The Development Corporation in Africa

Abstract

Economic is second only to political independence as a dominant theme on the continent of Africa. The newly independent countries in Africa are undeveloped economically, depend primarily upon one or a few raw materials which they produce and sell in the world market, and have too few citizens with appropriate managerial skills and entrepreneurial instincts. Aware of these facts, the governments of the new African nations want to encourage growth and diversification of their economies with increasing emphasis on industrialization-a process which will require help from abroad. The philosophical attitudes of impatient African nationalist leaders demand direct action, and their new governments can be expected to take an aggressive role in the of their economies. One technique used to help galvanize the national economy is the development corporation. This national institution has much the same purpose as the proliferation of financial and institutions designed to foster economic on a broader geographical scale-international institutions such as the International Bank for Reconstruction and Development (World Bank), International Finance Corporation, International Development Association, and Interamerican Development Bank, and national institutions with international scope such as the United States' Agency for International Development (formerly the International Co-operation Administration) and Development Loan Fund, now part of AID.' A representative African corporation is basically a financial institution and usually sponsored by the government, though some or all of its capital may come from private sources. Its object is to stimulate of the economy by promoting industrial, agricultural, and commercial enterprises. It has extensive powers to loan money, guarantee loans, make equity investments, supply nonfinancial assistance, and undertake other non-profit activities germane to economic development. In addition to supplying funds to others,