on cash crops. 

In my recent episode on African women warriors, I mentioned some notable African female leaders. Some were very popular for their negotiation skills, and for securing favorable economic terms for their communities. Others out-right rebelled against unfair taxation by colonialists.

This could be attributed to the nature of African economies, which have historically been embedded in society and are not very separate from social organization. Labor on farms was - and in some places still is - considered a social family role or a community activity. In turn, the proceeds took care of everyone in the household or community. Work was also festive, and that is why there are tribal or cultural dances that imitate harvests or other productive activities.  Economists often ignore the role of such institutions in traditional African economies.
Image:Anoushka Mehrotra

Today, much of Africa still has an economy of subsistence agriculture.  At the same time, the continent’s reserves of rare or valuable raw materials and minerals are key to the global digital economy.  African countries with such natural resources are often disadvantaged because they lack the bargaining power that can only be achieved through negotiations by regional economic blocs or by strong leaders.

When it comes to technology and innovation, Africa is often branded as a background continent. However, specialists in the technology sector know that this is far from the truth. The difference is that technology in Africa is relevant to the social and economic setup of the communities in Africa. This is also known as local contextualization of technology.

Traditional banking systems had long excluded millions of Africans who work in the informal sector. By the turn of the century, people in Uganda, Ghana and Botswana started exchanging mobile airtime as a proxy for money transfers.

The Gamos consultancy and the Commonwealth Telecommunications Organization, undertook a study funded by the UK Department for International Development, which led to the creation of mobile applications for transferring money and conducting transactions, such as “M-Pesa” in Kenya and “Mobile Money” in Uganda. Launched about a decade ago, these services were widely adopted, years before mobile payment apps became common in America.

REGRETTABLY, Africa faces a paradox of critical thinkers who are not doers and doers who are not critical thinkers. These two need to merge to play a significant role in the inclusive digitization of the continent, to compete favorably in the world economic market.

Overall, Africa’s economy has always taken a different form than western economies. Historically, it has been characterized by efficient use of resources, and economic activities structured in smaller units, which do not directly correlate to concepts used by modern economists. Production is almost invisible because a significant amount is gifted to relatives and friends, as part of social obligations. Because these traditional economic systems still drive Africa’s economy, much of it remains informal and difficult to measure.  But it is important to note that this simplistic economy has survived for a very long time. 

Image: Bryan Crite
Vivian Birchall- Author

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