Balance of Payment in Africa

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Balance of payment deficit is an imbalance in a nation’s balance of payments in which payments made by the country exceeds payments received by the country. It’s also known as unfavourable balance of payment because more currency is flowing out then currency flowing in to the country. Unequal flow of currency will reduce supply of money in the nation and has implications for inflation, unemployment, production, and other factors of domestic economy (political, social, cultural and economic factors).

I agree with the statement that political, cultural, social and economic factors have forced countries in Africa to have consistent deficit balance of payment. Below are some findings and some supporting points on why such factors have contributed to a balance of payment deficit in Africa.

Africa is still today in a problem of how to separate private from public interests. ancient sentiments still characterized most of the continent as such is making it difficult to draw a line between elemental public which is the indigenous sphere defined in moral, ethnic and pre-colonial geographic terms and to some extent abstract is inherited from the colonial state. (Governance and the Economy in Africa. Tools for Analysis and Reform of Corruption IRIS, University of Maryland, 1996, p.9)

Corruption- It is argued that to win an election in Africa or in the developed world there is need of raising money particular in a scenario where the minority parties feel they are at a disadvantage. Therefore the need of more money is required to ensure a level of playing field and this cannot be over emphasized. However, since parties in Africa are usually poor also in terms of funding of activities, they usually implore funding from agencies th...

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...mplications of problems are never understood fully.

REFERENCES

AFRODAD (2002) Civil Society Participation in the PRSP Process: A Case for Tanzania. KwikPrint, Harare Zimbabwe.

Africa South of the Sahara (2004) by Europa Publications.

Bradshaw, S. and Linneker, B. (2003). Challenging Women’s Poverty: Perspectives on gender and poverty reduction strategies from Nicaragua and Honduras. CIIR-ICD: London.

Desai, V. and Potter, R. (2008). The Companion to Development Studies. Hodder Education: London. Available from: http://www.imf.org/external/np/exr/facts/prsp.htm [Accessed on 20th March 2011]

Girling John 1997, Corruption, Capitalism and Democracy, Routledge, London

Hashim, Osman.(1966). The Journal of Modern African Studies. Cambridge University Press.

www.europaworld.com (accessed on 26th march 2011)

www.apnacafrica.org/docs

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