Download a Historical Perspect

XIV International Economic History Congress, Helsinki 2006 Session 11
Development Policies in Africa : a Historical Perspective.
Grietjie Verhoef
University of Johannesburg.
The nature of the relationship between the colonial powers and their colonies was a
function of the international position of the colonial power. Despite the loss of the
American colonies, Britain was still the greatest imperial power in the world in the 1790s.
This position was confirmed by her victory in the Napoleonic Wars. In the following
century the Empire expanded in geographical area on four continents. By 1914 it had
become a global power of immense economic and cultural diversity and by far the most
prosperous and populous of the European Imperial domains. Despite these impressive
dimensions, Britain never recaptured the position of importance in Britain’s economic
life it had held before 1776. British economic relations expanded dramatically between
1790 and 1914 and by the latter part of the century 66 per cent of her trade was with
extra-European partners. The British Empire always had a far greater influence on the
mother country than did the overseas possessions of France or Germany.
In this paper the aim is to explore the historical roots of development policy towards
Africa. The main question is :
•
What was the development policy towards Africa since earliest contact?
•
How did these develop?
•
Is ther clear development policy towards Africa in the current period?
1
1.
Policy towards overseas possessions up to 1900.
The British relations with her colonial empire were primarily driven by trade
relationships. It is difficult to establish exactly what the Empire’s role in international
trade had been before 1850 because of the limitations of the available statistics. A
complex system of imperial preferences had nevertheless been in place, which
contributed to the commodity flows between empire and mother country. The
commodities of the 1830s most advantaged by these preferences were sugar and timber,
also later coffee. These preferences only began to disappear by the 1840s. In return
British goods were exported to the colonial possessions, but by the 1840s accounted for
only 30 per cent of British commodity exports, and first to the West Indies, British North
America and then to British Asia. Africa did not present a major market for British goods
by the middle of the nineteenth century. India and Australia gradually moved in as
primary markets for British goods since the 1840s. Britain as the largest colonial power
in African by the middle of the nineteenth century thus had no specific development
objective in her African possessions, but engaged in trade as the dominant commercial
activity with her colonies.
By the late 1880s only did the European powers agree to the terms of the Berlin Treaty of
1884/1885. European powers agreed that effective occupation of a territory would
constitute the establishment of a sphere of influence in such an area and thus be
considered an area under the control of a specific colonial power. Representatives from
the Britain Austria-Hungary, Belgium, Denmark, Spain, the United States, France, Italy,
2
the Netherlands, Portugal, Russia, Sweden and the Ottoman Empire were invited to an
international conference in Berlin to consider the regulation of conditions most
favourable to the development of trade and ‘… civilization in certain regions of Africa,
and also to assure to all nations the advantages of free navigation on the two chief rivers
of African flowing into the Atlantic Ocean.” A secondary aim was to obviate the
misunderstanding and disputes which might in future arise from new acts of occupation
on the coast of Africa, through a declaration introducing into international relations
certain uniform rules with reference to future occupations. The result was the codification
of the rules of ‘effective occupation’ in article 35 of the final Act of the Berlin
Conference: “The Signatory Powers of the present Act recognize the obligation to insure
the establishment of authority in the regions occupied by them on the coasts of the
African continent sufficient to protect existing rights, and, as the case may be, freedom of
trade and of transit under the conditions agreed upon.” (General Act of the Conference of
Berlin, 1885)
The Berlin Treaty marked the beginning of effective colonisation in
Africa by European powers, especially Britain, Germany and France. Since then those
colonial powers focussed their efforts more directly on the establishment of an
administrative
presence
and
accompanying economic
‘infrastructure’.
African
possessions were so marginal to the British economy by the middle of the nineteenth
century, that only 2,4 per cent of British exports were directed at Africa as a whole and
another 3,8 per cent to South African in particular between 1854 and 1857. By the period
1909 -1913 these ratios had risen to 4,9 per cent and 12,1 per cent respectively. British
exports to the empire as a percentage of total British exports was 30,3 per cent in 1857
and 35,4 per cent in 1913.(Schlote,1952:169) These figures indicate that the British
3
empire did not constitute the major recipient of British exports by the first decade of the
twentieth century.
Between 1800 and 1850 the volume of world trade increased by almost two and a half
times, primarily as a result of the discoveries of gold in Australia and North America and
the transportation revolution that followed. These long term developments facilitated the
development over the next sixty years for the first time truly multilateral world trade.
(Cain & Hopkins,1993) Britain imported from the Empire mainly three commodities:
wool (of which Australia was the primary supplier), timber (primarily from Canada) and
raw sugar (from the West Indies – although the import of sugar from the West Indies
started to decline from the mid-1850s onwards). The share of Imperial imports to Britain
nevertheless remained at the level of about 20 per cent of total imports. This figure
started to drop since the 1850s as a result of free trade, since Britain under free trade,
increasingly imported manufactured goods. By 1913 these manufactured imports from
Western Europe made up approximately 25 per cent of total British imports. The Empire
was supplying only 12 per cent of total British imports by 1913, but 29 per cent of food
imports to Britain in 1913. (Cain,1999:42-44) Britain also re-exported goods originally
imported from the Empire back to the Empire: by 1913 30 per cent of imports were reexported to the Empire. The position of Africa in the imports to Britain was small. In
1857 3,1 per cent of British imports were from South Africa and 5,8 per cent from the
rest of Africa. This figure was 6,2 per cent and 3,4 per cent respectively by 1913. Cain
argued that the ‘dependent’ Empire, especially those territories added to the Empire after
the 1880s, contributed very disappointingly to British business. (Cain, 1999:44-45) At the
same time one of the most notable features of British economic history, was the flow of
4
investments out of Britain. In the period between 1870 and 1914 it was estimated that the
total value of British assets abroad had risen from £700 million to £4 billion. (Cain &
Hopkins,1993:173-179) About 37,6 per cent of foreign investment was placed in the
Empire by 1914 and 60 per cent thereof went to the financing of infrastructure investment
in Australia, Canada and South Africa. Despite the massive extension of the ‘dependent’
Empire during the last quarter of the nineteenth century, only 10 per cent of Imperial
investment or 4 per cent of total foreign investment went to the ‘dependent’ Empire as a
whole> (‘dependent’ Empire was that part of the British Empire excluding areas of white
settlement, and India.) (Cain,1999:48-49)
It is therefore to be expected that imperial possessions in Africa, would not occupy the
main focus of British economic policies. Also to other European powers the trade with
Africa was limited. Kenwood and Lougheed estimated that by 1913 Northwest European
nations (these included Finland, Sweden, Norway, Denmark, Germany, Belgium,
Netherlands, Switzerland and Austria) imported 43,1 per cent of their primary products
from Africa and exported only 25,2 per cent primary products back to the region. By the
same year other European countries imported 12,3 per cent of their primary products
from Africa and exported 14,7 per cent of their primary exports to the continent. While
Britain was thus a major driving force in expanding the international economy over the
course of the nineteenth century, she was not alone. Continental European economies
supplied some of the men, money and markets that were needed to transform economic
relations in new parts of the world, inter alia Africa.(Kenwood & Lougheed,2004) These
exports were considered by Reynolds to be the driving force which ensured that twenty-
5
three developing non-European nations passed a decisive turning point on the road to
intensive growth. Twenty-one of those countries were from tropical Africa.
(Reynolds,1985:31-35) The growth of output and production in tropical Africa was thus
substantially lower than in the countries of ‘recent settlement.’ The transformation of the
world economy characterised by the massive demand for commodities, required
fundamental changes in land use. While the expansion in croplands in other parts of the
world increased dramatically, Tropical African displayed the third lowest percentage
change in such land transformation. Between 1850 and 1920 the change in the
transformation of land use to cultivation of crops was 258 per cent for North America,
200 per cent for South East Asia,150 per cent for Latin America, but only54,4 per cent
for Tropical Africa, 38 per cent for
South Asia and 26,7 per cent for China.
(Tomlinson,1999:67)
There was therefore no definitive ‘development’
policy with respect to African
possessions of the European nations nor of the British Empire by the end of the
nineteenth century. Cain observed: “Throughout the ‘long nineteenth century’, Empire
played a role in British international economic affairs which was far too big to ignore but
never big enough to dominate either events or policy.” (Cain,1999:50) Tomlinson
commented: “Over the course of the nineteenth century a broadly based international
economic system was created, based around the social, technical, intellectual and moral
structures generated in the core areas of European capitalism. The whole world was
opened up to western science and classificatory systems, which
led the search for
products to consume and spread capital concepts of utility worldwide with arable land
systems being imposed on hunter-gatherers, notions of private property supplanting
6
community entitlements, and law replacing custom.” (Tomlinson,1999:71) African
nations responded to these forces of capitalist expansion, but not easily or fundamentally.
Meiji Japan introduced structural transformations in her economy, but Tropical Africa
could not adapt easily.
In the period of colonial control by primarily Britain and France, the focus was on the
management of colonies as extensions of the economy of the mother country. The
European colonial powers created a new infrastructure of administration, transport and
social services which influenced all aspects of exchange and production. Different
systems of colonial control were instituted. The most extensive forms of colonial
administration was the British, followed y the French., but the Belgian, Portuguese and
German administrative systems were direct and provided for no indigenous participation.
(Collins,1970:160-300) Collins explained the system of indirect rule by Britain and the
French policies of assimilation and association as administrative mechanisms to
incorporate some degree of indigenous participation in the colonial administration of the
British and the French colonies. The application of such administrative systems did not
ensure ant form of ‘democratic’ participation in government of the colonies. Colonial
administration remained the prerogative of the imperial powers in order to ensure strong
adherence to the wider economic policies of the mother country. The direct form of
administration by Portugal, Belgium and Germany in effect had very much the same
outcome. The difference lay in the attempts during the last two to three decades of
colonial rule of incorporation of African indigenous representative in the process of
government.
2.
Nature of developmental economic activities, 1900 – 1940.
7
In the implementation of economic policies, the colonial powers acted so as to protect
their national economic interests. (Fage & Tordoff, 2002) The following types of
development activities were conducted by colonial powers:
•
Construction of infrastructure. Infrastructure served as prerequisite to
commercial exchange. Major investments in modern transport were
required for the acceleration of internal and external commerce, seen to
be ‘prohibitive costs’. Initially colonial governments followed two
strategies. The first was to grant charters to private companies to perform
the responsibilities of infrastructure provision. Such charters were
granted to companies in Northern Nigeria, German East Africa
Tanzania), British East Africa (Kenya), and British South-Central Africa
(Rhodesia/Zimbabwe). The chartered companies ruled the colonies
almost without colonial government involvement. These initiatives failed
almost universally, except for Zimbabwe. The second alternative strategy
was followed in French colonies, where state concessions were granted
for certain regions to private companies, but overall responsibility
remaining in the hands of the colonial civil service. None of these
initiatives raised sufficient capital to effect the infrastructural
developments needed in the colonies. Metropolitan governments took
over the task and railway lines emerged primarily in coastal regions to
service commercial needs. Railway lines were erected on the British and
German East African coast, through Anglo-French West Africa, along
8
the German-French-Belgian coasts of West Central Africa. There were
off course the grandiose schemes of the French trans-Sahara and
Senegal-Sudan-Guinea “Grandiose Traverse” , the British “Cape to
Cairo” and the German “Mittelafrika” which did not materialise. The
railway construction completed was financed by metropolitan capital,
thus ‘indebting’ colonies closely to the metropolitan powers. Railway
construction did not offer substantial ‘backward linkages’ to the
indigenous economies, since the capital stock required for the railways
was all imported. The indigenous communities benefited only from
employment creation in railways and linked harbours. (Austen1987:125129)
•
Commercial activities encouraged. The linking of metropolitan
commerce to African markets was also initially left open to chartered
private or concession companies. These companies soon operated to
establish secured access to and control of trading routes. By the 1920s
commercial activities in West Africa was dominated by three
conglomerates: the
French
Compagnie
Francaise de’l
Africain
Occidentale (CFAO), Société Commerciale de l’Ouest Africain (SCOA)
and the British United African Company (UAC). These commercial
concentration complemented railway development, since railway
development required the presence of commercial enterprise that would
have the capacity to maintain the administration and integration of
business, sustain inventories, and survive long term commitments. The
9
linkage effects of these commercial activities were also limited for the
indigenous people, since the nature of technology utilised was capital
intensive, thus precluding substantial African participation. The major
role performed by the indigenous population during this period was in
the areas where they did not require European technology, i.e. petty
retailing or merchant intermediation in urban centres and export areas. It
was in this area that Muslim trading activities were encouraged and
expanded. (Austen, 1987:129-132) The official regulation of such
commercial activities were extremely varied: from more extensive
official regulation in East and Central Africa, to very limited official
regulation in French West Africa, to never overwhelming intervention
by the British in West Africa. When official government intervention
was actually implemented in West and Central Africa, intervention was
more extensive than in the weaker economies of tropical Africa. This
difference resulted from the greater commercial exposure of colonial
enterprise to those areas where larger regulation was implemented, eg.
The British government intervened during the 1930s following Ghanaian
and some Nigerian cocoa growers’ protests against European purchasing
companies attempting to reduce competition during Depression times.
(Austen, 1987:137)
•
Peasant production. This form of agricultural production was actively
promoted by indigenous leaders, private enterprise as well as official
policies, because of the potential for integration in world markets. The
10
expansion of peasant production has led to a cost to subsistence
production as well as the transformation of food production away from
subsistence use to cash crops for market use. The least disturbing export
activities were those involving the production of commodities the
indigenous communities used themselves, such as palm oil and peanuts,
cocoa and coffee. Increased production thereof only required more
extensive production, no production reorganisation. The integration into
world markets with agricultural production nevertheless depended on the
prices of such commodities on world markets. In that respect primary
production in Africa was equally affected by international price
fluctuations as European producers of primary products. These smallscale farmers soon developed more efficient production of tropical export
crops than other plantations in the colonial areas. As indicated in the
trade statistics above, the export of such production to European
countries remained below 15 per cent of European imports. The
impressive increase in production by peasants did also not represent any
leading position in the transformation of croplands compared to the trend
internationally. A degree of resistance against more intensive farming
manifested, because of the existence of opportunities outside the farming
sector: surplus rural wealth was invested in commerce, transport and
education of children for white-collar occupations. The risk of such
enterprises was that competition with Europeans, Asians and Levantines
was increased. Losing the latter would only place that investment in
11
jeopardy, but failure with agriculture, threatened their total basis of
subsistence.
•
Monetisation of economic exchange. The integration of Africa into the
world trade system required utilisation of money, of which the value was
determined outside the traditional economies. Money as a medium of
exchange was introduced prior to the period of colonial control, but
afterwards currency policies by colonial powers shifted the medium of
value away from natural commodities (such as livestock, salt, metal,
tools, palm oil etc.) to physically secure metals such as silver, copper and
gold of which resources were limited and primarily under the control of
the colonial powers. This was the introduction of new governmentissued specie (coin) and paper at fixed rates to the metropolitan monetary
system. These currency systems linked the colonies to the world
currencies linked to gold as a stable standard and thus assisted the
movement towards an universal currency standard. The outcome was
easier control over currency flows in colonies, also tax collection and
payment of public expenditures. Although the introduction of
monetisation inconvenienced those remote areas far removed from
market transactions, the impact was only limited in established centres of
trade, such as the Nigerian coast. The overall impact was nevertheless the
more rapid integration of areas outside the boundaries of the market
economy more closely to them. It also enhanced state intervention
12
through tax collection and therefore also mistrust against the market
mechanism. (Jones,1958:43-53; Hopkins,1970; Fieldhouse,1971)
3.
Development during Decolonisation, 1940 -1960.
Economic development in Africa developed a different dimension in the process of
decolonisation. During the world-wide decolonisation drive commencing during the late
1940s with the decolonisation of India in 1948, followed by the decolonisation of the
Dutch colonies in East Asia (Indonesia) and British colonies in North Africa (Egypt,
Sudan) the massive withdrawal by France and Britain from their African possessions
became imminent. Debates were conducted amongst commentators of the decolonisation
process: some interpreted decolonisation as political separation, between colonial power
and colony (Calvocoressi,1985: 6-15; Qiunn,2002:41-43) but others interpreted
decolonisation as the removal of European political control without a change in the
economic relationships. Decolonisation did not change the economic relationships
between Africa and the international economy. (Hopkins,1973; Wallerstein,1976;
Robinson,1972) The change that could be observed in the relationship with former
colonies, was an uncertainty about future economic ties between colonial powers and the
newly independent states. One perspective was that colonialism had provided the basic
institutions to overcome barriers between the international economy and Africa and by
decolonisation those institutions could safely be left in the hands of the new governing
elite. (Austen,1985:197) Scepticism existed amongst others, fearing the exploitation of
Africa rather than development.
13
During the 1920s European governments ensured the development of their African
territories’ economies to produce export goods, closely related to the market situation.
Lonely voices were expressed in favour of extensive public investments in the colonies –
both in Britain and France – but without success. Both countries however, moved
towards greater intervention in the colonial economies through the introduction of major
colonial loan programmes. In 1920 the British government passed the Colonial
Development Act and in the same year the conservative French government accepted the
‘Great Colonial Loans Acts’. These two schemes were based on the assumption that
sufficient resources were available in the metropoles to finance African development. In
the period 1880 – 1914 Britain made grants available to possessions in Africa to the
following extent: (Kesner,1981:34-43; Constantine,1984:12)
Colonial Office grants 1880 1914
£3,198 million
East African Loans 1896 – 1914
£ 8,503 million
Guaranteed Loan Act loans 1919 – 1939
£ 25,383 million
Colonial Office Aid 1921 – 1940
£ 4,653 million
Colonial Development Act 1929 – 1939
£ 3,779 million.
These programmes thus invested a total of £ 45,527 million into British colonies prior to
1940.
Up to 1914 France had offered Fr.276 million guaranteed loans to her colonies. Between
1914 and 1939 a further Fr.6 020 million were allocated towards development in French
colonies. (Morgan,1980; Abbot,1970:73-89) The bulk of these grants and loans went
towards infrastructure, as mentioned earlier. In the British case most was spent on the
construction of the Uganda Railways, the construction of a bridge over the Zambezi
14
River facilitating the access of the Mozambique railway line into Nyassaland ( currently
Malawi), the Congo-Océan railway line and the Office du Niger irrigation scheme for
agriculture in present day Mali. (Kesner,1981:36)
During the aftermath of the
Depression the imperial preference policy (adopted in terms of the Ottowa Agreement of
1932) assisted the colonial economies to survive, but when economic instability
continued in Europe, colonial policies were not considering withdrawal, but rather
reforms which would overcome problems and provide a sounder basis for long-term
African contributions to European prosperity. (Austen 1985:203).
The revived interest in African commodities after the 1940s was the outcome of the
disruptions of WW2: military needs exploded suddenly and supplies were cut off as a
result of Japanese conquest in South East Asia. A phase of so-called ‘neo-mercantilism’
emerged: European colonial powers suddenly reconsidered their relationships with their
colonial possessions and extensive development investment started to flow towards the
African continent. On the other hand the United States of America rose to world
leadership in the wake of the weakening of Britain and was concerned about world
economic recovery. The two main options to the western nations were either to develop
the neglected colonial economies as an extension of the separate European national
economies, or simply to integrate western Europe into a single integrated economic bloc.
The decision to concentrate on European recovery is well known. The impact thereof
virtually ushered in the marginalisation if the African economies to Europe.
Prior to the implementation of the Marshall Plan, Britain and France had commenced
with massive economic development initiatives for their possessions in Africa. These
initiatives took the form of public expenditure increases. This policy was introduced by
15
the British Colonial Development and Welfare Act (CDW) of 1940. The CDW was
amended in 1945, 1950 and 1955 to provide for further investment, with the effect of
total British investment flows to Africa in terms of the CDW rising to £145,070 million
between 1946 and 1960. (Cairncross,1981: 375) Furthermore Britain funded two more
special agencies for development in Africa. The first was the Overseas Food Corporation
(OFC) and the second was the Colonial Development Corporation (CDC). These were to
initiate and finance productive efforts in Africa and disbursed £75,402 million between
1945 and 1960 and £89,949 million in the same period respectively to Africa. In total
British colonial development aid to Africa amounted to £ 396,888 million between 1880
and 1960. France on the other hand also engaged in development financing by means of
FIDES – Fonds d’investissement pour le développement économique et social. Through
FIDES and related state and other development agencies, France provided a grand total
of Fr.888 647,96 million towards her African colonies’ development between 1946 and
1960. As indicated by the names of these development institutions of both France and
Britain, the intention had been to foster both economic development and social
advancement of the colonial peoples, but the contrary materialised. The investment in
health, education, urban facilities and other aspects of social welfare did much to enhance
the quality of life of colonial communities, but, the bulk of the investments nevertheless
went into infrastructure and had not in any way changed the structure of African
economies. Investment went into primary production and not into manufacturing. Some
efforts were made in minerals, forestry and agriculture.
Portugal remained its presence in Africa until the mid-1970s. Portuguese colonial policy
was one of direct administration of the colonies as provinces of Portugal with no explicit
16
development aim. Private landowners were permitted to engage in agricultural
development, but without an overall state policy to promote or support or finance it in
any way. The only reliable statistics on trade flows between Portugal and her colonies
between 1861 and 1970 display a growing , but limited role for the colonies in the
Portuguese overall trade. In 1861 imports from Africa made up 3 per cent of total
Portuguese imports. This figure rose slowly to 8 per cent in 1931 and then to 15 per cent
in 1970. The relative position of exports from Portugal to the colonies was similar: in
1861 exports to the colonies in Africa was4 per cent of total Portuguese exports. By
191931 the contribution of Portuguese exports to Africa was 12 per cent, but then almost
doubled to 23 per cent in 1970. The stronger growth in exports to the colonies could be
explained through the growing demands for food and basic consumer goods following the
disruption caused by civil war since the mid-1960s. (Austen,1985:278-279)
The assumption of the colonial powers was that the colonial economies had been opened
up to the markets of the world. What was required after the war was the injection of
capital for large scale technological innovation for efficient land and labour utilisation.
Serious barriers existed: lack of reliable rainfall, soil difficulties and attacks of parasites
and plagues. There were also the costs of installation and maintaining mechanised farm
equipment and extensive resettlement of subsistence farmers. Finally by the 1950s the
terms of trade turned decisively against African countries, with a steady decline in the
prices of the continent’s most important export crops. These developments occurred at a
conjuncture in the history of the international economy when “… Africa’s general
position shifted back again to the periphery of European concern.” (Austen, 1985:209).
17
European integration was institutionalised in the formation of the European Economic
Community in 1957.
4.
Post- European Recovery Programme and Post-independence Africa, 1950 –
1970.
Simultaneously with the initiatives for the economic reconstruction of Europe, an
American initiative was launched. In his inaugural speech President Harry S. Truman on
20 January 1949 stated that America “… must embark on a bold new program for
making the benefits of our scientific advances and industrial progress available for nthe
improvement and growth of underdeveloped areas… I believe that we should make
available to peace-loving peoples the benefits of our store of technical knowledge in
order to help them to help realize their aspirations for a better life.” (Butterfield,2004:1)
The USA initiative was declared as part of a four point foreign policy statement. The first
referred to support for the UN, full implementation of the Marshall Plan, partnership of
NATO and finally “Point Four: A bold new program for the improvement and growth of
the world’s underdeveloped areas.” (Butterfield,2004:2) The emphasis fell on
‘development as a process’, which implied actions that would over time improve the
quality of people’s lives. Three elements were identified to the development process:
•
Raising living standards, through better incomes, consumption levels of
foods, medical services, education through economic growth;
18
•
Create conditions conducive to the enhancement of people’s self-esteem
through the establishment of social, political and economic systems and
institutions that promote human dignity and respect;
•
Enhancing freedom by widening their choice variables, such as the
varieties
of
consumer
goods
and
services.(Foreign
Service
Journal,1999:56-57)
The American ‘initiative’ was an unmistakable part of a policy to do more to eliminate
the social and economic conditions in which communism thrived and therefore also part
of the Cold War strategy against communism and would increase international trade and
investment. It was not considered ‘anything new’, since early missionaries and private
businessmen had in effect been offering technical assistance wherever they went. The
Institute of Inter-American Affairs was also engaged in technical assistance to countries
in Latin America and Liberia, and after 1948 through the Joint Commission on Rural
Reconstruction in China. The new element of USA involvement was the government
commitment to the programme, and the fact that the whole American nation was required
to commit resources as a fundamental part of their foreign policy to the idea of helping all
‘peace-loving peoples’.(Bingham,1954:11-12) The emphasis nevertheless fell much on
similar aspects of general social improvements which the colonial powers started
focussing on after 1940.
The program then started with the formation of the Technical Cooperation
Administration (TCA) in 1950, but was replaced in 1953 by the Foreign Operation
Administration (FOA), again to be succeeded in 1955 by the International Cooperation
Administration (ICA) President Eisenhower significantly expanded the development aid
19
programme by adding financial assistance as a major element through the Development
Loan Fund (DLF) in 1957. The DLF provided low interest rate long-term loans. Under
the Kennedy Administration the ICA and DLF was merged to form the Agency for
International Development (AID or USAID) to implement the “Decade for
Development” (Butterfield,2004:8-10) By the 1970s USAID had developed strongly into
the field of applied knowledge- research in agricultural development, health and
population growth. The congruence of international activity in development required
American assistance. By the 1970s the USA initiated donor co-ordination and shifted the
emphasis from economic growth to ‘economic equity’. By this time the USA
development initiatives were no longer to be distinguished from the network of
international development agencies. USA
development aid to African was cut
substantially and the DFA not reauthorized. The World bank, the European Union’s
European Development Fund and Japan have emerged as Africa’s principal sources of
aid. (Butterfield,2004:10 -13, 217-227,232-233)
The post-colonial phase in the relationship between African countries and former colonial
powers and the USA, as well as other western donor nations and donor parties (not all
donors were government owned ), was influenced by world economic initiatives. It is not
necessary to discuss the formation of the IMF and International bank for Reconstruction
and Development (World Bank). The focus was first and foremost on European
reconstruction and when that had been achieved, the Breton Woods institutions turned to
the Third World needs. (Kenwood and Lougheed, 2004).
The economic strategies of newly independent African governments depended on their
historical political allegiance from the colonial era and the process of decolonisation –
20
either pro-western capitalist orientation, or pro-USSR and thus inclined towards
socialism.
(Ashante,1996:187-189; Belsham & Livingstone,2002: 253-266, 81-83;
Calvocoressi,1985:31-49) Whatever policy there was towards the development in Africa,
remained driven by the former colonial powers and the USA. African leaders and states
were engulfed in the drawn out process of decolonisation, which started in the early
1950s, but was only completed (with the exception of Zimbabwe, Namibia and South
Africa) by 1968. The political division of Africa was averted by the compromise of the
Organisation of African Unity (OAU) in 1963. The two opposing political economy
strategies were the Nkrumah political unification of Africa in the interests of pooling
economic resources for continental economic development; and the Senghor/Tubman
approach of state integrity but economic co-operation. (Fage & Tordoff,2002; Van
Walraven,1999:104-110) At first the OAU resisted propagating policies towards regional
economic development in fear of sparking the divisive forces that delayed the formation
of the OAU so long. It was eventually the UN Economic Commission for Africa’s (ECA)
intervention which led to an official OAU policy towards economic development in
African through regional economic co-operation and integration. (Snyder &
Tadese,2002:2;Calovocoressi,1985:56) There were early experimental initiatives towards
economic co-operation on regional basis. Reference can be made to the formation of the
following regional economic organisations: (Ashante,1996:187-190)
•
Small federations of French states such as the Chad Convention, the Niger
River Convention, the Senegal River Convention and the Mano River
Union of 1974 (between Liberia and Senegal) were regional formation
21
with the aim of economic co-operation. These organisations all (except the
Malo River Union) disintegrated soon after independence.
•
OAMCE – Organisation
for economic Co-operation in Africa and
Madagascar, established in 1961. OAMCE was established to convert preindependence economic
relationships
with
France
into
a post-
independence mould, but it expanded in 1965 by including Zaïre (former
Belgian Congo). The organisation terminated its existence by 1968 as a
result of OAU opposition. The only remaining regional organisation in
Equatorial Africa, was the 1964 Equatorial Customs Union (UDE). In
1976 the Economic Union of the Great Lakes Countries was formed, but
disappeared in the conflict between Rwanda and Burundi in the later
1980s.
•
In South African the Southern African Customs Union (SACU) was
formed in 1910 between South Africa, Lesotho, Botswana and Swaziland
to co-operate on customs collection and distribution, as well as facilitate
the free movement of trade goods between member states.
•
In British East Africa there were also pre-independence organisation such
as the Joint Currency Board of East Africa 1905, the postal union of 1911,
a customs union established in 1917 and an East African Service
Commission of 1961. None of the organisations survived independence.
The Kampala treaty of 1967 provided the legal basis for the establishment
of the East African Community (EAC) as a continuation of the 1917
customs union.
22
•
The first decade of independence saw the modest beginnings of
regionalism in Africa. The establishment of the OAU was coupled with
the formation of the African Development Bank (ADB)
•
Two late regional initiatives are still in operation: ECOWAS (Economic
Organisation of West African States) established in 1975. ECOWAS was
the successor to the West-African Customs Union (UDAO), which was
formed in June 1959, later replaced by the Customs Union of West Africa
(UDEA) in 1966. ECOWAS is dedicated to the formation of a common
market, free trade, and joint enterprises.
•
SADC (Southern African Development Community – originally excluding
South African and then known as SADCC – Southern African
Development Co-ordinating Conference) established in 1980. This
regional organisation wanted to strengthen economic co-operation in
Southern Africa first to reduce member states’ dependence on South
Africa, but currently to promote regional economic development through
trade, financial and general economic co-operation. (Oostergaard,1990)
This paper will not address the full history of regional economic organisations in Africa.
The relevance to the aforementioned is to illustrate the shift in development policy. The
extensive economic difficulties experienced by Third World countries, Africa included,
during the 1980s and early 1990s, led to massive IMF and World Bank involvement
following the 1981 Berg Report. This paper is once again not the place to repeat what has
already been written on the depth of Africa’s economic and debt problems. There is
23
extensive literature by Easterly and Levine (1997), Sachs and Warner (1997) and Rodrik
(1998) explaining the causes of Africa’s dilemma: ethnic fragmentation and poor quality
institutions (Easterly and Levine), closed trade policies and geographical position (Sachs
and Warner), or not one single statistically significant variable (Rodrik). Dollar and
Easterly (1999) found that the short- and medium term linkages between aid, investment
and growth were not significantly strong. They concluded that aid did not necessarily
lead to investment and investment did not necessarily secure growth. It was nevertheless
found that private investment correlated positively with the phenomenon of economic
growth, but public investment less so. (Devarajan, Easterly, Pack,2001) What seemed to
transpire from the recent foreign direct investment flow analysis, is that higher
investment in Africa would not self produce growth, but “… unless some or all of the
underlying factors that made investment unproductive in the past are addressed, the result
may be disappointing.” (Devarajan, Easterley Pack,2001: 23) This paper will also not
engage in the analysis of what structural reform policies for the Third World were and are
under debate as to what they should be.
The solution is now sought by means of gradual market related economic reforms,
directed through gradual but intensive regional integration initiatives.(OuragaDjoussou,1995:46 -49) These initiatives started in Africa when the EEC, signed the
preferential trade agreements with former French and Belgian colonies (including
Somalia) in terms of the 1963 Yaounde Convention. This initiative was rejected by some
new independent states as ‘neo-colonial’, but I later years participated in follow-up
agreements with the EEC. In 1968 the Arusha declaration was signed, revised in 1969,
and in 1975 the Lomé Convention was signed and revised in 1980. The 54 ACP
24
signatories to these conventions were developing countries, the bulk from Africa. The
conventions secured them access to European markets and aid, thus returning to trade
bloc formation of the pre-war era when preferential trade agreements secured the degree
of economic stability African countries experienced in the interwar years. Austen,
1985:211-212; Ashante,1996:179 -182). The efforts to harness regional co-operation in
Africa from the myriad of regional organisations on the continent, resulted in the Lagos
Plan of Action (1980) and the Final Act of Lagos of 1980 in which African leaders
committed themselves to the creation at the national, regional and sub-regional levels a
dynamic and interdependent African economy.(Ashante,1996:180) Then followed the
Africa’s Priority Programme for Economic Recovery (APPER) of 1986; the African
Alternative Framework to Structural Adjustment Programme for Socio-Economic
Recovery and Transformation (AAF-SA) of 1989, and The African Charter for Popular
Participation for Development in 1990.(Olukoshi,2003:18) These initiatives paved the
way for the acceptance by African leaders of the Charter of the African Economic
Community in June 1991, in Abudja, Nigeria. This Charter envisaged the integration of
the African economy along the lines of the EU by 2023. Revisions and reformulations of
the Abuidja plan was accepted in 2000 as the Compact for African Recovery and then in
2002 as the New Partnership for Africa’s Development (NEPAD)(Olukoshi,2003:722).The Nepad document put forward a plan for the holistic economic and social
development of the continent in phases in close collaboration with “partners” or whatever
the nature of other parties might be – states, donors, private investors etc. The Nepad
programme made proposals for a variety of surrounding issues: peace and security,
human rights, democracy, access to basic services, technology gap transition, regional
25
integration, good governance, economic diversification, increased capital inflows and
environmental protection. The Nepad document is the most comprehensive effort by
African leaders to take
agency of the total development needs of the
continent.(Aboyade,1995:12 – 18) Most of the targets are very optimistic, but reflect the
sense of urgency experienced by some African leaders. Unfortunately very limited
concrete measures are available as to how the idealism will be translated into practice.
Furthermore the OAU was terminated by the acceptance in July 2002 of the Constitutive
Act of the African Union, which sets out the plan of action to integrate African politically
within two decades.
Conclusion.
The history of development in Africa is a history of the continent’s gradual integration
into the international economy. This paper has show the incomplete nature of that
integration process, as well as the lack of African leadership agency in such development.
The disruptive impact of African political division since the first wave of decolonisation,
placed the emphasis on the achievement of African political unity first. The so-called
‘nation state’ as agent for economic development , as raised by Madison with respect to
the economic successes in South East Asia (Madison,), took a very long time to manifest
itself in Africa. Political stability remains problematic and contributed to the divergence
of foreign investment flows from Africa since the early 1980s. When the trade
relationship which constituted the basis of the economic ties between Africa and
European nations weakened after WW2, macro-economic growth policies were
introduced by SEA governments. The introduction of a market related economic system
in SEA was not duplicated in Africa. African nations had a strong reliance on preferential
26
trade dispensations since the earliest stage of international trade. These relationships were
strengthened repeatedly by the colonial powers (Montreal Accord) and again with
Yaounde and Lomé after 1960. The paper must conclude with an observation that there
was no directed development policy towards Africa, apart from integrating trading
networks. Investment flows did little to transform the structure of former colonial
economies similar to the fundamental restructuring witnessed in SEA. Development
policy in Africa is now for the first time taking shape with substantial African agency and
acceptance of the responsibility to transform the structures of their economic systems in
accordance with market trends and international realities.
27
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