Perspectives: Why has Africa grown slowly?

Paul Collier (1999) clearly stated his arguments and explanations why Continental Africa is lagging behind in terms of development and growth unlike other regions of the world. Africa’s slow growth was explained by grouping the perceived causes into two-by-two matrix separating on one hand policy and “destiny” factors and on the other external and domestic. Furthermore, he comes to his conclusion by saying that reforms, especially in areas of domestic policy dealing with service delivery needs to be intensified while finally stating that freedom will be helpful in strengthening democracy which will likely support economic reform.

 Although extensive and valid explanations were given by the author, it is quite hard not to separate the author from the institution he is working for when he published the article. He was working as a director of development research with the World Bank, thus making it hard for readers to rule out institutional bias since he barely made reference to structural adjustments programmes and other forms of reforms advocated for by the institution that some scholars have associated with Africa’s slow growth. Looking at it from this perspective it comes across as if the author is writing from one angle, to an extent ruling out World Bank’s contribution if any to Africa’s slow growth through conditionalities it attached to the aid that negatively impacted some of the African states’ growth.

Paul’s final conclusion is that economic reform is dependent on “openness and democracy”, and for Africa to have viable economic growth, reforms are necessary. The World Bank and the IMF required African states that wanted aid and assistance to “democratise, allow multipartism, freedom” e.t.c and with all these conditionalities attached to the aid kitty, Africa was expected to grow and develop. However, growth did not happen as expected as these states were forced to implement these reforms drastically, which ultimately led to new forms of challenges ranging from environmental to economic and social that stunted rather than increase the continent’s growth.

In addition, as the author proclaimed, corruption, less mechanisation and lack of enough expertise/skills in state/public run enterprises have reduced growth in the continent and that the remedy was privatisation and private take over for growth to be experienced.  However, arrivals of these private foreign firms brought with them good and bad that ultimately saw decline in most of African states in late 1990’s[1]. This negative growth is attributed to new form of exploitation in states that were weak administratively to oversee the activities of these firms which exploited human labour and succeeded in crippling domestic/local economic sectors, while at the same repatriated profits back to their home countries.

Comparison of African states to their Asian counterparts might appear highly relevant, however, there are some major points underlying these two examples that the author did not clearly bring out. The colonial economy structure established in these two different continents though similar in some aspects are also very different in that this system has not deeply penetrated into interior Africa as it did in Asian countries under the rule of Japanese and European powers. Furthermore, decolonisations in African states were not as a result of a long planned transition but an event triggered by international events that resulted in some states’ independence irrespective of the fact that the internal development was minimal. Moreover, in the newly independent African states unlike in Asia there were limited or absence of business community with extensive networks around the world, for example the networks formed by minority Chinese in East Asia[2].

Unfair trade cannot be ruled out when it comes to Africa’s stunted growth. Majority of African exports are primary goods, either agricultural products or minerals which are exported mainly to other continents than for domestic consumption.  Unfair trading platform has been created by European and North American countries in such a way that they give billions of dollars to assist Africa in trade expansion and development while at the same time spend five times more subsiding their farmers and manufactures creating an unfair competition which makes their goods much cheaper in market. For example, equivalent of US $56Bn is given to Africa while US $300Bn is used subsiding agriculture alone in the developed countries[3] giving them leverage in market as African produce becomes costly due to cost of production.

 J Barro, (1996) analysed over 100 countries for a period of 30 years to determine whether democracy has an impact on economic development/growth or vice versa. The findings showed that positive impacts of growth/economic developments such as small government consumption, rule of law, education are favourable however, when these variables are held constant, democracy’s impact on growth is negative. It is general improvement in the standard of living like good educations, healthcare, that will ultimately give chance for democracy/political freedom to prosper and develop. Thus economic growth precedes political freedom/democracy.

Although there examples that show the above statement is equally valid, there are some exceptions in African states. Examples can be drawn from the recent events in Libya. This is a country ranked 57^th out of 120 states in UNHDI[4], 90% literacy level, and with 77year life expectancy, ruled by one individual for four decades under very limited political freedom[5]. Following Barro’s method of analysis Libya would have been a free country with high level of political participation and the recent uprising would have been unimaginable. Thus, good standard of living and economic well being did not lead to gradual increase in political freedom in Libya; instead, it turned out to be dictatorship. The same can be said of states like United Arab Emirates, Qatar, Oman, Bahrain in the Middle East, which are very wealthy states ruled by either monarchy or constitutional monarchs, where political freedom is very limited and citizen’s move to demand their rights being suppressed.

Supporting Barro’s claim is the example form majority of African states prior to SAP initiated by the World Bank. For example Kenya was under authoritarian one party rule, with steady agricultural based economy dictated by the government, however, after adoption of IMF led policies of economic liberalisation and reforms, the economy gradually slowed. What if African states were left to develop at their own pase under their “repressive regimes”? Would Africa economy have grown over the years? Did political freedom advocated for by aid donor states actually led to economic stagnation? Or is it because African states did not experience state formation process as did the Western states over hundreds of years?, as obvious as it may seem, majority of African states are not internally strong enough to with stand challenges of liberalised trade and globalisation where some multi-national companies own more assets that they do.

Additionally, there are some situations where democracy and economic growth has been going hand in hand. A good example is Botswana, a country that is a beacon of hope for majority of African states, has been a functioning democracy since its independence in 1960’s and has been growing economically as well. Unlike other states like Spain and Chile where growth preceded democracy/ political freedom, in Botswana, it has happened simultaneously[6].

BIBLIOGRAPHY:

Savo Heleta (July 2007). African Stagnation and Underdevelopment. URL: http://www.savoheleta.com/African_Stagnation_and_Underdevelopment_by_Savo_Heleta.pdf

Ghana Business News (2011), Democracy or prosperity, which comes first for African countries? URL: http://www.ghanabusinessnews.com/2011/09/30/democracy-or-prosperity-which-comes-first-for-african-countries/

Nick Martlew. Africa and Trade: The grand hypocrisy. Global Politics .URL: http://www.global-politics.co.uk/Archive/Africa%20and%20Trade.htm

Herbert Jauch,.  How The IMF-World Bank and Structural Adjustment Program(SAP) Destroyed Africa. URL: http://www.newsrescue.com/2009/05/how-the-imf-world-bank-and-structural-adjustment-programsap-destroyed-africa/#axzz1qVTlaLE1

Paul Collier & Jan-Willem Gunning (1999), “Why has Africa grown so slowly?” Journal of. Economic Perspectives, 13(3), pp 3-22.

Robert J. Barro. (1996).  Democracy: A Recipe for Growth? Journal of Economic Growth, March

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[1]Savo Heleta (July 2007). African Stagnation and Underdevelopment

[2] Ibid 1

[3] Savo Heleta (July 2007). African Stagnation and Underdevelopment. URL: http://www.savoheleta.com/African_Stagnation_and_Underdevelopment_by_Savo_Heleta.pdf

[4] UN Human development Index 2010

[5] Ghana Business News (2011), Democracy or prosperity, which comes first for African countries?

[6] Ibid3