ECONOMIC AND SOCIAL COUNCIL ECONOMIC COMMISSION FOR AFRICA
COMMISSION Forty-fourth session of the Economic Commission for Africa Sixth session of CAMEF
4th Joint Annual Meetings
of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development
Addis Ababa, Ethiopia 28 – 29 March 2011
Distr.: General
E/ECA/CM/CRP.1 AU/CAMEF/MIN/CRP.1 Date: 3 March 2011 Original: English
Governing Development in Africa – A Grassroots Perspective
African Monitor submission to the 4th Joint Annual Meetings of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of
Finance, Planning and Economic Development Addis Ababa, 26-28 March 2011
This meeting takes place at a critical moment in the history of the continent when high optimism of an emerging development breakthrough prevails. This breakthrough has been variously described, including by some of the ministers attending this meeting, as a “new dawn”; “a continent whose time has come”; “Africa’s moment”. Some of our leading policy makers, such as Donald Kaberuka, the President of the African Development Bank, are convinced that this moment is not going to be yet another false dawn, as happened at other times, arguing that “the renewed momentum is, this time, well-merited and anchored in solid foundations – a much sounder business environment, a reassessment of Africa’s risk, strong macro-economic fundamental and good progress in the microeconomic area, including increasing productivity at firm level - sufficient to carry the continent forward at the necessary pace…”1. Steven Radelet in his book “Emerging Africa” has identified 17 African countries that are leading the way2. Incidentally, it is this optimism that we at African Monitor share and are soon launching a campaign to mobilize greater ownership and effective participation in the momentum.
In many respects, this optimism is steeped in the vision of African Monitor: a continent rapidly achieving its development potential, whose people live dignified lives in just societies, where basic needs are met, human rights are upheld and good governance is entrenched. Of course, the African Union itself has an even nobler vision: an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.
This meeting is happening at a time when the continent is coming of age. We know very well the truth in the saying that “Rome was not made in one day”. Development takes time, a lot of time.
During 2010, seventeen countries made 50 years after gaining independence3.
Increasingly, we are showing a renewed eagerness to learn from the experience of others with whom we share a lot in common. Last year, we attended the Africa-China Poverty Reduction and Development Conference which was held in Addis Ababa, the venue of this Ministerial conference.
The conference galvanized South-South dialogue and cooperation on a number of themes including
“Development as a Transformation: Towards a High Growth Africa; Transformational Lessons: The Chinese Experience in Reducing Poverty; and a Food Secure Continent: Africa as the New Agricultural Power”. We learned how China has reduced poverty within 30 years, a relatively short time span:
achieving high economic growth rates while lifting more than half a billion people out of poverty was truly fascinating. We heard how the process involved continuous changes in the economy, institutions and society itself; and how its leadership played a strong role in building institutions and investing in capacities to catalyze and manage the process of change.
We find the theme of this conference, governing development, rather intriguing. We are not sure whether indeed it was inspired by the desire to dig deeper in trying to understand the Chinese process and how we might emulate it. On our part, we found the following aspects not only interesting but also
1UNDP (2010) Breakthrough Strategies for Accelerating Growth and Reducing Poverty in Africa: Africa-China Development Conference report
2 Radelet, S (2010) Emerging Africa: How 17 Countries are Leading the Way. Centre for Global Development. (The 17 countries are Botswana, Burkina Faso, Cape Verde, Ethiopia, Ghana, Lesotho, Mali, Mauritius, Mozambique, Namibia, Rwanda, São Tomé and Principe, Seychelles, South Africa, Tanzania, Uganda, and Zambia)
3 The 17 are: Cameroun, Togo, Madagascar, DRC, Somalia, Benin, Niger, Burkina Faso, Ivory Coast, Chad, Central African Republic, Congo, Gabon, Senegal, Mali, Nigeria and Mauritania.
resonating with a lot of what we have highlighted in our work all along. We highlight and nuance them for your further reflection.
1. The determination of leaders to get the job done.
Africa is not short of policies or even institutions. Being cognizant of this fact, our Heads of State and Governments have noted that:
“For many years, we have adopted at the national, regional and continental levels many plans, strategies and programmes for the development of our countries, individually and collectively.
Unfortunately, these plans and programmes were not adequately implemented by the majority of our countries and in some cases were completely paralyzed and jeopardized by incessant civil strife and natural calamities”4.
In his report to the Executive Council and the Assembly as recently as January 2009, the Chairperson of the Commission echoed these views when he said:
“Our Organization is, indeed, endowed with a wide range and relatively comprehensive set of documents (legal texts, decisions and recommendations) covering all spheres of human activity, documents that could make us the envy of other continents. It must however be observed that the political will underpinning this wide range of documentary assets, an asset shaped by our good intentions, has not always been translated into concrete measures. Our peoples in their towns and villages gain nothing from these good intentions which are quite often relegated to the status of feasibility study and consigned to the dusty archives of our offices”5.
In discussing how to govern development in Africa, this must be the starting point of our inquiry:
what needs to be done differently in order that the policies we put in place get implemented and lives get changed for the better? Every country, including in Africa, which has had the determination and will to change things has made considerable progress. This is been the case in the 17 African countries listed by Radelet as leading the way of emerging Africa. For example, while some governments are busy arguing that setting sector targets is not a viable policy option, all the 10 countries that have consistently allocated 10% of their national budgets to agriculture are among the 17 as the matrix below shows. In our monitoring work, we even found that meeting the targets for agriculture is not mutually incompatible with meeting the targets in health and education or other social sectors for that matter. It is a question of priorities and optimization of available resources.
4 Africa Union (2009) Advancing Shared Values with the African Union: the African Governance Architecture
5 Ibid
At the Africa-China conference last year, we heard how China’s poverty reduction was catalyzed by a significant increase in rural agricultural productivity in the initial post-reforms period,
followed by industrialization and a substantial increase in the number of people living in urban areas.
Significant reforms in agriculture, large investments in human development (education and health), and infrastructure for both urban and rural areas were the key for the transformation process. This is definitely not a new lesson for us, but it confirms our long-held belief of the need to refocus on mainstay economies of our people to prevent urbanization driven by illusion. It is fair to say that in many of our countries, the rural sector, smallholder farming and the informal sector - all of which account for more than 70% of our populations - tend to fall below the radar of official statistics, deliberations and projections. The community assets, stored in cattle, sheep, goats and chicken, are not linked to financial institutions and often cannot not be accepted as collateral for bank loans. More recently, these have been joined by the youth, whose unemployment levels are alarming and a ticking time-bomb. Much of the growth we have experienced has been driven by imports and commerce, not by value-addition to local content and there is inertia against changing the status quo.
Emerging 17 African countries as identified by
Steven Radelet of CGD (Average GDP per capita growth 1996-2008- annual %)
Public spending on Agriculture, Health and
Education, total (% of government expenditure) as estimated for DSM 2010
MDG Progress Score (adjusted) based on MDG Progress Index developed
by CGD
Human Development Index (HDI 2010)
1 Botswana 4.1 Senegal 17.3 Tunisia 7.0 Libya 0.81 2 Burkina Faso 2.8 Ethiopia 14.9 Egypt 6.9 Mauritius 0.748 3 Cape Verde 4.0 Mali 14.9 Algeria 5.1 Tunisia 0.729 4 Ethiopia 4.1 Rwanda 14.1 Burkina Faso 5.0 Algeria 0.712 5 Ghana 2.6 Cape Verde 14.0 Ethiopia 5.0 Egypt 0.659 6 Lesotho 2.3 Gabon 14.0 Ghana 5.0 Botswana 0.655 7 Mali 2.5 Burkina Faso 13.9 Malawi 5.0 Morocco 0.618 8 Mauritius 3.7 Namibia 13.7 Uganda 5.0 Congo 0.555 9 Mozambique 5.3 South Africa 13.5 Libya 4.8 Swaziland 0.536 10 Namibia 2.4 Niger 13.1 Solomon Islands 4.8 Kenya 0.504 11 Rwanda 3.7 Guinea 12.8 Mauritius 4.6 Cameroon 0.501 12 Sao Tome and Principe 5.0 Burundi 12.8 Namibia 4.6 Madagascar 0.494 13 Seychelles 2.5 Mozambique 12.6 Gambia, The 4.5 Ghana 0.492 14 South Africa 1.9 Malawi 12.6 Mauritania 4.5 Uganda 0.482 15 Tanzania 3.0 Botswana 12.4 Morocco 4.5 Nigeria 0.478 16 Uganda 3.8 Uganda 12.0 Botswana 4.0 Sudan 0.475 17 Zambia 1.8 Lesotho 11.8 Cape Verde 4.0 Benin 0.473 The matrix is based on Steven Radelet’s benchmarks which include GDP per capita growth and additional governance and social indicators; the Centre for Global Development’s MDG Progress Index; the DSM public spending allocation averages; and the 2010 HDI
This meeting is taking place at a time when we are witnessing widespread discontent, led by the
‘new’ generation of technologically connected African bent on having things done differently – a counter to the inertia mentioned above. Will this lead to stability and improvement? How can this new energy be channeled into constructive outcomes for more people? That is a question that should exercise our minds at this conference and when we return home. This could be a defining meeting.
2. African Consensus: bases for home-grown polices rooted in African realities
There is so much talk about Africa adopting a developmental state approach to development.
Before we embark discussions on who drives the economy, and the role of the African state in economic transformation, we need to remind ourselves that this is not the first time that Africa’s elite and policy makers debates on foreign development models and approaches based on either neo-liberal or socialist development models. In our view, what is needed is for African people to come together to create their own development paradigm that reflects its peoples’ realities and aspirations. In January, the African Union deliberated on “Shared African Values”. We probably need to extend this exercise to include shared African development thinking. Adésínà6 (2001,2009) observes “The critical necessity of development for Africa in the 21st century is an issue around which there is considerable consensus.
There is, however, little agreement on the nature of the crisis, the required development framework, and the ‘desired state’.” Therefore what is needed here, as Kofi Akosah-Sarpong - a Ghanaian journalist and academic - eloquently puts it, is “…Development thinking that emanates from the core ideals of African traditional values and rational realities. The product of this mixture can aptly be called, both philosophically and practically, the African Consensus.”7
Moving towards such a consensus on the nature of development challenges, the required development framework and our development ideals should be developed from the ground up and reflect our culture, values, assets, and aspirations across all generations. This consensus will be the basis for our deliberation on “the role of state in economic transformation”. And it will open up “the policy space” that encourages original thinking rather than replicating the “super models” others, including China, have followed. We will avoid the trap former President Thabo Mbeki warns us against “[Being] mere conveyor belts of knowledge generated by others outside our continent about ourselves and what we need to do to change our reality.”8 By the way, this is also true for the ‘new’
generation. It too needs policy space to create their own solutions.
Nearly two decades ago the upsurge of neoliberal economic policies informed by the “Washington consensus” prescribed, amongst others, the reduced role of the state in the economy in favour of the market. The wholesale application of the policy prescription was blind to the capacities of the African public and private sectors to lead growth. The proposition of the developmental state model seems a backlash to the excesses of the Washington Consensus.
6Adésínà, J.O. (2001). NEPAD and the Challenge of Africa’s Development: Towards the political economy of a discourse.
African Journal for International Affairs vol. 4, No. 1 & 2
7 Kofi Akosah-Sarpong is a journalist and academic
8 Mbeki, T (2010). Investing in Thought Leaders for Africa's Renewal. Africa Day Lecture, Thabo Mbeki Leadership Institute
It is our considered view that today, the role of the state in economic transformation should not be determined a priori based on ideological alignment. We need to learn that certain “wholesale”
application of economic models not rooted in realities of the people is bound to fail. We need to seize the moment as Prime Minister Zenawi calls for opening of policy space to deliberate on African development strategies without being held back by ideological dogmas. The role of the private sector and civil society need to be clearly articulated based on evidence-based analysis of the African reality.
Therefore this debate on the role of state in economic transformation should be based on what former President Thabo Mbeki9 describes as integrated continuum of
• Analysis of African reality and the global context within which our Continent exists and pursues its objectives;
• The policies relevant to the renaissance of Africa that would seek to transform the reality discovered through analysis;
• The politics Africa needs to translate these policies into the required transformative programmes; and,
• The institutions that must be put in place to drive the process towards the renaissance of Africa.
There is need to forge a new African development consensus that serves as the basis for our development policies. This line of thinking will help to reduce non implementation of development plans. The common causes for non-implementation basically is that, firstly, polices that do not reflect people’s voices, realities and aspirations and are not in synch with African realties, and secondly that policies and programmes are not based on African human, social and physical capitals. We seem to have fallen into the trap where we formulate policies we do not have capacities to execute and developing capacities we do not have programmes to utilize. A powerful lesson we learned during the Africa-China conference was that at almost every stage of reform over the past 30 years, China refused to import super economic models that transformed the developed countries, choosing rather to pursue home-grown policies and learn-by-doing. Apparently, it studied these models and learned from them but did not import them wholesale.
Of course, even with China, we must resist imbibing their model lock, stock and barrel, however appealing it may be. In fact we must beware that China has a strategy for Africa. We may not have looked it this way, but many of us in Africa are partly Chinese. By buying its cheap manufactures while letting our textile industries die, we oil the wheels of Chinese industrial revolution as if it were our own. The trade deficits that our countries have with China mean that we are consumers of Chinese products without reciprocation. One by one, the textile industries in African countries have all but collapsed, outcompeted into extinction by Chinese products. For example by 2004, Chinese textile exports to South Africa had doubled, forcing an estimated 75,000 people out of jobs. In neighbouring Lesotho, 10,000 jobs were lost and 10 factories closed due to cheaper Chinese imports. Likewise in Kano and Kaduna in Nigeria10, textile industries have suffered a similar fate.
We do not argue for wholesale protectionism, but certainly something is fundamentally wrong with the trade policies and regimes that create such realities. Likewise, Africa does not need to return to the era of command economics. But it must not stand by idly as one country after another see their
9 Ibid
10 Adebajo, A eds. (1998) The Curse of Berlin: Africa After the Cold War. University of KwaZulu Natal
manufacturing base obliterated in what is a rapid and, for some, complete de-industrialization in Africa.
Africa needs politics that translate policies for industrialization, job-creation, food security and similar transformative programmes to reality for the majority of all citizens, not just for a few. As Trevor Manuel said at the Africa-China conference, “Africa must act collectively to negotiate significantly improved market access” for the products we have competitive advantage in. To this we wish to add,
“If such products don’t exist, then we must do whatever it takes to invent them”. In the meantime, we must improve drastically intra-African trade from the current 9% or so if we are to unlock the African moment and enjoy a dynamic future.
3. The pivotal role of the African Scientist
It is noteworthy that governments commonly associated with the developmental state invested heavily in research and development. Scandinavian countries are perhaps the best examples of modern, democratic developmental states. Their success has, to a large part, depended on the priority they put to investing in R&D programmes. The United States, a country which one might categorize as the
“hidden developmental state”, had to invest heavily in R&D, focusing on cutting-edge technology situated in state agencies and then linking the technologies to business, universities and other research centres for commercial use. This is a good example of where an African state can play the strategic investor role or what Mkandawire refers to as “facilitative and transformative” state roles11.
The one point that we wish to highlight is the failure by many African countries to incentivize our best scientists working in centres of excellence and ‘smallholder researchers’. By and large, we create and then neglect our own scientists and centres of excellence. If an external donor does not come to their aid, (with their own research agendas in tow), they die or limp along as shadows of their original selves. Yet when put in the right environments, our scientists excel. Time has come for Africa to unleash its scientists to dip up answers to our development opportunities from where we have left them - our own backyard.
A telling phenomenon is what has been termed “land grabbing” in Africa. While an estimated 200- 300 million of Africa’s 1 billion people face chronic hunger, countries from outside the continent are coming to look for land to grow food for their people. They see food where there has been hunger!!
You are interested in governing development? This is what African scientists told us needs to be done when we (African Monitor) organised a policy forum on agriculture, food security and food sovereignty in June 2009: If you have a little money to invest in agriculture, prioritize the following:
• Focus investment on staple food crops - maize, cassava, millet, rice and grain legumes - in combinations that match the ecological zone conditions of each country or region. We have already figured which crops are suited for which agro-ecological zone. For example, Nigeria could focus on cassava, maize, sorghum, rice and millet, while Tanzania focuses on all these except millet and Malawi focuses on maize and beans, etc.
• Transfer the innovative high-yielding technologies, which already exist, to farmers so that they move from the “grandmother production techniques”, rigorously focusing on younger generations of farmers;
11 Mkandawire, T. (2010) “From maladjusted states to democratic developmental states in Africa” in Edigheji, O (eds) Constructing a Democratic Development State in South Africa: Potentials and Challenges. HSRC Press
• Improve post-harvest handling which currently causes loss of half of the food produced. Feed the children instead of feeding weevils. Technologies to stop that do exist.
• Give smallholder farmers access to high-yielding inputs distributed using “coco-cola” methods to make them available wherever they are needed packaged in quantities that suit the farmers’
pockets.
• Target training and finance to women who are the majority of the smallholder farmers.
• And, think and invest long-term, collectively. One of the lead constraints to agriculture in Africa, the experts highlighted, is that African soils are among the oldest and most depleted in the world. So, while Africa has 22% of the world’s arable land, the bulk of the soils is over 4 billion years old and has not been renewed by glacial or volcanic action. They are highly acidic and need long-term investment in correcting the basic soil fertility problems. Brazil, with similar soils, has, through concerted investment over a 20-year period, turned non-productive soils into the world’s biggest producer of soya bean.
If Africa were China, this would probably have been implemented already. Apparently this is exactly what China did to increase productivity in rural economy: promoted improved crop seeds, intensive use of fertilizer, and in later years, mechanization of agriculture. As we all know, African governments have already committed to agricultural growth and public spending targets of 6% and 10% respectively. This translates into around USD 20 billion a year. What the experts told us during the policy forum was that while the 10% spending target would realize sizeable increases in agricultural production, what is needed to ensure sustained household food security by 2015 (only 4 years from now) is USD 30-39 billion a year, which is close to 20%.
4. The Role of state, civil society and private sector
It would be unrealistic to look at the role of state in economic transformation without taking into consideration the roles of private sector and Civil society actors. There is merit in viewing the state, private sector and CSO as three legs of the transformation tripod. The synergy which could emerge from optimal combination of their roles is magnanimous for African development. The allocation of roles and effective coordination should reflect the existing relative strengths and capacities and should not be dictated economic models.
In view of the recent calls for increased state involvement in directing economic development that includes Macro economic planning and strong state intervention in addition to provision of the public goods, or as, Chang 12 broadens the definition of the developmental state that intervenes to promote economic development. We need to carefully look at the traditional roles of state, private sector and civil society, their strengths and capacity, and we have to reconstruct these roles and interaction among them. For instance, CSOs are good at promoting social accountability; State bodies are known for infrastructural services and regulatory function, while private sector actors are known for their
12 Chang, H. (2010) “How to “do” developmental state: political, organizational and human resource requirements for the developmental state” in Edigheji, O (eds) Constructing a Democratic Development State in South Africa: Potentials and Challenges. HSRC Press
entrepreneurship and innovation. Evans13 observes that “there is no fixed, universal model of how to build a developmental state; …successful building of the developmental state must be continually reflexive and “learning by doing process”. Only a flexible, creative process of exploration and experimentation that pays a careful attention to local institutional arrangements as a starting point will succeed“.
The approach where government directs development would make sense only if state capacity to assume the role exists. But, what our monitoring works tells us is that the states does not lack good- intentioned polices nor ambition. They lack of implementation capacities. When we look at the history of the so-called “developmental state” paradigm, we observe it not as a short run “quick fix” approach, but rather as a long run policy instrument. The construction of a developmental state in countries such Taiwan, Singapore and China, and even the Scandinavian countries and France has been evolving through time. The Singaporeans had to have a draconian saving scheme. In this spirit, the role of the state in governing African development cannot be a one size fits all. African countries have their own idiosyncrasies, histories, politics and capabilities. What is needed to draw our own development strategies based on our aspiration, our realities and our capabilities through experimentation, is to learn by doing and taking forward what works best. We need to have a steady hand in our implementation.
5. Cooperation for poverty reduction
One of the striking statements from the Chinese delegation was how they made poverty reduction everybody’s business:
“while making constant intuitional innovations and strengthening the special poverty reduction projects, the government has further integrated and reinforced poverty reduction cooperation among various sectors including agriculture, water conservation, traffic and transportation, education and health, ethnic affairs, as well as radio, film and TV, giving full play to the role of each sector. It has encouraged enterprises and social organizations to participate in development- oriented poverty reduction, and actively explored the incentives policies for enterprises participating in development-oriented poverty reduction”14.
In a number of our countries, we still struggle with coordination, let alone cooperation across government ministries and departments. Rarely does the left hand know what the right hand is doing or has done. Independent monitors like African Monitor are needed to constantly remind us of this governance pitfall. While this is improving in some countries which have instituted coordinating agencies, there is still a long way to go.
13 Evans, P. (2010) “Constructing the 21st century developmental state: potentialities and pitfalls” in Edigheji, O (eds) Constructing a Democratic Development State in South Africa: Potentials and Challenges. HSRC Press
14 UNDP (2010) Breakthrough Strategies for Accelerating Growth and Reducing Poverty in Africa: Africa-China Development Conference report , p. 8
6. Facilitating investment by African Diaspora
On February 8 2011 Reuters News Agency, quoting Kenya’s Central Bank, reported that Kenyans abroad sent home a record USD641.9 million in 201015. Remittances are the fourth largest source of foreign exchange in East Africa’s biggest economy, only bettered by tea, horticulture and tourism. The funds sent home are typically used on investments such as real estate and equities and to help their families pay for medical expenses and school fees. As we know, Africa has a large number of professionals working abroad who contribute to the development of those economies. While focus has been put on the remittances they send back home - and the Kenyan story is typical of many other African countries, particularly in West Africa where an estimated 25-50% of their nationals living abroad are university graduates - the African Diaspora contributes far more than remittances. They have been credited for facilitating the breakthrough in socio-economic development and good governance on the continent through technological and skills transfer and in their contribution to building democratic culture and institutions. They are taking advantage of the improvement in infrastructure to start businesses in some of the high-growth African economies. They are promoting a new culture of entrepreneurship and private sector innovation, which is re-invigorating the African economies and entrenching positive social capital conducive for democracy and civility. How can more be done to facilitate this role of the Diaspora even further, recalling that some left the continent because of bad governance?
7. Building constituencies for reform
In discussing governing development and how to sustain the current wave of optimism about Africa’s fortunes, we would do well to take a moment to reflect on what mechanism we as a continent have put in place to renew leadership in an orderly manner.
Development is a process that involves leadership, dialogue and renewal. It involves trade-offs which are rarely painless. Unlocking the African Moment is a process that needs to prepare the next generation of African leaders who think ‘possibility’ and are positive about the continent and their future in it.
Two points we wish to highlight in this regard. Afro-pessimism has for long been associated with outsiders who have a negative or low opinion of Africa and Africans. During 2010 when African Monitor conducted citizens’ consultations on the African development agenda, we heard, in what was described as “incompatibility of incentives”, that the worst skepticism about Africa is with those who are responsible for making things happen. Apparently these very people are so pessimistic about the future of the continent that they put all their investments off-shore, they do not have faith in the education or health systems they have set up, preferring to go abroad for minor treatments, etc. This pessimism among the elites needs to be addressed.
The second is the strategy for administrative rejuvenation. Interestingly, in the Africa-China conference referred to above, there was reference to the management of generational shift in government. “Realizing that the path of reform required government officials with different mindsets
15 Thomson Reuters (8 February 2011) Kenya remittances hit record 641.9 million
and skill sets”, an incentives package was put in place to “buy-out” those who would resist the reforms, including those in senior decision-making positions.
In conclusion, governing development must, among other things, focus on what we know needs doing but has not been done. A stronger role of the government in pushing forward economic reforms must avoid repeating the mistakes of the past, such as social and economic disruptions that impede further progress. It must be forward-looking: catch the spirit of the moment regarding a new dawn in Africa and what it takes to seize the moment, sustain it and make it beneficial to all the African people.
And it must foster a broad-based constituency for reform that includes state and non-state actors; the
‘old’ and the ‘new’ generations of people and technologies and a ‘possibility’ mindset.
