Dr. Ghelawdewos Araia, Development Policy Shift for Africa, African Link Magazine, Vol. 10, No. 3, 2001
The following is an excerpt of the article that deals with the current development polices adopted by African countries and the dilemma they have encountered in a globalized world:
For almost four decades Africa was on the spotlight as to how to design lasting and meaningful development policies and overhaul its economies. Unfortunately, however, none of the grand policies came for fruition except that there were some strategies that materialized temporarily but vanished like a phantasmagoria due to lack of sound economic policy which ought to have been holistic.
In the last couple of years the resurgence of development policy for Africa has dominated the themes of world conferences and the headlines of major media networks. Africans themselves and world institutions such as the United Nations and the World Bank in part, inspire this latest development policy for Africa.
On September 11, 2001 the United Nations Conference on Trade and Development
(UNCTAD) put out its press release entitled Economic Development in Africa: Performance, Prospects and Policy Issues which, in large measure, focused on “declining aid and terms of trade, mounting debt, and ineffective adjustment policies” that “have left sub-Saharan Africa
(SSA) poorer than two decades ago,” and as per UNCTAD the solution would be “bolstering growth and halving poverty in Africa over the next 15 years” which “will require a dramatic increase in aid and trade for the continent.”
The UNCTAD report and policy recommendation is based on Africa’s sluggish and ever deteriorating economic performance. The continent was better off in the mid-1960s and early 1970s than it is today. Even in 1980, when economists attributed the so-called ‘lost decade’ to Africa, the Continent was in much better shape than at the turn of the 21st century. At least then the per capita income was 10 per cent more than in the year 2000. There was, however, some resurgence of growth in the mid-1990s although it was not sustainable.
Since “capital accumulation and saving rates in SSA are currently much lower than the levels reached two decades ago,” the UNCTAD report advocates that “considerable external financing will be needed to close the resource gap if Africa is to attain a higher growth rate…an additional $10 billion a year in official flows is needed for reducing aid dependency in the future and for making poverty reduction targets more than empty promises.”
The UNCTAD advocacy is indeed encouraging, but on close scrutiny one may wonder whether the ultimate objective is to reduce poverty in Africa or to eliminate it, and whether huge finance will really overcome Africa’s indebtedness to the rich nations, which, after all, is the main culprit that sets off the balance of the Continent’s priorities in development. Notwithstanding UNCTAD’s “elimination of the external debt overhang and fresh money” in uplifting investment and growth in low-level African countries, the real solution (in the context of debt relief) is what was boldly asserted by President Bush on October 29, 2001 while addressing the African Growth and Opportunity Forum. Bush clearly stated that he is in favor of grants as opposed to loans, supported the New African Initiative
(NAI), and promised to allocate $200 million for overseas corporate facilities so that American companies can invest Africa and the latter enabled to sell its products in the global market.
Note: for further discussion on this issue and alternate strategies for development, please read the Article in its entirety in African Link, Volume 10, No. 3, 2001. Also read “Theories and Empirical Data” on this website.
Tuesday, February 24, 2004