Would This Idea Help Africa?: Subsidization of African Business Sales

 

One possibly good idea that might help the economies of African countries is, a subsidization per sale of transactions in African businesses.  For example, if someone has a business selling flowers, a philanthropic organization could agree to pay the business $0.05 (in whatever currency is appropriate) for every sale that they make.


From a Marshallian perspective, this would lead to a right-ward movement of the supply curve.  Prices would decrease and quantity supplied would increase.  It would have an effect that would be similar to a new innovation that decreased costs for the businesses.


In general, if this maneuver were affordable for a non-profit to sustain over time, it could lead to more small businesses starting up and staying in business, lower prices for consumers, and more products sold.  Although, due to price decreases, it might not make the GDP go up by all that much or anything at all, it should lead to increased purchasing power for individual citizens...when prices are effectively lower due to subsidization of business endeavors, people can afford to buy more, and businesses can afford to cut their prices a little bit to compete, or at least, the businesses will make more money.


Someday, I hope that I will have enough training in economics to thoroughly evaluate this idea for myself.

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