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16 January 2000

[from Our Continent, Our Future: African Perspectives on Structural Adjustment. Thandika Mkandawire and Charles Soludo, CODESRIA, Africa World Press and IDRC, 1999. Used with permission from the publisher.]

Initial debates on adjustment were couched mainly in terms of whether the macroeconomic disequilibria were externally caused or induced by policy. This often gave the mistaken impression that national economies could be absolved from making the necessary adjustments. An important lesson from experience is that whatever the cause of the disequilibria, the burden of adjustment lies ultimately with the national economies, although complementary actions by the international community could greatly ease the cost of such adjustment. If, as African experience has shown, the expected external response is not forthcoming, individual countries have to carefully identify the structural and demand components of the disequilibria and choose an optimal mix of instruments to address the imbalances. African policymakers should take adjustment seriously. Adjustment in this sense entails a dynamic view of society and its capacity to continually adjust to changing domestic and external environments.

Perhaps the first important thing Africans can do is to reassume responsibility for plotting the paths of development in their respective countries. The tragedy of Africa's policy-making and policy implementation in the last several years is the complete surrender of national policies to the ever-changing ideas of international experts. Africans have lacked the confidence to consciously and vigorously craft and will a future for themselves. The first attempts that Africans made at articulating a framework for their development were in the Lagos Plan of Action, the Final Act of Lagos, and UNECA's African Alternative Framework to Structural Adjustment Programs. Most African governments signed the documents, and, to date, none of these governments has publicly dissociated itself from the ideas espoused in them. But the World Bank virulently attacked those documents, and every African government that wished to have successful debt rescheduling or aid negotiations distanced itself from the principles in them.

What is not often appreciated is that most of what appears today as new insights about the imperatives of poverty reduction, investment in infrastructure and education, the requirements of rapid industrialization, and the structural and institutional bottlenecks of Africa's underdevelopment are nothing but the rehearsal of old but disparaged ideas of African scholars and policymakers.

If only Africans took themselves seriously and if only the international community listened, the long and costly reaming curve could be minimized. The challenge is to blend macroeconomic stabilization cum adjustment under the SAPs with the detailed structural change and microeconomic and institutional transformations proposed by the Africans. The lessons from this costly experiment should provide the basis for future engagement.

For more than a decade, most of Africa has spent time and resources "adjusting" non-existent or defective markets. It was hoped that getting the prices and the monetary or financial fundamentals right would be the one medicine needed to ensure the health of African economies: poverty reduction, equity, growth, industrialization, macrosustainability, and so forth. The plethora of micro and structural changes, the development of human capital and infrastructure, and the institution-building required for a modern capitalist economy were recognized only as important footnotes in the development model. Evidently, at least in most of SSA, the nostrums for all economic ills have been overwhelmed by the enormity of the ailment. The irony is that it has taken more than a decade for us to rediscover that, as the World Bank (Adjustment in Africa, 1994, p. 2) finally admitted, "adjustment alone is not adequate for long-term sustainable development."

It has become commonplace to argue that measures adopted to deliberately accelerate development in other regions are inappropriate for Africa, not so much because things have changed but because of the alleged "peculiar" politics or culture of Africa. Our states are putatively more porous and vulnerable to capture than others. Our culture is not frugal enough or is downright antidevelopment. We invest too much in social relations to have any time for anything else. And on it goes. These views nourish the Afro- pessimistic stance that some have adopted. But they also nourish the arrogance of those who have chosen to assume the task of developing Africa without African involvement. As Claude Ake ("Development on the Indigenous," mimeo, 1991) stressed, "the idea that a people or their culture and social institutions can be an obstacle to their development is one of the major confusions of current development thinking, and it is one of its most expensive errors."

However, although we may loathe the attempts to locate Africa's poor performance on its supposedly immutable and peculiar characteristics, we must also recognize the need for fundamental changes in some of our attitudes, institutional arrangements, orientation to governance, and economic management. For example, the tensions and suspicion between the state and the capitalist class in many African countries that lead to massive capital outflows to safer havens are very unhealthy for the development of a capitalist economy. Furthermore, subordinating the national goals and development agenda to the narrow and often temporary interests of political survival or ethnic loyalty is hardly the best way to build a competitive and prosperous economy. In the end, there is no wishing away the sociopolitical issues that the transition to a market economy brings. Each country must, out of its own historical experiences, forge its own vision and design the requisite institutions to achieve development. Outsiders can assist, but this can never substitute for local initiative.

We cannot overstress the role that international conjuncture can play in widening or further narrowing the road ahead. Africa must learn to compete in this global arena. Such a learning process will be facilitated not just by developing and participating in regional markets but also by adopting an active strategy for increasing and diversifying Africa's exports. Africa's natural resources may facilitate this process, but we should recognize that only a strategy that relies on our human capacities would create a development process that can respond flexibly to circumstances in a rapidly changing world. Our natural-resource endowment will only contribute to development if we add intellectual value to it and if we use the revenue earned from it to transform and modernize agriculture and strengthen the development of an industrial sector made competitive by a strategically orchestrated exposure to competitiveness in international markets. The current wave of simply opening up more mines according to something akin to the colonial "enclave" model does not augur well for the use of natural resources for development.

Africa should know that it cannot integrate itself fully into the global economy by permanently depending on aid and preferential treatment. Neither of these has served Africa well. Aid has produced the phenomenon of the dependency syndrome that stifles both imagination and initiative, whereas preferential treatment (especially under the Lome Convention) has provided incentives to perpetuate activities that fossilize our production structures in primary commodities. What Africa needs as it approaches the 21st century is not increased aid but a levelling of the playing field. An important element in this is an unconditional debt write-off for all the indebted SSA countries. Tying debt reduction to perceived compliance with certain performance standards may amount to circular reasoning. Poorly performing countries could blame their performance on the debt burden, whereas the high flyers may owe their growth to debt relief, which currently comes by way of increased official aid.

African economies are market economies. This means that although the state may draw up the larger developmental plans, implementing such plans depends on the responses of households, private entrepreneurs, and institutions. Two important lessons from Africa's development experience have been that failure to mobilize the resource-allocative functions of the market can only contribute to the inflexibility of the economy; and failure to recognize the weakness of market forces in a number of fundamental areas can lead to failed adjustment. Development policies will therefore have to be keenly responsive to the capacities and weaknesses of both states and markets in Africa and seek to mobilize the former while correcting the latter. Dogmatic faith in either planning or markets will simply not do.

Moving beyond adjustment to growth and development is, of course, not an easy task. The issues are complex, and a synthesis such as this cannot delve into all the issues. What emerges from the project is that Africa must take the driver's seat in moving the economies of the continent ahead. Africa must and can compete in a rapidly changing global environment. We must avoid a "failure complex," which leads to a tendency to adopt self-fulfilling blanket condemnations of our own reality and makes us incapable of learning from our experiences.

Moving African economies onto a development path will require robust state and societal institutions. These, in turn will require creative mechanisms to produce a truly developmental state-society nexus able to synergistically mobilize human and physical resources and address the many contradictions inherent in our societies and in any processes of rapid change.

Economic development is quintessentially a political process involving the distribution of not only economic resources but also power. It is a process that taxes the political system heavily. It involves sacrifices and commitments that can only be sustained through a sense of shared vision and common purpose. It calls for the mobilization of national capacities. We have argued that such a process must be democratic, not only because of the inherent value of democracy but also because, given the nature of African societies their social pluralism and the artificiality of national borders and the current political conjuncture, only a democratic developmental state can acquire the adhesion of a citizenry as diverse as one finds in African countries.

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