Aborted take-off

The Missing Millions - Africa's Choices - Structural Adjustment in Sub-Saharan Africa
May 24, 1996

Africa's economic problems over the past two decades are by now well-known. A combination of unfavourable trends in world commodity markets, together with war, political turmoil, and domestic policy mistakes have combined to undermine economic growth and to increase poverty. The bright hopes of independence have in many cases been extinguished. The collapse of the economies and societies of Liberia, Rwanda and Somalia, and the stagnation of Nigeria, Sudan and Zaire have created a deep pessimism about the prospects of the continent. Yet there is much to be hopeful about. Eritrea, Ethiopia and Mozambique are now recovering from war, Namibia and South Africa are shaking off their apartheid pasts, and Ghana and Uganda have made significant, if at times shaky economic progress.

The pile of books, official reports, and articles attempting to diagnose the problems and prescribe suitable remedies has grown enormously since the onset of Africa's crisis. If lack of printed paper were the solution to Africa's malaise, then the continent would be well on the way to economic recovery by now. The three volumes under review add another 900 pages or so to the stack of material available. Inevitably they cross common territory; each book has a lot to say about the origins of the economic crisis, each evaluates the economic reforms now under way across the continent, and each offers its own prescriptions. The spectre of the International Monetary Fund and the World Bank loom large in each author's thoughts, and the criticisms of these agencies are well rehearsed.

The book by R. Lensink has more economic theory and data, while Kinfe Abraham and Michael Barratt Brown offer more political insights. Each in its own way makes a useful contribution to the debate. Abraham is good on the early pre-independence and post-independence visions of African leaders, and the problems of developing effective education systems. Barratt Brown offers a skilful blend of economic assessment and observation of community efforts. Lesink is useful on basic differences between economists in the way they view the problems, and how this relates back to their confidence in the abilities of the state versus the effectiveness of markets.

Why has sub-Saharan Africa fared so badly in comparison to the rest of the developing world? There is no denying that for many countries the colonial inheritance was meagre; rapid decolonisation left the continent with weak administrations, a lack of skilled people to run both government and the private sector, and a transport infrastructure that was directed to the colonial export economies.

The most damaging legacy has been the arbitrary drawing of colonial political boundaries Q the straight lines which run across the maps of Africa Q which has in many countries thrown together peoples of entirely different cultures resulting in a web of competing ethnic rivalries. The inability of many governments to formulate a clear vision for the development of their countries, and to set priorities accordingly, in many ways stems from the fragile colonial inheritance. This fundamental weakness has set Africa back at least two decades in comparison to the much more effective states of Asia. Abraham and Barratt Brown offer accurate diagnoses of the problems of the colonial inheritance, and Abraham shows why the early visions of pan-African political unity, and economic integration, have never come to fruition.

Early development theory and advice must also take its share of the blame for Africa's weak economic performance. Barratt Brown is critical of W. W. Rostow's "Stages of Growth" view of development which, while widely influential in the 1950s and 1960s, is today seen as offering too simplified view of the conditions for growth. Both Barratt Brown and Abraham are equally critical of the command economy model offered by Soviet planners and accepted so readily. Imposing a command economy when governments had such limited institutional capacity to organise effective state intervention made no sense. The development of countries as diverse as Ethiopia and Mozambique was undermined by heavy-handed state intervention, particularly the promotion of large-scale capital-intensive farming to the neglect of investments in infrastructure and appropriate technologies for smallholders.

The turbulence of the world economy, especially the fluctuations in the world prices of Africa's commodities, must also take its share of the blame. Africa's economies, with the exception of South Africa, remain over-dependent on a narrow range of commodity exports. Their macroeconomic performance is therefore highly vulnerable to shifts in world commodity prices, a point amply shown by Lensink's data, and Barratt Brown's discussion of various failed proposals for the international management of commodity prices. All three authors, however, pay insufficient attention to how African governments mismanaged the earnings from the commodity price booms of the 1970s. For example, Cote d'Ivoire, Ghana, and Tanzania failed to invest wisely the earnings from price booms in commodities such as cocoa and tea. Foreign exchange earnings were spent on further expansion of the bureaucracy to provide urban employment and ill-conceived industrial projects.

All three studies place great emphasis on the role of the World Bank and the IMF in shaping the future path of development through the use of structural adjustment and stabilisation programmes. Lensink provides a detailed summary of macro-economic framework underlying the reforms, and a useful summary of the evidence on their impact. Not surprisingly it is very difficult to disentangle their effectiveness given that in many cases the programmes have not been fully implemented, they have often been knocked off course by events such as drought, and war and political turmoil have been present.

Of the three studies, Barratt Brown offers the most complete criticism of the World Bank, although on certain key issues, for example the ineffectiveness of state marketing boards, he holds views close to the bank's own. It is undoubtedly true that the World Bank has made many mistakes, and that it is reluctant to admit to them. But on many key issues, such as the importance of macroeconomic stability to securing the basis for growth and poverty reduction, the Bank and the IMF have been right. Too often critics of the Bank, particularly in nongovernment organisations, fail to recognise that much of Africa's underperformance has been the direct result of failing to run prudent macroeconomic policies. The political interests of urban elites have resulted in wasteful public expenditures which have both crowded out basic education and health care and created macro-economic problems such as inflation.

At the heart of Africa's failure to develop is the weakness of the state. While all three authors are rightly worried about the capacity of Africa's economies to grow through a reliance on market forces alone, the institutional problems which bedevil governments make it very unlikely that they can effectively achieve the level of state intervention which has contributed to the rapid growth of East Asia's economies. It is therefore essential that African governments focus on what offers the most potential, that is the provision of infrastructure for smallholders, investment in the human capital of the poor, and safety nets to help cope with drought and the vulnerability of the poor. On these issues there is in fact a large measure of agreement between those involved in African development. All three books offer numerous suggestions for achieving this agenda. However, the question remains: can Africa develop the strong democratic institutions needed to respond to the urgent needs of its population? Or will the political malaise which underlies Africa's economic problems continue well into the next century?

Tony Addison is lecturer in economics, University of Warwick.

The Missing Millions: Why and How Africa is Underdeveloped

Author - Kinfe Abraham
ISBN - 0 86543 353 4
Publisher - Africa World Press
Price - £10.99
Pages - 290

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