Causes of disequilibrium in the balance of payment.
- Importation of expensive manufactured goods such as cars that increase foreign exchange expenditure
- Low output /limited industrialization leading to low export volumes
- Exportation of primary products yielding low foreign exchange income
- High inflationary tendencies causing low demand for goods and services
- Limited variety of exports cause low foreign exchange incomes
- Debt servicing drains foreign exchanges from the country
- Persistence political instabilities leading high military expenditure causing high military imports
- Profit and income repatriation by foreign investors and imported skilled manpower.
- High government expenditure on foreign trips
- High population growth rates leading to high dependence, low marginal productivity and high consumption
- A large subsistence sector cause low productivity
- Low technology leads low productivity and poor quality goods and service yielding low incomes from exports
- Unfavorable natural factors such as floods and draughts leading low agricultural outputs.
- Liberalization leading to dumping of cheap substitutes that kill domestic industries from unfair competition.
- Corruption and swindling of government revenues
CATEGORIES Economics
TAGS Dr. Bbosa Science
