Structural Adjustment and African Industry

Abstract

Over the years, many analysts have despaired of the effects of structural adjustment on the economies of sub-Saharan Africa: the ability of these economies to respond positively to exposure to market liberalisation has been weak and faltering. The weakness of the African supply response has been particularly marked in manufacturing industry and manufactured export performance. Even the World Bank, the main architect of adjustment programmes, has at times shown disappointment with the failure of its recipes, though it has remained doggedly optimistic. However, its latest report on adjustment in Africa (World Bank, 1994) comes to rather optimistic conclusions on the impact of adjustment, especially on industry. Thus, Adjustment in Africa starts as follows, ‘In the African countries that have undertaken and sustained major policy reform, adjustment is working.’² It finds that the countries that had the most improvements in policies had the strongest increases in GDP growth and that the ‘increase in their industrial and export growth rates was even more striking’. In view of the past debate on the effects of structural adjustment in Africa³ (following the established convention, the discussion of Africa covers sub-Saharan Africa excluding South Africa) these findings are important and deserve scrutiny.

I am grateful to Sunil Mani for his help in collecting the data used in this chapter and to two referees of World Development for their helpful comments on an earlier draft.