The Potential of Kuznets Cycle Model in the Analysis of Economy of Sub-Saharan Africa

The article covers the peculiarities of economic development of the two countries of Sub-Saharan Africa – Ghana and Senegal from 1970 to 2013. The trends of their GDP and GDP per capita were analysed. The question of how these indices are affected by changes in population, structure of production, flows of foreign direct investment (FDI) and official development assistance (ODA), as well as the number of employees by economic sectors and indicators distribution of income was investigated. Comparing with other investigations much attention was paid to the trends of remittances from citizens abroad to Ghana and Senegal in addition to these factors. It is revealed that ODA was more important for two countries during a period of slow growth, and during the period of rapid growth of FDI and the growth of GDP, the flows of FDI and ODA were more significant in Ghana, and remittances and SDT – in Senegal. Services are significantly superior in the structure of production of two countries. Among the different types, financial and insurance services are predominant in Ghana and Senegal. The share of agriculture in the structure of production of two countries decreased somewhat during the specified period, while the share of industry increased, which occurred at the expense of the mining sector and construction. It has been determined that there are cycles of ups and downs associated with restructuring of production in the economic processes of Ghana and Senegal. It has been established that not only the human factor, as determined in the conclusions of Kuznets S., but also capital, are important for the growth of their production. The action of “the Kuznets law” was confirmed in Ghana: At the initial stage of growth, the distribution of income deteriorated, then its equalization took place. “The Kuznets law" has not been confirmed in Senegal: At the initial stage of growth, the distribution of revenues improved, and later, during the period of rapid growth, it remained virtually unchanged.