"Africa's Economic Crisis" by Carol Lancaster
Summary by Caramellow Randle
Over the past few decades, much of the world focused on the debt crisis of Latin America, but the economic crisis in Africa was one that was more complex and rested on issues deeper than the short-term financial obligations of Latin American countries. The woes of the African economy were plentiful. Agricultural production, governmental institutions, and political origins were only a few of the contributors to the economic crisis of this vast continent. The solutions would be extremely difficult and would require the help of established countries, primarily the United States.
Agricultural production has long been the primary export of African countries. However, Africa's population rapidly increased with the increase in agricultural production. Although Africa is largely agricultural, the continent had to import increasing amounts of food to keep pace with the population growth. During the 1960's, agricultural production increased at a rate of 2.3 percent greater than the population increase. By the 1970's, increase in agricultural products slowed, while population accelerated and in some years Africa was just barely breaking even. In two countries, food production was actually less than the population increase and accounted for the need of imports.
Another agricultural problem persisted in the farmlands. Farming in much of Africa was based on a system where land was cleared, cultivated for several years, and left fallow to gain its fertility. However, the pressure exerted by a rapidly rising population forced farmers to shorten necessary fallow periods, thus decreasing the fertility of the land. In the long run, farmers paid the price of declining soil productivity and mounting weed and pest problems. To overcome such difficulties caused by continuos cultivation, Africa's farmers would need better seeds and fertilizers, pesticides, and technical aids, but all of these things are very expensive for low-level subsistence farmers.
The agricultural problems of Africa did not stop at the population increase or the farmlands, but continued to incorporate an irrigation crisis. African farms depended heavily on rainfall in an area frequented by droughts. Africa has a number of major river systems that could potentially serve as sources of irrigation, but constructing and maintaining irrigation facilities is expensive. Finally, two pests accidentally imported from the Western Hemisphere threatened the production of Africa's staple crop. Africa's major export, agricultural goods, was definitely in trouble from every viewpoint imaginable.
The foundations for the economic ailments had already been laid in the 1970's and 1980's. State enterprises inherited from colonial powers, ran the national airlines, public utilities, large-scale agricultural products, and financial institutions. These enterprises also regulated the sale and price of many commodities. The presence of the government in the economy was substantial and in socialist-oriented countries, these enterprises were hostile to private investment. These governments were subject to political influence and pressures and when they failed to operate efficiently, they became a financial drain on the government and were replaced with a new group of leaders.
African leaders soon replaced the political institutions and the new leaders attempted to monopolize their power. National economic resources and policies became a political battleground. Political leaders sought to enhance national pride, but more so, their own positions, by spending money on prestigious projects. The Black Star Square in Accra, Ghana is an example of such public buildings, modern hotels, and otherwise meaningless facilities. These new buildings were visible, but expensive and unproductive from an economic viewpoint. Government agencies became sources of employment of supporters of the part y in power and selected and located investment projects on political rather than economic grounds. In many countries, politicians created lavish lifestyles financed by public resources. This allowed and possibly persuaded lower level public officials into corruption in order to supplement their inadequate incomes.
Another increasingly prominent factor in African politics was the military and its demands. The military was often motivated by a desire to improve its own circumstances. Enlarging arsenals, modernizing equipment, and raising salaries were top priorities. In 1970, African countries spent $175 million on importing arms; by 1979, these estimates had skyrocketed to $2.3 billion.
One suggestion of improving the situation in Africa was that of self-sufficiency. This requires the cooperation of all the countries to purchase goods and services from other countries of the continent. Although it is a good idea, it is difficult to maintain because it can hurt poorer countries. These countries are obliged to purchase goods from their wealthier partners over cheaper products from established industries in industrialized countries. This causes the poorer countries to feel that they do not share equally in the benefits of such economic union.
A second remedy and the one that seems to be the major idea, for the African economic crisis comes from major aid donors, primarily the United States and the World Bank. The United States could also take other initiatives such as increasing support for the World Bank, Africa's largest donor, better coordinate and fund existing programs in Africa, and review of their emphasis on basic human needs programs for technical assistance to African governments. Together with other donors, the United States could offer a package of balance-of-payments financing, debt-rescheduling, development funding, and additional incentives. In short, an improvement in Africa's economic crisis requires an exercise of political will by African governments, the Unites States, and other donors.