This chapter covers the overview of the country in a short history, banking system, commercial banks and interest rate theory. The chapter provides also the theoretical review of interest rate and profitability. 2.1 HISTORICAL OVERVIEW The Congolese historical situation is dominated by a series of conflicts such as political (civil wars), socio-political, and a financial system confiscated by the ancient colonizer, in controlling everything in economic activities, political system, banking system, so on., since its independence in 1960. The resources wealth of the Congolese economy were drastically declined in the mid-1980s. The political conflicts, first and second Congo civil wars had reduced the national output, foreign direct investment …show more content…
The Congolese economy is excessively based in the oil sector, which represents about 52% of its GDP, 85% of its exports, and 70% of public revenue. The industry, non-oil sector, despite to Congo’s great potential is underdeveloped. The GDP was $12.6 billion and GDP per capita $3,700. Formerly ranked as a lower-middle- income country, per capita income has declined steadily since the late 1980s. The inflation and annual real growth were respectively 2.6% and -1.6%. We may significantly notice that more of the Congolese economic activities are not reflected the in GDP data and took place in the informal sector. The GDP by sector was represented as follow, industry (65%), agriculture (5%), and services …show more content…
The World Bank and some international financial institutions forced the Congolese government to make reforms for reducing the size of the state bureaucracy and a civil service payroll that represented more than 20% of GDP in 1993. The decision carried out for reduction started in 1994 with a 50% devaluation that decrease in half the payroll and by a mid-year reduction of 8,000 in civil service employment and that ended to the inflation of 61%. The Congolese economy had a difficult transition between the period 1994 and 1996 after the political conflicts. The Congolese government decided to take some measures to liberalize its economy by reforming the tax, labor, and other hydrocarbon codes. It made also privatization plans of telecommunications and transportation monopolies which will help to improve an unreliable infrastructure. In June 1996, the International Monetary Fund (IMF) for building a healthy economy and solving the problem approved a three year economic
"Economic Development. (From the Library)." Government Finance Review 17.6 (Dec 2001): 58(1). General OneFile. Gale. Apollo Library. 19 May 2008 ..
One of the largest industries within Sierra Leone is mining industry due to it's natural resources such as diamonds. This has caused an issue of food production as many of the youths in Sierra Leone have chosen mining over agriculture. The mining industry offers the potential of making large sums of money so many workers are switching due to “the lure of striking it rich”(Grant Andrew, 2007) . The idea of workers making lager sums of money in other industries is one of the main reasons why their is a labour shortage in the agriculture sector. Although researchers found that “Flooding the labour market in the diamond sector will further reduce the already
When studying Angola’s inflation rates and economy structure it is important to understand the inherent challenges faced. Unlike the US, Angola has a poorly developed infrastructure that makes moving goods and equipment difficult and costly. Also Angola suffers from an inefficient trading system with her African neighbors. Each side is required to first exchange their currencies into a third party foreign currency, like the US dollar, then they can conduct business. This makes transactions complex, time consuming, and expensive. Examples like this form the basis on why Angola’s inflation rates are relatively high. From 2009 to 2011 Angola dealt with rates between 13.5% and 14.5%. From 2012 to 2014 the inflation rates have steadily declined
The economics of Haiti has deceased in the last 4 years after the devastating earthquake that struck it 4 years ago. The Haiti economy has become very poor and one of the poorest country in the south, Central America and Caribbean region making it ranked 24 out of 29 countries in this area and its overall score is below average. Haiti’s economic freedom is 48.1 making it economy the 151st freest country while in the last several years Declines in the management of government spending, freedom from corruption, and labor freedom make its overall score 2.6 points lower than last year. Recovering from the disastrous earthquake in 2010 with the support of the U.S. recovering efforts “Haiti’s post-earthquake reconstruction efforts continue, assisted by substantial aid from the international community. Governing institutions remain weak and inefficient, and overall progress has not been substantial. The parliament has not renewed the mandate of the Interim Haiti Recovery Commission, which had been tasked with overseeing reconstruction efforts but was unpopular.”( .heritage.org). The open market of Haiti trade weighted to be 2.1 this is because the lack of tariffs hamper the trade freedom of Haiti. Foreign investors are given national treatment but the investment is small and the financial sector is remained underdeveloped and does not provide any adequate support.
As Sovereign over the people in the Congo, everyone was forced to do their share labor. In the 80s and 90s the need for rubber for the bicycle and car industry increased, this was the reason for such demand. The Congo had the worlds largest supply of wild rubber which meant a lot of money coming in for Leopold if he kept up with the need for rubber. Each person has to meet a quota of materials to keep up with the demand Leopold set. The Congo became one large...
The Congo Crisis was a war of cultures between the US and the USSR. Despite the Soviet Union having some support within the Congo, the US was able to prevail and instill capitalism by taking more direct action in the Crisis and by ensuring the new leader of Mobutu was friendly to American interests. The Congo Crisis negatively affected decolonization by serving as an example of the failings of an independent state ran by Africans, despite a majority of problems coming from foreign influence. As a battle of the Cold War, the Congo acted as foreshadowing to the US success over the USSR and as proof to the West that capitalism was the best and foreign ideas were inferior, negatively affecting their opinions of other states for years to come.
The Democratic Republic of the Congo, short DR Congo or DRC, is a country situated in Central Africa with a long history of civil unrest. The official language is French, it is supposed to be an ethnically neutral language, due to the many ethnic groups found in the DRCongo. During the Belgian colonization French and Dutch were both official languages but French was more widely spoken. Today about 30% of the population speak French either as their first or second language. The Belgian colonization played an important role in the history of DR Congo. In 1884-1885 at the Berlin West Africa King Leopold II got the rights for the Congo. The many natural resources of the Congo, such as rubber, were a way for the Belgian king to increase his wealth, but it led to brutality against the local population. The rubber brought fame to King Leopold but the Congolese population, still to this day, feel like they do not get recognized enough. The DRCongo suffered a long period of suppression, corruption and poor leadership. Even after they gained independence from Belgium on 30 June 1960, they were still described as unstable. Colonialism, however was not the only longtime cause of the weakening of the country, others were the cold war and the democratic transition of the DRC...
From 1965 to 1975 he was able to build the economy based on the copper boom. On the other hand, he quickly destroyed it by appropriating all local businesses and turning them over to chersonese. Moreover, he did built the first hydroelectric dams in the region as well as established hospitals and a state television system. He also change the name of the state from Congo to Zaire. What at first seemed was a positive coup quickly became obvious to the people that it was not going to be peaceful or and open government that would ultimately factor into the Congo
Gabon’s GPD (gross domestic product) is estimated to be around 7.7 billion dollars. The GPD is divided into three sections the first being agriculture making up 8%. Gabon’s agriculture consists of cocoa, coffee, sugar, palm oil, cattle, and fish. The second section, industry, contributes 67% of the nations GPD. Gabon’s industry includes textile, lumbering and plywood, petroleum, cement, manganese, uranium, gold mining, and chemicals. Oil was located of the coast of Gabon in the 1970’s. Petroleum alone now makes up 50% of the GDP. The last section of the GDP is services, making up 25%. Ship repair supplies the most to this category of the GDP.
Prior to 1960, Belgium and their King, Leopold ruled the Congo region. They held great interests in the rubber industry and created harsh labor camps that exploited the people. That is why after gaining independence in 1960, the nation then known as Zaire plunged into chaos. Military unrest coupled with oppressive warlord throughout the region made it a very unstable state, ready to collapse. Nowadays, U.N. peacekeeping forces hold posts in the nation to maintain its stability. The United States has had foreign relations with the country from 1960 and has signed many treaties to help promote growth in the region. One such document is the Peace, Security and Cooperation framework that exists between the United States and the Democratic Republic of the Congo as well as 10 other African nations. I believe that The Peace, Security and Cooperation framework definitely helps to promote the United States best interest in the DRC due to access to oil, prevention of military destabilization in the region as well as benefits from African businesses.
When Congo gained its independence from Belgium it struggled to develop and remained a weak state. There were many factors that led to Congo being unable to progress and create strong institutions within its countries borders. “Political divisions along the ethnic lines were prevalent, though this fact could be misleading. Ethnicity became the primary source of political mobilization i...
Liberia was free and in debt while the Congo was being colonized by Belgium and undergoing torture. The citizens of the Congo were being forced into slavery and were economically exploded. The citizens of the Congo were being forced to work hard labor and live in inhumane conditions. There was no organized government controlling them. Belgium was exploiting the Congo and killing any disobedient citizens. Although the Congo suffered much more then Liberia, Liberia was still suffering. Similarly to the Congo, Liberia was going through economic troubles. Liberia was trying to modernize their country, which lead to foreign debt. This debt lead to many countries trying to step in and a loss of a large sum of land in Liberia. Luckily, due to other countries interests in having an alliance with the USA, Liberia’s government was never overthrown. Some of Liberia’s natural resources are diamonds, iron ore, rubber, and gold. Similarly, three major resources in the Congo are gold, diamonds, and rubber. During this time period, the Congo definitely got the short end of the stick. Nigeria also got the short end of the
The question to be answered in this paper is to what extent has the resource curse affected the Nigerian economy and government? Resource curse is a term that states the observation that countries that have a plethora of natural resources (e.g. oil, coal, diamonds etc.). usually have unstable political and economic structures (Sachs, 827). Nigeria is categorized as a nation that has succumbed to the resource curse as it has an abundance of, and an overdependence on, oil, and a decreasing gross domestic product (GDP) (Samuels, 321-322). Nigeria is known for its specialization and overdependence on oil and according to Ross, nations of such nature tend to have high levels of poverty, large class gaps, weak educational systems, more corruption within the government, and are less likely to become democracies (Ross, 356).
But the growth has not been inclusive, broad-based and transformational. The implication of this trend is that economic growth in Nigeria has not resulted in the desired structural changes that would make manufacturing the engine of growth, create employment, promote technological development and induce poverty alleviation. Available data has put the national poverty level at 54.4 per cent. Similarly, there has been rising unemployment with the current level put at 19.7 per cent by the National Bureau of Statistics
A variety of groups are concerned in bank profitability for various reasons. The bank shareholders would want to know if the value of their investments is high or low. The investors also use current and past performance to predict future price of the banks’ shares traded on the stock exchanged. The management of the bank as trustee of the shareholders is evaluated and compensated on the basis of how well their decisions and planning have contributed to growth in assets and profits of their banks. Employees of bank also are concerned with profits, since their salaries and promotions are frequently tied to the profitability performance of their banks. Depositors use bank performance and profitability as indicators of security for their deposits in the banks. Finally, business community and general public are concerned about their banks’ performance to the extent that their economic prosperity is linked to the success or failure of their banks.