African Development Prospects

A Policy Modelling Approach

United Nations Staff, Dominick Salvatore

• Publisher: Taylor & Francis
• Year: 2018
• eBook ISBN: 9781317841128
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

First published in 1989. This volume is the result of a research carried out within the framework of the Project UN-EXPLORER, supported with a financial contribution of the Department for Development Co-operation of the Ministry of Foreign Affairs of Italy.

Part I. Overview of African Development

Chapter 1

INTRODUCTION

Dominick Salvatore

AFRICA: A CONTINENT IN CRISIS

Several years after the worst drought and famine in history (1983–1985), Africa remains a continent in crisis. Although the problems of drought and famine have not been entirely eradicated, the foreign debt has moved to the top of the agenda as the most serious problem facing most African economies today. The financial crisis in Africa has arisen because of falling prices and earnings from commodity exports, sharply increased debt-repayment burdens, and the reduced private capital flows from industrial countries.

The present financial crisis threatens the efficiency and success of the growth-oriented reforms that many African countries have adopted during the past several years in order to increase the free play of market forces in their economies, following the recommendations of the World Bank and the International Monetary Fund. These reforms, under the name of the United Nations’ Programme of Action for African Economic Recovery and Development (UN-PAAERD), include the adoption of realistic exchange rates, deregulated food production, reduction in food subsidies, reductions in budget deficits, and cutting state bureaucracies. Whereas these growth and market-oriented policies have been taking hold throughout most of Africa, the industrialized countries have yet to respond with the extra assistance on the scale required to overcome the present financial crisis, as they had promised at the Thirteenth Special Session of the General Assembly of the United Nations in May 1986.

A panel of experts appointed by the United Nations in April of 1987 to assess Africa’s financial crisis estimated that the poorest nations on the African continent will require an additional $2 billion over and above the extra $3 billion of emergency aid already being provided under the new initiatives announced in December 1987 by the World Bank, the International Monetary Fund, and the African Development Bank to overcome the financial crisis. These new initiatives involve debt relief and fresh injections of new capital during the next few years to encourage African countries to continue economic reforms and ensure their success. A still larger relief effort is required, however, to overcome the financial crisis. As it is, the 1983–1985 drought and famine have given way to an equally serious “financial famine” in the late 1980s.¹

It is inevitable that today much of the discussion, efforts, and resources be directed at resolving Africa’s present financial woes. Indeed, the successful resolution of this crisis is a necessary precondition for the resumption of growth on a self-sustaining basis in the Africa of the future. But we must also look past this financial crisis and examine how the other serious problems facing Africa today can be resolved in order to establish the framework for the resumption of self-sustaining growth on the continent in the long run. The economic reforms that most African countries have adopted or are in the process of adopting are certainly crucial toward this end. But we must also keep in mind that drought and famine are still prevalent in several African countries, such as Ethiopia, Mozambique, and Angola, and that a recurrence of a continentwide drought and famine in the near future is always lurking in the background. Similarly, whereas a large injection of new capital is required to overcome today’s financial troubles, huge capital inflows will also be required for several decades to supplement inadequate savings if an increase in standards of living is to be possible in the future in Africa.

Before the present financial crisis was fully recognized, the director-general of the Food and Agriculture Organization of the United Nations (FAO) stated that Africa faced four superimposed crises:²

1. A technical crisis stemming from the extension of rain-dependent agriculture and grazing into areas of less reliable rainfall, the running down of fragile soils under intensive, traditional cultivation, and the lack of adapted, high-yielding technologies.
2. A development crisis characterized by failures in many African countries to establish policies and institutions capable of enabling agriculture to flourish as a foundation for broad national development.
3. An economic crisis of largely external origin, marked by reduced world demand for and prices of Africa’s main commodity exports, whereas Africa’s demand for imports and the prices of some of them continued to climb.
4. A political crisis of many dimensions, including armed combat in Angola, Chad, Ethiopia, Mozambique, and Somalia, burdensome influxes of refugees in many countries, tensions emanating from South Africa, coups, and other disruptive political changes.

Of these interrelated crises, only the development crisis is being addressed to some extent by the growth and market-oriented reforms being adopted by most African economies today. As we have seen, however, for these reforms to be successful, African countries require much more assistance from the developed countries than is now being provided. Resumption of rapid growth in the world economy is still elusive and, as a result, the economic crisis persists in Africa. Furthermore, practically no progress has been made to resolve the technical and political crises that Africa faces.

Despite the fact that the drought has subsided, millions of people are still chronically hungry in many African countries. Child mortality in Africa is almost double the average for all developing countries; only 38 percent of the African people have access to safe drinkable water; there is only one doctor for each 23,000 people, and only 15 percent of the secondary-age school children are enrolled in school. Africa faces the fastest population growth of any continent. As in other developing lands, millions of people in Africa are leaving the countryside for the urban centers, where overcrowding, unemployment, crime, and disease are straining the very fabric of society. Whereas it is difficult to speak of typical cases in a continent as large and heterogeneous as Africa, increasing poverty in many African countries has brought about an uneasy and unstable coexistence between traditional values and modem demands. This has led to a desire for greater discipline and authority, which has reduced liberty in many countries. In such a desperate situation, it is not surprising that political problems and instability are common. Indeed, it is not exaggeration to say that Africa today is a time bomb ready to explode if the present deteriorating trend of poverty, famine, and desperation is not arrested soon.

Political instability in Africa is also a consequence of history. Decolonization has been relatively recent in most African countries (two decades in most cases, but only a few years in others). Colonization often determined state entities that did not always correspond to national identities, while ensuring that public administration and entrepreneurship remained in the hands of expatriates. This explains the fragility of new governments in Africa, the internal strife among regions, and many international border disputes. The delay in the process of independence of Namibia and the apartheid regime of South Africa with its discriminating and violent nature are omens of continued violence in Africa.

In the early 1960s when much of Africa gained its independence, practically no country was under military rule. Since then, there have been more than 70 successful coups and several hundred failed attempts. Today, 24 of the 51 independent countries of Africa are ruled by the military and only 6 of the 23 sub-Saharan countries are under civilian government. Many African governments, military or otherwise, have made serious attempts to introduce market reforms and deal with the financial crisis and declining per capita incomes, but these problems have been overwhelming in most cases. Whereas this book deals primarily with the present economic crisis and with the prospects for long-term development in Africa, it cannot neglect the political difficulties faced by many African countries today since it is well established that economic development is strongly dependent on a minimum of internal political stability.

An important conclusion to acknowledge is that there are no easy or quick solutions such as import substitution, export-led growth, rapid industrialization, or concentrating exclusively on agriculture for the African countries to follow to overcome the present crisis and achieve rapid growth and development. We will see that, in general, what is required is an integrated approach to economic development stressing both agriculture and industry, keeping in mind that without significant progress in agriculture, no development program can succeed in Africa. Thus cumulative and self-sustaining growth and development there depend crucially on the establishment of strong backward linkages between agriculture and the sectors that supply agricultural inputs (such as agricultural research and extension stations, human capital, physical infrastructures, fertilizer, machinery, and energy) on the one hand, and, on the other hand, strong forward linkages between agriculture and the outlets or uses of agricultural products (such as the processing of agricultural products for domestic use and export) and the consumer goods industries that supply the simple manufactures that farm families purchase. This effort cannot succeed, however, without more effective cooperation among African countries aimed at creating a larger market and achieving economies of scale in production. It is also essential that population growth, now the highest of any continent, be significantly slowed down. Otherwise, most of any increase in production would simply go to feed increasing numbers without any improvement in standards of living.

Also crucial is the concomitant development of financial institutions to stimulate savings by the agricultural sector and channel them toward the expansion of rural credit. Such an integrated sectoral development program pivoting on agriculture is the most promising avenue for the resumption of growth and development after rehabilitation from the present serious crisis is completed. Integrated multisectoral growth is just as (and perhaps even more) crucial to those African economies rich in mineral resources, lest they remain “enclave” economies with little if any spillover effects on the rest of the economy from their mineral extraction operations. In short, the simplistic development prescriptions of the 1960s and 1970s (industrialization based on import substitution and export-led growth, respectively) have given way to the more eclectic approach of the 1980s, which stresses a multisectoral trend and the crucial importance of agriculture in the entire development process.

ANALYZING AFRICAN DEVELOPMENT

From the preceding section, it is clear that Africa is a continent in crisis and that immediate and massive action is required to overcome the financial difficulties and reverse the terrible declining trend in per capita incomes and growth that Africa faces today. It is also clear that we must look beyond the present crisis to determine the best course of action and the most appropriate policies that will encourage long-term development in Africa. This requires a careful analysis of present conditions in each African country, an evaluation of future potentials, a determination of the best policy mix to promote long-term development, and an estimate of the foreign aid and other resource flows from the developed countries that are required to ac...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication Page
• Contents
• Preface (Ohlin)
• Part I. Overview of African Development
• Part II. Dimension of African Development Problems
• Part III. Assessing African Development
• Part IV. Development Prospects for Africa
• Appendices
• Appendix II: Baseline Forecasts for African Countries (Altshuler, Demirors)
• Index