Explain five circumstances under a country would rely more on primary level of production.
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Answer:
What are the advantages and disadvantages for a developing economy, such as Ghana if it is dependent on primary products?
Definition of Primary products: Raw materials and resources used in the productive process. Examples include metals, agricultural products and minerals.
primary-sector
Advantages of Producing Primary Products
For many developing economies, their main comparative advantage will be in producing primary products. The industry becomes an important source of economic growth, employment, tax revenue and export earnings. Without primary products, countries would be worse off.
Developing economies have a large and elastic supply of labour willing and able to work in these industries.
Doesn’t require costly investment and borrowing to finance investment. The industries can be managed by local workers. Developing economies which have tried to switch to manufacturing have not always been successful because they lack the relative infrastructure, education and human capital
An important source of export revenue and foreign currency.
Can attract foreign direct investment. China has been investing in Central Africa to improve access to raw materials. This has involved building roads and railways – infrastructure which will have wider benefits to the economy – from beyond exporting primary products.
Primary product industries can be a stepping stone towards economic development – if export earnings are invested in improving different aspects of economic infrastructure