The Political Economy of African Countries

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This paper will provide a critical and analytical perspective on global development. It will focus on the political economy of debt and inequality in the context of African countries. The analysis will be based on the perspectives of Brown (1997) concerning economic development in Africa.

The central tenet of Brown’s argument is that Africa has failed to develop due to implementation of top-down policies that are often imposed on national governments by foreign development partners. The structural adjustment programmes (SAPs) are some of the notable policies that were imposed on African states by the World Bank and the IMF to stimulate economic growth.

The policies included reducing public expenditure, liberalising the economy, increasing domestic savings, and promoting exports. Although these policies were implemented in over half of African countries, the desired economic growth was not achieved. Reduction of public expenditure resulted into loss of jobs in the public sector in countries such as Zambia, Nigeria, and Kenya, thereby worsening inequality.

Nonetheless, privatization of state owned corporations improved efficiency in the public sector in countries such as Kenya. Industrialisation failed in Africa because of inadequate investment in infrastructure. By contrast, Asian countries achieved rapid economic growth because their governments increased public expenditure in order to develop transport and communication infrastructure.

Most African countries were forced by the World Bank to liberalise their economies prematurely. Consequently, the nascent industries in the agricultural and manufacturing sectors failed because they were not ready to compete effectively in the global market.

In this respect, Brown (1997) argues that African states should promote cooperation rather than competition at the grassroots level to empower their producers. Indeed cooperative societies have promoted economic development in Tanzania and Kenya. However, competition has to be promoted in every market economy to enhance efficiency and profitable production.

Brown (1997) argues that homegrown policies are the solution to Africa’s economic problems. These include focusing on long-term development plans, increasing investment in agriculture, and marketing local products. Although these strategies are likely to improve economic growth, they can easily fail due to lack of financial capital and expertise.

For instance, modernising the agricultural sector will necessitate increased borrowing which in turn will worsen the debt burden in most countries. In addition, the development policies formulated by African countries have failed to address inequality.

The urban populations tend to enjoy improved quality of life, whereas the rural populations remain backward and miserable in Sub-Sahara Africa. In this respect, substituting foreign policies with local ones will not spur economic development if inequality is not addressed.

Brown (1997) asserts that aid-givers should consider cancelling the huge foreign debts in African countries to improve economic growth. However, this strategy is likely to encourage mismanagement since African leaders will expect more cancellation of foreign debts in future.

In addition, local conditions such as high inflation rate and political instability make it difficult for aid-givers such as the World Bank to provide credit to African countries at favorable terms. In this respect, the level of debt and inequality in Africa is likely to increase in future.

Conclusion

The failure of foreign economic policies in Africa, calls for the implementation of local policies. However, implementation of the local policies still requires financial and technical support from foreign aid-givers. Thus, improving efficiency in the public sector and promoting uniform development is the best way to reduce debts and inequality in Africa.

Reference

Brown, M 1997, Africa’s choices: after thirty years of the World Bank, Westview Press, Boulder.

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The Political Economy of African Countries

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