Africa is in A Mess: What Went Wrong and What Should Be Done
Author: Godfrey Mwakikagile
Paperback; 176 pages
Publisher: New Africa Press (25 November 2006)
ISBN-10: 0980253470
ISBN-13: 978-0980253474
Chapter Four:
Africa's Economic Performance Since The Sixties: What Went Wrong and What Should De Done
AFRICAN COUNTRIES are in a mess today because of bad leadership and the wrong policies they pursued for decades since independence.
And we are still on the wrong path because of the refusal by most of our leaders to change course despite claims to the contrary especially since the end of the Cold War. We have lost more than an entire generation to such wrongheaded leadership and, in a few cases, well-meaning incompetence.
The record of African governments in the economic arena since the sixties is one of dismal performance at best, and tragic failure at worst.
They have failed to function as a dynamic force for fundamental change because of their poor economic performance. They have, more than anything else, served as instruments of oppression and exploitation, stifling individual initiative by dominating the economy and neutralizing dissent. They have also earned a well-deserved reputation as highly corrupt institutions whose failure is writ large on the African economic landscape telescoped into appalling statistics.
Even in this era of globalization, many people don't want to invest in Africa because of corruption, civil wars and unrest, political instability, lack of law and order, utter disregard for individual freedom and property rights, unwarranted bureaucratic interference and intrusion, lack of infrastructure, and a myriad other problems.
Even local investors are scared to invest in Africa. As Herman Cohen, the American assistant secretary of state for African affairs under President George H. W. Bush, stated:
"(Africa) does not provide the climate for investment and economic growth.
Not only do foreign investors worry about the safety of what they're going to put in, but local people have the same problem.
When I went to Ghana recently (1989), they asked why American investors aren't coming in. And I said, how come Ghanaian investors aren't investing? They said they're waiting for the Americans to show that we have confidence."1
During the last several years, international trade, foreign investment and increasing technology have transformed the global economy and continue to improve the lives of tens - if not hundreds - of millions of people in the Third World. But this improvement has taken place mostly in Asia and in some parts of Latin America, alleviating poverty.
Africa is the only underdeveloped region that has been almost completely left out. Hundreds of millions of Africans have become poorer through the years; their poverty and misery compounded by the AIDS pandemic which has claimed more than 20 million lives in Africa alone since the early eighties and continues to kill about 2 million Africans every year. And there seems to be no way out of this vicious cycle of poverty and misery.
Political chaos, corruption, wrong economic policies, lack of infrastructure - poor transportation and communications and storage facilities - and a host of other problems including lack of skilled labour due to low levels of education and poor health services have all retarded economic growth in African countries. And diminution of the labour force because of frequent and long-term illnesses has been compounded by the AIDS pandemic ravaging the continent.
All those problems collectively are the reason why African countries are in such a deplorable condition more than an entire generation after independence.
In fact, most of the African countries were better off during the first decade of independence in the sixties than they are today.
Besides the former Belgian Congo and a few other hot spots, they had less chaos then than they do today. And they had more to eat then than they do now. Some of them even exported food three decades or so before the sixties. And they still had plenty left for the people to eat and sell on the domestic market. As Dr. Robert Gardiner, the internationally renowned Ghanaian economist who was the first Executive Secretary of the UN Economic Commission for Africa, stated at the 15th Session of the UN Economic and Social Council in Geneva, Switzerland, on July 12, 1968:
"Africa, Asia and Latin America were all net grain exporters thirty years ago, when the total grain outflow from these regions was taking place at an average annual rate of 11 million tons. In the 1940s, the developing regions became net importers; and by 1965, developing Africa was importing 4 million tons of cereals more than it exported."2
Today, 40 years or so after independence, almost all African countries not only import a substantial amount of food; many of them depend on food donations and other forms of assistance from other countries for sheer survival.
Even other developing countries sometimes donate food to Africa, although they are not rich themselves but painfully aware of Africa's plight. They feel sorry for us.
Yet they were just as poor as their African counterparts a generation ago. Some were even poorer. Not only are they richer today; they are also far more technologically advanced than almost all the African countries. Even simple technology has bypassed Africa. And where such technology exists even if in rudimentary form, it can still be a battle to get things done, as this case illustrates:
"For years, customers could not call Kwabena Afari, a pineapple exporter, directly in Aburi, his hometown 65 miles north of here (Accra). His clients first had to call this city, Ghana's capital. Then someone here would call the Aburi post office. Then a post office messenger (from the Aburi post office) would go to Mr. Aburi's home (usually walking, or on a bicycle).
If anything went wrong, and it frequently did, he might not receive the message for days. "Customers were complaining," said Mr. Afari, 46, who recently bought a cellular telephone. "My guy in Turin (Italy) got fed up. He said, 'I can't work with you anymore. It is hard to communicate.'"
My. Afari's struggles are an example of what ails sub-Saharan Africa....As a great wave of trade and foreign investment transforms the global economy...sub-Saharan Africa has been left behind."3
That is something most of us admit. In fact, things are worse than that. Africa has not even entered the race for a share of the global economic pie which goes to the swiftest: those who attract foreign investors and have the upper hand in technical skills Africans don't have, creating a climate conducive to investment. As Lucia Quachey, head of the Ghanaian Association of Women Entrepreneurs, put it: "It's not that we have been left behind. It's that we haven't even started."4
Africa has fallen so far behind that she really has nowhere to go but forward even if it's at a snail's pace while others are flying past her.
Statistics tell the story, and it's a sad one through the years. They paint a gloomy picture of Africa's socioeconomic status, yet a realistic one.
In its report entitled "ECA and Africa's Development, 1983 - 2008," the Economic Commission for Africa (ECA) has the following to say:
"In 1980, the average per capita income of the African region was only $741 compared with a per capita GNP of $9,684 in the industrialized countries. But this crude measure says little about the sad realities of life in Africa."5
The report then goes on to depict an even more appalling statistical profile of Africa's socioeconomic plight in stark terms:
- 70 out of every 100 Africans are either destitute or on the verge of poverty.
- Only 1 out of 4 Africans has access to clean water.
- Of the 33 million people added to the work force during the 1970s, only 15 percent found remunerative employment.
- Per capita income has risen more slowly in Africa than in any other part of the world in the last 20 years.
- Africa's population is expanding at a rate of 2.8 percent annually, while food production is expanding at 1.5 percent.
- In 1980 Africa spent $5 billion importing 20.4 million tons of grain, excluding substantial freight costs.
- In 1980, the average African had 12 percent less home-grown food than in 1960.
- Africa's potential arable land is estimated at 4.2 acres per person, yet only 1.4 acres per person are currently being used.
- Africa's average food production per acre is about half of the world's average.6
In his introduction to the report, ECA Executive Secretary Adebayo Adedeji said if the current trends continue for 25 years, which means until 2008, Africa's socioeconomic situation would be "horrendous." Sadly enough, we are almost there and, in many respects, Africa is no better off than she was back in 1983 when the ECA report was issued.
Nevertheless, to avert the catastrophe the ECA back then called upon massive reforms in Africa and in the international system.
To reverse the negative historical trends, the Commission called for the industrialized nations to live up to their commitment of devoting 0.7 percent of their gross national product to development assistance for African countries, a pledge made to other Third World nations as well. It also exhorted African nations to manage their own resources better in order to fuel an "industrial takeoff."
Warning African countries about the devastating effects of their dependence on imported food, the ECA report recommended changes in agricultural pricing - which discourages African peasants and farmers from producing a lot of food since they are not paid much for it when they sell it on the domestic market. It also recommended changes in land-tenure practices. Both of these changes were recommended as an incentive to increased food production.
But the ECA report proposed nothing new in terms of solutions, except emphasis. In emphasizing the darker side of the continent's predicament, with grim statistics, the report left no doubt that Africa faces enormous problems just to be able to survive at the subsistence level, let alone develop.
In fact, ominous trends to where Africa was headed were evident as far back as the 1960s. During that decade in the initial euphoria of African independence, economic growth in African countries was very slow and generally below the modest target established by the UN General Assembly for the newly independent nations.
Even back then, Africa had the largest number of the poorest and least-developed countries as it still does today. Its economic growth was also the lowest compared with the other developing regions of the world, mainly Asia and Latin America. Computed in 1960 prices, African total output grew by 3.4 percent per year from 1960 to 1966; while per capita income grew by a mere 1 percent annually during the same period.7
As a result of such retarded economic growth, the poverty and misery which were so common across the continent at the beginning of the decade continued virtually unabated during the following years. Africa's poor economic performance during the sixties was also highlighted by stark contrast as it has been through the years since independence.
Higher growth rates in other developing regions have served to sharpen the contrast between Africa's plight and the relatively better conditions in many other parts of the Third World. For example, Mozambique is not Guyana nor is Niger the same as Trinidad & Tobago in terms of economic conditions, although they are all Third World countries.
There are poor countries, and there are those that are the poorest of the poor. And that's where Africa comes into sharp focus.
Unfortunately, the strategy African countries - hence African governments - adopted to pursue economic development was more externally- than locally-based. They counted a lot on foreign aid to fuel their economies. And that was a tragic mistake, and failure, by the modern African state practically in every country across the continent. The reason is simple, although perhaps deceptively simple, which may explain why it eludes even some of our best minds.
We cannot depend on the goodwill of the industrialized nations to develop Africa. To a very large degree, their very prosperity depends on perpetuating the status of African countries - and other underdeveloped regions of the world - as plantation economies for the provision of cheap raw materials to the industrialized world, and as a source of cheap labour for the manufacture of consumer goods for the metropolitan countries. It has now become common practice for companies in the industrialized world to transfer some of their operations or relocate to Third World countries to take advantage of the virtually unlimited reservoir of cheap labour.
This asymmetrical relationship between the industrialized and underdeveloped countries also guarantees markets in the Third World for manufactured goods from the metropolitan nations.
African countries through the years have been flooded with goods from other nations instead of encouraging the growth of their own industries to manufacture import-substitution items. African governments discouraged such entrepreneurship because they dominated the economies of their countries through nationalization of most businesses, thus excluding local investors and entrepreneurs. They also squandered the nation's resources which could have been better spent to achieve economic growth and industrialization.
And this served the industrialized nations well, since it meant African countries would remain primary producers of raw materials for the industrialized world and continue to be a dumping ground for its cheap manufactured goods.
That is what they still are today. And any talk of a new international economic order to redress the imbalance is sheer wishful thinking.
Rich nations dominate the world economy, hence the world market. They are not interested in changing terms of trade to their detriment in order to enable Africans and other Third Worlders have access to markets in metropolitan countries and sell their products to western consumers; nor are they going to allow them to have control over the prices of the goods they produce and sell on the global market.
That is not how the profit system works; not at the national level or at the international level. You can't reform the price system for the benefit of the underdog because the only way it is meant to work is to serve the interests of the rich and the powerful; be it the industrialized nations vis-a-vis the underdeveloped countries of Africa or the local retailer versus peasant customers who buy sugar and cooking oil from him.
There is no room for sentiment in business. Businessmen, individuals or nations, are not in the business of reducing their profits. They in the business of making more and more, not less. And the international economic system, controlled and manipulated at will by rich powerful nations, is based on the exploitation of the weak raw-material producing countries. Therefore it cannot be reformed to benefit the exploited.
The contradiction is obvious. For example, when African countries and other Third World nations called for a new international economic order to transfer some of the wealth from the rich to the poor nations, the former American ambassador to the United Nations, Daniel Patrick Moynihan, bluntly said: "That's looting." And he said it on American national television which was as effective in transmitting his message as if it were an international medium. That was in the late seventies.
So we are on our own. What African countries need to do is to be self-reliant by increasing trade among themselves and establish an African common market on which they can even sell their own manufactured goods to each other which may not be competitive on the world market. Without regional integration and a continental market, we are doomed. Africa's infant industries are simply not ready to compete on the world market flooded by manufactured goods from the industrialized nations.
Had this strategy been pursued from the beginning soon after independence, African countries would not be in the kind of mess they are in today.
But instead, they sought wider markets outside Africa for their primary commodities, and unimpeded access to customers in the industrialized nations to try and induce them to buy African semi-manufactured and even a few manufactured goods which, unfortunately, were no match for those produced in the developed countries. They are also sought the transfer of resources and technology to Africa which would have amounted to about 1 percent of the gross national product of the developed nations per year.
To their dismay, they found out that the industrialized nations erected tariff barriers against African imports, except for those goods they really needed and could not produce themselves. The governments of the developed countries also subsidized exports from their own producers, farmers and manufacturers, giving them a competitive edge over African commodities. And in most cases, the industrialized nations did not honour their commitment to contribute 1 percent of their gross national product to finance economic development in Third World countries. They still don't today.
Behind all these strategies and policies was the modern African state which since independence has been the fundamental dynamic in Africa's economic development; without any input from local entrepreneurs since the state discouraged the growth of the private sector; and without any input from the opposition, of which there was virtually none since the state tolerated no dissent, all of whom could have proposed alternative economic policies which could have saved Africa from economic ruin.
And that is still the case today in most countries across the continent, as the state continues to muzzle the opposition while paying only lip service to democracy, and only grudgingly implementing free-market policies intended to dismantle state monopoly over the economy and replace it with the private sector as the engine for economic growth. The state still wants to maintain monopoly despite its tragic failure as a catalyst for economic progress.
The role the opposition could have played here - pointing in the opposite direction as the best route to economic development, and demanding transparency and accountability from those in office - cannot be underestimated; even if such opposition had been allowed to flourish and present alternative policies within the ruling party itself, while maintaining the one-party system especially during the early years of independence for the sake of national unity which could have cracked along ethnic and regional lines under "multiparty" - read, multi-tribal - democracy many people were demanding soon after the young African nations emerged from colonial rule.
But that does not mean that the one-party state should have, as it did in most African countries, snuffed out the opposition, muzzled the press, and discouraged cross-fertilization of ideas in public forums, just for the sake of "national unity." Had the people been allowed to freely express their views without fear of retribution and instant justice from the nation's security forces, and to publicly challenge government policies and present alternative policies even without the existence of an official opposition in parliament, almost all African countries would have adopted free-market policies soon after independence, and their economies would not be in tatters today.
People want money and profit. They can't get that under socialism, or they get very little of it. They don't get paid or earn enough for their labour and skills and sacrifices under socialism. But they can do so under capitalism more than any other economic system, despite the predatory nature of capitalism. African countries have now adopted free market policies and democracy - one generation too late.
The people should have been allowed to decide what they wanted to do with their lives and what kind of policies their countries should pursue. But they were denied that right and were scared to speak up. Freedom of speech is a natural right, and difference of opinion part of human nature. As one Ugandan professor at the renowned Makerere University in Kampala, Uganda, who for his own safety asked that his name not be used, said in an interview in 1998: "Don't tell me democracy is a Western concept. It's a market concept. Don't tax me and say I should not question you."8
But there were also other problems during the sixties and later on through the decades which retarded Africa's economic growth; again, thanks to the ubiquitous presence of the modern African state, directing virtually everything instead of allowing the people to micro-manage their own affairs and letting the invisible hand of laissez-faire play a role in pursuit of economic development.
However, some of those problems also had their own momentum due to the underdeveloped nature of the African economies and would still have impeded progress even if the state had played a minimal or peripheral role in directing economic development. But the problems were also compounded by unwarranted intrusion by the state, misguided policies, and waste of resources through outright theft and mismanagement by government officials and their auxiliaries.
However, it is also very important to remember that although the modern African state failed to fuel economic growth through state enterprises, its failure should also be looked at in its proper historical context.
There would have been no economic development in Africa at all without state involvement and enterprise. In the absence of a vibrant indigenous private sector, and there was hardly any, it was only the state in the young African nations which had the money - from export commodities, taxes, and foreign aid and investments - to launch and finance economic development projects and invest in the economy.
Equally important to remember is the fact that when African countries won independence, the first thing they had in mind was the consolidation of the nation-state - no country can survive under a weak government and without national unity - and the provision of education and health services (training teachers, doctors and nurses; building schools, clinics and hospitals), as well as the building of infrastructure: mainly roads and bridges, railways and harbours, communications networks, power plants, storage facilities, and much more.
They were all essential projects, as they still are today. But they were not productive right away. They absorbed more funds and other resources than they yielded benefits during those early years of independence. It was years before African countries could see the results, and not all positive.
Agriculture was, of course, the backbone of the economy in all African countries, as it still is today and probably for decades to come. But unfortunately, between 1960 and 1966, agricultural production grew more slowly than the other sectors of the economy in most African countries. In 1960, the agricultural sector accounted for almost 40 percent of the gross domestic product of Africa. And during the next six years, the value added to total output by agriculture increased at a dismal rate of 1.3 percent per year.9
The low level in agricultural production explains, more than anything else, why incomes grew so slowly in African countries during that period. And it is easy to understand why agricultural output was so low, as it still is today in this continent of a peasant economy.
In most parts of Africa, most of the food and export crops are produced in very old-fashioned ways; "primitive" is the word others use, but we don't because of its derogatory connotation in this context.
But it is true that farming techniques in African villages, where most of the crops are grown, have remained relatively the same probably for hundreds of years, severely limiting agricultural production mostly to the subsistence level. Such low yield can guarantee only one thing: economic stagnation, even retardation.
And also, very unfortunately, such output has not kept pace with population growth and increasing urbanization. Even the peasants themselves don't always have enough food for their own families, let alone for urban dwellers. One of the devastating consequences of such low production is hunger. Food shortage across Africa through the years since independence has forced African countries to import and even beg for food without which there would be mass starvation.
Yet all these are primarily agricultural countries which should be exporting food instead. They have more than enough arable land for that. Even in some fertile areas, people still starve because they don't produce or work hard enough; they have large families they can't fully support; and they use poor farming methods without modern skills and equipment.
Income levels have equally stagnated or climbed very slowly through the decades, so that by the late 1990s, almost half the entire African population - and not all that half is a wage-less peasant population - was living on less than $1 a day. That is almost 400 million people. As Stephen Buckley reported from Africa in 1997 in the International Herald Tribune:
"About 40 percent of Africa's people live on less than $1 a day. From 1989 to 1992, nearly half of the continent's countries suffered negative economic growth rates.
Only in the last two years have there been signs of an upturn as such countries as Ghana, Mozambique, Tanzania and Uganda pursue free-market policies; regional growth may have reached 5 percent last year, according to the International Monetary Fund.
Still, in the last 20 years, per-capita income has crawled upward roughly $70 in Africa, compared with a $900 jump in East Asia."10
As Africa's population continues to grow at a phenomenal rate, at least 20 million more people every year, there is an imperative need for African countries to improve agricultural production and marketing in order to increase output and income especially for those living at the subsistence level. As you increase the purchasing power of the vast majority of the people, who are mostly peasants and workers, you also improve prospects for industrialization which is impossible and meaningless without a large domestic market for manufactured goods.
An improvement of the agricultural economy will also increase the labour force for industry - by producing enough food for urban dwellers where factories and workers are - and expand other sectors of the economy whose growth depends on the existence of a vibrant agricultural sector in pre-industrial societies such as Africa.
The industrial sector in most African countries is still very small and rudimentary, not very much different from what it was during the sixties, despite its steady growth in some parts of the continent through the years; for example in the Ivory Coast, Nigeria, Ghana, and Kenya, which are some of the most industrialized countries in black Africa, at least by African standards; by international standards, they are not industrialized at all - nothing but agrarian societies like the rest on the continent.
Between 1960 and 1966, the contribution of manufacturing production to total output in Africa as a whole grew at an annual rate of 4.2 percent. However, by 1966, the manufacturing sector accounted for less than 12 percent of Africa's gross domestic product.11
Some of the major obstacles which impede industrialization in Africa are the very same ones which retard economic growth: lack of investments; a weak infrastructure; shortage of energy supplies in spite of the fact that Africa alone has 40 percent of the world's hydroelectric potential, the largest of any continent, which unfortunately is underutilized; low levels of technical skills; poor health and rampant disease; and the limited scope of domestic markets. For example, in terms of market potential, 30 African countries in 1968 had a total population of less than 5 million each. Some even had less than 1 million. That is in a continent of 53 countries.
Compounding the problem was the fact that these small populations were spread over vast expanses of territory, called countries of course, whose per capita and aggregate purchasing power was almost negligible in terms of sustaining a large domestic market for both agricultural and industrial products.
But even if all these problems, besides small population, were eliminated overnight, most African countries simply did not have large domestic markets to justify large-scale investment in industrialization without coordinating their activities to pursue industrial projects at the regional level. Today they have larger populations, but still not large enough individually to achieve rapid economic growth and industrialization. It is only through regional integration that they can do that.
A regional grouping is in a much stronger position to attract larger investments, especially from foreign investors who have the largest amount of capital, because of its large size for a domestic market and provision of raw materials. An integrated region is also in a much stronger position to form common services and taxation systems and build a solid infrastructure at the regional level, all of which are vital for rapid economic growth.
In the absence of massive foreign aid, such growth is possible only when the private sector is allowed to flourish and operate as the main engine of progress. And it is possible to achieve such progress on a continental scale because of Africa's enormous potential wealth. Tragically, the world's richest continent in terms of natural resources is also the poorest. It is a paradox that will continue to haunt us for a long time. But Africa's plight does not have to be permanent. We can end our poverty and misery.
The effort has to start in Africa itself on regional basis to integrate the continent as a whole, instead of being so dependent on outsiders in terms of trade and economic aid. We must be self-reliant and self-sufficient. One way to achieve this is through inter-territorial and inter-regional trade on a continental scale. Unfortunately, African countries do very little trade among themselves. They also have very few transportation and communication links between them.
Because of the continent's colonial past, the transport system African countries inherited at independence was oriented towards export and import trade with countries outside the continent, and was also intended to serve the colonial powers in their own areas. There was no road, railway or telecommunications network linking several African countries as one region.
Where some of those links existed, it was mainly between countries under the same colonial power. For example Kenya, Uganda, and Tanganyika had a common market, a common currency, and common services under the East African Common Services Organisation (EACSO).
The common services were the East African Railways and Harbours Corporation (EAR&H) which also included the road network; the East African Posts and Telecommunications Services; and the East African Airways (EAA). The East African Currency Board issued a common currency. And there was, of course, the East African Common Market and joint research facilities. As Walter Elkan states:
"The three mainland territories of East Africa, Kenya, Uganda and Tanganyika - all of them administered by Great Britain - were associated in three ways.
First they constituted a common market with more or less uniform external tariff, 'revenue raising' rather than 'protective' in intent. Within East Africa there was virtually free trade both in goods imported from abroad and in goods produced in the region.
Secondly, they were associated by a common currency issued by the E.A. (East African) Currency Board and freely convertible into sterling with which it stood at par. There were no restrictions whatever upon the movement of money and since the commercial banks were all - with one exception - subsidiaries or branches of banks whose headquarters were in London, the whole system could be viewed as in a sense part of the British system with its apex in the Bank of England rather than in East Africa.
Thirdly, they shared a number of common services which were jointly administered by the E.A. High Commission, later reorganised and renamed the East African Common Services Organisation (EACSO). Some of these, the railways, posts and airways, were described as 'self-contained' because they were financed from their own revenues.
The others, called the General Funds services, which included the collection of direct and indirect taxes and the provision of a number of agricultural, medical and other research services, were financed partly by the British CD&W funds and various overseas foundations, and partly by the three East African Governments. The High Commission also administered a number of other matters on which the three (colonial) territories tried to act in concert."12
In fact, East Africa was the most integrated region in British colonial Africa. Yet, it was not economically linked with the other neighbouring countries some of which were under different colonial powers. For example when Tanganyika was under British rule, it had no commercial or transport and communication links with Portuguese Mozambique; very little with Belgian Congo, and only limited commercial ties with Burundi which, like neighbouring Rwanda, was also under Belgian rule. The ties with Burundi were due to the fact that most of that country's exports and imports went through Tanganyika, as they still do through Tanzania today.
But colonial Tanganyika hardly had any trade links with Rwanda; virtually none with Nyasaland (which is Malawi today), except some transport links through the shipping service on Lake Nyasa (which belongs to Tanzania, Malawi, and Mozambique, and not just Malawi) in spite of the fact that both countries were under British rule. Tanganyika also hardly had any commercial ties with neighbouring Northern Rhodesia (now Zambia), another British colony.
Instead, Nyasaland and Northern Rhodesia, together with Southern Rhodesia (Zimbabwe today), belonged to what was then called the Central African Federation which was established by the British in 1953 and dissolved in 1963. Yet, the federation had no formal or even informal links with the three British territories of East Africa: Kenya, Uganda, and Tanganyika. It was more oriented towards apartheid South Africa.
That was the nature of the relationship among African countries during colonial rule. The continent was fragmented in more than one way, although the colonial boundaries themselves were bad enough. And when the modern African state came into being at independence, it unfortunately did very little to facilitate regional cooperation let alone integration.
In fact, it was during the post-colonial era that Africa witnessed the collapse of the East African Community (resurrected in 2001) which could have fostered economic growth at the regional level for the benefit of the three countries involved - Kenya, Uganda, and Tanzania - and for Africa as a whole It would have been an economic powerhouse.
Therefore like in all the other African countries, the task of economic development had to be carried out by individual states within their own boundaries after the Community collapsed; which proved to be an almost impossible task for such economically non-viable states without strong regional cooperation. Almost all African countries are non-viable economic and political entities.
Besides lack of regional cooperation, all African countries faced other major problems after independence. As Adebayo Adedeji, an internationally respected Nigerian economist who served as the Executive Secretary of the UN Economic Commission for Africa (ECA), stated in 1983 in an interview with Africa Report:
"These countries today are faced with major economic crises. We are now increasingly dependent on food imports. We have energy crises for the majority of the member states that are non-oil producing. We have balance of payments problems and debt burdens. We are in a way the victim of the international economic community because, as a result of colonialism, we inherited economies that were utterly dependent on the international economic community.
We made the mistake of not cutting the link as soon as we became independent. We continued with the same mix of policies that we inherited - producing for export and import substitution industry. But we now know that this has not only failed to help us, but it has aggravated our very poor position."13
Trade among ourselves to achieve self-sufficiency would have helped to alleviate our plight and solve the problem. Externally-oriented trade also had a devastating impact on Africa in another way. Undue emphasis on production of export crops - coffee, tea, sisal, tobacco and others - left Africa hungry through the years; in fact so much so that we turned to other countries for relief, begging for food we ourselves could have easily produced on this agricultural continent with plenty of arable land more than enough to feed everybody across Africa.
African countries should have emphasized food production first, as soon as they won independence. Instead, they did exactly the opposite. It is true that they needed foreign exchange earned from export commodities as much as they do today. But what good does it do when they end up spending the foreign exchange they just earned to buy food from other countries - at an even much greater cost than what they earn from export crops - they themselves could have produced on their own soil?
It is the independent African countries themselves, not the colonialists who have long been gone, which are now responsible for their condition and for having their priorities in the wrong order: export crops first, food last, instead of the reverse being the case.
Even today, African economies are still oriented towards export production - to serve outsiders - instead of being geared towards food production to feed their own people. That's why we beg so much.
And unfortunately, African exports themselves have not done well on the world market. They are not in high demand, they fetch low prices, and are easily substituted in the industrialized countries by local products - a lot of them synthetic.
Yet these are the very same nations Africans expect to be their biggest customers. But they are not buying much from them. So Africans are stuck with their commodities or end up selling them at very low prices. That alone is a compelling argument for the establishment of an African common market on which Africans can sell their products to each other even for better prices instead of waiting for outsiders to buy their products and get paid very little for them.
Even Africa's industrialization depends on outsiders, not only for capital investment and technical skills but also for provision of raw materials. With regard to the first two, Africa will probably have to depend on foreigners for a long time. They are the ones who have the capital to invest far more than Africans do. They are also the ones who have the technical skills Africans don't have.
But in terms of raw materials, African countries can do far better than what they do now. And African governments - synonymous with the modern African states - are the ones who are at fault because it is they who formulate policies and strategies for national development including industrialization.
Why do they import raw materials when Africa produces all kinds of raw materials which can be used by the industries on the continent? Most of the industries in Africa use imported raw materials. Yet their operations could be adapted to use local materials and produce goods from domestic resources.
Even in the petroleum sector, it's the same problem. For example, Nigeria is the world's fifth largest producer of oil and the largest in Africa. Yet it does not even have enough petrol for its own people.
That is the same contradiction Africans face with regard to food. Africa is an agricultural continent which can produce more than enough food to feed its own people. Yet African countries import food, and even beg for food, counting on donor nations and international relief agencies to send food to Africa.
Such dependence on imported food has even changed the eating habits of many Africans. They want to eat the kind of food their countries cannot even produce because of the different climate. Food grown in America, Europe and Australia, continents which have a temperate climate, cannot be grown in Africa's tropical climate.
Dependence on imported food has also affected agricultural production. Some people don't want to grow enough food because they are waiting and expect to be given food donations. And there are those who don't grow enough food because they don't want to eat African food anymore. They are tired of eating cassava and cassava leaves, for example, and want wheat instead.
And it is the same situation with raw materials for African industries. Many Africans may be surprised to hear that most industries on the continent use imported raw materials which could very easily be replaced by local ones. But it's true. As Adebayo Adedeji pointed out:
"Eighty percent (which is really almost 100 percent) of the industries in Africa depend on imported raw materials and this is a raw material-producing continent. This is an agricultural continent. That is the greatest contradiction we face....
We have created enclaves of modernized sectors that really have no linkage with the rest of the economies. In the production of beer, for instance, every raw material except water is imported, because we do not produce malt, barley, etc. Again (like in the case of food) it is a question of adapting.
Why can't we adapt our own products? We must have industry based on the use of our own raw materials....
The result is that what should have been a savings of foreign exchange becomes instead a great demander of foreign exchange ( to pay for imported raw materials, which Africa wouldn't have to, if she used her own raw materials). And when you are short of foreign exchange, industries close down because you cannot purchase raw materials or spare parts."14
In spite of Africa's vast amount of natural resources, industrialization on the continent has proceeded at a very slow pace through the years. Foreign investments, a vital component of Africa's industrialization strategy, have not poured into the continent but have, instead, been diverted elsewhere; although Africa's potential as a highly lucrative market is beyond dispute considering the continent's immense resources and large population.
Not all foreign investors have ignored Africa, but a substantial number of them have. And if investment figures are a good statistical indicator of where the continent may be headed, it is highly probable that Africa will remain on the periphery of the global economy for many years to come; unless the continent moves en masse as an integrated whole into the mainstream of the world economy, and not as a fragmented region of dozens of non-viable states whose weakness and instability not only discourages but scares away investors. Investment figures tell the story, and it is a sad one.
Since 1988, foreign investors have invested more than $400 billion in developing countries.15 Yet only a trickle of that has gone to Africa. Trade in most parts of the world, including business transactions between developing nations in Asia and Latin America, has grown enormously since 1988. Yet African countries are still desperately struggling to find customers for their agricultural products and manufactured goods on the world market. Collectively, Africa receives only 3 percent of the total foreign investment directly invested in the Third World.16 The rest of it, a staggering 97 percent, is poured into Asia and Latin America.
Africa's minuscule share could diminish even further. For example in 1995 alone, according to the United Nations, the amount invested in Africa dropped by 27 percent, a frightening figure for a region which is already not getting much investment. In terms of dollars, the amount dropped down to $2.1 billion. That was the total amount invested in the whole continent, which was less than what China received in only two months.17 And most of that money was invested in South Africa which always gets the lion's share of the foreign investment going to Africa.
And it is easy to understand why Africa does not attract many investors as we explained earlier. It is for the same reasons why the continent is not industrialized. And it is for the same reasons why it has not even started to develop.
They include shortage of high-level manpower and other skilled workers; and lack of infrastructure and a large domestic market which would justify large foreign investments. These are just some of the major reasons, including political instability, why foreigners don't want to invest in Africa in large numbers. For example, it does not make any sense for a foreign manufacturer to build a manufacturing firm in Malawi or Mali to make refrigerators when only very few people in those countries can afford to buy them.
And that applies to almost all African countries across the continent except South Africa. As John Koo, president and chief executive officer of the giant Korean manufacturer LG Electronics, said in 1997: "With Africa, we have a problem making investment decisions and we don't have a solution at the moment.”18
Africa's inability to find enough investment from foreign countries has been made even worse by the reduction in foreign aid African nations have depended on so much since independence. The end of the Cold War has aggravated the situation. The Soviet Union is dead. Therefore there is no more competition between the two former ideological foes - the capitalist West led by the United States and the communist East led by the Soviet Union - for client states in Africa they used to entice with money and other forms of assistance.
The amount of aid from donor countries and multilateral institutions to Africa dropped from $17 billion to $15 billion between 1990 and 1994. As President Henri Konan Bedie of the Ivory Coast put it:
"We see certain countries going through budgetary difficulties that want to back away from offering development aid. They say everything ought to be referred to the private sector. If you wait until the private sector comes to build primary schools for children, I think you could wait a long time."19
He did not, of course, address the fundamental problem. As a leader, he knew he was part of the problem just like most of his colleagues across the continent are. In fact in most cases, they are the cause of the problem.
Schools, hospitals, roads and bridges, are not being built in African countries, not because of the Americans, the British, the French, the Germans and others; they are not being built because most African leaders don't want to build them or do anything else for their people. They are busy stealing. That is why our countries don't have enough schools, hospitals and medicine. That is why the infrastructure is crumbling. That is why institutional decay has become part of national life. And that is why some of our people want our former colonial masters to come back and rule us again. Life was better under them.
When nothing is done in our countries, don't blame donor nations for that. They can't keep on pouring money into Africa only to be stolen. So don't complain when they talk about donor fatigue. And don't complain when they are pulling out. Africa is not going to be developed by foreigners. It is going to be, and it must be, developed by us: Africans. But it has not because of bad leadership notorious for neglecting the continent's deplorable condition.
It is such neglect which has been used by soldiers to overthrow governments across the continent through the years. Tragically, they have not done any better than the leaders they overthrew. Military coups since the sixties soon after independence, and civil wars which have ravaged the continent for decades, have made the situation worse.
Since the first military coup in sub-Saharan Africa which took place in Togo on 13 January 1963, resulting in the assassination of President Sylvanus Olympio, more than 90 military coups have been carried out; an average of at least two coups almost every year since 1963.
In most of those years, more than one government was overthrown, sometimes within the same country. For example, two governments were overthrown in Nigeria in 1966; and three, including one civilian, were overthrown within the same month in Sierra Leone in April 1968.
In addition to military coups, more than 30 civil wars have been fought on the African continent since the sixties. That is an average of one every year, but in reality more than one are being fought.
There are also separatist tendencies, some violent: in Casamance province in Senegal; in the Ogaden region and among the Oromo people in Ethiopia; in the Comoro Islands; Angola, Nigeria, Namibia, Sudan; Tanzania where secessionist sentiments in Zanzibar are becoming more widespread; and elsewhere on the continent although muted, compounded by other form of strife caused by neglect.
Not every African country is on fire. But the conflicts are unsettling enough for many potential investors to avoid Africa and invest elsewhere where there is less conflict or no fighting at all. There are many conflicts across the continent, and there are many countries which are politically unstable even if they have not exploded into full-scale civil war as happened in Rwanda, Burundi, Somalia, Liberia, and Sierra Leone. Perception matters even if it is not reality in all cases. Therefore it is easy to understand why many investors are not very enthusiastic about investing in what is generally perceived to be a highly volatile continent.
Then there is the question of leadership even in the investment sector itself. Most leaders and other government officials across the continent are corrupt, demanding huge kickbacks from investors and stealing outright from their own people and whatever they can scoop out from foreign aid. They even steal donated food and clothes. They steal anything. And they steal from anybody, including the poorest of the poor.
Yet they have the audacity to blame foreigners for the kind of mess we are in today, the same kind of mess we have had since independence in most parts of Africa. As George Ayittey, the Ghanaian professor of economics at The American University, stated in 1997: "(Africa's economies will remain crippled) as long as you have these mafia governments, these predatory states. In Nigeria, in Zaire, all over the continent, the people in government are just looters."20
They also perpetuate themselves in power so that they can continue to steal. Yet they are the very same people who constitute the modern African state which is the fundamental dynamic in Africa's economic performance. Unfortunately in most cases, they have achieved nothing or exactly the opposite. As Ayittey stated on another occasion a few months earlier in The Wall Street Journal:
"Africa's economic performance has lagged persistently behind that of other Third World regions, despite receiving more than $300 billion in foreign aid since 1960.
Crumbling infrastructure, senseless civil wars, political instability, high taxes, rampant inflation, runaway government expenditures, unstable currencies and high-level corruption have all conspired to stunt Africa's economic growth and render the continent unattractive to foreign investors. According to the World Bank, in 1995 a record $231 billion in foreign investment flowed into the Third World. But Africa's share was a paltry $2 billion or 1 percent.
Even Africa's own kleptocrats avoid the continent. The UN itself estimated that $200 billion - or 90 percent of sub-Saharan Africa's GDP - was shipped to foreign banks in 1991 alone.
The secrets of economic growth are known: rule of law, private property rights, pro-market and pro-trade policies, investment in human capital and creating an entrepreneurial environment. But Africa's problem is the predatory state itself - government hijacked by gangsters and con artists, who have turned the state sector, instead of the market, into the arena for private wealth accumulation.
The underlying ethic is self-aggrandizement and self-perpetuation in power. The richest people in Africa are heads of state and their ministers. Helping the poor, promoting competitive economic growth and reforming the state are anathema to the ruling elite.
If pressured, they adopt temporary, cosmetic "reforms" that ensure a continued flow of Western aid. But most Africans understand this reform posturing as the "Babangida boogie": one step forward, three steps back, a sidekick and a flip to land on a fat Swiss bank account."21
But how have southeast Asian countries which are also corrupt been able to develop and surpass Africa in every conceivable way within a generation since independence? The colonial experience does not explain the difference. Both regions were colonized. Both emerged from colonial rule around the same time. And both suffered or benefited from colonial rule.
If colonial suffering accounts for the disparity, then we Africans need to be reminded that southeast Asian countries suffered even longer, in fact much longer, than we did under colonialism. And they were devastated during World War II in a way our countries were not. Yet they were able to recover and zoomed right past us.
How do we explain the difference in economic performance? Why have we performed so poorly? Some amongst us have even found clever ways to explain or justify our failure to develop. As the mayor of Congo's largest city Kisangani, Alauwa Lobela, stated in 1997:
"In Africa the climate is such that there's always fruit around, in the back of the house, and you just reach up and pick it when you're hungry. But in Europe and Asia, the climate forced people to get food, to protect themselves from the cold in the winter, to develop a spirit of battle."22
Yet we cannot explain why millions of our people are undernourished and starving on this continent of abundance. If we are satisfied with our condition, while napping under the tropical sun after eating some fruit easily plucked out of trees, then we will be sleeping for a long time while others sleep with their eyes wide awake, busy working. They include southeast Asians whom we have failed or simply refuse to emulate. And the contrast is glaring.
Since 1965, the per capita incomes of southeast Asia grew 11 times faster than those of sub-Saharan Africa. The question is why such a huge gap in economic performance between the two regions both of which emerged from colonial rule roughly around the same time during the post-World War II era.
There are several reasons. Economists point to a combination of factors associated with rapid economic growth in East Asia during the post-war period: countries like Japan, China, Taiwan and South Korea underwent land redistribution after World War II and became relatively egalitarian nations. That is one prime factor in the acceleration of their economic growth.
The other factors, besides land redistribution which helped transform these countries into egalitarian societies, cited by economists to explain Asian economic success include a well-educated and healthy population; a dramatic decline in birth rates; and open free-market policies emphasizing exports which East Asian nations adopted relatively early, contrasted with Africa.
A combination of all those factors proved to be a potent dose which helped fuel spectacular economic growth in those Asian countries.
They also emphasized fiscal responsibility, contained inflation, vigorously promoted export trade, and kept their currencies undervalued. And they are still following the same combined strategy.
African countries did exactly the opposite. They did nothing to reduce or contain skyrocketing inflation. They squandered money. They discouraged production of export commodities by controlling the economy and imposing very high taxes. And they did not devalue their currencies, a critical step towards rejuvenating weak economies.
Failure to do all those things paralyzed African economies and made it impossible for their exports to compete on the world market.
Then there was socialism. Almost all African countries adopted socialist policies in one way or another. And a number of them - for example Ghana under Nkrumah, Guinea under Sekou Toure, and Tanzania under Nyerere - were virulently anti-capitalist. As Professor Ali Mazrui stated in his book Towards A Pax Africana which was published in 1967, the euphoric sixties when most African countries won independence:
"No ideology commands respect so widely in Africa as the ideology of 'socialism' – though, as in Europe, it is socialism of different shades.
In Guinea and Mali a Marxist framework of reasoning is evident. In Ghana Leninism was wedded to notions of traditional collectivism. In Tanzania the concept of Ujamaa, derived from the sense of community of tribal life, is being radicalized into an assertion of modern socialism.
In Kenya there is a dilemma between establishing socialism and Africanizing the capitalism which already exists. In Nigeria, Senegal and Uganda some kind of allegiance is being paid to the ideal of social justice in situations with a multi-party background.
There are places, of course, where no school of socialism is propagated at all. But outside the Ivory Coast there is little defiant rejection of the idea of 'socialism' in former colonial Africa." - (Ali Mazrui, Towards A Pax Africana, p. 97).
Capitalism was, and for good reason, identified with colonialism and the colonial powers, all of them capitalist, from whom African countries had just won independence, and was therefore seen as a system of exploitation whose continuation by the new African nations would only perpetuate their colonial bondage in a new form: neo-colonialism.
Nkrumah and Nyerere became some of the most vociferous and articulate exponents of the theory of neo-colonialism. And they were vindicated by history despite the failure of their socialist policies to develop their countries.
By remarkable contrast, East Asian nations, especially the most successful ones, avoided socialism. They were also vindicated by history.
Through the decades, socialism proved to be disastrous round the globe and African countries were among those which suffered the most.
Savings is another factor which has played a vital role in the rapid economic growth of East Asian nations.
Savings are needed to finance new factories and provide capital for investments that stimulate economic growth. Partly because of market incentives and government initiatives, national savings rates have been much higher in Asia, averaging more than 30 percent of the gross domestic product, than in Africa whose savings rate on average is about only 12 percent. For example from 1981 to 1990 according to the World Bank, sub-Saharan Africa's savings rate was 12.6 percent contrasted with 33.2 percent for South Korea, Hong Kong, Singapore and Taiwan; and 31.9 percent for Thailand, Indonesia and Malaysia.23
And many Africans are well aware of the problem. As Professor Samuel Ndomba at the University of Kisangani in Congo stated: "Our problem is that we don't save. When people get a bit of money, they just spend it to buy a beer."24
Congo became one of the poorest countries in the world under the kleptocratic regime of Mobutu. Yet it is potentially one of the world's richest even without a national culture of savings. As Nicholas Kristof reported from the diamond-rich city of Kisangani, in The New York Times:
"The area around this river port city in eastern Congo (on the Congo River), is dilapidated and impoverished yet (fertile and) studded with diamonds, like a billionaire on Skid Row.
Back in the 1950's, when this country and several others in Africa were at the same income level as South Korea and while blessed with far more natural resources, it might have seemed reasonable that Africa would soon leave Asia in the dust. Now (resource-poor) South Korea has a per capita income of about $10,000 a year (1997 statistics), and (mineral-rich) Congo stands at $150 per person."25
Rotten leadership combined with Western greed ruined the Congo. And failure to save only made things worse through the years.
But besides the profligacy of some individuals, one of the main reasons why many Africans don't save is inflation and political instability compounded by corruption. Money saved ends up being stolen or simply confiscated in many cases in many countries.
There is no one to take to court because government officials and the courts themselves are corrupt And they work together. The judges are appointed by corrupt politicians, and politicians cannot be locked up by the judges they appointed. And the police who are supposed to be making the arrests are just as corrupt. Therefore they are not going to arrest the culprits who bribe them on regular basis and who are, in fact, more powerful than they are. It is a vicious cycle.
If a lot of money was saved, it would help fuel Africa's economic growth. And it can be done. Southeast nations, the Asian Tigers, have done it. And they continue to do it.
Japan also has done it, as have many other countries. And they continue to do so, except us. For example during the nineteenth century, Japan had very low savings rates. But they went up dramatically because of sustained governments campaigns encouraging the people to save. The savings also increased because of the establishment of savings institutions in different parts of the country where the people could save their money. Eventually, the large national savings were used to finance Japan's industrialization, one of the most successful in history.
Japan also invested heavily in education to train a large number of people who then went on to play a critical role in the country's industrialization and rapid economic growth.
Without a strong educational foundation, and a large educated work force, no country can develop regardless of how much foreign investment is poured into it. Before anything else, even natural resources, a country needs manpower. It comes first. Look at Singapore, a city state without natural resources. It is one of the most developed countries in the world.
It relied on brain power to develop. Its people are some of the most highly educated in the world, with a large number of scientists who have played a critical role in the country's spectacular economic and industrial growth - without minerals and other natural resources besides its people, the most important natural resource every country has.
Once a country has enough manpower including highly trained and skilled workers, it can then plan the next move, which includes absorbing technical information from the industrialized nations because it already has a critical mass of highly trained people and professionals who constitute the scientific community needed to digest and use that information for national development.
Many developing countries, including ours in Africa, demand technology transfer from the industrialized world without knowing exactly what they are going to do with it. Where are the people who are going to apply the technology? Do we have the scientists needed? There aren't even enough people who understand the technical journals coming from Europe, North America and other parts of the developed world. As Michael J. Moravcsik and J. Ziman, professors of physics at the University of Oregon and the University of Bristol, respectively, stated in their article, "Paradisia and Dominatia: Science and the Developing World," in Foreign Affairs:
"There are still those who seem unconvinced of the urgency of the need for an indigenous scientific community in a country such as Paradisia. With scientific knowledge and technological know-how available for all on the world market, would it not be easier to import and use whatever is needed, without building "local production facilities" in these commodities?
This commercial metaphor is appropriate, since the essence of this argument is an appeal to the principles of classical liberal economics - the open market, free trade, economies of scale, and the division of labour. Let the great knowledge factories of the advanced countries export their great surpluses of information, fact and theory, in exchange for industrial products manufactured in the newly developed nations.
At the most elementary level, this analogy is entirely fallacious. Scientific knowledge lacks many of the necessary attributes of a commercial commodity, and cannot be fairly bartered for material goods and services. It is not possible simply to "import" science and technology in the absence of an indigenous scientific and technical community....
(In) Japan, the large-scale importation of scientific techniques in recent times was preceded by decades of development of an indigenous scientific and technological community....Japan's industrial power is now matched by the intellectual resources of a first-class scientific community."26
In addition to Japan, each of the other East Asian nations also has a scientific community which is bigger and better trained than any found in black African countries with the exception of South Africa which inherited a lily-white first-class establishment built by the apartheid regime to perpetuate white supremacy.
But East Asia also has had another big advantage over Africa in terms of manpower in general, besides the large number of scientists and technicians. And that is something African countries cannot achieve within a relatively few years, not even in a generation, as demonstrated by Africa's slow progress through the decades since independence in the sixties; although things could be better, in fact much better.
Countries like South Korea started out on the road towards economic development with citizens who were already more educated, also more healthy and free of debilitating diseases and other health problems such as worm infestation, than those in Africa and other developing regions of the world. And they continued to improve their educational and health services through the decades when African countries were taking their first step on a parallel road towards the same destination.
Health problems are much more serious in Africa than in the Asian countries which have achieved rapid economic growth. Parasites, and microbes unheard of in other parts of the world, destroy people and the economy. As Nicholas Kristof stated in his report from Africa published in The New York Times:
"Health problems have also been a greater economic burden on Africa than is often realized. Most Africans, for example, have stomach worms, and as a result millions of people cannot study or work energetically, and some children have their intelligence permanently impaired because of anemia caused by parasites. "From the age of two, most people here have worms," shrugged Bakondagama Barandala, a 24-year-old nurse at a shabby clinic in Mambasa, in northeastern Congo.
The clinic is a metaphor for public health in Congo: it is the only clinic in the region, yet it has no doctor, no electricity, no drinking water, no instruments and no medicines."27
The government did nothing to help the people. It is the same complaint across Africa.
Governments do nothing to help the people, prompting some to recall with nostalgia the "good old days" of colonial rule when things were much better than they are now.
And it is to the same former colonial masters that we have now turned for solutions to our economic problems in terms of adopting capitalism as the best means to achieve our goals. Foreign aid is not going to develop Africa. In fact, it has not worked. And nothing is going to work as long as corruption remains a major problem. It is endemic. And nothing is going to work if African countries don't integrate their economies at the regional level.
Even the money given to implement free-market reforms has not always worked, mainly because of rampant corruption and waste. As Michael Chege, a Kenyan professor in the United States, stated in The Times Literary Supplement:
"In the ostensible effort to kick-start self-sustaining and "open" - as opposed to protectionist - capitalist economies in Africa, no region in the world has received as much external aid over the past two decades: $36 per capita in 1993, compared to $8 in Latin America and just $4 in South Asia.
On average, some 16 per cent of that gradually disappearing global share of the African gross domestic product was made up of concessional financial infusions from Western governments and multilateral organizations like the World Bank and the European Commission.
In equally poor Asia, economic recovery is already under way, even though foreign donations as a share of GDP were running at about a third of those of Africa up until the early 1990s."28
While Africa continues to lag behind other regions of the world, the continent's economic and political condition continues to deteriorate because of corruption and political instability. Where there has been some improvement, such improvement is either temporary or insignificant considering the enormous problems African countries face in all areas. Yet they expect foreigners to come and invest in those countries, knowing full well that our leaders have not done enough to create a climate conducive to investment.
First, conditions must be suitable for investment in Africa, and must be constantly improved. And foreigners must have confidence in Africa's economic prospects before risking their investments. But the primary emphasis by African countries must be on capital accumulation from national savings and domestic investments which is the only way they can fuel and guarantee sustained economic growth for decades to come.
Foreign investments do help, when they are available, and in amounts African countries deem necessary to finance economic development. But that is not always the case. And they are no substitute for locally created wealth as the best source of capital for long-term economic growth. Dependence on foreign investments to develop a country is suicidal.
Foreigners invest to help themselves, not to help develop a country in which they invest. If it goes down the drain, they simply pull out and go elsewhere to invest.
It is only the citizens of that country who can develop it, with or without foreigners. That is one lesson we have not learnt well in Africa as we continue to count on foreigners to develop our countries. And it partly explains why we are so marginalized in the global arena.
Although Africa is on the periphery of the mainstream in the global economy, it still is an integral part of the international system run along capitalist lines on terms dictated by the West where our conquerors came from. Capitalism itself is cruel by nature because it thrives on greed. Paradoxically, it is this very same vice, greed, which is its greatest "virtue" as an incentive to production many African governments failed to achieve under socialism with its redistributive ethic.
Other governments which did not pursue socialism also failed to develop their economies because of heavy-handed interference in the economy by the state just like their socialist counterparts. As Tanzania's President Benjamin Mkapa said after free-market policies were adopted in the nineties: "The Rubicon of reform has been crossed. Government has no business doing business."29
Yet it is the responsibility, hence the business, of the government - any government - to protect the weakest members of society from cruel market forces and other predators. Otherwise it cannot justify its existence. It is this failure by African governments to help and protect their people which has prompted many of them to seek relief elsewhere, especially from the West, including an appeal by some Africans to our former colonial masters to come back and rule us again.
Globalization itself, which is a form of penetration of Africa and other developing regions of the world on terms stipulated by the West, has caused a lot of misery and suffering in countries implementing structural adjustment programmes as a mandatory requirement for aid from the World Bank, the IMF and donor nations. But it has at the same also benefited many people adept at playing the capitalist game in the open field of market forces where the rules of the game are profit-making and self-aggrandizement, hoping for a ripple effect to spread the benefits of capitalism to the poor across society.
Whether or not globalization will help Africa to develop in the long run is one of the most contentious issues of our time. But there are those who feel that, with or without golobalization, Africa may be headed in another direction, and in fact should, because of the failure of African leaders to put our countries on the right track.
It is an idea that is terrifying and infuriating to many, if not the majority. But it is also a prospect whose compelling logic is derived from Africa's terrible experience since independence. However, one thing is certain. We are headed somewhere....
Africa is in A Mess: What Went Wrong and What Should Be Done
Author: Godfrey Mwakikagile
Paperback; 176 pages
Publisher: New Africa Press (25 November 2006)
ISBN-10: 0980253470
ISBN-13: 978-0980253474