Why is Africa Poor?

[MMMark]

Wed. 10/03/24 12:53 EDT
.post #25

@Benjamin

Almost all cocoa is grown in Africa, for example, but there’s not a single chocolate factory on the continent.

According to this article, Nestle has one, and Cadbury maintains several chocolate factories in Africa:

Cadbury also has manufacturing plants in Swaziland (producing Chappies bubblegum and Eclairs), in Botswana (producing Stimorol and Clorets gum products) and Namibia (producing seasonal products such as Easter eggs and Valentines and Christmas offerings).

The Port Elizabeth plant supplies some of the chocolate for the Namibia plant and the caramilk for the Eclairs manufactured in Swaziland.

Due to the aggressive growth in the market and demand for Cadbury products, says Meiring, the chocolate manufacturer will continue to invest significantly in its Nelson Mandela Bay manufacturing plant.

Nestlé, the world’s largest food and beverage firm, was registered as a company in South Africa in 1916 – with its first factory being established in East London 44 years after its first products arrived in the country in 1872.

“Visiting the East London plant is always exciting for me,” says Theo Mxakwe, director of corporate communication and public affairs at Nestlé. “This factory is unique as it is the only chocolate manufacturer Nestlé has in South Africa, but punches way beyond its weight as a supplier of chocolate to the southern, eastern and equatorial African regions.”

@Benjamin

And of course all the real money is in finished goods, not raw materials.

I’m not sure where this came from, what it means, and how it is relevant to the question “Why is Africa Poor?”

@Southern

I was refering to this statement: “I don’t disagree, except in the case of Botswana, whose literacy rate, while not stellar, is certainly higher than some other African countries, and even some other outside countries.”

…a statement I made when you pointed out the low literacy rates of sub-saharan African countries.

If we attribute poor economic performance to “blackness,” then yes, Botswana IS “the exception.” The existence of such a glaring exception to the “rule” suggests that the attribution may be wrong.

If we attribute poor economic performance to a sub-minimal level of liberty, then we don’t find exceptions to the “rule” and, in the case of Botswana, find CORROBORATION. This tends to support the validity of the attribution.

@MMMark

More likely is that the entire continent is a vast treasure-trove, as yet mostly undiscovered. This situation will change as Africa becomes increasingly infected with the ideas of liberty.

@Southern

…which implies that botswana’s particular natural wealth is not unusual. Which it is.

I don’t know what Botswana’s particular “natural wealth” is; you’ve said it’s diamonds. Of course, South Africa is also rich in diamonds, so right off the bat, Botswana’s diamond resource is not “unusual.” It’s reasonable to assume that undiscovered diamonds exist in other parts of Africa (not necessarily ALL other parts) but not reasonable to assume existence JUST in Botswana and South Africa.

It’s also reasonable to assume that DIFFERENT, undiscovered “natural wealth” resides in other parts of Africa.
Instituting liberty is the way to find out.

I want to take time out here to recommend, if you haven’t already read it, a book by Julian Simon, entitled The Ultimate Resource.

@MMMark

Capitalists don’t care how “easy” a resource is to “access”; they care about whether they can make a profit.

@Southern

Sure they do.

Okay, okay, but you get my point, which is that “ease of access” is only one of the factors. What decides, ultimately, whether the capitalist invests is the answer to the question “Can I make a profit?” As a “crude” example, oil is not “easy” to “access” in Alberta’s tar sands, but when the price per barrel exceeds a certain amount, extraction becomes profitable and proceeds. What also happens, typically, is that better methods are then developed, which reduces costs. Again, please read The Ultimate Resource.

But without some assurance that he gets to keep his profits, the capitalist will not make the initial investment. He’ll simply take his capital elsewhere, where the “institutional factors” are more liberty-oriented. The “blackness” of the population has nothing to do with it.

@Southern

Anyway the US poverty statistics, again, were not meant to illistrate why africa is poor. Only that institutional factors do not explain away why Africa is poor.

I don’t see that they illustrate this. Even within the U.S. black “poor” population, differences in economic performance exist. All this means is that people are different. This is true everywhere. In order to illustrate “…that institutional factors do not explain away why Africa is poor,” you’d have to find the institutional equivalent of a poor African country that is, nevertheless, wealthy. What we do find is that countries that trample liberty (such as many African countries) are poor, while countries that allow at least some liberty (such as the U.S.A., South Africa and Botswana) thrive.

@Southern

…they were used to demonstrate how “liberty” does not account for all differences in economic performance. Nothing more.

…but we’re examining “Why Africa is Poor,” not “what accounts for differences in economic performance.” It seems to me that these are totally different questions. The first pertains to the wealth of a country, while the second pertains to the differences between individuals.

@Southern

Was attempt to control for African populations and “liberty”. A way of looking at African populations outside of African institutions,

“African,” or “black”? “African populations” (i.e. the populations of African countries) include non-black individuals.