Economic history of Africa

The earliest humans were hunter gatherers who were living in small, family groupings. Even then there was considerable trade that
could cover long distances. Archaeologists have found that evidence of trade in luxury items like precious metals and shells across the
entirety of the continent.
African economic history often focuses on explanations of poverty and obscures other aspects such as the achievements of African
farmers, traders and states, including improvements in food security, and episodes of economic growth.[1]

A hunter-gatherer is a human living in a society in which most or all food is obtained by foraging (collecting wild plants and
pursuing wild animals). Hunter-gatherer societies stand in contrast to agricultural societies, which rely mainly
on domesticated species.

Africa has the longest and oldest economic history. Humanity originated in Africa, and as soon as human societies existed so
did economic activity. Earliest humans were hunter gatherers living in small, family groups. Even then there was considerable trade
that could cover long distances. Archaeologists have found that evidence of trade in luxury items like metals and shells across the
entirety of the continent were the main trades of the Berber people, lived in dry areas and became nomadic herders, while in
the savannah grasslands, cultivated crops and thus permanent settlement were possible. Agriculture supported large towns, and
eventually large trade networks developed between the towns.
Origins of agriculture
The first agriculture in Africa began in the heart of the Sahara Desert, which in 5200 BC was far more moist and densely populated
than today. Several native species were domesticated, most importantly pearl millet, sorghum and cowpeas, which spread
through West Africa and the Sahel. The Sahara at this time was like the Sahel today. Its wide open fields made cultivation easy, but
the poor soil and limited rain made intensive farming impossible. The local crops were also not ideal and produced fewer calories than
those of other regions. These factors limited surpluses and kept populations sparse and scattered. North Africa took a very different
route from the southern regions. Climatically it is linked to the Middle East and the Fertile Crescent, and the agricultural techniques of
that region were adopted wholesale. This included a different set of crops, such as wheat, barley, and grapes. North Africa was also
blessed by one of the richest agricultural regions in the world in the Nile River valley. With the arrival of agriculture, the Nile region
became one of the most densely populated areas in the world, and Egypt home to one of the first civilizations.
The drying of the Sahara created a formidable barrier between the northern and southern portions of the continent. Two important
exceptions were Nubian Sudan, which was linked to Egypt by the Nile and Ethiopia, which could trade with the northern regions over
the Red Sea. Powerful states grew up in these regions such as Kush in Nubia (modern day Northern Sudan and Southern Egypt)
and Aksum in Ethiopia. Especially from Nubia, ideas and technologies from the Middle East and Europe reached the rest of Africa.
Historians believe that iron working developed independently in Africa. Unlike other continents Africa did not have a period
of copper and bronze working before their Iron Age. Copper is quite rare in Africa while iron is quite common. In Nubia and Ethiopia,
iron, trade, and agricultural surpluses lead to the establishment of cities and civilizations.
The Bantu expansion
Further information:  Bantu expansion
Ordinarily, in the sparsely populated areas, this same period saw the expansion of the Bantu speaking peoples. The Bantu
expansion began in Southern Cameroon around 4000 years ago. Bantu languages are spoken there today and there is archaeological
evidence for incoming Neolithic farmers in Northern Gabon c. 3800 BC. It is known that Bantu expansion was extremely rapid and
massive, but its exact engine remains controversial. This period predated iron, which appears in the archaeological record by 2500 BC.
One of the early expansions of Bantu was the migration of the Bubi to Fernando Po (Bioko). They were still using stone technology at
first. The difficulties of cutting down the equatorial forest for farming have led to the suggestion that the primary expansion was along
river valleys, a hypothesis supported by studies of fish names. Another factor may have been the arrival of southeast-Asian food crops,
notably the AAB plantain, the cocoyam and the water-yam. Linguistic reconstructions suggest that the only livestock possessed by the
proto-Bantu was the goat. Over the centuries the entire southern half of Africa was covered with the group, excluding only
the Kalahari desert. Their expansion only ended relatively recently. In the year 1000, Arab traders described that the Bantu had not
reached as far as Mozambique, and European settlers observed the Bantu expansion into South Africa under the Zulu and others.
The importation Bantu pastoralism reshaped the continent's economy. Sometime in the first millennium, an equally important change
began as crops began to arrive from Southeast Asia. The Indian Ocean has always been far more open to trade than the
turbulent Atlantic and Pacific. Traders could ride the monsoon winds west early in the year and return east on them later. It is guessed
that these crops first arrived in Madagascar, which also adopted Southeast Asian languages, sometime between AD 300 and 800. From
the island, the crops crossed to African Great Lakes region. They included many crops, the most important being the banana.
The banana and other crops allowed for more intensive cultivation in the tropical regions of Africa, this was most notable in the Great
Lakes region, and area with excellent soil, that saw many cities and states form, their populations being fed largely

Aksumite gold coin of Endubis.

Early trans-Saharan trade routes.
While some level of trade had been ongoing, the rise of cities and empires made it far more central to the African economy. North
Africa was central to the trade of the entire Mediterranean region. Outside of Egypt, this trade was mostly controlled by
the Phoenicians who came to dominate North Africa, with Carthage becoming their most important city. The Greeks controlled much
of the eastern trade, including along the Red Sea with Ethiopia. In this region a number of Greek trading cities that were established
acted as a conduit for their civilization and learning.
The Egyptian (and later, Roman) city of Alexandria (founded by Alexander the Great in 334 BC), was one of the hubs for
Mediterranean trade for many centuries. Well into the 19th century Egypt remained one of the most developed parts of the world.
Nubia in Sudan likewise traded with interior African countries such as Chad and Libya, as well as with Egypt, China, India and the
Arabian peninsula.
For most of the 1st millennium AD, the Axumite Kingdom in Ethiopia and Eritrea had a powerful navy and trading links reaching as
far as the Byzantine Empire and India. Between the 14th and 17th centuries, the Ajuran Sultanate centered in modern-
day Somalia practiced hydraulic engineering and developed new systems for agriculture and taxation, which continued to be used in
parts of the Horn of Africa as late as the 19th century.
On the east coast of the continent Swahili traders linked the region into an Indian Ocean trading network, bringing imports
of Chinese pottery and Indian fabrics in exchange for gold, ivory, and slaves. Swahili Kingdoms created a prosperous trade empire,
where occupied the territory of modern-day Kenya, Tanzania and Uganda. Swahili cities were important trading ports for trade with
the Middle East and Far East.
In the interior of Africa, trade was far more limited. Low population densities made profitable commerce difficult. The massive barrier
of the Congo rainforests were more imposing than the Sahara, blocking trade through the center of the continent.
It was the arrival of the Islamic armies that transformed the economies of much of Africa. Though Islam had comparatively little
impact on North Africa where large cities, literacy, and centralized states had been the norm, Muslims were far more effective at
penetrating the Sahara than Christians had been. This was largely due to the camel, which had carried the Arab expansion and would
soon after carry large amounts of trade across the desert.
A series of states developed in the Sahel on the southern edge of the Sahara which made immense profits from trading across the
Sahara. The first of these was the Kingdom of Ghana, reaching it peak in the 12th century. Soon, others such as the Mali
Empire and Kanem-Bornu, also arose in the region. The main trade of these states was gold, which was plentiful in Guinea. Also
important was the trans-Saharan slave trade that shipped large numbers of slaves to North Africa.

Economic growth in West Africa

Growth has been present throughout the continent, with over one-third of Sub-Saharan Africa countries posting 6% or
higher growth rates, and another 40% growing between 4% to 6% per year. Several international business observers have also
named Africa as the future economic growth engine of the world.

ECONOMIC GROWTH AND TRADE

West African economic growth rates have been insufficient in most countries to make significant reductions in poverty.  Essentially,
West Africa’s farmers and firms produce and trade in highly localized markets and do not achieve the sufficient economies of scale
required to attract broad-based investment that could accelerate growth and reduce poverty. This is due to a number of constraints
including inefficient transportation and trade barriers along corridors and at borders, a heavy reliance on family and informal sources
of financing, and an insufficient supply of reliable and affordable power. These factors result in West African products being
uncompetitive in the international market place.

USAID/West Africa’s strategy is to work through regional organizations and private sector associations to address critical constraints
to competitiveness and demonstrate West Africa’s productive potential in order to trigger greater regional investment. 

West Africa Trade Hub

USAID/West Africa’s Trade Program is implemented through the West Africa Trade Hub in Accra, Ghana, in close coordination with
a network of African regional private sector partners and public institutions, including the Economic Community of West African
States (ECOWAS)(link is external) and the West African Economic and Monetary Union (WAEMU)(link is external). The
Trade Hub works through regional private sector 
associations to assist farmers and firms to meet product quality standards and market requirements, and to produce commercial
quantities. The USAID West Africa Trade Hub also assists key regional private sector associations to negotiate and meet contractual
obligations and access finance.

African Private Sector Alliances

USAID/West Africa focuses on private sector alliances in the Livestock and Grains, Transportation, Cashews, and Shea sectors:

Regional Trade in Livestock and Grains: 

USAID/West Africa’s Feed the Future strategy identifies livestock (cattle, sheep and goats) and grains (maize, rice, millet and
sorghum) as critical staple foods for regional food security. These provide a substantial portion of the protein and calories in the West
African diet, and regional trade is essential to ensure access to food and improve nutrition and resiliency to drought and climatic
shocks.
Regional trade in livestock and grains faces a number of competitive challenges. Low yields make local rice uncompetitive with Asian
imports. The expansion of maize production is constrained by aflatoxin and informal bans by West African governments. Trade in
cattle and small ruminants are constrained by poor transportation and graft along trade corridors. Livestock trade is confined to live
animals because cuts of local red meat cannot compete with imports. Improving storage life and product quality are among the top
priorities of regional agricultural association members.

USAID is building the capacity of the West Africa Grains Network (WAGN) and the regional association for livestock and meat
(COFENABVI) to help their members meet product requirements, negotiate formal contractual obligations, and access financial
services. The Trade Hub and Partner Network link West African farmers to regional processors and facilitate better access to
information on market opportunities and increase the understanding of market requirements. This includes building smallholder
farmers’ capacities to meet health regulations and grading, handling, and sorting requirements.

African Cashew Alliance (ACA):(link is external)

Smallholder production of cashews has more than doubled in the past decade, but processing in Africa remains a small share of global
production. However, African cashew processing is on the rise (35,000 MT in 2006 to 114,500 MT in 2012). It is estimated that even
a 25 percent increase in RCN processing will generate over USD 100 million in household income. The ACA, established in 2006,
provides support and technical assistance, facilitates investments, and promotes market linkages in the cashew industry. The Alliance
currently consists of 198 dues-paying member companies ranging from producers to processors and international buyers. The ACA
has facilitated the establishment of new cashew processing factories in the region, including the largest cashew factory in Africa. In
collaboration with the world’s largest cashew buyers - Kraft Foods, Intersnack, and Red River Foods - the Alliance developed the
ACA Quality and Sustainability Seal program to assure compliance with international food safety, quality, and labor standards. The
ACA Seal program has provided an opportunity to grow demand on the international market for cashews processed in Africa.

Borderless Alliance:
High transport costs in West Africa translate into lower prices for the goods of farmers and other producers, and make imports more
expensive. Major causes of high transport costs include bribery, administrative delays, arbitrary check-points, high taxes, inefficient
trade procedures, and poor infrastructure. Incorporated in September 2011, the Borderless Alliance represents a private sector-led
coalition to increase trade in West Africa and foster change by exposing trade inefficiencies throughout the region. To address the
issues of sustainability and effectiveness, the Borderless Alliance has evolved from an advocacy campaign into the region’s leading
free trade advocacy organization. From an initial group of six, the Borderless Alliance now has more than 50 dues-paying members
from the private sector across West Africa. Its membership base draws from a broad range of organizations involved in the various
supply chains including port authorities, freight forwarders, logistics operators, manufacturers, traders and farmers. The Borderless
Alliance’s premise is that by working together, businesses and traders can advocate effectively for change.

Global Shea Alliance (GSA):(link is external)

The shea industry in West Africa is rapidly expanding. Demand for shea butter produced in the region increased by more than 1,200
percent over the last 10 years. The GSA was established in 2011 to help make the shea industry more competitive, sustainable, and
profitable for its workers who are primarily women. It has over 350 members from around the world, including the world’s largest
buyers of shea nuts and butter, traders, processors, service providers, women’s groups, international brands and retailers, and non-
profit organizations. The GSA supports major initiatives in quality control, standards, and traceability. It works to improve the 

quality of West African shea products through developing training materials that demonstrate best practices in post-harvest shea nut
processing and handling. The GSA is developing industry-recognized quality standards for shea nuts and, finally, is facilitating direct
purchases between collector groups and shea nut buyers to encourage faster processing, which also promotes traceability.