Highlight the economic problems associated with the dependency of West African countries on primary production.

Answer Details

Primary production means the extractive activities that draw raw materials directly from nature, such as farming, mining, fishing and lumbering. Most West African economies earn the bulk of their income from a few unprocessed primary exports (cocoa, groundnut, crude oil, timber). This narrow dependence creates several economic problems.

• Price instability and unstable income. Prices of primary commodities fluctuate sharply on the world market because both demand and supply are inelastic. A poor harvest or a global glut swings export earnings wildly, making national income and government revenue unpredictable and planning difficult.
• Unfavourable terms of trade. The prices of primary exports tend to rise slowly (or fall) while the prices of the manufactured goods these countries import keep rising. A given quantity of exports therefore buys fewer imports over time, transferring real income abroad.
• Low income elasticity of demand. As world incomes rise, demand for foodstuffs and raw materials grows only slowly, so export earnings do not expand as fast as the country's need for imports.
• Balance of payments problems. Because export receipts are small and unstable while imports of manufactures and capital goods keep growing, these economies frequently run current-account deficits and pile up external debt.
• Low value added and slow industrial growth. Selling raw materials rather than finished goods means the value that would have been created by processing is captured abroad, so manufacturing, technology and skilled employment remain underdeveloped.
• Vulnerability to nature and to foreign control. Output depends on weather, pests and disease, and the volume and price are largely determined by foreign buyers, leaving the economy exposed and dependent.
• Unemployment and underemployment. Primary activities are seasonal, so labour is idle in the off-season, and mechanised mining employs few people.

Examination takeaway: group your points around price instability, unfavourable terms of trade, balance of payments strain and weak industrialisation, and explain why each follows from selling unprocessed primary goods rather than simply listing them.