30 May 2016

Continent Hobbled by Reliance on External Forces

Written by  Adekeye Adebajo

No. 366: Continent Hobbled by Reliance on External Forces / Adekeye Adebajo / Business Day
30 May 2016

Last week saw the commemoration of Africa Day across the continent, marking the birth of the Organisation of African Unity (OAU), forerunner of the African Union (AU), in 1963. In creating the AU in SA in 2002, African governments were forced to recognise that economic development could not simply be legislated into existence. The glue that had held the OAU together for three decades — the liberation of Southern Africa — had now come unstuck.

With growing poverty and continued insecurity replacing apartheid and colonialism as the common enemy, the OAU was forced to focus increasingly from the 1980s on economic development.

Less than 12% of continental trade is intra-African, and regional integration has been an abysmal failure. Although the percentage of Africans living in absolute poverty has fallen since 2000, from 58% to 41%, and primary school enrolment increased from 60% to 80%, most of the poorest economic performers in the UN human development index remain African countries.

The flattering western narrative of "Rising Africa" has been halted dramatically by the recent collapse of the commodity boom, resulting in a 16% fall in the continent's terms of trade.

In his famous 1972 treatise, How Europe Underdeveloped Africa, Guyanese scholar-activist Walter Rodney, a member of the radical "Dar School" at Tanzania's University of Dar es Salaam, lamented the consumerist rather than productive nature of African economies and the general lack of savings across the continent.

He bemoaned Africa's declining terms of trade, unequal exchange and the historical exploitation of the continent by European colonial powers — and, later, the US, which he argued had integrated Africa into the capitalist system on vastly unequal terms.

Rodney thus called for African self-reliance. Fellow socialist Egypt's Samir Amin similarly remained a critic of the liberal capitalist system whose demise he often predicted, suggesting that Africa "delink" itself from it in ways that could promote a genuine transition to world socialism.

Nigerian scholar-diplomat Adebayo Adedeji, who headed the UN Economic Commission for Africa between 1975 and 1991 and was Africa's most renowned visionary of economic integration, oversaw the creation of regional integration schemes encompassing West, Southern, Eastern, and Central Africa.

He also pushed the OAU to organise an economic summit in 1980 at which he championed — like Rodney — the collective self-reliance principles of his Lagos Plan of Action. Adedeji then produced an alternative plan to the World Bank and International Monetary Fund's (IMF's) structural adjustment programmes in 1989. His ideas were adopted enthusiastically by African leaders, but then left to gather dust.

Like Adedeji, Malawian economist Thandika Mkandawire has been one of the most eloquent critics of the Bretton Woods institutions' structural adjustment experiments in the 1980s and 1990s.

The bank and the fund enforced cuts in education, health and employment in an unaccountable manner that often undermined democratic governance and fuelled social unrest.

As Mkandawire noted, Africa's recovery from the mid-1990s was based on its exports to Asia doubling to 27%. However, with the Chinese boom slowing, the fragility of Africa's "growth without development" approach and considerable deindustrialisation became evident.

The key document of AU Commission chairwoman Nkosazana Dlamini-Zuma's tenure has been Agenda 2063, a 50-year vision for Africa. Although containing some sound ideas, the plan's more quixotic aspirations include eradicating poverty in two decades, creating a continental free-trade area by 2017 and doubling intra-African trade by 2022.

More concretely, the possibility of socioeconomic reform in Africa was provided by the first term of Nigeria's "Iron Lady", Ngozi Okonjo-Iweala, who served as finance minister of Africa's largest economy between 2003 and 2006. She was the architect of the deal to pay off Nigeria's $30bn debt (the second-largest such deal with the Paris Club of creditors at the time) and led a team of courageous technocratic reformers seeking to tackle corruption and build efficient public and private institutions.

Okonjo-Iweala's "second coming" as finance minister between 2011 and 2015, however, proved to be less messianic, as Nigeria's external and internal debt rose and graft increased.

Having achieved the political kingdom with SA's liberation in 1994, Africa is still on a quest for the economic kingdom.

Dr Adebajo is executive director of the Centre for Conflict Resolution, Cape Town, and visiting professor at the University of Johannesburg

This article was also published in Rand Daily Mail on 30 May 2016 under the headline "Why Africa's Socioeconomic Struggles are Set to Deepen".

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