Though the problems Africa faces are onerous, we don't have to resign ourselves to pessimism, writes Ahmed Haggag* With the eclipse of the colonial period, Africa sought after rapid positive change in security and living standards. Consequent volatile political developments, radical changes of policy, abrupt reversals of national priorities and profound alternations in export prices, combined to limit progress towards prosperous independence. Although experience varied from one country to another, some commonalities have been established. High population growth and low investment levels are two that immediately come to mind. In some countries, premature, poorly conceived or poorly timed attempts to industrialise, and public sector spending on grandiose but unsustainable projects, marked this period. The results have been disappointing. Continent- wide, the average African is no better off than he or she was a generation ago. This situation precipitated the decade of the 1980s, in which we stood witness to a socioeconomic crisis of unprecedented dimension. The crisis was so pervasive and persistent that in many instances it threatened the very capacity of societies to reproduce themselves as viable entities. Conditions today contrast sharply with those of the 1960s, and to a lesser extent, of the 1970s, when the continent registered respectable, if erratic, growth rates in output, as well as advances in education, health and other social sectors. The 1980s shattered all rising expectations in the immediate post-independence period. The situation may be summarised as follows: low economic growth rates, mounting debt, continued economic over-reliance on agriculture--which itself has been faltering--and inadequate achievements in human development. The situation at present is by no means less gloomy. In aggregate terms, high population growth, oil and international interest rates shocks, unfavorable terms of trade, conflicts and drought, have contributed to African difficulties, but weak economic management has been another major factor. Inappropriate domestic policies and lack of policy- implementing capacities have been key impediments to improved economic performance. On the continent level, it is as if a semblance of vision has dawned on African leaders. It has been strongly understood that the economic problems facing Africa cannot be resolved on an individual country basis, due to fragile domestic markets and the limited resource and skilled manpower bases. African states, thus, through the Organisation of African Unity (OAU)--now the African Union--and the Economic Commission for Africa (ECA), have issued declarations on the crisis and formulated plans of action for its speedy resolution. Through my work at the OAU for more than 12 years, I did have the privilege of following closely those plans. The Lagos Plan of Action, 1980, was a major attempt aimed at highlighting the critical nature of the continent's socio-economic plight and to chart, albeit in broad terms, an agenda for action. On several occasions after 1980 the alarm bell has been sounded. The major undertakings of this sort were: the Africa Priority Program for Economic Recovery and Development, 1968-1990 (APPER), of the OAU, the United Nations Programme of Action for African Economic Recovery and Development, 1968-1990 (UNPAAERD), and the African Alternative Framework to Structural Adjustment Programs (AAF-SAP). These efforts were crowned by the decision of the African leaders to establish an African Economic Community, in Abuja on 3 June 1991. The primary objective of the African Economic Community (AEC) is to promote economic, social and cultural development and the integration of the African economies, in order to increase economic self-reliance and promote indigenous, self-sustained development. Besides, there are number of sub-regional organisations (the Economic Community Of Central African States, the Arab Mahgreb Union, the Common Market for Eastern and Southern Africa, the Economic Community Of West African States, and the Southern African Development Community) which have been mandated to achieve similar objectives in their respective sub-regions. A new and visionary initiative is NEPAD, the New Economic Partnership for African Development, which received enthusiastic support from most of Africa, and its friends abroad. Notwithstanding the embarkation of several countries on the reform path and the seemingly earnest collective response of African leaders to the continent's crisis, the modus operandi of African policy makers has been largely one of crisis management. Insofar as policies are adopted to address the various aspects of socioeconomic and political development, often enough they are haphazardly implemented, fragmented in nature, and rarely made in the context of a holistic long-term perspective. The process of Africa's marginalisation must not be seen in academic terms, as a kind of natural, harmless and gradual reduction of contacts between Africa and the rest of the world. What could actually be involved is a deepening impoverishment of already very poor people, widespread unemployment, political instability and other economic and social hardships. Doubts are spreading about the effectiveness of existing economic policies and programs, including those sponsored by the two Bretton Woods institutions--the World Bank and IMF--because they are not bearing fruit, in spite of being practiced. We have to realise the magnitude of the impact of Africa's external debt on African economics, and even on our political stability. Despite so-called "debt cancellations", or relief measures, total debt is estimated to be around $350 billion for the whole of Africa. This may sound modest compared to Latin America, but when the figure is seen in terms of debt service ratios, which range from 35 per cent to 65 per cent--and in some countries much higher--or in terms of debt/GDP ratios, the heavy burden of the debt becomes obvious. In some countries, debt service is higher than all the proceeds from exports. Therefore, economic recovery will not be achieved unless the crushing debt burden is removed. Africa is a continent facing enormous challenges. The sobering figures speak for themselves: 33 of the world's 47 Least Developed Countries are in Africa. Fifty four per cent of its population is estimated to live in absolute--and growing--poverty. Population growth is the highest in the world. Religious tensions, civil wars and drought continue to take their toll, and real GDP growth fell from 4 per cent in the 1970s to 2.1 per cent in the 1980s, although recent IMF figures on growth are encouraging. In the area of education the situation is also critical: 138.8 million of the world's illiterate adults live in Africa, representing 56 per cent of the continent's adult population, of which over 60 per cent are women. Only 68.3 per cent of African children are enrolled in primary level education, with hardly one-third managing to complete. Secondary education was accessible to only 18 per cent of children of the appropriate age. Public expenditure on education, as a percentage of GDP, decreased from 5.2 per cent in 1980 to 4.6 per cent in 1991. In such times of resource constraint, mobilisation in favor of the poorer regions of the world requires bold decisions. A non-response to Africa's appeal for cooperation would accentuate the factors contributing to global instability. "Afro-pessimists" should recognise that the African continent is made up of clusters of states, which are proceeding on parallel paths of political and economic renewal at different rhythms and speeds. Some countries have actually found a "take-off point" by demonstrating able leadership, increased political openness, the principles of a multi-party system, and improved governance and economic growth rates, all which inspire confidence in local and foreign investors. Other countries show a marked willingness to reconstruct their battle-torn economies through enlightened leadership and sound economic policies. Yet, others are in a state of transition and achieving less positive results. In Nigeria, between 1987 and 1989, over 100,000 professionally and technically trained personnel emigrated to the West. The brain drain has serious implications for the capacity of countries to develop. Whereas capacity-building programs are useful, there is a need to seriously consider how to retain trained personnel and keep them economically active. Mobilisation of domestic savings for investment has great potential. The economic climate must be right to encourage small investors. There are two important instruments: namely, the stock exchange and the micro credit system. With a bit of education and information, it has been shown that small investors are prepared to take a risk in buying shares in the stock exchange. The flotation of Kenya Airways was over-subscribed four times when shares were offered to the public. A substantial number of investors were in fact small. Other new issues have had similar positive and encouraging participation by the local investors. There are not yet many active and vibrant stock exchanges in Africa. The most active and developed ones are Johannesburg, Cairo, Accra and Nairobi. Francophone West Africa is in a process of establishing the Abidjan mart. Dar es-Salam and Kampala have recently opened. The micro credit system as a new instrument is proving effective in accessing capital and mobilising savings from small enterprises. The micro enterprise sector is normally locked out of the formal financial sector. The Grameen bank ideas and concepts have been modified and attempts are being made to introduce the system in Africa. Already, many African countries are far ahead in using the micro credit approach to extend credit to small entrepreneurs. Those working in this sector are encouraged and have proven that one can bank on the poor. The objective of this instrument is no longer accessing credit, but offering a range of financial services and products. The micro credit system does in fact enable the process of miniaturisation of the economy by bringing in the informal sectors. The instrument is still in its infancy and requires support. It is gratifying to note the interest the World Bank has shown in the development of micro credit. To enable the system to work well, governments have to amend financial laws, which hinder the full development of micro credit. Whatever gains are made could be wiped out by the rate of population growth. For, Africa, according to UNDP, the rate is above three per cent. A lot is being done to control the rate of population growth and the impact is already being felt, but there is still a long way to go. It has been demonstrated that the most effective way of bringing down population growth is through investment in girls' education. Investment in girls' education has other direct benefits for the society as a whole. Could this, then, be one of our strategies for the coming years? * The writer is the secretary general of the Africa Society, Cairo, Egypt, and former assistant secretary general of the Organisation of African Unity, 1987-1999.
