Problems with Entrepreneurial Government in Africa
Some developing African countries are facing big challenges.
Governments of these countries initiate and spend much on multiple projects like dams, roads, electricity, etc that have a long gestation period. As a result:
1. inflation rises
. In order to fight inflation, they cap or impose quota on financing activities of commercial banks, destroying competitive business environment. What is the cure for inflation actually poisons the business.
2. Secondly, in situations where domestic products are more expensive than imports, entrepreneurship dies
because imports drive domestic products out of the market. Such situation mainly takes place in countries where the entrepreneurial skills and conscience of the people are extremely low.
3. Thirdly, even though locally produced or created goods are of the same quality in terms of price and standard, the market demand for local products is low
merely because they are domestically produced. This is the effect of peoples' perception of local products which, of course, needs intervention of the government.