Data Response K4.5

Upwardly mobile Africa: key to development lies in their hands

1. Explain how improving infrastructure, like establishing mobile phone networks, can help to improve the rate of economic growth.

Improved infrastructure will help improve the rate of economic growth. Firstly, adequate transportation such as roads and bridges will increase efficiency and productivity. Secondly, energy infrastructure will allow for better sources of energy which are lower in costs. Thirdly, water management infrastructure will give more drinking water supply that will improve health. Infrastructure like establishing mobile phone networks can also help to improve the rate of economic growth because it simply increases the communication efficiency.

 2. Explain how improved phone networks in developing countries in Africa can contribute to reductions in levels of poverty. 

Improved phone networks in developing countries in Africa can contribute to reductions in levels of poverty. As the article states, “Fisherman in Tanzania, meanwhile, use mobiles to get weather reports, and a service has been set up in the Kenyan capital, Nairobi, that alerts jobseekers to potential work via text messages”. Also, “fruit growers can call contacts to determine what is selling well or what is missing from the market. Farmers can check weather reports and market prices for their crops without having to travel”. All these contribute to Africa’s reductions in levels of poverty, as such communication networks to improve allows for productivity and efficiency within employees, so that they can cut down on their transportation costs.

3. Discuss the advantages and disadvantages of foreign direct investment for developing countries.

There are both the advantages and disadvantages of foreign direct investment (FDI) for developing countries. The advantages are that it would increase foreign currency, which can create an increase in exports of foreign currencies. Also, there would be a multiplier effect, which leads on to a higher competition amongst firms, which will eventually lead to transfer of technology and skills in the long-run. However on the other side, there can be the disadvantages. These include the destruction of domestic firms, and also countries that are invested may become over dependent on the FDI.

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