Globalist Bookshelf

Setting Africa on the Right Track

What do the last 30 years teach us about Africa's future?

Order Henry Nau's "At Home Abroad."

Takeaways


African countries do not need strong states to develop. They need strong societies — meaning, a strong sense of community and common purpose. These qualities a state may symbolize, but it cannot create.

This connection also explains why it is so unfortunate that Africa's post-independence authoritarian leaders have often used the state to create personal fiefdoms.

As Kofi Annan, the UN secretary-general noted, they created "an acute form of 'winner-takes-all' politics, where victory at the ballot box has translated into total control over a nation's wealth and resources."

Democracy could do much better.

Indeed, the only country in Africa that has achieved Asian-type growth (of around 8% per year during the period from 1965—1990) is Botswana.

This southern African country is a good example of democracy, albeit one in which the same party has won every election since independence.

At best, democracy is a formula that accommodates diversity, unleashes economic incentives — and creates a sense of common worth.

But democracy in Africa, although it may be long in coming, should not be delayed because it is thought to complicate development.

Elites — and the state apparatus they construct and control — not ethnic pluralism, are the chief obstacles to development in Africa.

Africa needs better indigenous political leadership, but not a stronger or bigger state. It needs leaders who can rise above ethnic origins.

And it needs leaders who create a sense of fair play and rules that apply to all ethnic and socioeconomic groups.

Democratic processes contribute directly to the creation of this sense of fairness. South Africa may be an example.

Elections in 1994 — considered by all to be free and fair — produced a unity government that included the white minority and struggled to marginalize extremists.

This government produced a new constitution. The white-dominated National Party then withdrew from the government.

It now plays the role of the loyal opposition. The transition still has a long way to go. Crime is rising — and whites continue to dominate economic life. The government has yet to prove its capacity to provide safety and opportunity for all its citizens.

But the country is moving in the right direction. I believe three policies are key to promoting civil society in Africa — agricultural development, privatization — and small-industry investment and export orientation.

Agriculture must lead. Based on arable land, Africa could produce 130 times more food than it does today. It has 2 billion acres of arable land that are not being cultivated.

The surplus generated by agriculture could then be plowed back into education, health — and housing for the majority agricultural population.

Some of the people will likely migrate to cities, but many of them will largely be accommodated in the country.

Cottage industries — textiles, toys and plastics — will have to be encouraged.

Some labor will then be absorbed in the construction of rural infrastructure, such as roads, storage facilities and communication lines.

The objective, however, is not to keep the poor on the farm indefinitely. That is the false prescription some of the anti-city ideologies of the 1970s advocated (the “small is beautiful” movement).

The objective is to move people gradually — so long as human and social situations permit — into the industrial economy and the nationally, regionally and internationally-oriented urban communities.

Government policy has a critical role to play. But the international community should finally get it right as to what that role is.

Government invests in education and health to populate the civil society with independent and activist citizens.

It provides safety and an impartial judicial system to protect private property and contracts.

It creates rules for private competition and mobility in all sectors — labor, capital and trade. It opens markets for countries that are too small to develop on their own.

And it maintains stable macroeconomic policies and financial markets.

Since the mid-1990s, over two-thirds of Sub-Saharan African countries have been implementing government policies along these lines. And in 1995-96, these countries averaged growth rates of 5% per year.

Countries implementing IMF programs grew fastest. IMF programs are not the problem. The problem is how these programs are implemented by local governments.

IMF programs provide currency support for developing countries — if these countries meet certain targets for reducing budget deficits, money supply and inflation.

But IMF programs cannot work when local politicians cut budget deficits by reducing education and health expenditures for the poor. Rather, they need to cut subsidies for elite urban hospitals or raise taxes on the rich.

Also, these programs cannot work if central banks are corrupt or are unable to manage the money supply. The IMF then becomes a convenient scapegoat for bad policies by elitist governments — but it is not the cause of these policies.

The international trade regime is also critical for African countries. Its share of world trade is miniscule and in reality, it fell in the 1950s to mid-1990s.

With the most small countries of any other continent, Africa needs healthy regional and global markets to promote the development of its national markets. In 1991, the Organization for African Unity set a target for the economic integration of Africa by 2025.

But little progress has been made. Frustrated, the OAU recreated itself in 2001 as the African Union, modeled after the European Union.

But this effort, inspired and financed by Libyan strongman Moammar El-Gadhafi, is more politics than substance. Africa is too diverse to unify economically.

Subregional common market efforts may be more feasible. Some already exist — such as the Common Market for Eastern and Southern Africa, the Southern African Development Community and the Economic Community of West African States.

Quantitative barriers to trade have fallen and exchange rate regimes have been rendered more liberal. These trends are minimal and not yet widespread.

But, they are moving in the right direction. They should be complemented by broader global trade liberalization efforts.

Yet, eventually, trade is the continent's best hope because foreign capital will not come into the continent without more open markets amid lower costs of production.

Without private capital, Africa remains dependent on permanent aid and periodic debt relief, which is the same thing as aid.

All of this is why Africa and other developing countries should be the focus of a major new, U.S-led, global trade round that sharply raises these countries’ greater involvement in the globalization process.

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