The whole world knows that ... the African nations and their 650 million people have suffered a bitter and persistent social and economic crisis, especially during the 1980s. ...
Africa has the largest number of the poorest countries in the world. Out of the 42 nations in the world that are known as the least developed countries (LDCs) which are the poorest among the poor ... Africa has 29 countries. ...
Africa is the only continent where economic production per person has declined consistently throughout the 1980s. Per capita output fell from $752 in 1980 to $613 in 1988(in constant 1980 US dollars). ...
Africa's agriculture depends on primitive technology and is virtually totally dependent on rainfall. When it does not rain there is drought and famine. When it rains too much there are floods and famine again.
African industry is overly dependent on imports of capital, skilled labor, technology and spare parts, and entrepreneurial and management skills are scarce.
Africa contains many small States that have very small populations. ... What are the underlying causes of Africa's social and economic crisis? This question, otherwise we will never know how Africa gets out of the crisis and gets on with the business of development for the benefit of its suffering people.
The very structure of the African economy is the primary underlying cause of its persistent crisis. It is a structure that obliges Africa to keep producing commodities it does not need because its people consume very little of such commodities while it depends on other people for the production of its own need. It is a structure of dependency rather than self-reliance. It is a structure that is more import-export oriented rather than production-oriented. The other main features of the African economy are:
The predominance of subsistence activities with people producing just enough to survive on their own.
A base for producing goods that is very small, that has no linkages within it, that uses backward and unscientific methods and which has no modern machinery or technology.
The existence of a large informal sector.
The degraded environment with large chunks of land having become desolate and unusable for cultivation of crops or rearing of livestock.
Lop-sided development due to the urban bias of public policies ... thus permanently leaving the rural areas in poverty ...
The fragmentation of the African economy in small markets.
The openness and excessive dependence of the economies including dependence on external factor inputs; and weak institutional capabilities.
The social structures also fundamentally contribute to Africa's persistent crisis. First, Africa has very distinct and deeply rooted types of social differentiations. These relate to linguistic affinities, gender, ancestral origins or blood relations such as those that result in ethnic groups or nationalities or clans. This has many implications on social mobilization for development; on efficient and objective economic management; on the proper functioning of national institutions; and, on political stability in general.
The political environment is also a major cause of the African problems. Basic rights, individual freedom and democratic participation are often lacking in African countries. Yet, without them people feel alienated and are unable to devote their energies to development and productivity. Indeed, in a place where injustices are the norm rather than the exceptions, it is almost impossible to expect a momentum of progress. What you often find is disillusion, lethargy, repression, civil strife and an environment where fear and man's inhumanity against man prevail. Given such circumstances, people do not work hard or produce optimally and, naturally if people do not work hard, the pace of development, if any, is at snail's speed.
The combination of the social and political weaknesses has also led to an acute crisis of skills and management in Africa. This has led to a breakdown of institutions, closure of industries and a failure of others to maintain profitability. Lack of accountability has been a major problem for Africa. ... Self-enrichment at the cost of development has become a cancer that is eating away at the resources that otherwise would have been invested in development.
At first glance, simple cause-and-effect governs the relation between declining economic performance and declining standards of living: the former brings about the latter. But ... causes and effects travel a two-way street. In a world economy that places a premium on technology and information processing, only a healthy, secure and literate population can engineer an economic upturn. Desperate living conditions fuel both social unrest and the internal strife and civil wars that we identified earlier as a major cause of social and economic crises ... These, in turn, discourage outside investment, cripple domestic productivity and erode the will of citizens to work for a better future. In short, government initiative, private investment and assistance from overseas will be unable to establish the conditions for sustained economic growth unless there is an improvement in the standard of living of the African people.
... The whole economic setting has been put out of gear. Let us, for example, take agriculture. Once net exporters of food, African countries now have difficulty feeding their own people. Harvests per capita fell by about 10 percent over the course of the 1980s. About one-third of Africa's people rely wholly or in part on imported food ... Modern agricultural techniques are now applied mostly to export crops. The tremendous contribution of African women to the raising and harvesting of crops is diminished by their meager share of land, capital, credit and technology and by social and cultural customs and taboos that marginalize their role in the economy. Low-technology economies that depend on natural resources are exhausting the land through overgrazing, cutting down trees for household fuel, and farming techniques with long-term disadvantages.
Consider also the external trade sector. With a land mass second among continents only to Asia and a 12 percent share of the world's population (a share that will grow rapidly in the years to come), Africa accounts for a mere 3 percent of world trade. This share is also declining rapidly. Too many African countries depend on too few export items ... Most exports are minerals and agricultural commodities, and the world market prices of many of these raw and semi-processed materials fell sharply in the 1980s. Unfortunately they are also unlikely to recover significantly in the foreseeable future. ...
Even if production of traditional export items could be increased, there will be no instant solutions for African economies. In the first place, flooding the markets with increased exports would, under a perverse trick of supply-and-demand, lower the prices of these items. Secondly, most industrialized nations, the major customers for African raw materials, protect their own miners and farmers by putting a ceiling on imported materials or fencing them out with protective tariffs.
Clearly then emergency borrowing to fend off the economic shocks of the 1980s did not and cannot promise to solve or stabilize the problems of African countries. [Instead it] led to rapidly growing debt. Debt payments to the International Monetary Fund (IMF) ... now outstrip new loans and grants coming in. In 1986, 45 sub-Saharan African countries paid out $895 million more to the IMF than they took in. The net outflow in 1989 was $657 million. So, African countries are just borrowing to pay out - a situation that is obviously unsustainable.