232. rrhe last decade has witnessed a profound transformation of the political, economic and social position of most of t1he African countries. Faced with the immense task of recording the facts of this change, econornists and social and political scientists have h~~dly beg~n to assess an~ evaluate the far reaching dnterences In concepts, attItudes, modes and methods of thought and behaviour, which the various but simultaneous revolutions have engendered. Up to now, it\frican nationalism and personality have been considered essentially negative in content. It was thought that after colonial rule, most of the emerging African States would have little or no common policy to take the place of the old order.I2But the Heads of State Conference in May 1963 has shown that such an interpretation is devoid of an understanding about the mainspr!ings of the desire and drive for self-deter-mination, economic progress and political unity in Africa.
233. Revolts and strikes in Madagascar, Algeria and other British, French and Belgian colonial pos-sessions had long served notice of the emergence of an organized political consciousness on the part of the Africans. But it was not until the last decade that this consciousness reached such an intensity that bastions of the colonial Powers crumbled under one tidal ~vVave of nationalism. In 1960, it culminated in the independence of seventeen African States.
234. Africa accounts for 22 per cent of the \vorld land area. Its estimated population of 257 million,13 constituting some 8.5 per cent of the world popula-tion, is spread over 32 independent countries14 and
12See the special supplement on the African revolution in the Econonlist Vol. CLXXXIX, No. 6016, London, 13 December 1958, p. 24.
13Estimates of the 1960 population of the African con-tinent by the Demographic Section of the United Nations Economic Commission for Africa.
14Not taking into account the Republic of South A.frica.
25 oyerseas provinces, territories, colonies or depen-denCIes. About 26 per cent of this population lives in north Africa, 6 per cent in the Republic of South Africa, while the relnaining 68 per cent are account-ed for .by tropical Africa, including the Malagasy RepublIC and other outlying islands. Only eight of the 58 countries or territories in the region have a population of more than ten million: Nigeria, the United Arab Republic (Egypt), Ethiopia, the Congo (.Leopoldville), the Republic of South Africa, Sudan, Morocco and Algeria. Of these, Nigeria, with an estimated population of about 35 millions (14 per cent ofthe total African population), and the United Ara? Republic, with 26 millions (10 per cent of the coailnenf's population), are the most populous.
235. There is a very large number of extremely small countries in Africa. Some 19 countries, eac:h with a population of between 2.6 to 10 millions con-tribute over one third of the total African population.
There are 31 areas including the off-shore islands each of which have a population of less than
2.6
~illions or less than one per cent of the total popula-tIon..By Augu~t 1963, about 80 per cent of the po-pulatIon of AfrIca was living in politically independent States. The remaining fifth,15 distributed over 26 territories, "provinces" or dependencies, was still under some form of political tutelage.. Some of these like Kenya, Nyasaland and Northern RJhodesia are rapidly proceeding towards political independence.16 236. r-rhe prevalence of so many small countries stems froill the history of the continent in the nineteenth century. Although contact with Europe had existed in Roman times, intensive trade - in slaves - between Europeans and the African king-doms began in the fifteenth century. The second half of the nineteenth century saw the culmination of this long contact. During the last century of economic
15Including the Republic of South Africa where a white rninority Government is in power.
16As of N oven1ber 1963.
I I Il ~
change in industrIal .Europe, agricultural output rose some four to five-fold, industrial output about forty-fold and over-all per caput output more than seven tim.es. But the African and other pre-industrial coun-tries "continued to represent the models of dynamics of political economy as elucidated by Ricardo, Mal-thus and Mill where 'the power of population marched almost in line with 'the power of produc-tion'".17
237. This remarkable development which altered the distribution of the world income and power did not remain without its political consequences. With it began the European domination of Africa. It was organized, not in an orderly and considered manner, hut in a competitive and rivalrous spirit. The former African kingdoms were split into a mosaic of tiny States. Their boundaries marked the lines where each individual European power had extended its sphere of influence without coming into serious conflict
\vith its neighbouring European power. These fron-tiers cut across ethnic groups. They did not corre-spond \vith known rational geographical, economic or political criteria.
238. Besides the legacy of so many small States left in Africa by external domination, there is ano-ther problem that remains to be resolved. That is racial discrimination or apartheid policies, pursued in South Africa and to a lesser extent in Southern Rhodesia.18 During the political enslavement of the African continent, large dynamic white settlements appeared where both the climate and economic con-ditions were particularly favourable, as in Southern Rhodesia and South Africa. European capital and managerial talent were attracted to these areas. As a result, these national economies have developed much more than countries in tropical regions of Africa,
\vh~r.e the absence of :vhite settlers has led to rapid polItIcal advance, and Introduction of 'one man~one vote'l democracies. But \vhere \vhite settler minorities exist, the application of such a political principle 'vvould mean the enthroning of an African majority government. Thus we find in Africa the paradoxical situation that where political power has been Africa-nized earlier, economic development and growth are still in their initial stages, while where modernization of the economy has taken long strides, "racial fru-stration, barriers and hatreds foster and grow.19
17Patel, Surendra J., "Economic distance between na-tions - its origin, measurement and outlook", in the Eco-n0171ic Journal, March 1964.
18For details, see International Cotnmission of Jurists, Report on South Africa Geneva, 1960; United Nations Economic Commission for A.frica, Economic and social consequences of racial discrinlinatory practices, (EjCN.14j 132); Carter, G.M., The politics of inequality - South Africa since 1948, London, 1958; and South African In-stitute of Race Relations, A survey of race relations in South Africa, Johannesburg, 1958-1959,1959-1960,1961-1962.
19CO!l1pare the special supplement on the African re-volution of the ECOtlOfnisf Opecit., p. 5-8.
After the achievement of political independence~the African countries are now turning to the solution of their varied economic and social prob~ems. Indepen-dence is not an end in itself but rather a means to an end, a means to end the age-old afflictions of Mrican humanity - poverty, hunger, illiteracy and disease -and to restore the pristine dignity of the African him-self.
239. Although some progress in social development has been made and its tempo and pace quickened du-ring the last decade, the task still facing the African countries in the social field is immense.2o For less than half of the countries under consideration have only one hospital bed to 700 inhabitants, one docto!
to 15,000 persons, and an adult literacy rate of 2~
per cent. Education may be used as an indicator.
Only 40 per cent of those of school-age were in primary school by 1961-1962. At the secondary and higher education levels, only 3 per cent and 0.2 per cent of the respective age groups were receiving education.
The implementation of the 1961 Addis Ababa plan for education in Africa implies a 100per cent~23 per cent and 2 per cent enrolment of the relevant age-groups at the primary, secondary and higher educa-tional levels, In absolute number, this would involve an enrolment of 33 million at the primary, 6 million at the secondary and 0.3 million at the higher educa-tion levels bv1980. The Plan would cost an estimated
$24 billion 'of which some $ 8 billion are to come as foreign aid.
(b) The economic setting
(i) Structure of the economy
240. A salient feature in the economic evolution of most countries in Africa is the continued transforma-tion of the traditransforma-tional and mainly subsistence econo-my to a modern economy, producing agricultural or mineral goods for export. But this dependence on primary production for export constitutes a basic
\veakness of the region's economy in its drive for flcceleratedeconomic growth. For, as can be seen from table B. I. 1, the unit value of African exports in 1962 was barely higher than twelve years earlier in 1950. The average price of imports, on the other hand, had increased significantly (by some 15 per cent) with the result that the region's terms of trade had deteriorated by some13per cent during the period.
241. This trend characterizes the trade not only of the African countries but also of all other developing countries.2l It is estimated that "had the terms of trade of the less developed countries been stabilized at their 1950 level, the' aggregate purchasing power of their exports in terms of imports in 1960 would have been greater to the extent of $ 2.3 billion".
20See this Bulletin, chapter B.II.
21See United Nations, World economic survey 1962, I.
"The developing countries in world trade", ]\Te\v York, 1963, p.2.
-
41-242. Africa's export trade dependence on primary products is only a reflection of the dependence of the greater majority of Africa's 257 million people on agriculture for a livelihood. Thus 40 per cent of the national income of the African countries, as compar-ed with 10 per cent in the industrial countries of Eu-rope, comes from agriculture. Because of the low level of productivity in this sector, the proportion which it contributed to the gross domestic product is less than would be expected from the proportion of the eco-nomicaUy active population engaged in it. On a per caput basis, for example, thrice as much land is
cuI-tivated as in the developed countries of Europe, while agricultural income, which is $40 per caput for the wihole population, is only a third of that in Europe.
Another important facet of Africa is its livestock. It has a larger number of livestock per inhabitant than most countries in the world. This is due to the fact that a great portion of the continent is semi-arid which makes it suitable for livestock. The per caput number of livestock is twice as high as in Europe, while the amount of graz,ing land available per unit of livestock is seven times as high.
TABLE B.I. 1
Unit values of exports and imports for African and developed countries, 1950·1960
(Index numbers, 1958= 100)
1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 African countries
Unit value of Exports 88 115 111 101 104 103 104 102 100 94 94 90 89
Unit value of Imports 85 99 108 101 98 97 100 103 100 96 97 97 98
Terms of trade 103 116 103 100 107 106 104 99 100 99 97 93 90
Developed countries
Unit value of Exports 85 102 103 99 97 97 100 103 100 99 100 101 101
Unit value of Imports 88 111 109 101 100 101 103 107 100 97 98 97 96
Terms of trade 97 92 95 98 96 96 97 96 100 102 103 104 105
Sources: United Nations, A10nthly Bulletin of Statistics, New York, April 1963, p. Vlll and x; United Nations, World Economic Survey 1962, I.,"The developing countries in world trade", New York, 1963, p. 2.
243. Tlhe potential resources of the continent are vast, although a complete appraisal of the natural resources of the region has yet to be made. Mining, which is the only sector wholly within the money economy and is largely controlled by foreign financial interests accounts for about one seventh of the world mineral output. Known reserves of high grade iron ore, to take only one example, total some 5,980 million tions.22 Per caput consumption of energy, indicative of the low level of manufacturing, is still low as com-pared with that of the industrial countries although the energy resources are considerable. The coal re-serves in South Africa amount to some 75 billion tons.
The hydro-electric potential of the continent, located mostly in the centre, forms 40 per cent of the world total. The oil and gas resources of north and west Africa are considerable.
244. Gross domestic product in Africa is of the or-derof $ 31 billion, the average annual per caput in-come being in the neighbourhood of $ 120. Excluding the Republic of South Africa which~ though it con-tains only 6.2 per cent of the population, accounts
22United Nations, Econolnic survey of Africa since 1950, p. 119-120.
for about one fifth of the total output of the region~
the average annual per caput income for the rest of Africa would fall to some $ 100, or less than 8 per cent of that of the industrial countries, and about equal to that of most of south-east Asia.
(ii) Foreign trade
245. Africa's share of world trade is greater than its share of world income. The trade share, however, has declined during the decade 1952 - 1962. A remarkable feature of the regional economy is its foreign trade dependence, per caput levels of exports and imports in 1961 being $ 25 and $ 31 respectively. Calculated as a percentage of total output, trade dependence with respect to imports and exports is 29 per cent and 23 per cent. Comparable figures for the United King-dom are about 25 per cent for imports and exports.23 The figures given here do not, however, accurately
23Calculated on the basis of world trade figures given in the OECD Foreign trade statistical bulletin, June 1963 p.2, and on ECA 1961 population estimate for Africa of 263 millions. The basic figures from which the percentage for the United Kingdom is derived are taken from Interna-tional Monetary Fund, International financial statistics, August 1963, p. 268.
42
-reflect the foreign trade dependence of the continent, which must be much greater, since about one third of the continent's output originates in subsistence agriculture.
246. Imports, which expanded rapidly during the period 1950-1960 at an average annual growth rate of 5.2 per cent, have increasingly consisted of capital goods. The percentage share of foodstuffs and textiles has decreased, indicating an increase in the local man-ufacture of such products. Export earnings of most of the countries of the region derive mainly from only a few products. Since a considerable proportion of government revenues (some three to four fifths of budgetary revenue in some countries) is from import and export duties, these economies are extremely s,ensitive to variations in economic growth, in the in-dustrial economies and consequently to import de-mand originating therefrom.24
(iii) Intra - African trade25
247. The high foreign trade dependence of the re-gion reflects in part uhe low volume of intra-African trade which is no more than one tenth of the total trade of the region. The development of intra-African trade is hampered by the "homogeneous production pattern" of the African countries and the lack of adequate transport facilities betweenth~m. The value of intra-African trade was $544 million in 1960, with east, central and south Africa accounting for over half of this, while north and west Africa accounted for 8 per cent each. This trade \vas mainly in manu-factures, which made up 43 per cent of the total, and represented only 19 per cent of total African exports and 5 per cent of total African imports of foodstuffs and raw materials.
248. A remarkable feature of intra-African trade is its concentration according to sub-regional, mone-tary or economic groupings. The countries grouped as east, central and south Africa conducted over 80 per cent of their total intra-regional trade amongst themselves, with South Africa providing 75 per cent of the intra-African imports of Uganda, Kenya and Tanganiyka, and 90 per cent of those of the Rhode-sias and Nyasaland. South Africa took 40 per cent of its imports from the Rhodesias and Nyasaland.
The basic pattern in other sub-regions is nearly simi-lar. The west African countries conduct 90 per cent of their intra-African trade amongst themselves, with the twelve OAMCE countries accounting for some 75 per cent of this total. In north Africa, Algeria and Morocco account for some 77 per cent of the trade within the sub-region. The UAR, Sudan, Ethiopia and Somaliland fall into another group wlith the Sudan receiving 70 per cent of its intra-African im-ports from the UAR and Ethiopia, the DAR 50 per
24EconoDlic Conlmission for Africa, Econonzic bulletin for Africa, Vol. I, No.2, Addis Ababa, June 1961.
25The basic figures for this section are taken from Economic Commission for Africa, Foreign trade newsletter, No.3 (E/CN.14/STC/FTN/3).
cent of its African imports from the Sudan and Ethio-pia, and Ethiopia receiving 80 per cent of its African imports from the UAR and the Sudan.
(iv) Preferential systems, currency areas and current economic groupings
249. T\vo questions immediately suggest themselves from the foregoing analysis of the structure and pat-tern of trade of the economies of the countries of the African region - one relates to the set of principles or guidelines responsible for the present state and pattern of developm·ent and the second to their in-fluence in the future.
250. In present day Africa, there are seven major currency areas: the former French, British and Bel-gian areas, the Spanish peseta and the Portuguese escudo areas, the South African rand area and the countries with national monetary autonomy. For our analysis, by far the most important of these areas are the French Franc Zone and the British Sterling Area26 to which South Africa, before becoming a republic early in 1961, also belonged.
The Franc Zone area
251. The French preferential zone which had de-veloped since 1927-1928 was characterized by high tariff walls and managed markets, prices in France for some tropical products like coffee and groundnuts from the overseas territories being 25-60 per cent a-bove world market prices. The benefits enjoyed by the African territories in the sheltered French market were substantial. The preferential treatment preclud-ed the development of exports to other markets, thus reflecting the adverse effect which preference had on the international competitiveness of their products.
Moreover, they were to buy manufactured goods from the relatively high priced French market, although cheaper goods were available elsewhere.
252. The guaranteed high prices for products from these territories attracted large metropolitan firms in-to primary production. These firms did not usually plough back their gains into the territories but repa-triated to France their profits and dividends, so that the territories did not create the basis for sustained investment. Where it was possible to establish indu-stries in the secondary and tertiary sectors, the metro..
politan Government often imposed import quotas a~d
other forms of protection in order to protect the In-terests of metropolitan firms and workers.
253. French Africa, apart from North Africa, Ma-dagascar and French Somaliland, was grouped i~to
two federated territories: French West and EquatorIal Mrica with centralized administrations at Dakar and Brazzaville. These two centres contained the bulk of the French civil servants, who received a substan-tial proportion of the monetized incomes of these territories. They attracted the headquarters of the large
26Compare here Thomas Balogh, "Africa and. the Com-mon Market" in Journal of ComCom-mon market studies, Vol. I.
No.1, Oxford, May 1962.
No.1, Oxford, May 1962.