The Political Economy of Africa

Vishnu Padayachee, Vishnu Padayachee

• Publisher: Routledge
• Year: 2010
• ISBN:
  9781136989063
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

The Political Economy of Africa addresses the real possibilities for African development in the coming decades when seen in the light of the continent's economic performance over the last half-century. This involves an effort to emancipate our thinking from the grip of western economic models that have often ignored Africa's diversity in their rush to peddle simple nostrums of dubious merit.

The book addresses the seemingly intractable economic problems of the African continent, and traces their origins. It also brings out the instances of successful economic change, and the possibilities for economic revival and renewal. As well as surveying the variety of contemporary situations, the text will provide readers with a firm grasp of the historical background to the topic. It explores issues such as:

• employment and poverty
• social policy and security
• structural adjustment programs and neo-liberal globalization
• majority rule and democratization
• taxation and resource mobilization.

It contains a selection of country specific case studies from a range of international contributors, many of whom have lived and worked in Africa. The book will be of particular interest to higher level students in political economy, development studies, area studies (Africa) and economics in general.

1
Introducing the African economy

Vishnu Padayachee and Keith Hart

The strategy of this book

Since the millennium, some observers have seen evidence of economic recovery in parts of Africa. This was fuelled partly by a rise in world prices for the continent’s minerals exports (see Freund below), partly by hot international money in the last years of the credit boom, partly by various endogenous developments. Thus in 2008 Angola had the highest annual growth rate in the world at 23 per cent, as a result of high oil prices, infrastructure reconstruction after three decades of civil war and the renewal of local enterprise. Some countries like Ghana seem to have embarked on a path of political democracy and economic growth, a factor in President Obama’s choice of that country to launch a new model of international partnership with Africa. East Africa is a world leader in low-cost computing and the use of mobile telephony for banking, commercial and administrative purposes. As we write, the global economic crisis is said to have snuffed out this precarious revival, with foreign investments drying up and commodity prices collapsed. But this judgment is premature.

This book stands back from such ephemeral journalistic perspectives to address the real possibilities for African development in the coming decades when seen in the light of the continent’s economic performance over the last half-century. This involves an effort to emancipate our thinking from the grip of western economic models that have often ignored Africa’s diversity in their rush to peddle simple nostrums of dubious merit. We look forward to a time when much of Africa recovers strongly from the setbacks of the immediate post-colonial period and when analysis of its economies will be more securely grounded in local conditions. Neither of these developments has yet occurred. So we introduce here a collection produced by scholars who mostly live and work in Africa, one which keeps an eye open for constructive developments, while surveying the variety of contemporary situations and giving readers a firm grasp of the historical background to our topic.

For two decades, the 1980s and 1990s, Africa seemed to many to have resumed its traditional place as a backward, poor and violent region with only weak connections to the rest of world society, ‘the dark continent’. Whereas, at the start of the twentieth century, Africa’s raw material exports and its demand for manufactures were crucial to western industrialization, by its end the region accounted for a tiny part of world trade and only 2 per cent of total purchasing power. This was the heyday of neo-liberal globalization (‘the Washington consensus’) which deliberately opened up the continent to capital flows and, in the name of ‘structural adjustment’, dismantled its governments’ ability to protect their citizens. The prevailing mood, both at home and abroad, was one of ‘Afro-pessimism’, a hopeless perspective that saw only the four horsemen of the apocalypse (famine, war, pestilence and death) rampaging through Africa and a regressive ‘politics of the belly’ there that left many Africans worse off than in colonial times.

It was not always so. The immediate post-independence mood in Africa was optimistic and not without justification. Much progress was made in many newly independent African countries (see Lawrence below). In 1960, Ghana, the world’s leading cocoa producer and proud possessor of Africa’s most developed middle class, had an economy larger than Indonesia’s and a per capita income on a par with South Korea’s. The youth of western countries, alienated from their own imperialist traditions, looked to the region and others like it for new directions in world political economy. Things began to change in the early 1970s, when the post-war exchange rate system collapsed and the energy crisis threw the world economy into depression (especially markets for non-oil commodities).

The half-century or more since the Second World War offers a striking contrast between its two main periods. In the 1950s and 1960s, global economic growth was strong and this was reinforced by a universal commitment to the developmental state, the idea that governments could raise their national economies through an emphasis on public spending. There was a genuine desire to reduce global inequality by harnessing the resources of the rich to the development needs of the poor. After the watershed of the 1970s, a renewed emphasis on the free market saw the privatization of public commitments and a retreat from the substance of international development. Rather, financialflows from the poor to the rich countries were higher than at any time in the heyday of colonial empire. Africa was one of the principal victims of this trend.

It is easy to forget how quickly national economic fortunes can turn around. In the period between the two world wars, China was the poorest region in the world and torn apart by warlord violence; 80 years later it is seen as a contender with the United States for world leadership. Africa’s economic prospects in the coming decades could well be brighter than most people currently consider. As the most striking symbol of an unequal world society structured along racial lines – with whites at the top, browns and yellows in the middle and blacks at the bottom – Africa has much to gain from the current shift in economic power from the West to Asia. At the very least, dominance by the societies of the North Atlantic is being undermined, making for a more fluid world economy than at any time in the modern era.

The present volume thus aims to overcome three obstacles to effective thinking about Africa’s economic development. The first is a tendency to lump the continent’s many regions together in a vague abstraction, ‘Africa’, which can then be made the subject of oversimplified general theories, themselves often swinging between polarized extremes. We do not discount the importance of a continental approach to Africa’s economic problems (see Hart and Hart and Padayachee below), but this is an historical project with a long way yet to go and it should not divert us from engaging with Africa’s diversity now. The second problem concerns how ‘development’ might be imagined. In the past this has often been represented as a leap from one idea to its negation, from ‘colonialism’ to ‘independence’, from ‘capitalism’ to ‘socialism’, whereas historical reality is always a more gradual shift in emphasis between plural institutions that coexist across time and space. The third concerns political agency. African politicians and intellectuals often talk as if development were a free choice from a smorgasbord of historical or comparative examples, to follow the American, Russian, Korean or Chinese route regardless of the constraints imposed by world political economy at a given moment.

The intellectual problem here concerns a widespread inability to keep more than a single idea in one’s head at a time, to think dialectically about the global and the national, about the state, the market and popular institutions, about the here and now versus other times and places conceived of in the long run. The strategy of this volume is to take systematic steps towards redressing this problem. Its form to some extent mirrors its content. We start with African political economy seen in overview, proceed to analyses that have general application in Africa, move then to particular case studies which reflect more accurately conditions on the ground and finally engage with new directions in the continent’s political economy. We do not claim that we have resolved all the issues that stand in the way of an adequate conceptualization of Africa’s development dilemmas. But we hope that the design of the book and its range of chapters point towards a more positive construction of its economic problems and their potential solution.

In what follows we will consider the meaning that might be attached to our title and the tension between external and internal voices when it comes to analysing and prescribing paths of African development. Then we will summarize the contents and organization of the chapters. We will finally offer some brief conclusions.

An African political economy?

Every person of African descent, whatever their actual history and experience – they could be Barack Obama, for example – suffers the practical consequences of being stigmatized by colour in a world society that has been built on racial difference. The United States and South Africa stand out for their racist oppression of black people, whether under slavery, colonialism or apartheid. But many Africans do not share this extreme history. Nigeria in West Africa, for example is a populous region that suffered the predations of the slave trade for centuries, but never had to accommodate white settlers and endured colonialism for a relatively short period. One in six Africans is a Nigerian and it makes no sense at all to approach their history through the lens of colonial empire – before, during and after.

There is already some precedent for viewing Africa as a unity. The African Union, NEPAD and other continental institutions do exist after all. Africa’s relative poverty has increased in the last half-century, but, from being the most sparsely populated and least urbanized major region around 1900, Africa’s seventh of the world’s population now equals its share of the total land mass; and urbanization there is fast approaching the global average of around a half. Africa is divided into three disparate regions – North, South and Middle (West, Central and East Africa); but a measure of convergence between them is now taking place, raising the prospect of economic and political union, as once envisaged in Pan-Africanist ideology. This prospect has been boosted by commitments and time lines agreed by the AU for monetary union, as well as by the recent election as AU President of Libya’s Colonel Muammar Gaddaffi, a champion of a ‘United States of Africa’, as once promoted by Ghana’s Kwame Nkrumah. Such a process draws on the collective aspirations of black people for their long-delayed emancipation, but it is a matter of universal concern since the blight of racism affects us all.

So, the idea of ‘Africa’ may be most suitably conceived of as a continental territory – Africans, Arabs and Europeans alike – possibly embarked on a march towards economic and political union. But the legacy of imperialism means that race and development are still linked in symbolic and practical terms; and dreams of African emancipation have global, not just regional implications. It would not be surprising if an economics conceived of in universal terms found it difficult to embrace such an historical and dialectical notion of Africa. And this has indeed been the case. Most writing about African economy borrows wholesale from western mainstream economics as practised at hegemonic institutions such as the World Bank (see Fine below). We have adopted the term ‘political economy’ because it draws attention to the variable political institutions that structure African economy over time. It follows from this that we are sensitive to the question of how far economic ideas and policies concerning Africa originate from outside or inside the continent.

There is no African ‘personality’ in economics. There is no ‘African’ economic theory as such that has been developed for and is applicable only to Africa. Most of the writing on economics and economic development problems and theory is usually presented in general terms applicable to all the world or to all of the underdeveloped world. Much of this is relevant to Africa and often has been the result of research on Africa, but the conclusions are generalized into theory which is not limited to Africa alone. However, there are aspects of economic problems which are especially applicable to Africa, as well as specifically African manifestations of general economic phenomena (Kamarck, 1965: 221).

Is there something that can be described as an African economics, distinguishable from economics in general or western economics? Or, put another way, do ‘we have to avoid the accusation (and reality) of eurocentrism’ (see Fine below)? This poses quite a challenge (see Freund below and elsewhere), since a coherent African tradition of economic theory and policy is indeed hard to find. Maloka dissents from this view: ‘While African leaders can be faulted in many ways, they have made a series of heroic efforts since the early 1970s to craft their own indigenous development paradigms in the light of their own perceptions’ (2002:1); and his book reproduces some key documents produced within Africa since then.

A number of factors do appear to have restricted African intellectual production in recent decades. Amina Mana lists the poor state of Africa’s universities, autocratic national regimes and the influence of international financial institutions as major contributory factors. ‘African underdevelopment’ is thus intellectual as well as economic. Yet she insists that ‘Africa’s more critical intellectuals have contributed significantly to the emergence of the alternative theories, analyses, and methodologies’ (2006: 214–15). Mahmood Mandani argues that African intellectuals must also share the blame. Following independence,

We celebrated. We had arrived. We read off the social history of the national movement as a national history of the social movement. We reduced social history to political history and political history sometimes to political biography of national leaders. We articulated a state nationalism … We did not touch the question of popular struggle.

(1992: 193–4)

The disciplines associated with development and political economy are just as uneven. Continental networks such as the African Economics Research Consortium and the African Capacity Building Foundation have done sound work, but could be said to have stayed too close to the orthodoxy of the Bretton Woods institutions. The ACBF has been partly funded by the World Bank and UNDP; it is a co-sponsor of the AERC and supports Nepad’s development goals. A more heterodox and some would say progressive source of research and collaborative networks are the somewhat older institutions, Council for the Development of Social Science Research in Africa (CODESRIA) and the Association for African Women for Research and Development (AAWORD). The Egyptian-born, French-trained Marxist economist, Samir Amin, heads the Dakar-based Third World Forum, which links African, Asian and Latin American scholars concerned to articulate alternatives to the standard options associated with globalization. Amin has made major contributions to the theory and practice of development (especially Unequal Development, 1976), including exchanges with André Gunder Frank and others in the influential debates over dependency in the 1970s. He has long insisted on ‘delinking’ as a precondition for more self-sustaining national development models in developing countries. The Kampala-based Centre for Basic Research was established by a group of scholars and trade unionists with the aim of reversing a situation where ‘academics were increasingly being drawn into short-term consultancies to cater for immediate financial needs, thus making long term research and critical intellectual discourse a prerogative of non-national academics and agencies’ (www.cbr-ug.org).

Vishnu Padayachee has had direct experience of the situation in South Africa in the run up to democracy and immediately after. Progressive South African economists joined forces then with their western-based, mostly Marxist counterparts, as well as with local progressive social movements and trade unions, and later the African National Congress itself to debate and formulate appropriate development strategies and economic policies for the post-apartheid dispensation. A strong local cadre was based mainly in the liberal universities of Cape Town, Witwatersrand and Natal, and the historically-black Universities of Durban-Westville and Western Cape. They set up research networks such as the Economic Trends Research Group (ET) and the Industrial Strategy Group (ISP). The ANC alliance itself established, with financial support from Canada and other western donors, the Macroeconomics Research Group (MERG) to articulate a macroeconomic policy framework for post-apartheid reconstructi...