Abstract
Sub-Saharan Africa is currently suffering an economic crisis of a magnitude unprecedented in its recent history. According to the World Bank, ‘a real possibility’ exists that per capita incomes will fall below those levels which prevailed when most countries gained their independence, 25 years ago. Although impressive welfare gains have been made in the interim in areas such as health care, education, and housing, these are threatened by the continuing and deepening economic crisis. Already, as Green and Singer note, the welfare gap between Africa and other least developed countries has widened.3 SubSaharan Africa is the only region in which per capita food production has declined over the last two decades. Not coincidentally, it is the region with the fastest growth of population and the only one in which rates of population growth are projected to increase during the 1980s.
The picture that emerges from the analysis of the perspective of the African region by the year 2008 under the historical trend scenario is almost a nightmare. Poverty would reach unimaginable dimensions since rural incomes would become almost negligible relative to the cost of physical goods and services. The conditions in the urban centres would also worsen with more shanty towns, more congested roads, more beggars and more delinquents. The level of the unemployed searching desperately for the means to survive would imply increased crimes rates and misery. Against such a background of misery and social injustice, the political situation would inevitably be difficult. The very consequence of extreme poverty would be social tensions and unrest which, in turn, would result in political instability. With the continuous and cumulative financial difficulties, governments would have little choice but to yield to the often unkind designs of international monopoly capital. As a result, the very notion of national sovereignty would be at stake.
(ECA and Africa’s Development)1
The history of economic development has been full of surprises. The evidence is overwhelming that, with the right combination of external assistance and domestic policies, countries can turn around, often in less than a decade.
(Toward Sustained Development)2
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Notes
United Nations Economic Commission for Africa, ECA and Africa’s Development, 1983–2008 (Addis Ababa: ECA, 1983) pp. 93–4.
World Bank, Toward Sustained Development in Sub-Saharan Africa: A Joint Program of Action (Washington, DC: World Bank, 1984) p. 15.
Reginald Herbold Green and Hans Singer, ‘Sub-Saharan Africa in Depression: The Impact on the Welfare of Children’, World Development, vol. 12 (March 1984) no. 3, p. 284.
It is no coincidence that one of the earliest exceptions to this focused on agricultural policies: Michael F. Lofchie, ‘Political and Economic Origins of African Hunger’, Journal of Modern African Studies, vol. 13 (December 1975) no. 4, pp. 551–67.
Cf. the statement by the Bank’s President, A. W. Clausen: ‘We have had more project failures in agriculture than in any other sector, and the failures have been concentrated in Africa’. Poverty in the Developing Countries1985, Address given at the Martin Luther King, Jr, Center, Atlanta, Georgia, 11 January 1985 (Washington, DC: World Bank, 1985) p. 9.
For the former position see, e.g., Cheryl Payer, ‘Tanzania and the World Bank’, Third World Quarterly, vol. 5 (October 1983) no. 4, pp. 791–813; for the latter,
Samir Amin, ‘A Critique of the World Bank Report Entitled “Accelerated Development in Sub-Saharan Africa”’, Africa Development, vol. 7 (1982) no. 1/2, pp. 23–9.
Such critics probably overestimate the extent to which the Bank became fully converted to the Basic Needs philosophy: ‘The concern that the Bank might desert the poor must depart from a realization that under McNamara it never totally embraced them’. Robert L. Ayres, Banking on the Poor (Cambridge, Mass.: MIT Press, 1983) p. 33. See also
William Ascher, ‘New development approaches and the adaptability of international agencies: the case of the World Bank’, International Organizaton, vol. 37 (Summer 1983) no. 3, pp. 415–39.
See, for example, Irma Adelman, ‘Beyond Export-Led Growth’, World Development, vol. 12 (September 1984) no. 9, pp. 937–49. Concise statements on the role of agriculture in economic growth are found in
W. Arthur Lewis, The Evolution of the International Economic Order (Princeton University Press, 1978); and
World Bank, World Development Report 1982 (New York: Oxford University Press, 1982).
Half of this number are projected to remain underemployed, however. ECA and Africa’s Development 1983–2008 p. 59; other data are from World Bank, Accelerated Development in Sub-Saharan Africa: An Agenda for Action (Washington, DC: World Bank, 1981). At current rates of population growth, the absolute size of Africa’s agricultural labour force is projected to increase throughout the next century.
World Bank, World Development Report 1984 (New York: Oxford University Press, 1984) p. 89.
Carl K. Eicher, ‘West Africa’s Agrarian Crisis’, (West African Association of Agricultural Economists, 1984). Data in this section, unless otherwise noted, are from World Bank, Toward Sustained Development, Statistical Annex.
Charles Elliott, ‘Equity and Growth: An Unresolved Conflict in Zambian Rural Development Policy’, in Dharam Ghai and Samir Radwan (eds), Agrarian Policies and Rural Poverty in Africa (Geneva: International Labour Organisation, 1983) p. 161.
For an excellent analysis of this issue in historical perspective see John Tosh, ‘The Cash-Crop Revolution in Tropical Africa: An Agricultural Reappraisal’, African Affairs, vol. 79 (January 1980) no. 314, pp. 79–94.
Robert H. Bates, Markets and States in Tropical Africa (Berkeley: University of California Press, 1981); and
Essays on the Political Economy of Africa (Cambridge University Press, 1983).
In the Ivory Coast, for instance, bananas and pineapples, whose production is so capital-intensive that smallholder production is not viable, are not subject to marketing boards and consequent ‘taxation’. Robert E. Hecht, ‘The Ivory Coast Economic “Miracle”: What Benefits for Peasant Farmers?’, Journal of Modern African Studies, vol. 21 (March 1983) no. 1, p. 50.
David K. Leonard, ‘What is Rational when Rationality Isn’t?: Comments on the Administrative Proposals of the Berg Report’ (mimeo). Even in market-oriented Kenya, the share of public employment in total ‘formal’ employment rose from 29.6 per cent in 1963 to 41.7 per cent in 1977 (Accelerated Development, p. 41).
See, for instance, Frank Ellis, ‘Agricultural Price Policy in Tanzania’, World Development, vol. 10 (April 1982) no. 4, p. 266.
Tanzania provides an excellent example. Ellis notes that the National Milling Corporation, the parastatal responsible for marketing most domestic food crops, had accumulated an overdraft with the domestic banking system by December 1980 of T.Shs 2.8 billion. At that date the accumulated indebtedness of all crop authorities was T.Shs 5 billion, nearly three times the total producer value of all official crop purchases in 1979/80, and equivalent to 15 per cent of Tanzania’s GDP in 1979 (ibid. p. 277). See also Eicher, Chapter 7 of this volume. According to the World Bank (Accelerated Development, p. 59, n. 17), charges by marketing authorities in Kenya for storage, marketing, transport and administrative overheads amounted to 34 per cent of the f.o.b. price received for maize exports, 23 per cent for wheat, and 49 per cent for rice.
For instance, the marketing parastatal in Benin handled a significant percentage of the Nigerian cocoa crop. See Daniel C. Bach, ‘The Politics of West African Economic Co-operation: C.E.A.O. and E.C.O.W.A.S.’, Journal of Modern African Studies, vol. 21 (December 1983) no. 4, p. 615.
Marian E. Bond, ‘Agricultural Responses to Prices in Sub-Saharan African Countries’, IMF Staff Papers, vol. 30 (December 1983) no. 4, pp. 710–11.
Ibid. p. 724.
World Bank, Sub-Saharan Africa: Progress Report on Development Prospects and Programs (Washington DC: World Bank, 1983) p. 4.
Raj Krishna, ‘Some Aspects of Agricultural Growth, Price Policy and Equity in Developing Countries’, Food Research Institute Studies, vol. xviii (1982) no. 3, pp. 219–60. Improved prices will of course encourage farmers to invest in technology. But a substantial increase in government investment in the agricultural sector, e.g. on irrigation, Krishna argues, is more likely to lead to a rapid and sustained increase in output.
Quoted in United States Department of Agriculture (USDA), Food Problems and Prospects in Sub-Saharan Africa, Foreign Agricultural Research Report No. 166, August 1981 (Washington DC: US Department of Agriculture) p. 13.
Goran Hyden, No Shortcuts to Progress, (Berkeley: University of California Press, 1983) p. 5.
USDA, Food Problems and Prospects, p. 104. Green records that grain storage losses in Tanzania in the 1976–79 period were equivalent to the total volume of maize imported in the years 1979–81, Reginald Green, ‘Incentives, Policies, Participation and Response: Reflections on World Bank “Policies and Priorities in Agriculture”’, IDS Bulletin, vol. 14 (January 1983) no. 1, p. 35. As Green and Allison note, AD had very little to say regarding viable rural technological improvements appropriate for peasant producers.
Richard E. Stryker, ‘The World Bank and Agricultural Development: Food Production and Rural Poverty’, World Development, vol. 7 (March 1979) no 3, pp. 331–2. The case against smallholder production is argued cogently by
Keith Hart, The Political Economy of West African Agriculture (Cambridge University Press, 1982).
I.M.D. Little, Tibor Scitovsky and M.F.G. Scott, Industry and Trade in Some Developing Countries (Oxford University Press, 1971) p. 237. Elsewhere these authors caution explicitly: ‘But what if a large number of developing countries were to follow the example of the leading exporters? Is there not a danger, in that case, that they would cut each others’ throats? For some important commodities this clearly is a danger. The most obvious examples are coffee, tea, and cocoa’
(ibid. p. 270). These three are respectively ranked numbers one, five and two in Africa’s agricultural exports. Prices of all of Africa’s principal food and beverage exports except coffee and cocoa declined in real terms in the period 1970–82. For the period 1980–90, the World Bank projected an annual increase in the value of world trade in food and beverages of only 1.7 per cent. In 1990, the real price of cocoa is projected to be only 75 per cent of the average in the years 1960–70; for tea the figure is only 44 per cent (AD p. 23; Toward Sustained Development Statistical Annex; Progress Report p. 4). While Accelerated Development asserts the need for Africa to recover its share of its traditional export markets as a short-term measure for improving export earnings, Toward Sustained Development notes that ‘an increase in imports is unlikely to be possible from improved exports earnings from these commodities in the short run’ but adds, curiously, ‘although in the medium to longer run that has to be the objective’ (p. 7). By focusing on producer incentives and exchange rate policy the Bank implies that the principal problem facing African agricultural exports is one of supply rather than inelastic world demand.
OAU, Lagos Plan of Action for the Economic Development of Africa, 1980–2000 (Geneva: International Institute for Labour Studies, 1981) p. 7.
Especially the series of works summarised in Krueger’s Liberalization Attempts and Consequences (Cambridge, Mass.: Ballinger, for the National Institute of Economic Research, 1978); see also, for example
Balassa, ‘Structural Adjustment Policies in Developing Economies’, World Development, vol. 10 (January 1982) no. 1, pp. 23–38.
Manfred Bienefeld comments, for instance, on ‘the Report’s [AD] heavy reliance on, and frequent reference to, the N.I.C. experience — to back up the central assertion that African governments should reduce the extent and change (in a specific manner) the nature of their economic involvement.’ ‘Efficiency, Expertise, NICs and the Accelerated Development Report’, IDS Bulletin, vol. 14 (January 1983) no. 1, p. 20. There are only about four references to the NICs in AD, however, and only one of those (a reference to supply responsiveness to devaluation on p. 30), bears out his argument. The other references are: (a) an explicit denial that African countries are in a position to follow Korea or Taiwan in export-led manufacturing growth (p. 95); (b) a reference (p. 97) to local value-added requirements in Mexico to illustrate the need for African governments to bargain more effectively with transnational corporations (TNCs); (c) a reference to an effective government programme of family planning in Indonesia (p. 113) — and some would question whether Indonesia can correctly be termed a NIC.
See, for example, John Gerard Ruggie, ‘Introduction: International Interdependence and National Welfare’, in Ruggie (ed.), The Antinomies of Interdependence (New York: Columbia University Press, 1983) especially p. 19.
For example, in various periods in Brazil and India. Industry and Trade in Some Developing Countries p. 180: ‘for some products, India lost foreign exchange by exporting (just as foreign exchange may be lost by inappropriate import substitution)’. See also Paul Streeten, ‘A Cool Look at “Outward-Looking Strategies for Development”’, The World Economy, vol. 5 (September 1982) no. 2, pp. 159–69. The X-efficiency and other arguments are presented in
Anne O. Krueger, ‘Export-Led Industrial Growth Reconsidered’ in Wontack Hong and Lawrence B. Krause (eds), Trade and Growth of the Advanced Developing Countries in the Pacific Basin (Seoul: Korea Development Institute, 1981) pp. 3–27.
This point is discussed in detail in John Ravenhill, Collective Clientelism: The Lomé Conventions and North-South Relations (New York: Columbia Univerity Press, 1985) Chapter 4. It is questionable whether textiles industries in Europe, with the partial exception of France, were in fact pursuing a strategy of looking to Africa as a location for some labour-intensive processes, as Langdon suggests in Chapter 8 of this volume. Few European industries, given the high cost and low productivity of African labour, have seriously considered SSA as a location in their strategy of worldwide sourcing. Langdon’s evidence may suggest, rather, that they perceived Africa primarily as a convenient dumping ground for obsolete machinery.
On the overall inelasticity of industrialised countries’ demand for LDCs’ exports see William R. Cline, ‘Can the East Asian Model of Development Be Generalized’, World Development, vol. 10 (February 1982) no. 2, pp. 81–90.
Christopher Stevens and Ann Weston, ‘Trade Diversification: Has Lomé Helped?’ in Christopher Stevens (ed.), The EEC and the Third World: A Survey 4. Renegotiating Lomé (London: Hodder & Stoughton, 1984) Chapter 2.
Patrick Low, ‘Export Subsidies and Trade Policy: The Case of Kenya’, World Development, vol. 10 (April 1982) no. 4, p. 301.
Albert O. Hirschman, ‘The Political Economy of Import-Substituting Industrialization in Latin America’ in Hirschman, A Bias for Hope (New Haven: Yale University Press, 1971) pp. 117–19.
Reginald H. Green, ‘African Economies in the Mid-1980’s — “Naught for Your Comfort but that the Waves Grow Higher and the Storms Grow Wilder” ’ in J. Carlsson (ed.), Recession in Africa (Uppsala: Scandinavian Institute of African Studies, 1983) pp. 177–9.
Carlos F. Diaz-Alejandro, ‘On the Import Intensity of Import Substitution’, Kyklos, vol. 18 (1965) no. 3, pp. 495–509; on the experience of the People’s Democratic Republic of Korea see Green, ‘African Economies in the Mid-1980’s’. Green’s comments (pp. 195–6) are particularly relevant to the Lagos Plan: ‘to restructure for economic self reliance requires additional imports, these must be paid for, the most self reliant way of paying is from exports, if exports are allowed to stagnate the nation — and its self reliant strategy — will be delivered bound hand and foot into the hands of its creditors’.
For data on the early years of import substitution in Tanzania see Ravi Gulhati and Uday Sekhar, ‘Industrial Strategy for Late Starters: The Experience of Kenya, Tanzania and Zambia’, World Development, vol. 10 (November 1982) no. 11, pp. 949–72.
For instance, Christopher Colclough, ‘Are African Governments as Unproductive as the Accelerated Development Report Implies?’, IDS Bulletin, vol. 14 (January 1983) no. 1, pp. 24–9.
Langdon is probably overly charitable towards the Kenyan state in largely absolving it from responsibility for the failure of the export strategy for the textiles industry. Many of the problems that he discusses point to an ineffective bargaining strategy on the part of the state vis-à-vis TNCs. TNCs were allowed to engage in transfer pricing, were granted protection which effectively removed the possibility of domestic competition, and were bailed out when their inefficiencies caused them to suffer sustained losses. There was, to be sure, a symbiotic relationship between some TNCs and some members of the Kenyan political elite; the fact that some were ‘bought off surely does not absolve the state of responsibility. For an examination of the inability of African governments to bargain effectively with TNCs see Donald Rothchild and Robert L. Curry, Jr, Scarcity. Choice and Public Policy in Middle Africa (Berkeley: University of California Press, 1978) Chapter 4.
Karl Polanyi, The Great Transformation (Boston: Beacon, 1944).
Sayre P. Schatz, ‘Pirate Capitalism and the Inert Economy of Nigeria’, Journal of Modern African Studies, vol. 22 (March 1984) no. 1, pp. 45–57.
Anne O. Krueger, ‘The Political Economy of the Rent-Seeking Society’, American Economic Review, vol. LXIV (June 1974) no. 3, p. 302.
G. K. Helleiner, The IMF and Africa in the 1980s Essays in International Finance No. 152, July 1983 (International Finance Section, Department of Economics, Princeton University).
Ronald T. Libby, ‘External Co-optation of a Less Developed Country’s Policy Making: The Case of Ghana, 1969–72’, World Politics, vol. 29 (1976) no 1, pp. 67–89.
See, for instance, Elliott R. Morss, ‘Institutional Destruction Resulting from Donor and Project Proliferation in Sub-Saharan African Countries’, World Development, vol. 12 (April 1984) no. 4, pp. 465–70.
Compensatory financing is particularly important in helping to reduce the negative effects of fluctuating export earnings to which countries like those of Africa, heavily dependent on a limited number of export products, are particularly vulnerable. When linked to the earnings of individual export crops, as is the case with the Lomé Conventions’ STABEX scheme, compensatory financing may assist governments to maintain producer prices at a time of (presumably) temporarily declining world prices. This assumes, however, that the compensatory financing will be utilised in the sector suffering export loss. In the experience of STABEX this has not been the case. For compensatory financing to work in this manner, greater conditionality on use of funds would have to be imposed. Despite a decade of attempting this, the EEC has not been successful. See John Ravenhill, ‘What is to be Done for Third World Commodity Producers? An Evaluation of the STABEX Scheme’, International Organization, vol. 38 (Summer 1984) no. 3, pp. 537–74.
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Ravenhill, J. (1986). Africa’s Continuing Crises: The Elusiveness of Development. In: Ravenhill, J. (eds) Africa in Economic Crisis. Macmillan International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18371-5_1
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