Theory question 104
Economic Growth and DevelopmentSection B: answer three questions only from this section.
Highlight the economic problems associated with the dependence of West African countries on primary production.
Show the model answer
Unstable export earnings: prices of primary products fluctuate widely on world markets
Worsening terms of trade: prices of primary exports tend to fall relative to manufactured imports
Low and inelastic world demand for many primary products
Dependence on weather, pests and diseases makes output uncertain
Low income and low standard of living for producers; low value added
Little industrialisation: raw materials are exported unprocessed, so jobs and skills are created abroad
Balance of payments problems and dependence on foreign aid and loans
Mono-product economies are very vulnerable when that product's price falls
Difficulty in planning because government revenue is unpredictable
Exhaustion of non-renewable resources such as minerals
Give at least five problems, each with a short explanation.