Discuss the impact of improved transport links between African countries on economic growth rates

Edexcel A-Level Economics Paper 2 June 2023 Extract

Discuss the impact of improved transport links between African countries on economic growth rates. (12 marks)

Better transport links is likely to increase economic growth because it enables African countries to specialise more. As countries in Africa won’t have to rely as heavily on road transport each time they trade, they will be encouraged to trade more. This enables them to specialise. Typically, countries or regions should specialise in the good or service where they have a comparative advantage; the good or service they can produce at the lowest opportunity cost. The extract mentions attempts from Zambia to produce copper and Malawi to produce tea, which was previously hindered by ‘queues for miles’. When specialisation happens properly, producers can improve productivity through repetition. As productivity increases, it becomes cheaper to produce the same number of goods and services comp

Better transport links is also likely to increase economic growth because it can make African countries more internationally competitive. The extract mentions that ‘poor infrastructure is a major barrier to trade’. As transport links improve, it makes it cheaper and faster to ship goods and services, for example from factories to airport or cargo terminals. As this improves, African countries can pass down their lower costs to customers around Africa and around the world. As exports is a component of aggregate demand (AD), AD would increase so there would be an increase in real gdp; economic growth. 

However, the disadvantages of improving transport links are both the opportunity cost and possible time lags. Firstly, there is a huge cost to governments when improving infrastructure and transport links. Extract B mentions one example of Angola already struggling with debt and opting for debt relief. Even if other African countries were able to afford investment in transport, they may have to sacrifice spending in other areas like education or healthcare, which can potentially harm development even further. If this were to happen, human capital would worsen, and this would make it harder for citizens to get jobs in the manufacturing or service sector, making it harder for them to increase their incomes and their living standards.

A-Level Economics Tutoring

I offer one-to-one and small group A-Level Economics tutoring for students across the UK and internationally. With 87+ five-star Google reviews and tutoring experience since 2017, I specialise in helping students understand difficult concepts and improve their exam technique.