Say NO to SAPs in Africa!

| March 5, 2009 - 9:10 pm

Tags: Africa, economic development, structural adjustment programs

     It is refreshing to read African perspectives on the Structural Adjustment Programs (SAPs) imposed on African countries by Bretton Woods institutions, as is the case in Our Continent Our Future: African Perspectives on Structural Adjustment. Such a view is not often heard, as reports of failures, deficits, and continued underdevelopment in Africa made by mainly Western sources is what reaches media outlets. Authors Thandika Mkandawire and Charles C. Soludo weave together evidence from 30 different individual studies, 25 of which are done by Africans themselves, in an attempt to summarize an African perspective on the poor economic state of African countries and the systemic policies and programs that continue to inhibit their growth. Not only do they describe Africa’s economic problems due to SAPs and their continued failure to bring about positive growth, but they propose alternatives (or ‘policy prescriptions’) that move away from structural adjustment policy and toward ‘broadening and developing fundamentals’ in a number of economic development sectors, including socio-politics and sustainable development of which I will focus exclusively.  Progress in this sector, Mkandawire and Soludo argue, is vital to the development prospects of African countries and to Africa as a whole.

Africa, in the Ages of Development and Structural Adjustment

    Africa wasn’t always in the poor economic state that it is now. After the majority of African countries gained their independents after the 1960s, Africa was on its way to becoming a developed continent. According to Mkandawire and Soludo, by the mid-1970s, many African countries were progressing in economic and social development as “[s]ome level of industrialization had been initiated, levels of school enrolment had increased, new roads had been constructed, [and] the indigenization of the civil service had advanced…” (20). Even so these economies were still extremely underdeveloped because of their recent history of colonialism and colonial exploitation of economic means. In an attempt to better develop their states, African countries turned to Bretton Woods institutions for loans. When these countries found that they could not repay the loans, loaning institutions such as the World Bank began to impose Structural Adjustment Programs on them in order to open up their economies and leave room for economic growth. Three major policy actions that were central to these growth-oriented programs were “(a) more suitable exchange-rate policies; (b) increased efficiency of resources use in the public sector; and (c) improvement in agricultural policies” (Mkandawire and Soludo 42). These policies were implemented as short to medium terns macroeconomic stabilization measures to restore the balances of countries both internally and externally. Various reforms were implemented such as industrial policy, agricultural, financial, trade, labor market, education, and administrative reforms (Mkandawire and Soludo 42-8). Several countries, such as Ghana, had effective implementation up until 1994 but then suddenly dropped and were replaced by new ones such as Cote d’Ivoire, Ethiopia and Uganda (Mkandawire and Soludo 84). This pattern of growth and then relapse continues to occur today, and for the large part SAPs have failed in most African countries. Many are wondering, what are the reasons for this?

Arguments for the Effectiveness/Ineffectiveness of SAPs

    Mkandawire and Soludo explore a few on both sides of the spectrum. Some argue that is the fault of the African countries, that African societies are too unstable to handle reforms, that money is being misused, or some other kind of corruption is taking place. Explanatory variables blame Africa for trade restrictions such as the lack of openness to trade, lack of financial depth, deficient public service and infrastructural provision, lack of social capital, high macroeconomic volatility and uncertainty, terms-of-trade shocks, drought, offsetting effects of aid, and external debt-burden (Mkandawire and Soludo 82). Others argue that is the staunch and unfamiliar policies of primarily Western nations being out of place in African societies, and that BWIs take little care to incorporate policies that are in accordance with the specific histories African countries and that is has nothing to do with the inherent characteristics of African countries. In any case, the fact of the matter is that Bretton Woods institutions are failing to effectively implement their programs. It is time to move onto something else, argues Mkandawire and Soludo, toward something they term as ‘broadening and developing fundamentals’ in African countries. What they mean is simply that when creating effective policies, the following issues must be addressed: equity, economic growth, economic stability, and political legitimacy. Emphasis must be put on not only economic growth in areas of GDP or trade, but equal attention and investment must be put on the social and infrastructural development, something SAPs have tended to ignore in the past. One area in which the fundamentals need to be strengthened are in the realms of socio-political and sustainable development.

Socio-political and Sustainable Development:
The Push for Capacity Building and Democratization

    Areas in which need attention are those in which “social capital,” “social capability,” and “social structure of accumulation” can be achieved (Mkandawire and Soludo 124). This would prepare Africans for the task of controlling their own countries and in turn controlling their own fates. Africans need to gain the technical skills to deal with what Mkandawire and Soludo call the “physical hardware of investment,” along with organizational skills, the skills to govern markets, workplace management skills, the ability to form labor relations, state-society relationships, and the freedom to participate in ideological, social, and cultural consumption patterns that correspond with class, gender, and ethnic lines (124). In order for such a society to be possible, economic policy must be compatible with the process of democratization.
    According to Mkandawire and Soludo, SAPs have affected democratization of African countries in three ways. SAPs relate to a growing private space, which ends up informalizing economic life and marginalizing large parts of the population. SAPs have also affected the political legitimacy of post-colonial governments by affecting its ability to implement its own policies. Finally, SAPs have interfered with the process of policy making by leaving little room for countries to make their own policy choices (75-6). Mkandawire and Soludo believe that in order to have enough strength to carry out effective policy dealing with technical capacity, political legitimacy, and social welfare, and due to the extensive history of social pluralism and the artificiality of national borders, democracy is the only way to carry out the necessary programs (125). Moving toward amore democratic governance would take reforming civil service sectors, generating programs for capacity building on both the micro and macroeconomic level—only then can the fiscal capacity of the state be effectively reformed.

Conclusion

    I completely agree with Mkandawire and Soludo that only through democracy is the kind of change necessary able to be implemented. No economic policy can flourish if the political system of the country is on the verge of collapse. Thus far, Bretton Woods Institutions have failed to take into account pre-existing factors such as social pluralism and arbitrarily drawn national borders of African countries, and they have tried to impose a foreign, Western culture through their policies and programs. This naturally creates resistance, and the SAPs have failed to significantly increase growth in all sectors of African countries. Socio-political strength is necessary for African people to make choices that correspond with African ways of life. If Africans were given more say in how SAPs were implemented in their countries, and then were allowed to be agents of change, perhaps more structural adjustment would be affective. I believe this is the message that Mkandawire and Soludo have been trying to get across in their book, and that this is the only way Africa will be able to catch up in the world of development. Any time wasted due to pride, stubbornness, economic exploitation or misunderstanding on the part of the Bretton Woods institutions means more suffering for individual African people. The children and future leaders of African countries face a future of concentrated poverty, unemployment, lack of access to health care, income and housing disparities, insufficient educational systems, unattainable higher education, and the HIV/AIDS pandemic among countless others ills that come with economic underdevelopment. If this is to change, the African people cannot afford to wait any longer. Structural Adjustment Programs must attempt to meet African people halfway, or there will be no more Africa to speak of to develop.

Works Cited

Thandika, Mkandawire and Charles C. Soludo. Our Continent Our Future: African Perspectives on Structural Adjustment. Trenton: African World Press, Inc, 1999.

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