ECONOMIC DEVELOPMENT IN AFRICA: INDICES AND EXPLANATIONS

 

Africa’s role in the World economy has been the SUPPLIER of raw materials and a CONSUMER of imported industrial goods. This began with colonization for much of colonial policy was preoccupied with bringing about an increase in raw material production and exports. The development of industry was discouraged in the African colonies. Despite efforts by independent African states to overcome this economic difficulty, there has been very little change. The EXPORTER of raw materials and CONSUMER of imported goods status has created several economic problems for African countries:

 

1.   Unfavorable terms of trade and low purchasing power (see page 329 for table).

2.   Led to Huge Debts (mainly from imports)

3.   Turned African countries into recipients of financial aids (see pages 330 & 333 for Table)

 

Africa: A contradiction?

 

Africa comprises 19% of world's total land area and is home to 13% its population. The continent is endowed with 97% of worlds chromium; 90% of cobalt; 85% of platinum; 64% of manganese; 50% of gold and phosphates; 40% of HEP potential; 30% of uranium;; 20% of all traded petroleum outside USA and USSR; 12% of natural gas; 7.7% of coal; 13% of copper; 15% of iron ore; the bulk of the world's diamonds; 70% of world cocoa; 60% of coffee; 50% palm oil; millions of acres of arable land. In spite of all these resources,

a. Africa remains the poorest continent with more than half of the worlds 44 poorest countries

b. Large populations in Africa suffer from acute forms of poverty

c. Per capita income account for only 3% of world income. This small share is even on decline

c. Controls only 2% of international trade

d. Maintains a Life expectancy much lower than in the industrial countries .

e. Under 5 mortality account for 30% of all deaths in Africa ( 2-3 % in most industrialized communities ).

 

Possible Explanations of Africa's poverty in the midst of plenty

1. Under utilization or non-use of resources

2. Ineffective or inefficient use

3. Resources not being utilized for Africa's benefit

 

Manifestations of economic decline in Africa:

-declining food availability

-worsening balance of payment deficits

-dwindling foreign exchange revenue

-sluggish or negative growth of national income

-high rates of inflation

-declining productivity especially in the public sector

-rising budget deficits

-degradation of the physical environment i.e deforestation, soil erosion, desertification

-bankruptcy and the collapse of corporations

-rising unemployment

-increasing indebtedness

 

Underlying causes of Africa's deteriorating economy

 

a. Domestic mismanagement and problems:

Corruption; administrative bottlenecks; ineffective population control; political instability;

pricing, trade and exchange rate policies; civil wars

 

b. Hostile international economic environment:

Lack of demand for primary products which represent Africa's principal trade items; trade

protectionism in developed economies; rising interest rates and increasing debt burden; energy

costs

 

c. Acts of nature:

Climatic and geographical factors such as drought, land-locked countries etc.

 

WHAT IS ECONOMIC DEVELOPMENT?

 

Neo-classical economists have adopted several indices for measuring development and inequalities. These indices are widely used in World Bank and UN publications that monitor growth and development in the international arena.

 

INDICES OF DEVELOPMENT

 

1. Gross National Product (GNP) per head

The most widely used indicator of economic development. If GNP per head grows over time in a particular country, then development is said to have taken place. The higher the GNP per capita, the richer the country and vice versa. For example, according to the table below which is based on 1990 figures, Mozambique with a GNP of US$80 and Switzerland with US$32,680 are classified by the World Bank as the poorest and richest countries, respectively. Using GNP, the world is divided into income groups.

Income groups Average GNP (US$) 1990

Low income 350

Lower middle 1,530

Middle income 2,220

Upper middle income 3,410

Higher income 19,590

OECD members 20,170

 

Sub-Saharan Africa 340

Source: World Bank (1992) World Development Report, Table 1

 

Among the 43 countries classified by the World Bank as low income countries, 27 Are in Africa while 16 of the first world's 20 poorest countries are also in Africa. Only 11 of the 41 lower middle income countries are in Africa. Ony 2 countries -Gabon (GNP $ 3330 and South Africa (GNP 2530)- are classified as upper middle income. While the average growth rate of GNP in all the low income countries from 1965-1990 was 2.5%, Sub-Saharan Africa grew at only 0.2%.

 

2. Energy consumption per capita

In 1992, Low income countries consumed average energy equivalent to 339 kilograms of oil per capita, Sub-Saharan Africa consumed an average of 103 kg ( up from 74 in 1965. Energy import increased from 7% of merchandise import in 1965 to 28% in 1990. Compare from 8% to 10% in all low and middle income countries combined. Energy consumption range from 17 kgs in Chad, 21 in Burundi, 68 in Ghana to 598 in Egypt. (Compared with 10,000 in Canada, and 7,822 in USA).

 

3. Calorie intake and nutrition/Health

1989 Daily 1984 Population per

Calorie intake Physician Nurse

 

Low income 2406 5,890 2,180

middle income 2860 2,180 980

lower midd.inc 2768 1,020 1,080

upper mid. inc 2987 1,160 930

upper income 3398 470 140

OECD 3072 450 130

Canada 3482 510 -

USA 3671 470 70

Japan 2956 660 60

Ghana 2248 20,390 1,670

Kenya 2163 10,050 -

 

Sub-Saharan Africa 2122 26,670 2,180

Source: World Bank (1992) World Development Report, Table 28

 

4. Adult illiteracy levels 1990 (%)

 

Sub-Saharan Africa: 50

Ghana 40

Zimbabwe 33

Ethiopia 76

 

Low income countries 40

Middle income 25

OECD 4

 

5. Demographics

 

Group/Country Inf. Mort. Crude B/R Crude D/R Fertility Life Exp.

per 1000 per 1000 per 1000

 

Low income 70 31 10 3.3 62

Middle Income 51 29 08 3.7 73

Upper Inc. 09 14 09 1.8 76

OECD 08 13 09 1.7 76

Canada 08 14 07 1.7 77

USA 10 15 09 1.9 76

Ghana 86 45 13 6.3 55

Mozambique 137 46 17 6.4 49

 

S.Saharan Africa 107 46 16 6.5 51

 

Source: World Bank (1991;1992) Tables 1 and 27

 

6. Level of Urbanization

-higher in developed countries: eg Higher income countries had average of 71 and 77% of population in urban areas in 1965 and 1990 respectively. Figures were 72 and 77 for OECD countries in the same year. Compare with 17 and 36 % for developing countries in 1965 and 1989 respectively. Sub-Saharan Africa: 32 %in 1990; Growth rate 5-9 % from 1980-1990

 

7. Social indicators and Physical Quality of Life indices

Physical Quality of Life Index (PQLI) shows where individual countries or other groups stand among the worst and best in the world regarding indices such as adult literacy rates, life expectancy at birth etc. Despite the crude nature of the PQLI, it is able to measure results rather than input by making use of widely available data. Generally, the higher the GNP of a country, the better the PQLI. Although the PQLI correlates with GNP, there may be divergences here and there.

 

DEVELOPED vrs. UNDERDEVELOPED AREAS

 

In short, developing countries are said to be characterized a litany of ills which include poverty, very high rates of population growth, low growth rates of gross domestic product, low rates of industrialization, extremely high dependence on agriculture, high unemployment and underemployment, uneven income distribution, etc. From all the criteria examined, we can conclude that the whole of Africa is classified as underdeveloped. However, can we depend upon mere statistics, especially the GNP, to determine development?

 

Some basic questions about development:

 

Is economic development synonymous with growth in per capita income? According to Dudley Seers, the questions one needs to ask about development are:

a) what is happening to poverty?

b) what is happening to unemployment?

c) what is happening to inequality?

 

If the GNP doubles, triples or even quadruples and yet the number of people living in poverty increases, unemployment rises and inequalities become entrenched, then according to Seers (1969), then it is doubtful to say that development has taken place

 

OTHER INDICATORS:
 
PATTERNS OF REGIONAL INEQUALITIES

 

Patterns of disparities and inequalities can be seen at 4 levels, namely

- international patterns

- intra-national patterns

- intra-regional patterns

- intra-urban patterns

 
International Patterns

The differences between poor and rich countries can be measured by examining a wide range of statistical indices. If we analyze international inequalities by comparing the GNP of various countries, the result is shocking. In 1990, the average Swiss citizen had an income of $32,680 against $80 for the average Mozambican. While African had incomes of $340, citizens of the OECD enjoyed over $20,000 (ratio: 1: 58). Although simple averages can conceal the true picture and should therefore be interpreted with caution, these figures still illustrate the extent of international inequalities

 

The trend indicates that the rich countries are getting richer while the poor ones are getting poorer. On the average citizens of high income countries had incomes 55.5 times that of low income while middle income countries were 6 times richer than their counterparts in the rich countries. 107 out of every 1000 babies born in Africa are likely to die before they turn one (figure was 157 in 1965); 149 for Malawi; 134 in Burkina Faso; Zaire 94; Ghana 103. These figures for 1990 show considerable improvement over the past 30 years, but it is still unacceptable (compared with 7 (.07%) in Switzerland and Canada

 

On the average 107 children out of every 1000 born in sub-Saharan Africa are buried before their first birthday (Compare with 35 in East Asia, 95 in South Asia, 50 in Latin America and 8 in OECD countries). Apart from the pre-1 year olds, countless number of children between 1 and 4 also die from preventable or treatable diseases every year. In fact 33 out of every 1000 kids between 1-4 years die annually in developing compared with an insignificant 0.8 in the industrialized countries. Poor access to medical facilities, malnutrition, lack of treated water, ignorance and the like contribute to the prevalence of diseases like whooping cough, dysentery, polio, diarrhea (diarrhea), malaria and other infant killers which claim millions of life every year in the third world.

 

In the case of Africa, for instance, there has been a tremendous improvement from 1965 when the infant mortality rate was 157, but this is not enough. OECD figure dropped from 25 to 8 over the same period and low income countries as a whole from 124 to 70. We can analyze all the other indicators ranging from number of physicians per 1000 people to educational levels and the result will demonstrate ludicrous disparities between the developed and developing countries. Many developing countries, especially those in Africa, are caught in a vicious circle of poverty and unless they are able to break out (but how?) their situation will continue to get worse.

Intra-national disparities

Not only are disparities seen at the international level, but within the boundaries of individual countries too. In many African countries, urban dwellers receive incomes several times higher than their rural counterparts (refer to table below)

 

Incomes comparison in rural and urban areas in selected countries

 

Country Urban vs Rural

 

Gabon 1 : 5

Liberia 9 : 5

Ivory Coast 8 : 5

 

Source: Harrison, P (1984) Inside the Third World pg. 146

 

Rural-urban disparities are greater in Africa than any other continent. Whereas 68% or so of African urban dwellers have access to clean drinking water, only 21% in the rural areas do. In Ghana the 3 largest cities which account for only 13.2% of the population contain 58% of all households with access to electricity, 41% of all people served with pipe-borne water and 42% of all hospital beds. 60% of the population live in the rural areas but have access to only 21% of health facilities. 72% of urban population has access to safe drinking water against 33 of rural dwellers. 50% of all industrial and commercial establishments located in or near Accra, the capital city. 70% of all senior level public service jobs also in Accra. This picture is typical of other developing countries in Asia, Africa and Latin America. In Zambia, the top 20% controlled 61% of the national income in 1976 while the top 5% received 23%. In Botswana the top 10% share 42% of the national income (compared with 23% in Canada, 22% in Germany, 25% in the USA, 21% in Sweden and 23% in the UK)

 

INTRA-URBAN PATTERNS

 

This includes the following measures:

a. Social differentiation

b. High class vrs low class residential areas (slums, squatter settlements, ghettos)

c. Unequal access to jobs in various parts of the city

d. Unequal acces public transport

e. Unequal access to quality education for children

 

How can we explain the persistence and intensification of disparities, in capitalist and peripheral capitalist countries? Two main views have been advanced on this issue:

1. Spatial inequalities should be seen as the unfortunate but inevitable by-products of the capitalist mode of production (Browett 1984:156)

2. Uneven regional development is a necessary pre-condition for continuous capital accumulation (Browett 1984: 155)

 

 

EXPLAINING UNDERDEVELOPMENT IN AFRICA: THEORIES OF DEVELOPMENT AND UNDERDEVELOPMENT

 

Several theories have been propounded to explain how development and underdevelopment occur. These include:

 

1. Neoclassical/Modernization theories,

2. Neo-Marxist (Dependency and World system)

3. Marxist theories.

 

a. Neoclassical/modernization theories (also called 'growth' theories)

 

Key features:

1. Development was seen as a linear movement of society from traditional to modern. As Epstein (1973:1-2) puts it, this unilinear approach, while making some allowances for individual countries and regions describes contemporary world history as the progression of each country from underdeveloped or traditional to developed and modern and postulates a series of two or more stages through which all countries are alleged sooner or later to pass. Thus, the more 'traditional ' of the dual segments is seen as historically more archaic or less advanced, and it can see in the less traditional of the two segments the image of its own future.

ROWSTOW'S EVOLUTIONARY LADDER OF DEVELOPMENT

 

Perhaps, most of all, Rowstow's evolutionary theory of the stages of development represents the most popular version of this unilinear view.

-According to Rostow (1960) all societies must pass through five developmental stages which comprise :

1. the traditional society

2. pre takeoff

3. take-off stage

4. the stage of maturity

5. high mass consumption.

2. The transition from traditional societies to modernity in the 'backward' societies supposedly hindered by 2 types of obstacles:

a.    lack of certain inputs - e.g competent entrepreneurs, skilled workforce, motivation or work orientation

b.   too much of certain other characteristics lumped together as tradition, e.g traditional religion, extended family system etc.

The essence of this theory was that the problems of Africa were internally generated. The problems were caused by inadequacies within the national fabric, inadequacies which prosperous western nations had been able to overcome.

 

3. Development and westernization are synonymous. 'Modernization' theorists saw development as a continuum following the pattern followed in earlier decades by North America and Western Europe.

 

Problems with modernization theory:

 

a) Too much emphasis on internal processes and constraints as the determinants of development

b) Its insistence on the universal applicability of western paths of development.

c) By neglecting history and the seeds sown by the expansion of global capitalism, the modernization school failed to account for underdevelopment in the developing countries, particularly in Africa since, as argued by neo-Marxist scholars, the present day underdevelopment in these countries has been determined by the past five centuries of capitalist world development (King, 1989; Mabogunje, 1979; Amin, 1974a). To paraphrase Potter (1985:48),

 

The processes that led to mercantile trade, and distant colonialism, imperialism and post-war independence were also agents responsible in promoting contemporary underdevelopment in developing countries. Thus, no account of contemporary Third World underdevelopment can ignore the historical interdependence of the countries now comprising the so-called First, Second and Third Worlds.

 

d) Over dependence on the GNP as the barometer of development

e) Yet another shortcoming in the modernization development theory is its failure to consider the importance of spatial structure in the process of development.

 

Structural Adjustment

 

Despite all the weaknesses in the modernization theory that make it quite unacceptable, it is still in vogue. In the 1980's, the World Bank and International Monetary Fund resurrected 'modernization' and re-christened it 'Structural Adjustment'. In simple terms, structural adjustment, like modernization theory attributes underdevelopment to internal constraints while ignoring history and exogenous factors, and calls upon developing countries to put their economic houses in order so as to facilitate export led growth (Higgott,1983; World Bank, 1981) and consequently generate foreign exchange to cover import costs and for internal development.

 

b. The Neo-Marxist/Dependency paradigm

 

There are 2 main streams: Dependency theory and World System theory.

 

Despite the varying streams of thoughts within this school their key argument could be summed up as:

The chasm between the levels of prosperity in different countries was created by an economic process in which the development of one sector of the globe (the WEST) resulted in the stagnation or gradual retrogression of poor developing countries. Capitalist development simultaneously generated development in Western nations and underdevelopment in poor developing countries many of which were colonized by the West. Development and underdevelopment are therefore not separate processes, but related facets of one single process (Buchanan, 1968:81-3; also cited in Brewer, 1977 and Forbes, 1984). In other words underdevelopment and development are two sides of the same coin, to paraphrase Frank (1966; 1969; 1972). Thus, underdevelopment in the Third World has been 'conditioned' by the growth and expansion of Europe.

 

According to this school of thought, external forces are to blame for underdevelopment in Africa and elsewhere. National economies cannot be separated from the world economic system. The world is divided into Core and Periphery. The world economy should be seen as a chain of metropolis-satellite linkages at all levels from international down to local, by means of which surplus is continuously 'expropriated' or 'appropriated'

 

c. World System Theory

 

One of the theories cast in the neo-Marxist perspective. Key theorist is Immanuel Wallerstein. The key argument is that underdevelopment and development cannot be studied properly on the basis of individual nation states. The theory asserts that a capitalist world economy has been in existence since the 16th century. From that time on this system engulfed a growing number of previously more or less isolated and self-sufficient societies into a complex system of functional relations. The process of expansion had 2 major dimensions, viz. 1) geographical broadening and 2) socioeconomic deepening. The result of this expansion was that a small number of 'core' states transformed a huge area into a 'periphery'. In between these core and periphery, world system theorists identify 'semi-peripheries' which play a key role in the functioning of the system.

 

Division of labor under the world system is characterized by the core countries assuming the role of industrial producers whereas the periphery is consigned the role of agricultural producers. The most important feature of the semi-periphery compared with the periphery is an increase in industrial activities. Furthermore, the rising semi-peripheries are strong and ambitious states, more or less aggressively competing for core status ( Hettne, 1990 p. 123). Semi-peripheries partially deflect the political pressures which groups located in peripheral areas might otherwise direct against core states and the groups which operate within and through their state machineries.

 

According to the world system theory, the process of underdevelopment started with the incorporation of a particular external area into the world system, i.e peripherization. As the world system expanded, first Eastern Europe, then Latin America, Asia and Africa, in that order, were peripherized

 

Summary of neo-Marxist approaches to Development

 

1. Underdevelopment is not an original state, but rather a created condition

2. Development does not necessarily travel from the center to the periphery. Underdevelopment of the periphery is the result of the development of the center. The expansion of the industrialized and capitalist nations creates and perpetuates underdevelopment

3. Capitalist development creates dualism both at the international and national levels

4. International dualism within the Third World itself creates small centers of wealth and power while the periphery remains impoverished.

 

Critique of neo-Marxist views:

 

a. They provide a stagnant theory of development that is a little more than a mirror image of the modernization theories they claim to surpass.

b. Underdevelopment may not necessarily follow the expansion of capitalism. Dependency theories failed to distinguish the spheres of commodity exchange and production.

c. Neglect of internal processes and class formation but class conflict, as Petras (1981:68) points out, shapes the relationship between countries as much as it is shaped by intersystem relations.

 

Classical Marxist views of underdevelopment

 

According Classical Marxists, underdevelopment can only be understood in terms of Mode of Production and Class Analyses (Foster-Carter, 1978).

a) Marxists fundamental thesis is that the material economic base of society determines the superstructure of social, legal and political institutions rather than vice versa, and that each historical society is characterized by struggles between the opposing social classes arising from the particular processes of production within it (Sarin, 1982:7).

b) Although society is made up of several modes of production, each of which also consists of a combination of several systems only one mode of production dominates at any one time. Thus different societies in the world had once been dominated by pre-capitalist modes of production such as the communal, slave, feudal and Asiatic modes and currently it is the capitalist mode that reigns supreme.

c) The capitalist mode of production which broke up and superseded the Asiatic mode began in Europe in the 13th century, and has since dominated the world for several centuries, included the accumulation of merchant capital, which involved the exploitation of other societies through slavery, colonial plunder and unequal exchange (Amin, 1974; Onimode, 1985).

d) It was this spirit of capitalism that sent the European merchant class and the colonialists to Africa and Asia where they imposed the capitalist economic system on the indigenous societies and set in motion complex forces which created present day underdevelopment

 

From the Classical Marxist perspectives therefore, modern society in the developing world is viewed as the process by which pre-existing structures are encroached upon by capitalism in such a way that surplus generated in the former are expropriated so as to perpetuate ('reproduce') the latter. Capitalism has emerged in the modern world as a mode of production characterized by separation between producers and their means of production. The economy has come to determine all other aspects of social life to such an extent that society reproduces itself solely through the economy.

According to the Classical Marxists, any theory of underdevelopment that does not include the mode of production cannot explain the situation satisfactorily, since this is the foundation of all genuine social theories. The imposition of the capitalist mode of production divided the indigenous societies into the owners of the means of production and the owners of labor and made it inevitable for the latter to move to the urban centers to sell their labor to the former for a living wage in order to survive. The bourgeois and elite classes that emerged from this relationship have since co-operated with transnational and other foreign exploiters in the exploitation of Third World resources to develop Europe.

 

Summary of Classical Marxist views

 

1. The contemporary world dominated by 2 modes of production: Capitalist and Socialist

2. Capitalist mode of production has 2 main features : viz.

a. Uneven distribution of the mode of production

b. Commodity production

3. A means of production is unevenly distributed to the extent that society is divided into 2 groups:

1. a small group of people who monopolize the means of production

2. the rest of the population who have no means of production

 

4. The relationship between the owners of means of production and the majority who possess only labor is known as class relations. Society is thus made up of the bourgeoisie and the proletariat. The difference between the exchange value of the proletariat labor power and the value of its product called 'surplus value'. The surplus value goes into the pocket of the bourgeoisie who thus live off the sweat of the proletariat.

5. Characterized by commodity production which give capitalist society some of its characteristics

 

Which paradigm: neo-Marxist or Classical Marxist?

 

It may be argued that neither the neo-Marxist views as espoused by neither the dependency school nor the classical Marxist views are sufficient in themselves to render a fuller understanding of underdevelopment. Taken together, however, they could complement each other and lead to a better understanding since several competing devices are likely to prove reciprocally reinforcing in a somewhat analogous way.

 

Key references:

 

Hicks and Streeten, 1979; World Development Reports (1990; 1992); Ahluwalia, 1986; Cornia et al, 1988; World Development , Vol. 7 No.6 1979 (special issue); Seers, 1972; 1977