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Balance-of-Payments Problems of African Countries

Published online by Cambridge University Press:  11 November 2008

Osman Hashim Abdel-Salam
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Extract

The difficulties experienced by some African countries in settling their external payments have become a matter of considerable concern, both to the countries themselves as well as to the regional and international institutions concerned with economic and financial development. More and more countries are plagued by these difficulties, while the difficulties themselves continue to multiply. Nevertheless, it appears that the nature, the size, and the implications of these payments problems are not always fully understood. This article seeks to analyse them, to emphasise the need for further study and to seek possible solutions.

Type
Articles
Information
The Journal of Modern African Studies , Volume 4 , Issue 2 , October 1966 , pp. 155 - 176
Copyright
Copyright © Cambridge University Press 1966

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References

Page 155 note 1 For America the ratio is six per cent for both exports and imports.

Page 156 note 1 For more detailed discussion of the importance of foreign trade for Africa, cf. ‘Balance of Payments Problems in Developing Africa,’ in the United Africa Company, Statistical and Economic Review (London), 29, 04 1964.Google Scholar

Page 156 note 2 Jucker-Fleetwood, Erin E., Money and Finance in Africa (London, 1964), ch. xxv.Google Scholar

Page 157 note 1 Meade, J. E., The Theory of International Economic Policy, vol. I, The Balance of Payments (London, 1951), p. 11.Google Scholar

Page 158 note 1 Meade, op. Cit. p. 15.

Page 158 note 2 E.g. Jucker-Fleetwood, op. Cit. p. 292.

Page 161 note 1 Sources: mainly I.M.F., Balance of Payments Yearbook, International Financial Statistics, supplemented by national publications. The source for franc zone countries, except Morocco and Tunisia, is Comité Monétaire de Ia Zone Franc, La Zone Franc.

Page 161 note 2 Dahomey, Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta.

Page 161 note 3 Central African Republic except Cameroun, i.e. Chad, Congo (Brazzaville), and Gabon.

Page 163 note 1 Sources: mainly I. M. F., International Financial Statistics, supplemented by national publications.

Page 166 note 1 Devons, Ely, ‘World Trade in Invisibles’, in Lloyds Bank Review (London), 04 1961.Google Scholar

Page 166 note 2 Ethiopia, Ghana, Morocco, Nigeria, Somalia, Sudan, Tunisia, and the former Federation of Rhodesia and Nyasaland.

Page 167 note 1 Sources: mainly I. M. F., Balance of Payments Yearbook, International Financial Statistics, supplemented by national publications. The source for franc zone countries, except Morocco and Tunisia, is Comité Monétaire de la Zone Franc, La Zone Franc.

Page 168 note 1 Banque centrale des états de l'Afrique de l'ouest.

Page 168 note 2 Banque centrale des états de l'Afrique équatoriale et du Cameroun.

Page 169 note 1 Sources: mainly I. M. F., International Financial Stalistics, supplemented by national publications. Note: G & S = Goods & Services; C A= Current Account.

Page 170 note 1 International Bank for Reconstruction and Development, ‘Economic Growth and External Debt—An Analytical Framework’, E/CONF. 46/84.

Page 170 note 2 Ethiopia, Kenya, Malawi, Nigeria, Rhodesia, Sudan, Tanzania, Uganda, and Zambia.

Page 171 note 1 Sources: mainly I. M. F., International Financial Statistics, supplemented by national publications. Note: A plus sign indicates a net inflow of capital, or a net addition to reserves (normally as a result of an active current account balance or an excess of capital inflow over current account deficit). A minus sign indicates a net capital outflow, or a net reduction in a country's reserves (due to drawing necessitated by a balance of payments deficit that could not be fully financed out of capital inflow). C=Capital; E R=External Reserves.

Page 172 note 1 The Organisation for Economic Co-operation and Development Secretariat estimates that 60 per cent of total official bilateral contributions have been in the form of grants and grant-like contributions. O.E.C.D., The Flow of Financial Resources to Developing Countries in 1961 (Paris, 1963), p. 18.Google Scholar

Page 172 note 2 The return flow of profits from mining activities should not, however, be under-estimated. Generally speaking, income transfers are especially large in countries where extractive industries represent a significant sector of economic activities, e.g. Libya, Algeria, Liberia, Congo (Kinshasa), and Zambia. Mining concerns in these countries depend mainly on foreign investment, including both physical capital as well as the highly skilled and highly paid manpower employed in these massive businesses. It is thus the degree of foreign domination in the economy that determines the over-all size of the outflow of income transfers, and not only in mining: plantation agriculture and export-import trade are also important.

Page 174 note 1 Sources: I. M. F., Inerntio, w1 Financial Statistics.

Page 175 note 1 Sources: as for Table I.