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Africa in the World Economy:
The National, Regional and International Challenges


Edited by Jan Joost Teunissen and Age Akkerman

Forum on Debt and Development (FONDAD)

December 2005

SARPN acknowledges FONDAD as a source of this document: www.fondad.org
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Clichйs, Realities and Policy Challenges of Africa: By Way of Introduction
Jan Joost Teunissen

After all, the world is full of clichйs, and we know that many of them endure even when reality tells us that they are wrong. Well-known clichйs about Africa include, “Africans should stop blaming others for their economic problems and first put their own house in order” or “Pumping more money into Africa is useless and will only prolong its addiction to foreign aid.” Are these clichйs right? Are they wrong? Whatever one thinks about them, they may have one very negative effect: they may prevent Western policymakers from doing what they ought to do in the first place and in all modesty: help African policymakers more effectively to put an end to the suffering of the African people.

Now I must confess immediately that I myself harbour some clichйs about Africa. One of them is that I often think: Let Africa become like us, fully capitalist, otherwise they will never be able to compete with us in world politics and world economics. At the same time, I resist this thought because I am concerned about the shortcomings and negative tendencies in our capitalist societies and would not like to see them copied in African societies. Still, it will be hard to stop this process.

This book examines a number of the economic challenges and constraints that African countries are facing. They range from national and regional challenges such as improving infrastructure and the financial sector to international challenges in the spheres of trade and finance. All of the chapters defy some clichйs about Africa’s development and deliver valuable insights into how the constraints can be overcome.

Domestic and External Constraints to Development

In the next chapter, Wing Thye Woo, Gordon McCord and Jeffrey Sachs challenge some of the economic clichйs that many of the Western policymakers and mainstream economists hold about Africa. The main clichй Woo et al. deal with is the pretence of the so-called Washington Consensus that Africa’s poverty and development problems can simply be blamed on “macroeconomic mismanagement” and “poor governance”. “Many parts of Africa are well governed,” according to Woo et al., “and yet remain trapped in poverty. Governance is a problem, but Africa’s development challenges are much deeper.”

I find it remarkable that Andrйs Solimano (Chapter 3), who has been with the World Bank for ten years, endorses the critical view of Woo, Sachs and McCord about the Washington Consensus. This shows that another clichй, i.e. that the World Bank and IMF are monolithic institutions that do not allow diversity of opinion, is wrong. Solimano not only agrees that in its original formulation, the Washington Consensus ignored the importance of institutions, politics and social conflict, but also endorses a fundamental point of Woo et al.: governance is not an exogenous variable that explains economic performance. “On the contrary,” says Solimano, “the quality of governance in itself is a result of the development level of a country.1 In this line, the traditionally assumed causality from governance to development must be changed for a causality that goes from development to governance.”

Indeed, one of the central arguments of Woo, Sachs and McCord is that good governance does not depend so much on the idiosyncrasy of a people but on the availability of sufficient government resources to pay reasonable salaries to well-talented professionals. But there is more. Not only is there a need for money to pay the salaries of good professionals, there is also a need for freedom of design and implementation of African development policies. Here we see another constraint to good policymaking in sub-Saharan Africa: the policy conditionality imposed on African policymakers by Western donor countries and international institutions such as the IMF and World Bank. Even though the IMF and World Bank and the donor countries assert that they do not interfere in Africa’s policymaking, or only do so with good intentions, the reality is that they do interfere – and not always with good (say, altruistic) intentions. Therefore, it is not surprising that well-informed observers like Matthew Martin (Chapter 17) advocate ending this practice of limiting the room and freedom for policymaking in African countries. “In terms of economic policy,” says Martin, “the major constraint for most African countries is excessive conditionality. … Another major problem is that restrictive macroeconomic frameworks set by the IMF still provide insufficient ‘fiscal space’ to absorb aid in sufficient amounts to reach the Millennium Development Goals.”

Constraints to achieving development in Africa is a recurrent theme throughout this book. The contributing authors recognise that these constraints are both of a domestic and an international nature. When I invited them to prepare papers for a conference to be held in South Africa, I asked them to emphasise the international constraints. In no way does this mean that I, or the contributing authors, think that domestic constraints are less important. They are just as important, as public and private authorities as well as civil society in African countries recognise. The main reason I invited the authors to focus on the international constraints is that policymakers all over the world have agreed to engage in enhanced support for Africa to try and help Africa overcome its “poverty trap”.


Footnote:
  1. However, the reverse need not be true. In my view, a high level of development is not a guarantee for a high level of governance.


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