African nations regularly fall to the bottom of any list measuring economic activity, such as per capita income or per capita GDP, despite a wealth of natural resources. The bottom 25 spots of the United Nations (UN) quality of life index are regularly filled by African nations.
In 2006, 34 of the 50 nations on the UN list of least developed countries are in Africa. In many nations, the per capita income is often less than $200 U.S. per year, with the vast majority of the population living on much less. In addition, Africa's share of income has been consistently dropping over the past century by any measure.
In 1820, the average European worker earned about three times what the average African did. Now, the average European earns twenty times what the average African does. Although per capita incomes in Africa have also been steadily growing, and poverty falling, measures are still far better in other parts of the world, such as Latin America, which suffers from many of the same disadvantages.

Overpopulation
As with any society largely dependent on agriculture, African families are often very large. Most of the elderly rely on their children for support, and as much agriculture in Africa is labor-intensive, large numbers of children provide much needed labor for plowing, planting and harvesting.

However, overpopulation is a serious problem in the areas, which have grown enormously since the beginnings of African independence in the 1960s and later. For example, in 1960, 14.5% of Nigeria's population lived in urban areas; that number had grown to 43% by 2000, and is growing at an estimated 5.5% per year, compared to a 2.9% national population growth rate. This is a trend that can be seen throughout the continent. During times of famine, the high demand for food in relatively affluent cities often draws supplies away from needy rural areas.

Mismanagement of land
In addition to cash crops, European settlers also introduced new staple crops such as maize. Africans readily accepted these new foods into their diets. The continent was not as accepting as her people. Initially, the new staple crops performed well under what appeared to be ideal growing conditions.
They produced great yields, leading to increased acceptance and eventual reliance on these new sources of food. In time, this reliance led to food insecurity.

Two factors contributed greatly to this outcome: water and fertilizer. Both were lacking. African subsistence farmers traditionally did not irrigate, but relied on rainfall to water their crops and planted multiple staple crops each season; some did well under dryer conditions, others under wetter. Under ideal conditions, the newer staple crops outperformed the old ones. However, they were not as tolerant of the widely varying range of African growing conditions as the native crops, and in years when there wasn't enough water, an unirrigated field planted solely with a single drought-susceptible crop yielded nothing.
Traditional methods of land use such as companion planting and post-harvest grazing by herd animals enriched the soil at no monetary cost to farmers. Widespread adoption of fenced land monoculture depleted the soil.

Despite large amounts of arable land south of the Sahara Desert, small, individual land holdings are rare. In many nations, land is subject to tribal ownership and in others, most of the land is often in the hands of descendants of European settlers of the late 19th century and early 20th century.
For example, according to a 2005 IRIN report, about 82% of the arable land in South Africa is owned by those of European descent. Many nations lack a system of freehold landowning. In others, the laws prevent people from disadvantaged groups from owning land at all.
Although often these laws are ignored, and land sales to disadvantaged groups occur, legal title to the land is not assured. As such, rural Africans rarely have clear title to their own land, and have to survive as farm laborers. Unused land is plentiful, but is often private property. Most African nations have very poor land registration systems, making squatting and land theft common occurrences. This makes it difficult to get a mortgage or similar loan, as ownership of the property often cannot be established to the satisfaction of financiers.

It should be noted that this system often gives an advantage to one native African group over another, and not just Europeans over Africans. For example, it was hoped that land reform in Zimbabwe would transfer land from European land owners to family farmers. Instead, it simply substituted native Africans with ties to the government for Europeans, leaving much of the population disadvantaged. Because of this abuse, foreign aid that was destined for land purchases was withdrawn.

It is estimated that a family of four can be made self-sufficient for about $200 (U.S.) - the cost of an Ox, a few hectares of land, and starter seeds. Historically, such programs have been few and far between, with much foreign aid being concentrated on the raising of cash crops and large plantations rather than family farms.

There is no consensus on what the optimal strategy for land use in Africa may be. Studies by the National Academy of Sciences have suggested great promise in relying on native crops as a means to improving Africa's food security. A report by Future Harvest suggests that traditionally used forage plants show the same promise. Supporting a different viewpoint is an article appearing in AgBioForum which suggests that small hold farmers benefited substantially by planting a genetically modified variety of maize. In a similar vein is an article discussing the use of nontraditional crops for export published as part of the proceedings of a Purdue University symposium.

Misused Money
Over $500 billion (U.S.) has been sent to African nations in the form of direct aid. The consensus is that the money has had little long term effect.
In addition, most African nations have borrowed substantial sums of money. However, a large percentage of the money was either invested in weapons (money that was spent back in developed nations, and provided little or no benefit to the native population) or was directly misappropriated by corrupt governments.
As such, many newly democratic nations in Africa are saddled with debt run up by totalitarian regimes. Large debts usually result in little being spent on social services, such as education, pensions, or medical care. In addition, most of the debt currently owed (approximately $321 billion (U.S.) in 1996) represents only the interest portion on the debt, and far exceeds the amounts that were actually borrowed (although this is true of large debts in developed nations as well).
Most African nations are pushing for debt relief, as they are effectively unable to maintain payments on debt without extending the debt payments indefinitely. However, most plans to forgive debt affect only the smallest nations, and large debtor nations, like Nigeria, are often excluded from such plans.

What large sums of money that are in Africa are often used to develop mega-projects when the need is for smaller scale projects.
For example, Ghana was the richest country in Africa when it obtained independence. However, a few years later, it had no foreign reserves of any consequence.
The money was spent on large projects that turned out to be a waste of resources:

- The Akosombo Dam was built in order to supply electricity for the extraction of aluminium from bauxite. Unfortunately, Ghanian ores turned out to be too low grade and the electricity is now used to process ores from other nations.
- A two-lane paved highway was built into the interior. Unfortunately, Ghana has few cars that require such a superior roadway, and there are very few other roads of any kind in the country.
- Storage silos for the storage of cocoa were built to allow Ghana to take advantage of fluctuations in the commodity prices. Unfortunately, unprocessed cocoa does not react well to even short-term storage and the silos now sit empty.

Another excellent example of misspent money is the Aswan High Dam. The dam was supposed to have modernized Egypt and Sudan immediately. Instead, the block of the natural flow of the Nile River meant that the Nile's natural supply of nitrate fertilizer and organic material was blocked. Now, about one-third of the dam's electric output goes directly into fertilizer production for what used to be the most fertile area on the planet. Moreover, the dam is silting up and may cease to serve any useful purpose within the next few centuries. In addition, the Mediterranean Sea is slowly becoming more saline as the Nile used to provide it with most of its new fresh water.

Corruption is also a major problem in the region, although it is certainly not universal or limited to Africa. Many native groups in Africa believe family relationships are more important than national identity, and people in authority often use nepotism and bribery for the benefit of their extended family group at the expense of their nations. To be fair, many corrupt governments often do better than authoritarian ones that replace them. Ethiopia is a good case study. Under Haile Selassie, corruption was rife and poverty rampant.
However, after his overthrow, corruption was lessened, but then famine and military aggressiveness came to the fore. In any event, corruption both diverts aid money and foreign investment (which is usually sent to offshore banks outside of Africa), and puts a heavy burden on native populations forced to pay bribes to get basic government services.

In the end, foreign aid may not even be helpful in the long run to many African nations. It often encourages them not to tax internal economic activities of multi-national corporations within their borders in order to attract foreign investment. In addition, most African nations have at least some wealthy nationals, and foreign aid often allows them to avoid paying more than negligible taxes. As such, wealth redistribution and capital controls are often seen as a more appropriate way for African nations to stabilize funding for their government budgets and smooth out the boom and bust cycles that can often arise in a developing economy. However, this sort of strategy often leads to internal political dissent and capital flight.

Capital Flight
This has been a problem since the very beginning of European colonization, and in many ways the problem has become worse. Because most African nations are heavily in debt, most export income generated by these nations goes out in the form of interest payments.
In addition, many assets within Africa are owned by foreign interests, and money earned by those assets (particularly oil) is often sent directly out of the country. However, nationalization of assets has not always ensured prosperity. When Egypt nationalized the Suez Canal in the late 1950s, it nearly touched off a world war, and in the period between the Six Day War and the Camp David Accords, the flow of traffic through the canal was threatened due to the instability of the region.

This situation has often been exacerbated by policies imposed by the International Monetary Fund and the World Bank, which often insist on trade liberalization and a lack of capital controls as a condition of loan guarantees. Those nations which have avoided IMF and World Bank conditions, such as Botswana and South Africa, have the most robust economies on the continent.

Human Resources
Amazing availability of cheap labor has often perpetuated policies that encourage poor agricultural and industrial practices, leaving Africa further and further behind. For example, author P.J. O'Rourke noted on his trip to Tanzania for his book Eat the Rich that gravel was produced with manual labor (by pounding rocks with tools), where in almost everywhere else in the world machines did the same work far more cheaply and efficiently. He used Tanzania as an example of a nation with superb natural resources that nevertheless was among the poorest nations in the world.

Education is also a major problem. Elementary education is scattershot, even in the wealthier nations. Illiteracy rates are high although a good proportion of Africans speak at least two languages and a number speak three (generally their native language, a neighbouring or trade language, and a European language). Higher education is almost unheard of, although universities in Egypt and South Africa have excellent reputations. However, some African nations have only a scattering of persons with university degrees, and advanced degrees are rare in most areas. As such, the continent, for the most part, lacks lawyers, engineers and even teachers. The seeming parody of aid workers attempting to teach tri-lingual people English is not entirely untrue.

South Africa under apartheid is an excellent example of how bad things can get even when minimal funds are available. The largely black population often wished to learn English (black South Africans saw it as a way to unite themselves as they speak several different native languages). However, South African law required that blacks be taught entirely in Afrikaans, a language they had almost no exposure to before starting school, while most were very familiar with English.

Disease
Much attention has been given to the prevalence of AIDS in Africa. 3,000 Africans die every day of AIDS and an additional 11,000 are infected. Less than 1% are actually treated. However, even with the widespread prevalence of AIDS (where infection rates can approach 30% among the sexually active population), and fatal infections such as the Ebola virus, other diseases are far more problematic.
In fact, the situation with AIDS is improving in many nations as infection rates drop, and deaths from Ebola are rare.
On the other hand, diseases once common but now almost unknown in most of the industrialized world, like malaria, tuberculosis, tapeworm and dysentery often claim far more victims, particularly among the young. Polio has made a comeback recently due to misinformation spread by anti-American Islamic groups in Nigeria. Diseases native to Africa, such as sleeping sickness, also resist all attempts at elimination!

Lack of Infrastructure
Clean, potable water is rare in most of Africa (even those parts outside the sub-Saharan region) despite the fact that the continent is crossed by several major rivers and contains some of the largest fresh water lakes in the world. However, many of the major population centres are on the coast, and few major cities have adequate sewage treatment systems. Although boiling water is a possibility, fuel for boiling is scarce as well. The problem is worst in Africa's rapidly growing cities, such as Cairo, Lagos and Kinshasa.

Colonialism concentrated on joining the coast with internal territories. As such, nearly none of Africa's roads and railways connect with each other in any meaningful way. Joining Africa's extensive railway network has recently become a priority for African nations outside of south-west Africa, which has an integrated network. Transportation between neighbouring coastal settlements is nearly always by sea, no matter what the topography of the land in between them. Even basic services like telecommunications are often treated the same way.
For example, phone calls between Ghana and neighbouring Côte d'Ivoire once had to be routed through England and France. Although Africa had numerous pre-European overland trade routes, few are suitable for modern transport such as trucks or railways, especially when they cross old European colonial borders.

Conflict
Despite other hot spots for war, Africa consistently remains among the top places for ongoing conflicts, consisting of both long standing civil wars (e.g. Somalia) and conflicts between countries (e.g. Ethiopia and Eritrea's border wars after the latter's independence from the former).
Despite a lack of basic social services or even the basic necessities of life, military forces are usually well financed and well equipped.

As a result, Africa is full of refugees, who are often deliberately displaced by military forces during a conflict, rather than just having fled from war torn areas. Although many refugees emigrate to open countries such as Germany, Canada, and the United States, the ones who do emigrate are often the most educated and skilled. The remainder often becomes a burden on neighbouring African nations that, while peaceful, are generally unable to deal with the logistical problems refugees pose.

Civil war usually has the result of totally shutting down all government services. For example, Somalia does not even have low level services such as birth-death-marriage registration and a postal service - services that exist in even the poorest countries.

However, any conflict generally disrupts what trade or economy there is. For example, Ethiopia is now land-locked and its wars with Eritrea just have the effect of shutting it off from the rest of the world. Sierra Leone, which depends on diamonds for much of its economic activity, not only faces disruption in production (which reduces the supply), but a thriving black market in conflict diamonds, which drives down the price for what diamonds are produced.

Effects of widespread poverty
Africa's economic malaise is self-perpetuating, as it engenders more of the disease, warfare, misgovernment, and corruption that created it in the first place. Other effects of poverty have similar consequences.
The most direct consequence of low GDP is Africa's low standard of living and quality of life. Except for a wealthy elite and the more prosperous peoples of South Africa and the Maghreb, Africans have very few consumer goods. Quality of life does not correlate exactly with a nation's wealth.
Angola, for instance, reaps large sums annually from its diamond mines, but after years of civil war, conditions there remain poor. Radios, televisions, and automobiles are rare luxuries. Most Africans are on the far side of the Digital Divide and are cut off from communications technology and the Internet.

Quality of life and human development are also low. African nations dominate the lower reaches of the UN Human Development Index. Infant mortality is high, while life expectancy, literacy, and education are all low. The UN also lowers the ranking of African states because the continent sees greater inequality than any other region. The best educated often choose to leave the continent for the West or the Persian Gulf to seek a better life.

Catastrophes cause deadly periods of great shortages. The most damaging are the famines that have regularly hit the continent, especially the Horn of Africa. These have been caused by disruptions due to warfare, years of drought, and plagues of locusts.

An average African faced annual inflation of over 60% from 1990 until 2002 in those few countries that account for inflation. At the high end, Angola and the Democratic Republic of the Congo both saw triple-digit inflation throughout the period. Most African states saw inflation of around 10% per year.

There are no reliable numbers for unemployment in most African nations, but it is an important problem. Major cities like Lagos and Kinshasa have large slums of the unemployed and underemployed.