THE POVERTY OF DEVELOPMENT STRATEGY IN AFRICA
By Dr. Cosmas Ochieng, Executive Director, ACTS
Abstract
A combination of robust economic performance and an uptick in scientific and technological indicators over the last two decades has given rise to exuberant assessments of Africa’s development prospects in the 21st century. Loose parallels are being drawn between development in Africa today and economic development in East Asia (i.e. the ‘East Asian tigers’) and the rise of ‘Silicon Valley’. This article argues that Africa’s economic and techno-scientific progress is being lionized prematurely, to the detriment of its long term development. The ‘Africa rising’ narrative masks a poverty of development strategies: lack of coherent development policies and capacity for strategic thinking necessary to consolidate recent gains and to harness future global mega trends.
The poverty of development strategy manifests itself in at least four interrelated ways. The morphing of ‘Economic Advisors’ into ‘Policymakers’ in all but name has restrained ‘development ambition’ and ‘strategic policy space’ in Africa. ‘Palliative’ or policies focused on poverty reduction have been mistaken for development policy. Africa has failed to bet big on science, technology and innovation for its development. Policy making has proceeded as if Africa is a country, yielding dubious one-size-fits-all prescriptions.
Introduction: Two Decades of Robust Economic Performance but Nothing Miraculous
In 2000, the World Bank published an assessment of Sub Saharan Africa’s development prospects in the 21st century: Can Africa Claim the 21st Century? The Bank hedged its bets. Africa entered the 21st century with dismal socio-economic indicators. It had many of the world’s poorest countries and a growing share of the world’s absolute poor. Its total income was not much more than Belgium’s, and its ‘‘average output per capita in constant prices was lower at the end of the 1990's than 30 years before’’ (World Bank, 2000, 8). The continent was characterized by financial and human capital flight; declining export shares in traditional commodities; limited economic diversification; widespread civil strife (with one in five Africans living in a conflict stricken country); and limited popular participation in political governance.
At the turn of the century, 40 percent of Africa’s private wealth was held abroad, an amount equivalent to the size of its debt or 90 percent of its GDP. By comparison, only 6 percent of East Asian and 10 percent of Latin American wealth were held abroad. Between 1960s and 2000, Africa had lost a third of its human capital through emigration. In 2000, 1 out of 8 Africans with a university education lived in a country in the OECD. This was the highest rate among developing regions, with the exception of the Caribbean, Central America and Mexico. Moreover, the continent appeared in danger of being marginalized by the information revolution. In the estimation of the World Bank, many development problems had become largely confined to Africa. These included lagging primary school enrollments, high child mortality, and endemic diseases—‘‘including malaria and HIV/ AIDS—that impose costs on Africa at least twice those in any other developing region’’ (World Bank, 2000,1). The World Bank concluded that Africa’s development challenges went beyond low incomes, low savings, slow growth and falling trade shares to include inequality, uneven access to resources, social exclusion, and insecurity.
Against this background, it is easy to see why the broad-based and sustained economic growth, falling poverty rates, and the unexpected uptake of information and communication technologies in much of Africa over the last two decades has generated a dramatic shift in elite and popular perception of Africa’s development prospects. Consider the following.
Over the last two decades, real economic activity in Africa more than doubled. According to Africa’s Pulse, the economies of Sub-Saharan Africa grew at a relatively strong pace of 4.5 percent a year on average between 1995 and 2013. This is comparable to that of other developing regions (4.4 percent). Africa was outperformed only by East Asia and the Pacific at 5.1 percent (Africa’s Pulse, Vol. 9, 2014). Over the same period, Sub-Saharan Africa witnessed more than a 30-fold increase in foreign direct investment (FDI), an expansion ‘‘7.5 times faster than in high-income countries and nearly 10 times faster than global GDP’’ (Ibid.). The share of the African population in extreme poverty fell from 56 percent in 1990 to 43 percent in 2012.
While Africa’s total income was not much larger than Belgium’s at the turn of the century, according to the IMF’s World Economic Outlook, by 2014, Nigeria had become the 21st largest economy in the world (by nominal GDP). In global rankings (by nominal GDP) it was a larger economy than: Sweden, Belgium, Norway, Austria, United Arab Emirates, Colombia, Denmark, Malaysia, Singapore, Israel, Finland, Ireland, Pakistan, Portugal and Greece. According to McKinsey’s study in 2010 (Lions on the Move), at $ 1.6 trillion, Africa’s combined GDP in 2008 was roughly equal to Brazil’s or Russia’s. The continent has also become less prone to macroeconomic instability. The ‘‘incidence of sharp declines in real output per capita (peak-to-trough drops that exceeded 10 percent) was reduced from 36 percent during 1974–94 to approximately 18 percent during 1995–2011...Furthermore, the duration and depth of recessions also declined... On average, the duration of recessions across the region dropped from 2.2 years during 1974–94 to 1.9 years during 1995–2011, while the median contraction declined from 9.3 percent during 1974–94 to 5.4 percent during 1995–2012’’ (Ibid.). Unlike the 1980s and 1990s, Africa’s debt ratios are currently lower than those for other developing regions. All these indicators confirm that Africa’s economic performance over the last two decades has been robust and broad based. What this performance is not, however, is anything near ‘miraculous’ relative to successful economic development cases of the last 60 years (e.g. Japan, South Korea, Taiwan, Singapore, China et cetera) or relative to what is needed to transform a majority of African countries into newly industrialized economies, say by 2030-2040, going by most national development aspirations. In other words, sustained economic and techno-scientific development in Africa is far from being around the corner.
The most important illustration of this is the industrial stagnation or decline in much of Africa over the last two decades. A 2011 study by UNCTAD and UNIDO (Economic Development in Africa: Fostering Industrial Development in Africa in the New Global Environment) found that the share of manufacturing in GDP in Africa fell from 15.3 percent in 1990 to 12.8 percent in 2000 and 10.5 percent in 2008. The share of manufacturing in GDP in Africa rose from 6.3 percent in 1970 to a peak of 15.3 percent in 1990, just before the structural adjustment program of the ‘Washington Consensus’ went into full bloom across much of Africa. It has been declining ever since. The share of manufactures in Africa’s total exports fell from 43 percent in 2000 to 39 percent in 2008. Nearly half of Sub Saharan African countries had negative MVA (Manufacturing Value Added) per capita growth from 1990 to 2010.
Even Africa’s share of low-technology manufacturing activities in MVA also fell from 23 percent in 2000 to 20 percent in 2008, while its share of low technology manufacturing exports fell from 25 percent in 2000 to 18 percent in 2008.
Even on its own terms, the African economic story of the last two decades is not an unqualified success. Take the case of poverty reduction. While poverty rates have fallen, the number of people living in poverty increased by more than 100 million, partly as a result of population growth. There are now more people living in poverty in Africa than there were in 1990. Africa is also the only developing region to have failed to reach the UN Millennium Development Goal (MDG) of halving poverty by 2015. The growth of FDI might have been impressive but because of weak linkages between foreign investors and local economies, its economy-wide spill over effect has been limited. The lower debt-to-GDP ratio is a result of two debt cancellation programs (the Heavily Indebted Poor Countries initiative and the Multilateral Debt Relief Initiative) and fast economic growth. There is limited room for further debt relief, in part because many African countries are back to borrowing from the private market (as opposed to official lenders such as the World Bank and the IMF). Personal, corporate and government debts are all on the rise in Africa. Since 2008, the debt-to-GDP ratio is on the rise in many African countries. If economic growth falters, the debt burden might become unsustainable.
Africa’s economic performance over the last two decades has been attributable to a combination of benign external factors and domestic improvements in macro-economic management. There are signs of changes in both fronts. ‘‘On the external front, growth performance in the region was boosted by rising commodity prices, the emergence of China as an important trade and investment partner, and the surge of foreign capital into developing countries due to accommodative monetary policies in the advanced world’’ (Africa’s Pulse, Vo. 9. 2014, pp 25). Other than the ‘China effect’, commodity prices and monetary policies in advanced countries are already on different trajectories.
Domestically, recent budget deficits (e.g. Ghana and Tanzania), currency crises (Ghana and Zambia), sovereign bond issues (at least 16 African countries have issued ‘Eurobonds’) and growing cases of corruption raise questions about fiscal discipline and macroeconomic management in a number of countries.
To be sure, some accounts of the ‘Africa rising’ narrative recognize that the continent continues to face significant challenges. The World Bank’s latest study, Poverty in a Rising Africa, notes that despite falling poverty rates, more people in Africa are poor today than in 1990, that violence is on the rise and that illiteracy levels on the continent remain significantly high. Nonetheless, many accounts of the ‘Africa rising’ narrative give the impression that Africa has reached the ‘economic take off’ stage – as in Rostow’s theory of economic development.
While poverty rates have fallen, the number of people living in poverty increased by more than 100 million, partly as a result of population growth. There are now more people living in poverty in Africa than there were in 1990.
McKinsey’s Lions on the Move exemplifies this. ‘‘Looking ahead, a critical question is whether Africa’s surge represents a onetime event or an economic takeoff. The continent’s growth also picked up during the oil boom of the 1970s but slowed sharply when oil and other commodity prices collapsed during the subsequent two decades. Today, while individual African economies could suffer many setbacks, our analysis suggests that the continent’s long term growth prospects are strong, propelled by both external trends in the global economy and internal changes in the continent’s societies and economies’’ (McKinsey, 2010, 3).
Economic development is not a ‘zero- sum’ game. Development in one country or region does not equate to underdevelopment in another. Nevertheless, theoretical thinking on economic development always benefits from comparative analysis. The ‘Africa rising’ narrative suffers from a lack of keen attention to comparative analysis. This has led it to over-estimate Africa’s economic and techno-scientific ‘successes’.
While the last two decades have been good for economic and techno-scientific progress in Africa, they have also been a period of even more unprecedented economic, social, technological and political transformation in the rest of the developing world (see Steven Radelet’s: The Great Surge: The Ascent of the Developing World). The ‘era’ of the ‘Africa rising’ narrative is also the period during which China became the second largest economy in the world and Brazil and India joined the club of the 10 largest global economies.
While an ‘African economy’ the size of Russia’s or Brazil’s is an improvement on an ‘African economy’ slightly larger than Belgium’s, what this really tells us is that Africa is still a very poor continent. Brazil has undergone phenomenal economic change over the last few decades. Nevertheless, it is barely a ‘developed country’. That its economy is roughly the same size as dozens of African economies combined, this tells us more about Brazil’s current state of economic development. Nigeria and South Africa together constitute 55 percent of the GDP of 48 Sub Saharan African countries. When they are taken out of the equation, Africa’s economic performance over the last two decades begins to look less impressive.
In sum, the nature of economic and techno-scientific development in Africa does not measure up to the hype. The ‘Lion State’, ‘Silicon Savannah’ and related analogies are false and premature. The Africa rising narrative would benefit immensely from greater attention to comparative analysis. By hyping the nature of economic progress in Africa, the ‘Africa rising’ narrative under- emphasizes the complex, multifaceted development challenges that still face the continent. In spite of its recent economic and ‘technoscientific gains, and in spite of opportunities in global megatrends over the next decade or so (which according to a 2012 Report of the US National Intelligence Council (Global Trends 2030) includes demographic patterns, diffusion of global power or ‘emancipatory multi-polarity’, individual empowerment, urbanization, disruptive technologies and food-water-energy pressures; see also Prof Nwadiuto Esiobu’s article in this Issue of the Magazine), Africa faces a number of fundamental development challenges, including: structural transformation and economic diversification; inequality and social exclusion; insecurity and political instability; underdeveloped scientific, technological and innovation capabilities, to mention but a few. Even after two decades of solid economic growth, Africa is still more or less where it was at the turn of the century: many development problems remain largely confined to the continent.
Addressing these challenges will require a more creative, bold and innovative approach to development policy than currently employed by many African countries. Most accounts of the ‘Africa rising’ narrative assume that African countries have the requisite development policies and leadership necessary to move the continent to the next ‘level’ of development. Below, I argue that Africa lacks coherent development strategies and leadership required for this task.
Even if the proposition that Africa has reached the ‘economic takeoff’ stage is correct, according to Rostow’s theory, a country could still take anywhere between 50 to 100 years to transition to the next ‘stage’ of economic development: ‘Drive to Maturity’. That would require a long interval of sustained economic growth, something that is currently doubtful given the present makeup of what constitutes ‘development policy’ in many African countries.
Rostow’s theory of economic development is problematic and a critique of it is beyond the scope of this article. For our purposes, suffice it to say that we know from the case studies of economic development in South Korea, Singapore and Taiwan for example, that with the ‘right set of development policies’, economic development can be achieved within a generation. Regardless of its current ‘stage’ of economic development, if Africa is to realize the dream of industrialization by 2020, 2025, 2030, 2040 or 2063, going by different national and continental aspirations, at a minimum, the continent will need greater technoscientific and industrial capacities.
This will in turn require more than ‘palliative policies’ or policies primarily focused on poverty reduction. This will also require that the continent reclaims the role of ‘Policymaker’ from ‘Economic Advisors’. Finally, this will require that development policymaking recognizes that Africa is not a country: a one-size-fits-all development approach might be counterproductive to Africa’s development objectives, whether it is deployed by ‘home grown’ African institutions such as the African Union, NEPAD and the African Development Bank or Africa’s ‘development partners’ such as the World Bank, IMF, UN agencies, bilateral and multilateral ‘donors’. The rest of this article discusses each of these in turn.
PROMISING TECHNO-SCIENTIFIC PROGRESS BUT STILL A LONG WAY TO GO
Africa’s techno-scientific progress over the last few years mirrors that of its ‘economy’: impressive but nothing miraculous in comparative perspective or relative to its development needs. This is not to diminish Africa’s recent techno-scientific gains. At the turn of the century, there was a real concern that the information revolution would marginalize Africa. While the technoscientific and industrial gap between Africa and the rest of the world remains wide, today, it looks more likely than not that the information and digital revolutions will help Africa to bridge this gap. Africa’s ability to harness applications of information and communication technologies (ICTs), especially mobile technologies and the internet, is partly responsible for its current economic and techno-scientific dynamism. A 2012 joint study by the African Development Bank and the World Bank (The Transformational Use of Information and Communication Technologies in Africa) estimated that ICTs directly contribute about 7 percent of Africa’s GDP, a figure higher than the global average. The study also found that two-thirds of African adults now have access to ICTs.
In many countries in Africa, ICT applications are being harnessed in the fields of finance, education, agriculture, health, climate change and public service. In 2014, the ‘mobile ecosystem’ supported 4.4 million jobs and ‘‘generated 5.7 percent of GDP in Sub Saharan Africa, a contribution of just over $100 billion in economic value’’, according to GSMA’s Mobile Economy, Sub Saharan Africa report of 2015. It is estimated that 88 percent of Africa’s population is covered by a mobile-cellular signal. Africa’s mobile penetration rate now stands at 67 percent while its internet penetration rate stands at 26.5 percent or nearly 300 million people. The number of mobile subscribers in Africa grew from less than 25 million in 2001 to nearly 650 million by 2012. According to the GSMA report, more than one-fifth of mobile connections in Africa are connected to a mobile money account and there are ‘‘more registered mobile money accounts than banks accounts in a number of countries’’. African mobile innovations such as MPesa have given rise to a vibrant mobile economy on the continent.
There are currently over 200 tech hubs or innovation labs (also known as co-working spaces, innovation hubs, collaboration spaces, innovation clusters or business incubators) across the continent. Among the most famous of these are Nairobi’s Ihub, Kigali’s KLab, Liberia’s ILab, Nigeria’s Co- Creation Hub and FabLabs (i.e. engineering based hubs) in Nairobi and Namibia. The proliferation of these tech hubs, together with planned or nascent formal but fairly ambitious state led science, industrial and technology parks, cities or clusters such as those in Kenya (Konza Techno City or Technopolis); Nigeria (Anam New City, Eko Atlantic, and Centennial City), Botswana (Botswana Innovation Hub); South Africa (Science and Technology Park) and Egypt (City of Scientific Research and Technological Applications (SRTA-City) is what has given rise to the concept of the Silicon Savannah.
Africa’s surprisingly speedy uptake and adaptation of ICTs has done a lot for its techno-scientific image. This has somewhat overshadowed its gains in scientific research and development. Two new publications find that the quality and quantity of Africa’s research output increased over the last decade (Andreas Blom, George Lan, and Mariam Adil, Sub-Saharan African Science, Technology, Engineering, and Mathematics Research: A Decade of Development, and UNESCO Science Report, Towards 2030). Sub-Saharan Africa more than doubled its yearly research output from 2003 to 2012. The region’s share of global research increased from 0.44 percent to 0.72 percent over the same period. Between 2008 and 2014, the number of research articles published in Africa rose by 60 percent, with Africa’s share of global publications increasing from 2 percent to 2.6 percent. The number of researchers in Africa grew from 150,000 in 2009 to 190,000 in 2013, while the continent’s gross expenditure on research and development (GERD) grew from US$12.9 billion in 2007 to US$19.9 billion in 2013 or 0.36 percent to 0.45 percent as a percentage of GDP.
While the techno-scientific and industrial gap between africa and the rest of the world remains wide, today, it looks more likely than not that the information and digital revolutions might help Africa to bridge this gap.
The ICT and R&D figures are impressive relative to Africa’s historical performance. However, from a global comparative perspective, they don’t look as impressive. McKinsey’s 2011 study, Lions go Digital, found that the Internet’s contribution to Africa’s GDP at 1.1 percent was just ‘‘over half the levels seen in other emerging markets and well below the average of 3.7 percent in developed economies’’. (There are significant variations across African countries with countries such as Kenya and Senegal performing particularly well, at 2.9 percent and 3.3 percent respectively).
All the ICT related papers in this Issue (i.e. Mark Graham and Christopher Foster, Laura Mann, Padraid Carmody and James T. Murphy, Graham, Mann and Friederici, Mrinalini Tankha and Ken Banks) demonstrate that the African ICT sector is still far from meeting its full potential. Much has been made of the proposed Konza Technopolis in Kenya and similar techno-scientific or innovation cluster proposals/projects in Africa.
While the proliferation of these proposals is a positive sign that much of the continent is finally waking up to the power of science, technology and innovation as a driver of economic development, the hype is misguided. To begin with, outside South Africa, most countries in Africa have a dismal record with ‘mega projects’ in general and ‘mega scientific or technology projects’ in particular. Early attempts at ‘mega projects’ in the 1960s through the 1980s resulted in many ‘white elephants’ or investment projects with negative social surplus.
More recently, simple plans to supply schools with laptops in many African countries have stalled. Apart from the fact that without a skilled manpower base, proposed mega techno-scientific projects are more likely to turn into ‘white elephants’, bureaucratic difficulties in executing relatively simple projects do not inspire much confidence in the fate of the proposed mega projects.
Secondly, and perhaps more importantly, even assuming successful completion, African techno cities or innovation clusters wouldn’t be the most ambitious, innovative or competitive in the world. A number of countries have either successfully developed similar or more advanced initiatives (e.g. Biopolis in Singapore, Software Technology Parks in India, Israel’s Silicon Wadi, Edinburgh’s BioQuarter, Hsinchu Science Park in Taiwan, Tsukuba Science City in Japan – not to mention the original Silicon Valley and its many variants in the US). Others are racing to complete similar projects: Paris-Saclay (France) Skolkovo (Russia), Cyberjaya (Malaysia), Chilecon Valley, (Chile) and Tech City London, (United Kingdom). Many of these projects have two advantages over those in Africa: (a) more developed scientific infrastructure (i.e. larger pools of science, technology, engineering and mathematics (STEM) graduates, world class universities and research centers, heavy private sector concentration and participation, large outlays of both public and private sector funding, established or functional industry-state-university partnerships) and (b) greater ‘ambition’ and ‘innovation’. Each of the non-African projects has a holistic talent strategy to develop and attract world-class scientists, whether local or international (e.g. flexible visa rules, ‘seed’ funding, nationality, ethnicity and race blind immigration policies). For example, Singapore’s A*STAR Program provides scholarships for the best students in Singapore to pursue undergraduate and graduate scientific training at top universities in Singapore and around the world. It also allows brilliant international postdocs to conduct research in Singapore. Singapore is also able to attract many capable and talented foreign students into its national science ecosystem through its world class higher education system. Brazil’s Scientific Mobility Program (BSMP) is a government initiative designed to grant 100,000 Brazilian university students the opportunity to study abroad at the world’s top universities. ‘Start-Up Chile’ is a Chilean government funded start-up incubator program that since 2010 has spent US$40 million in grants to attract the best and brightest entrepreneurs from all around the world by providing them with a one year residency visa, US$ 40, 000 in seed funding, office space, and opportunities for mentoring and coaching.
By comparison, many of the African initiatives lack coherent strategies to either build and/or to attract the best global talent. It is estimated that Africa needs 10,000 STEM graduates over the next 10 years. Nothing much has been done about this so far. While other countries are investing in world class research centers and universities, many African countries seem more interested in expanding the ‘quantity’ rather than the ‘quality’ of university education. If Africa is not going to compete aggressively for global talent, including Africa’s own talent, it is unlikely that many of the planned techno-cities and innovation clusters will succeed.
The point is not that Africa should cede mega scientific and technological projects to others. On the contrary, the point is that in terms of economic development, Africa can longer afford to leave, in the famous words of Thandika Mkandawire, ‘‘the thinking, planning, experimenting, and therefore learning, to foreign institutions’ (quoted in Seyoum Hameso’s 2001 book: Development, State and Society: Theories and Practice in Contemporary Africa). The continent already has limited scientific and research infrastructure.
This acts as a major obstacle to attracting global talent. Africa has to find creative and innovative ways of making itself an attractive ‘hub’ for scientific research and technological innovation. Achieving this will require a coherent development policy, focused leadership and capacity for strategic thinking. Notably, this will require some world class mastery of ‘industrial policy’: ability to successfully identify and to effectively support sectors, industries or even firms, with the potential to fundamentally transform the structure of an entire industry or country. It is not clear that many of Africa’s planned mega techno - scientific and technology projects are embedded within strategic and coherent national development policies.
Africa’s promising ICT story over the last decade has occurred with limited state or government support – outside of the provision of requisite infrastructure (e.g. investments in broadband, STEM training) and enabling regulatory frameworks. In spite of this, Africa has emerged as a global leader in mobile technologies and innovations. Much of the mobile technology and innovation work in Africa has been done through an interesting combination of universities, telephone companies, ‘seed funding’ agencies, and thousands of entrepreneurial Africans who congregate in the more than 200 innovation hubs or labs across the continent. Considering that the entire mobile ecosystem in Africa is still a loose, informal and precarious infrastructure, despite its vibrancy and dynamism, perhaps a more innovative and appropriate ‘industrial policy’ in Africa would be for the state to ‘follow’ its entrepreneurs and focus investments, research and development and related infrastructure on the ‘mobile technology and solutions sector’. This might still require the building of a Technopolis but it would be a very different Technopolis, one perhaps better suited to Africa’s already world class innovation capabilities and ecosystems in mobile technologies and innovations. A mobile, virtual or cyber Technopolis might help overcome many of the barriers to scientific and technological development in Africa, including the challenges associated with financial and human capital.
African entrepreneurs and innovators have demonstrable expertise and interest in this type of challenge. That is partly the logic and method behind the mobile revolution in Africa. It is also partly the logic and method behind the self-selection and location of the more than 200 ihubs across Africa.
Many of these are already associated with leading African universities, global researchers and the private sector, both local and foreign. In other words, many of the tech hubs might be low cost and small scale but they are already ‘functional innovation clusters’. Why build a ‘formal’ innovation cluster from scratch? Why not build on these pre-existing innovation hubs? After all, many of the pre-existing hubs focus on generating innovations with social applications.
A fundamental problem with Africa’s techno-scientific development is that the continent is yet to bet big on science, technology and innovation for its economic development. Scientific development is at the heart of technological change and innovation. Since the industrial revolution, developed countries have had the most science and technology capacity and have grown fastest. More recently, returns to research and development (R&D) have been shown to be consistently positive and high across many industries in both developed and developing countries, suggesting a correlation between innovation and growth.
Developed economies have continued to invest heavily in research and development but many of the fastest growing developing countries of the last few decades have recently joined this league. According to Batelle’s Global R&D Funding Forecast, in 2014, the US invested 2.8 percent of its GDP to R&D. In the same year, the figure was 2.0 percent for China, 3.4 percent (Japan), 2.9 percent (Germany), 3.6 percent (South Korea), 2.3 percent (France), 1.3 percent Brazil, 2.7 percent (Qatar), 2.7 percent (Singapore), 4.2 percent (Israel) and 2.4 percent (Taiwan).
In 1980, African leaders pledged that each African country would spend at least one percent of its GDP on R&D. This pledge was not met. In 2007, African leaders renewed this pledge. There has been little movement so far. Africa’s R&D expenditure as a percentage of GDP grew from 0.36 percent in 2007 to 0.45 percent in 2013. The 1 percent target isn’t sufficiently ambitious to begin with. That no more than 3 African countries have met this target since the renewed pledge in 2007 speaks to misplaced development strategies in Africa. Africa’s gross expenditure on research and development (GERD) might have increased from US$12.9 billion in 2007 to US$19.9 billion in 2013 but in comparative terms all this tells us is that Africa is yet to bet on science, technology and innovation.
Consider this. With nearly half a trillion dollars in R&D investments annually (or about 2.8 percent of its GDP), US annual R&D investments are just over the size of South Africa’s GDP. In 2014, South Korea’s gross expenditure on research and development was $ 63 billion, about the size of the entire Kenyan economy. Africa’s GERD of US$ 19.9 billion in 2014, was just slightly bigger than Spain’s (US$ 18 billion).
While Africa has done well in research and development over the last few years, it is worth putting this in comparative perspective. Africa’s research and publication indicators might be trending upwards but Sub- Saharan Africa still accounts for less than 1 percent of the world’s research output. More importantly, despite the realization that to achieve economic transformation, Sub-Saharan Africa requires more and better STEM skills and knowledge, its research output in STEM significantly lags behind that of other subject areas. The share of STEM research in Africa declined marginally by 0.2. percent annually over the last decade.
While STEM constituted the largest share of Malaysia’s and Vietnam’s total research output at an average of 68 percent, it was only 29 percent of all research in Sub Saharan Africa. According to Blom et al, ‘‘in 2012, the quality of STEM research in Sub-Saharan Africa, as measured by relative citation impact, was 0.68 (32 percent below the global average). This is below that of all disciplines in Sub-Saharan Africa (0.92) and the global average (1.00), and it has virtually stayed the same since 2003. In contrast, STEM research in Malaysia, Vietnam and South Africa in 2012 was slightly above the world average (1.02) and has improved 15 percent since 2003’’. The growth in Sub-Saharan Africa’s research has been largely driven by the Health sciences, which grew at an impressive rate of 4 percent annually and accounts for 45 percent of all Sub-Saharan African research. Investments in African research and development over the last few years have been partly driven by international partnerships and external funding. While this is welcome and needs strengthening, it can be problematic, absent a coherent development strategy. According to Andreas Blom et al, in 2012, 79 percent, 70 percent, and 45 percent of all research by Southern Africa, East Africa, and West and Central Africa, respectively, were produced through international collaborations. By comparison, 68 percent, 45 percent, and 32 percent of Vietnam, South Africa, and Malaysia’s research output, respectively, were produced through international collaborations.
By comparison, all the African initiatives lack coherent strategies to either build and/or to attract the best global talent.
This suggests that Sub Saharan Africa lacks internal research capacity and the critical mass to produce international quality research on its own. Blom et al also argue that the transitory nature of many researchers in these international partnerships ‘‘may prevent researchers from building relationships with African firms and governments, reducing the economic impact and relevance of research’’.
More importantly, they conclude that there ‘‘appears to be little knowledge transfer and collaboration between Sub- Saharan African academics and the corporate sector, as measured by corporate downloads of and patent citations to African academic research, especially for STEM disciplines… Such trends suggest that corporations do not rely much on African-generated knowledge and research for their competitiveness.’’
The poverty of development strategy
Many African countries lack strategic development policies to consolidate their recent economic and techno-scientific gains and to capitalize on potentially favorable global megatrends in the future. In the absence of strategic development policies, recent gains and any potential fortunes in future megatrends are not as useful as ‘enabling development conditions’ as they otherwise would be. Development strategy is here defined as ‘‘an economic conception that defines the priority goals, coherently explains how set goals can be reached, identifies the policy tools and explores trade-offs and the time frame’’ (Priewe, 2015, 27 in UNCTAD’s Rethinking Development Strategies After the Financial Crisis: Making the Case for Policy Space). In their assessment of successful development strategies of Japan, South Korea, Taiwan and China (or the Beijing- Seoul-Tokyo (BeST) Consensus for development), Professors Keun Lee, John Mathews and Robert Wade caution that development policies are not to be confused with ‘palliative policies’ focused on poverty reduction, such as the Millennium Development Goals. ‘‘Development policies take as their touchstone building capacities of (local or joint venture) firms, especially technological capacities; and strengthening the links from profits to investment and investment to profits. In tackling the task of building the capacities of firms, public agencies can help compensate for deficiencies in the existing structure of markets - agencies such as export-import banks, export processing zone administrations, development banks, technology institutes, and high-level state coordinating)’’ (http://www.ft.com/intl/cms/s/0/0a9462ee-7e36-11dc-
8fac 0000779fd2ac.html#axzz3uUJnuWx0). Lee, Mathews and Wade stress that Best Consensus is not a matter of either constructing a ‘developmental state’ or choosing ‘free markets’. Rather, it is about the national leadership embracing the norms behind the Best Consensus, and applying these precepts in line with available capacity. Broadly speaking, three approaches have underpinned development policy in many African countries over the last 55 years:
- 1960s -1970s: ‘Dirigiste Dogma’: the use of indicative economic planning to supplement the market system combined with substantial state-directed investments and incentives to promote particular strategic sectors or industries (i.e. various elements of industrial policy. See Deepak Lal’s The Poverty of Development Economics).
- 1980s-1990s: The ‘‘Washington Consensus’’: privatization, liberalization and deregulation of markets.
- 2000 – 2015: ‘Palliative’ (i.e. poverty reduction) and ‘Institutional Strengthening’: This approach builds on the ‘‘Washington Consensus’’ by adding a focus on poverty reduction and commitment to private property rights, rule of law, independent judiciary and other institutions that facilitate greater marketization, to the principal elements of the ‘‘Washington Consensus’’. This is what Ha-Joon Chang has called ‘Hamlet without the Prince Developmentalism’ or the substitution of the concept of economic and social structural transformation in development discourse with marginal improvements in socio-economic indicators.
The ‘‘Washington Consensus’’ and ‘Palliative cum Institutional’ Approaches have a lot in common. Both draw their inspiration from ‘mainstream’ neoclassical economic thinking, although the ‘Institutional’ approach also pays heed to tenets of ‘new institutional economics’. Widespread criticism of the ‘‘Washington Consensus’’ partly led to the rise of ‘Palliative and Institutional Strengthening’ approaches. Increasingly, the Palliative and Institutional Approaches have come under fire for being illsuited to the task of economic development, if economic development is defined in terms of structural change and transformation. Japan, China, Singapore, Taiwan, South Korea, Malaysia and a few other countries have upended economic orthodoxy by ‘developing’ phenomenally well in spite of (or perhaps because of) institutions and policies that markedly deviated from the principal elements of neoclassical and new institutional economics or entailed significant creativity or ‘allowances’ within the neoclassical/ new institutional economic paradigm.
The development success of ‘heterodox economies’ (e.g. China, Taiwan, South Korea, Japan and Singapore), the global financial crisis of 2008 and the ensuing Great Recession, have led to a growing body of work in economics that (a) questions the efficacy and relevance of the neoclassical economic paradigm not only for developing countries but also for developed ones and (b) seeks economic or development ‘lessons’ that both developing and developed countries can learn from the success of ‘heterodox economies’. The Chinese development experience, like that of the ‘East Asian Tigers’ and other successful ‘heterodox’ economies suggest that there are many successful visions of market economy and as many successful policy and institutional paths to achieving them. ‘‘Much of development economics had been viewed as asking how developing countries could successfully transition toward the kinds of market-oriented policy frameworks that came to be called “American style capitalism.” The debate was not about the goal, but the path to that goal, with some advocating “shock therapy,” while others focused on pacing and sequencing—a more gradualist tack. The global financial crisis has now raised questions about that model even for developed countries’’ (Joseph Stiglitz (2011) in ‘Rethinking Development Economics’, The World Bank Research Observer, pp. 230). China’s economic policies and institutions in particular, have been unambiguously un-orthodox that little attempt has been made (so far) to ‘package’ them otherwise. ‘‘Many country economic analyses address the issue of why a particular country has not lived up to its performance expectations. Usually, the answer is deemed to be obvious. That is, the country did not follow the appropriate policy; it deviated in fatal ways from orthodox policy prescriptions associated with the so-called ‘Washington Consensus’. Alternatively, if the country indeed did appear to have conformed to the tenets of this neoliberal doctrine, the literature probes the question as to why a country that dutifully carried out the policy consensus did not reap the expected benefits.
China is different. Much of the China literature addresses a contrary puzzle: with institutions and policies that have deviated greatly from established orthodoxy, how could China be performing so well?’’ (Jefferson, G. (2008) in ‘How Has China’s Economic Emergence Contributed to the Field of Economics?’ Comparative Economic Studies, pp.168).
Unfortunately, much of the new thinking on development is not happening in Africa. Much of Africa appears to be staying the course of palliative’ and ‘institutional’ approaches to development.
The success of the ‘heterodox economies’, the global financial crisis and the Great Recession, have forced consideration - ever so grudgingly - of the validity of alternative development or economic theories, institutions and policies. In the wake of the global financial crisis, the bastions of the ‘Washington Consensus’ – the IMF and the World Bank – are going through what Grabel has termed an interregnum of restrained ‘neoliberalism coherence’ amidst ‘productive incoherence’: ‘‘the proliferation of responses to the crisis by national governments, multilateral institutions (particularly the IMF) and the economics profession that to date have not congealed into any sort of consistent strategy or regime’’ (Grabel, Ilene, 2011. ‘Not your grandfather’s IMF: global crisis, ‘productive incoherence’ and developmental policy space’, Cambridge Journal of Economics, 35: 5, pp. 806). The IMF’s response in the wake of the global financial crisis and the Great Recession has exhibited a rare lack of attachment to a rigid, one-size-fits-all strategy of global neoliberalism. (The same could be said of the actions of major advanced economies during the Great Recession, including particularly the US).
For example, the crisis has had the ef-fect of ‘normalizing’ capital controls in developing countries which Grabel considers ‘‘to be the most significant expansion of policy space in the developing world over the past several decades’’ (Ibid. pp 807). Grabel also points out that IMF’s conditionality programs while still ‘harsh’ and mostly faithful to neoliberalism, display ‘incoherence’ in two notable ways. ‘‘First, while the Fund continues to advocate fiscal retrenchment, it also now routinely emphasizes the need for ‘pro-poor spending’ to protect the most vulnerable from economic hardship. Second, there is a striking lack of consistency in conditionality programs across countries. Indeed, the IMF’s crisis response strategy is marked by ad hoc measures that reflect all sorts of differences across the countries where the IMF has asserted its influence’’ (Ibid). Grabel is careful to emphasize that these ‘deviations’ from orthodoxy are far from sufficient indicators of either fundamental intellectual or policy shifts within economics in general or ‘mainstream’ ‘development institutions’ in particular. Any development policy space they might embody is presently fragile and easily reversible. Moreover, neoliberalism has a vaunted reputation for resilience even in the face of compelling empirical evidence.
While no one is advocating a wholesale return to the policies of the 1960s and 1970s, or even a replication of the exact policies employed by the BeST countries (the global development, policy and institutional landscape has changed significantly over the last 30 years), three interrelated themes are emerging from a new strand in development thinking: (a) there are many successful visions of market economy and as many successful policy and institutional paths to achieving economic development (b) notwithstanding the changed global institutional and policy landscape, there is still space and scope for successful exploitation of industrial policy and critical elements of the ‘developmental state’ by both developing and developed countries, and (c) there remains a great and constructive role for the government in development, particularly in facilitating technological innovation, entrepreneurship, social and physical infrastructure. Unfortunately, much of the new thinking on development is not happening in Africa. Much of Africa appears to be staying the course of Palliative’ and ‘Institutional’ Approaches to development. This is problematic because if Africa is to consolidate and sustain its recent economic and techno-scientific gains, it is going to have to rethink its development strategies In ‘Rethinking the Millennium Development Goals for Africa’, Harvard University’s Stephen Peterson, joins Professors Lee, Mathews and Wade in challenging ‘palliative policies’, specifically, the Millennium Development Goals, as effective development strategies for Africa. Peterson proposes an alternative strategy for Africa called DIGS or Decade Infrastructure Goals where ‘I’ stands for transportation, power, agriculture and revenues. Peterson argues that the DIGS prioritize investments with proven abilities to act as growth multipliers, alleviate poverty and promote sustainability. “By starting D for decade, DIGs avoids the shifting fads that blow through development and will force a discipline of direction with a time scale that promotes accountability’’. One need not agree with Peterson to appreciate that many of Africa’s current ‘megainfrastructure’ projects would likely yield greater economy-wide spill-over effects, if they were part of coherent national development strategies.
In ‘Rethinking Development Strategies after the Financial Crisis, UNCTAD argues that countries need a ‘strategic compass’ or development strategy for long-run economic development. This can be explicit or implicit but it must include a focus on institution building, sectoral policies (including industrial and trade policies), macroeconomic policies, ‘development friendly global governance’, and policy space to adjust to the specific (and evolving) social, historical and institutional contexts. UNCTAD reflects on the Asian development experience to conclude that the key to successful development lies in the implementation of ‘experimental and learning approaches’ rather than narrow and rigid general guidelines. A key message of the UNCTAD report is that developing countries can benefit from learning from each other and from their own historical experiences more. (Jan Nederveen Pieterse, writing in Development and Change (‘Global rebalancing: crisis & the East-South turn’) sees a global rebalancing that is not only redefining North-South relations but also South-South relations.
Developing countries might benefit from greater South-East relations). In its Economic Report of 2011, the United Nations Economic Commission for Africa (UNECA) endorses a ‘developmental state’ approach, based on lessons from East Asia, Malaysia and Brazil, as the best strategy for advancing sustained infrastructural, institutional and social development in Africa. For UNECA, a developmental state consists of five major elements: purposeful leadership and a developmentalist coalition; transformative institutions; industrial policy; investment in research; and enhanced social policy. ‘Palliative’ and ‘Institutional’ policies have succeeded in generating marginal improvements in socio economic indicators in African countries. However, they have failed to deliver structural transformation (e.g. industrialization).
In general, ‘palliative’ and ‘institutional’ policies are insufficient to (a) consolidate socio-economic and institutional gains in much of Africa and (b) to convert opportunities posed my global megatrends into material development gains. A new development policy mind-set is needed for this. At a minimum, this will require a re-evaluation of ‘national development ambition’ in Africa, the roles of Economic Advisors vis-à-vis Policymakers and the role of industrial policy. The rest of this article examines two interrelated cases to illustrate this: (a) a one-size-fits-all policymaking at the continental level which conveniently ignores that Africa is not a country and (b) and the role of ‘Economic Advisors’ as ‘Policymakers’ in all but name in many Africa countries.
Economic development is often nationally defined, for it is inextricably linked to a country’s national value systems, norms and ethos. Individual countries get to define their own ‘visions’ of development. Historically, the pursuit of national economic development has been a very explicit and ‘nation-state’ centered process. There is a reason why there isn’t a single version of capitalism or socialism. The ‘Liberal Market Economies’ of the US, UK and Australia, differ in critical ways from the ‘Coordinated Market Economies’ of Germany, Japan or Sweden although both sets of countries are still capitalist economies (see Peter Hall and David Soskice, 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage). Africa is not a country, a common currency area or even a customs union. However, since the early 2000s, much development policymaking on, and for the continent, has proceeded as if it is a country. Firstly, the ‘international community’ has facilitated this type of policymaking through the UN MDGs. Secondly, since at least 2003, some organs of the African Union (e.g. NEPAD - New Partnership for Africa’s Development – and the African Union Commission) have led similar efforts through continental sectoral planning, strategic planning and ‘grand visioning’. Together with African governments, development partners and non-state actors, these ‘stakeholders’ have produced continental ‘policy frameworks’, ‘strategies’, ‘programs’, ‘visions’ and ‘action plans’ that individual African countries are then supposed to ‘domesticate’, ‘mainstream’ or ‘implement’. These include: Comprehensive African Agricultural Developmen Program (CAADP); African Mining Vision 2050; Program for Infrastructure Development in Africa (PIDA); Science, Technology and Innovation Strategy for Africa (STISA); and African Union Agenda 2063.
The first thing to say about this economic policymaking is that it traces its origins from the fight for African ‘policy ownership’, waged at the height of the structural adjustment programs. In the late 1990s and early 2000s, pressure from African ‘renaissance’ leaders such as Thabo Mbeki, Olusegun Obasanjo and Abdoulaye Wade as well as from development thinkers and civil society organizations both within and outside Africa forced a concession, if a rhetorical one, in the ‘global development establishment’ that ‘policy ownership’ was critical for policy outcomes. The World Bank’s report at the turn of the century (Can Africa Claim the 21st Century?) captures this concession. The report found a modicum of hope for Africa in the 21st century, subject to certain conditions, including most notably, ‘policy ownership’. The century offered a ‘‘window of opportunity to reverse the marginalization of Africa’s people—and of Africa’s governments, relative to donors, in the development agenda’’ (World Bank, 2000, 2). The end of the Cold War and growing participatory democracy in Africa suggested that the continent would no longer be an ‘ideological’ and ‘strategic’ battleground between competing powers in which ‘trusted allies’ received ‘‘foreign assistance regardless of their record on governance and development’’(Ibid.).
According to the Bank, with an African designed and owned ‘Business Plan’ aimed at (a) improving governance, resolving conflicts and managing states; (b) addressing poverty and inequality (c) investing in people; (c) lowering infrastructure, information, and finance barriers (d) spurring agricultural and rural development; (e) diversifying exports, reorienting trade policy, and pursuing regional integration; and (f) reducing aid dependency and debt, and strengthening partnerships, Africa could ‘claim’ the 21st century (i.e. reverse years of social and economic marginalization in an increasingly dynamic and competitive world). ‘Policy ownership’ in the form of the vaguely worded African ‘Business Plan’ constituted a major concession. Can Africa Claim the 21st Century was written in collaboration with various African institutions and economists under the leadership of a ‘Steering Committee’ comprising of Ali A.G. Ali (United Nations Economic Commission for Africa), Tesfaye Dinka, (Global Coalition for Africa), Ibrahim Ahmed Elbadawi (World Bank), Augustin Fosu (African Economic Research Consortium), Alan Gelb (World Bank) and Kupukile Mlambo (African Development Bank). Perhaps the most interesting of its many observations was the notion of a ‘Business Plan’ ‘‘conceived and owned by Africans, and supported by donors through coordinated, long-term partnerships’’. Coming at the end of nearly two decades of structural adjustment programs in which the World Bank and the IMF had come to be viewed as calling the shots in economic policy making in many African countries, this is as close to an explicit discussion on the appropriate roles of Economic Advisors and Policymakers in Africa as the Bank has ever engaged in. What followed in terms of economic policy making in Africa over the last 15 years is not exactly a ‘Business Plan’ ‘‘conceived and owned by Africans, and supported by donors through coordinated, long-term partnerships’’.
This is true to some extent in a few African countries (e.g. Ethiopia and Rwanda). However, the degree to which this is true in all African countries is debatable. What is not debatable however, is the ‘policy coordination and long term partnerships between donors and African governments’ especially in the case of continental initiatives such as CAADP, PIDA and Africa Mining Vision 2050. This is also true in the case of ‘global development’ initiatives such as the MDGs (e.g. ‘palliative’ and ‘institutional’ strengthening policies).
The second thing to say about these continental programs, visions, strategies and action plans is that they do not constitute coherent (national) development strategies. Few African countries implement them. Take for example, CAADP, the longest running such initiative. Ten years into CAADP, only 13 African countries managed to meet or exceed the CAADP target of allocating 10 percent of the national budget to the agricultural sector. Similarly, in the first decade of CAADP, the continent was unable to meet the CAADP target of agricultural GDP growth rate of 6 percent per year. The continent surpassed the target of 6 percent agricultural GDP growth only three times: in 2003 (6.1 percent), in 2009 (7.5 percent), and in 2012 (6.9 percent).
The African Union is not a political federation or an economic union. No African state has ceded any of its sovereign functions, including economic policy making to any organs of the African Union, or to any other third parties for that matter (including the World Bank, IMF, the UN system or any donor agency). African governments do seek advice and advisors from these and other bodies. On paper, the continent has a calendar for creating an African Economic Community by 2028. The Abuja Treaty of 1991 lays out a multi-step process for this: establishment of regional economic communities followed by the establishment of a free trade area and customs union in each regional economic community by 2017 and across the entire continent by 2019. A continent-wide African Common Market is planned to go into effect in 2023. Finally, the Abuja Treaty provides for the establishment of a continent-wide economic and monetary union and parliament by 2028, with a single currency to be managed by an African Central Bank.
Apart from the creation of regional economic communities many of the other elements of the calendar are still far from implementation and it is not entirely clear that the Abuja plan remains on schedule as per the Treaty. (For historical and political reasons not related to the Abuja Treaty, 14 countries currently use the West African CFA and Central African CFA currency (in place since 1945 and now indexed on the Euro), while 5 countries currently use the South African Rand: Lesotho, Namibia, South Africa, Swaziland and Zimbabwe).
In spite of the many continental policy frameworks, programs, plans and visions, African countries continue to individually design and implement their own national development initiatives. In theory, these are supposed to be ‘aligned’ with continental initiatives. In practice however, rarely is there coherence, coordination or harmonization between national and continental development initiatives.
The content and sequencing of continental and national policies are often out of sync. For example, many national development visions (e.g. Vision 2020 (Rwanda; Nigeria), Vision 2030 (Kenya; South Africa); Vision 2040 (Uganda), precede the AU’s Vision 2063 which did not necessarily build on these visions. As I argued in this column in the last Issue of this Magazine (i.e. July 2015) these ‘national visions’ are in many cases merely wish lists of worthy goals, with no clear ways and means or ‘capabilities’ to bring about their realization. While long term development thinking in Africa needs all the encouragement it can get, the proliferation of unfulfilled and likely unfulfillable ‘national visions’ or more aptly ‘wish lists’ gives meaning to Helmut Schmidt’s famous admonition that people who have ‘visions’ should seek medical advice! The third thing to say about this policymaking is that it amounts to a one size- fits-all approach. African countries and peoples enjoy strong cultural and historical links – even economic relations in a few cases. So ingrained in the African psyche is the feeling of ‘oneness’ or ‘togetherness’ of African peoples that anything deemed ‘Pan Africa’ is almost always looked upon fondly, almost by default. For this reason, economic policymaking at the continental level runs the risk of ‘policy compromises’ that might lower development ambition on the continent, collectively or in terms of individual nation states. Differences among African countries can be quite stark. Any serious development strategy would not paper over them.
Consider the following:
- Some African economies are ‘large’ while others are either ‘medium’ or ‘small’. According to the IMF’s World Economic Outlook, in 2014, Nigeria, Africa’s largest economy, was the 21st largest economy in the world (by nominal GDP). By contrast, the Comoros, Gambia, Seychelles and Djibouti and the Central African Republic were among the 25th smallest economies in the world. The Nigerian economy was nearly 10 times as large as Kenya’s, the 8th largest economy in Africa.
- Some African countries are natural resource rich while others are natural resource poor
- Some are ‘mono-crop’ or monocommodity’ economies while others are relatively diversified.
- Some are landlocked, others are not.
- Some are democracies, others are not
Even with this level of diversity, there might well be very good reasons why a common development ‘strategy’ or ‘framework’ might work for the continent as a whole. Arguably, there are areas where a collective or common African approach might be superior to state based ‘go it alone’ approaches. Common trade, foreign, defense, climate or even science and technology policies would appear to be potentially good candidates for the ‘common’ one-size-fits-all approach. Apart from trade and arguably climate change, these are not typical areas for collectivist policies in Africa. In trade and or regional integration where this approach has been attempted for much of the last five decades, the record is not great. Economic policymaking at the continental level in other sectors (e.g. agriculture and infrastructure) seldom grapples with this problem. There might be very good reasons why Kenya might allocate 10 percent of its national budget to its agricultural sector over a 10-year period. It is not entirely clear why Djibouti or Seychelles or even Mauritius (given its current state of economic development) should do exactly the same thing, at the same time. If one wouldn’t lump together Sweden, Belgium, Finland, Malaysia, Singapore, Pakistan, the Gambia and the Central African Republic in a ‘single economic policy’, why would one lump together Nigeria, South Africa, Egypt, Cape Verde, the Comoros, Benin and Lesotho in such a policy? There are many reasons why a onesize- fits-all policymaking might not be the best development policy for Africa. Perhaps the strongest is the proposition that 54 different countries provide excellent laboratories for development thinking, experimentation, learning and policy innovation.
Whether a one-size-fits-all policy approach is superior to policy experimentation and learning at the national level should be an empirical question which should be debated and examined at national and continental levels. However, partly as a result of the triumph of Economic Advisors over Policymakers in Africa, even the policy space for discussing this has become increasingly diminished.
ECONOMIC ADVISORS ARE NOT POLICYMAKERS
The triumph of the ‘‘Washington Consensus’’ in the 1980s and 1990s ended - by fiat - a major contestation in economic policy making in Africa: the role of economic advisors vis a vis policymakers. The triumph of the ‘‘Washington Consensus’’ also ushered in the role of ‘Economic Advisors’ as ‘Policymakers’ in all but name, which continues to this day, in many African countries. A central premise of the ‘‘Washington Consensus’’is the proposition that poor countries are poor primarily because of ‘bad’, ‘wrong’ or ‘poor’ policies – as opposed to ‘history’, ‘geography’ or other ‘context’ dependent explanations. Consequently, the key to solving their development problems lies in ‘policy advice’ or getting them to implement the ‘right policies’, which for the ‘‘Washington Consensus’’ essentially came down to ‘greater marketization’: privatization, liberalization and deregulation of markets. To be sure, there were problems with development policies in Africa (and other developing countries) in the 1960s and 1970s. Part of this had to do with the substance of these policies, a case well made by many proponents of the ‘Washington Consensus’. Substance of policy was just one part of the problem however. Analysis of the conflicts between Economic Advisors and African Policymakers in the 1960s and 1970s suggest far more complex challenges to development in Africa, many of which remain unresolved in no small part because in conflating the roles of ‘Economic Advisors’ and Policymakers and in enforcing a rigid set of policies, proponents of the ‘‘Washington Consensus’’ have succeeded in stifling development policy debate in Africa. Many African countries started out with relatively clear national development strategies at the time of their independence. Indeed, there were nearly as many visions of the market economy and as many policy and institutional paths to achieving them a there were of the socialist economy.
Moreover, these strategies were hotly contested, both within the policymaking process, academia and the body politic. The ‘‘Washington Consensus’’ succeeded in reducing the complex and multi-faceted nature of development in Africa to one of simply getting the ‘policies right’, without offering much insight into how to get governments to implement ‘good’ or even ‘sound’ economic policies. Rather than deal with this problem intellectually (as Prof. Michael Lofchie does brilliantly elsewhere in this Magazine), proponents of the ‘Washington Consensus’ opted to use foreign aid as leverage to force reluctant governments to take their ‘policy advice’. Apparently, the ‘‘Washington Consensus’’ is all for ‘free markets’, except when it comes to the ‘market’ for ‘economic ideas’ or ‘policies’. (The ‘‘Washington Consensus’’ had a more narrow identification of the problem than I have allowed above. The essence of the ‘Consensus’ has been reduced to simply ‘getting the prices right’). While much of the development scholarship and popular discourse in the 1960s and 1970s tended to characterize development policy making in Africa along the Cold War divides of ‘capitalist’ and ‘socialist’ approaches, the reality was more complex. (See for example the ‘Kenyan Agrarian Debate’ and the works of Birth of Robert Tignor (W. Arthur Lewis and the Development Economics);Tony Killick (Development Economics in Action: A Study of Economic Policies in Ghana); Michael Lofchie (The Policy Factor: Agricultural Performance in Kenya and Tanzania; The Political Economy of Tanzania: Decline and Recovery) and Robert Bates (Markets and States in Tropical Africa ; Beyond the Miracle of the Market: The Political Economy of Agrarian Development in Kenya). For popular illustration, the first Cabinets in postcolonial Ghana and Kenya included ministers with ‘capitalist’ inclinations as well as those with ‘socialist’ predilections. National development strategies in both countries were hotly contested although this would not last for long, in either country. A key part of policy contestation in early postcolonial Africa took place between ‘Economic Advisors’ and ‘Policymakers. An analysis of this contestation reveals a complex, multifaceted nature of development challenges in Africa. Parts of these challenges required economic solutions and would benefit from the tools of economic analysis. However, other parts required a broader set of solutions, beyond economic expertise and analysis.
The Economic Advisors who were most successful in Africa of the 1960s and 1970s either understood or were sympathetic to this complexity. We focus on the relationship between Economic Advisors and Policymakers in early postcolonial Ghana (1957-1966) and Kenya (1964-1976) to illustrate this. The Ghanaian case study focuses on the relationship between Ghanaian leader Kwame Nkrumah and his handpicked Chief Economic Adviser, Prof. W. Arthur Lewis (who would later win the Nobel Prize in Economics in 1979). The Kenyan case focuses on the Ford Foundation Economic Advisory Service Program that sponsored a rotating group of Economic Advisors to Kenya between 1964 and 1976. (The Ford Foundation also provided Economic Advisors to other countries in Eastern and Southern Africa. Many of the Economic Advisors also worked in more than one Africa country. Tony Killick worked in both Kenya and Ghana. Lewis went into Ghana, under the UN auspices e.g as a UN Economic Advisor to Ghana) and the UN did supply quite a few Economic Advisors to a number of African countries, including Zambia. The World Bank did not get into the Economic Advisory Support Function Properly until late 1970s and early 1980s, when it converted itself, towards the end of the McNamara presidency, into a ‘development agency’ and a ‘knowledge bank’. Its approach to the economic advisory role – in the 1980s and 1990s – was very different from the approach employed mostly in the 1960s and 1970s. The Bank’s approach through structural adjustment programs was backed by policy or aid conditionality. The Economic Advisor-Policymaker conflicts in Africa in the 1960s and 1970s are instructive. In terms of power dynamics, the ‘Advisors’ and ‘Policymakers’ were relatively ‘matched’.
The ‘Policymakers’ needed the ‘Advisors’. All early postcolonial African governments faced the problem of economy-wide lack of skilled labor. This problem was particularly acute in what one might call the Economic Service, or Economic Planning units. Building competence in these areas was urgent and critical because this capability was essential to formulating and implementing policies aimed at solving many other development problems, including that of economy wide shortage of trained manpower. Early postcolonial African governments approached this problem in two interrelated ways. They hired external economic advisors to provide them with economic advice in the short term and to help build a local or indigenous cadre of economic experts in the medium to long term. That their expertise was urgently needed gave the early Economic Advisors significant power. This was reinforced by the seniority and professional accomplishments of many of them. Many of them were distinguished, celebrated economists who enjoyed independent professional prestige. Among the scholars who served in different capacities as ‘Economic Advisors’ to African governments in the 1960s and 1970s include: W. Arthur Lewis, Albert O. Hirschman, Nicholas Kaldor, Dudley Seers, Tony Killick, Josef Bognar, Edgar Edwards, Michael Roemer, Tom Easterbrook, Brian Van Arkadie, Reginald Green, Ben Lewis, Bevan Waide, Tim Aldington, Alan Simmance, Charles Slater, David Davies, and John Powelson.
Development policies in many African countries in the early postcolonial period drew heavily from what constituted mainstream development economics thinking at the time. This is not to hold any of these advisors or early development economists responsible for Africa’s development failures in the 1960s and 1970s. It is also not to hold their ‘ideas’ responsible for these failures either. That criticism is the entire case for support for the ‘‘Washington Consensus’’. Our point here is make the observation that a majority of development policies in early postcolonial Africa was well within the ‘mainstream’ of economic development policy and practice. It is also worth mentioning, if only in passing, that many African countries had better economic performance in the 1960s and 1970s compared to the era of the ‘‘Washington Consensus’’ in the 1980s and early 1990s.
African Policymakers had leverage too. Unlike the situation today, many early Economic Advisors were hired in their individual capacities, with limited, if any, organizational support. In most cases, they ‘spoke’ for themselves rather than for their ‘sponsoring’ or ‘parent’ organizations. There was no aid or policy conditionality to use as leverage. For the most part, all the Advisors had was their professional standing. This wasn’t insignificant influence when dealing with newly independent countries with hardly any locally trained economists, let alone experienced national planners and statisticians. It simply wasn’t overwhelming power when placed against the moral force of ‘strategic policy sovereignty’ in newly independent states run by popularly elected leaders who enjoyed, at least for a time, massive popularity and prestige.
The proper role of political leaders was to speak truth to the people and to promote realistic views of what economic experts told them their countries could accomplish
In any case, the differences between early Economic Advisors and Policymakers were not so much ideological as they were ‘operational’ or ‘tactical’. As Tony Killick argues in Development Economics in Action: A Study of Economic Policies in Ghana, a remarkable congruence existed between the ideas of mainstream development economists, socialism, and nationalism in the early 1960s. Early Economic Advisors and Policymakers were seldom ideological ‘opposites’. Countries initiated requests for Advisors. They could be quite specific in their preferences. For example in a request to the Ford Foundation for an Economic Advisor in the 1960s, Uganda insisted on an economist from a ‘socialist’ country, while Tanzania was so determined to maintain its strategic policy sovereignty (i.e. ‘independence’) that it insisted on getting advisors from multiple countries. ‘‘It was Tanzanian policy to diversify their sources of development assistance in order not to become dependent on any single country or agency.
At one point in the preparation of the 1969/74 Plan, advisors from 13 countries were working in DevPlan. The price of this independence from single-donor influence must have been a rather confusing mix of policy-oriented advice; but the policy definitely insulated the Tanzanians from undue donor pressures’’ (Ford Foundation, ‘‘Administration and Economic Planning in Eastern Africa: A Ford Foundation Program Evaluation’’, 1977, pp. 10).
In spite of all of this, there were still serious conflicts between Economic Advisors and Policymakers. At the heart of these conflicts are two fundamental questions, which remain as central to economic policymaking in Africa today as they were in the 1960s and 1970s: 1. Who gets to set the ‘national ambition’ for development? Is it Economic Advisors (local and foreign) or Policymakers (i.e. national political leadership)? Should national development ambition be determined only by what is ‘economically feasible’? 2. What is the proper balance between ‘politics’ and ‘economics’ in development policy making? Is development primarily an economic enterprise or does it entail political and social dimensions? The relationship between Kwame Nkrumah and his Chief Economic Advisor, Prof. W. Arthur Lewis, and the different viewpoints that each held with respect to these questions captures this problem.
To Kwame Nkrumah, the job of setting the national development ambition or economic agenda belonged to the political leadership. The job of the Economic Advisor or the Economist was to design mechanisms for achieving or realizing that ambition or agenda. On the other hand ‘‘Lewis believed that only the economists could determine what could be achieved, and only they could delineate the appropriate methods for realizing these goals. The proper role of political leaders was to speak truth to the people and to promote realistic views of what economic experts told them their countries could accomplish’’ (Robert Tignor, 2006. W. Arthur Lewis and the Development Economics, pp. 174).
Nkrumah conceived of national development as a broad enterprise with economic as well as social and political dimensions. He thought that economists under-estimated and misunderstood the relationship between politics and economics and the broader dimensions of ‘national development’. In fact, in the first few months of Lewis’ appointment as Chief Economic Advisor, Nkrumah did instruct Lewis to review Ghana’s economic, financial and social policies. Lewis had been hired on a two year contract as the Chief Economic Advisor to Nkrumah. However, due to policy disagreements between them, he only served 18 months in the post. In that time, he helped draft the country’s 1958-59 Budget and the 2nd Five Year Development Plan, in addition to debating and offering advice on many other development policies and projects including the Volta River Project. Nkrumah didn’t always follow Lewis’ advice, particularly with respect to the Volta River Project which Lewis felt was not the most cost-effective method for achieving Ghana’s objective of becoming ‘industrialized’. In a now famous letter to Lewis in 1958, Nkrumah, explained the situation thus: “The advice you have given me, sound though it may be, is essentially from the economic point of view, and I have told you, on many occasions, that I cannot always follow this advice as I am a politician and must gamble on the future” (Tignor, 2006, p. 173).
Political leaders in newly independent but fragile states, Nkrumah argued, ‘‘had to build coalitions, use patronage to solidify their political authority, even coerce the opposition, and be responsible to the high hopes that their peoples carried about the meaning of political independence’’ (Tignor, 2006, 174).
Lewis refused to buy this argument, seeing it as an excuse by Kwame Nkrumah to use ‘agencies of economic development’ for ‘political jobbery’ or what is today formally known as ‘rent seeking’ or corruption. (Prior to taking up his appointment, Lewis had extracted a promise from Nkrumah that economic agencies would be sheltered from political corruption, Tignor, 2006, 170-71). He made his views clear to the Prime Minister: ‘‘Alas, the main reason for this lack of balance is that the Plan contains too many schemes on which the Prime Minister is insisting for ‘political reasons’…In order to give you these toys, the Development Commission has had to cut down severely on water supplies, health centers, technical schools, roads, broadcast redifusion… It is not possible to make a good development plan for £100 million if the Prime Minister insists on inserting £18 million of his own pet schemes of a sort which neither develop the country nor increase the comfort of the people’’(Ibid.).
According to Lewis, ‘‘Nkrumah regarded economists as mere technicians, whose task it was to realize the economic dreams of the public and politicians, no matter how unrealistic’’ (Tignor, 2006, 174). Throughout his time in Ghana, Lewis objected to this view. He held firm to his advice on the Volta River Project. In the end, Nkrumah asserted his role as ‘Policymaker’ and claimed ‘strategic policy sovereignty’ for Ghana: “My mind is finally made up and irrespective of anybody’s advice to the contrary, I am determined to see that at all cost the dams at Ajena and Bui are built’’ (Murphy, C. N. 2006. The United Nations Development Program. pp.128).
For the most part, the relationship between Lewis and Nkrumah, however, unfortunate it might appear to those who admire both men, speaks to what the ideal nature of the relationship between an Economic Advisor and a Policymaker should be. The Policymaker should set the economic agenda, and make final decisions on national priorities and policies, taking into full account expert economic and other advice. The Economic Advisor should provide unvarnished expert advice and provide the Policymaker with ‘feasible options’ or ‘tools’ for pursuing national development priorities. If the Economic Advisor feels that they have lost the trust of the Policymaker or that the Policymaker is not following their advice, or that the Policymaker is morally or ethically compromised, the Economic Advisor should resign, as Lewis did. The Economic Advisor should not insist on his or her advice carrying the day. Certainly, the Economic Advisor should not resort to ‘extra-professional’ measures (e.g. aid or policy conditionality) in order to prevail.
In principle, on the role of Economic Advisors, Nkrumah was right. National development ambition need not be determined only by what is ‘economically feasible’. National development ambition can transform what is ‘economically feasible’ by inspiring technological, organizational, institutional or policy innovations.
This is the point that Lewis appears to have missed or under-emphasized. There is of course no guarantee that an ambitious national development agenda will inspire innovation. However, the process of economic development consists of experimentation, innovation, learning and capabilities accumulation. Even an ambitious development agenda that fails might still generate valuable lessons, innovations and capabilities accumulation that might still ultimately solve the original development problem. This seems to be one key lesson from the experience of the successful ‘heterodox economies’. In practice, Lewis was right that Nkrumah did, in fact, on several occasions, use economic policy and institutions for ‘political jobbery’ or corrupt aims.
Lewis was always rightly concerned about abuse and misuse of public resources. Developing countries can ill afford abuse and wastage of public resources. Lewis was also rightly keen to restrain ‘showy’ massive projects or ‘white elephants’ that were either un-necessary to the development effort or which the Ghanaian economy could not absorb at the time. He did the right thing by resigning as soon as he deemed that he had lost the confidence of Nkrumah.
Nonetheless, Lewis’s problems were two fold. Firstly, he did not sufficiently appreciate that economic development in a newly independent state (in which the very concepts of ‘political and economic independence’ had to be given material meaning) was going to ‘conflate’ national political, social and economic ambitions. Under the circumstances, economic policymaking was inevitably going to be a political process. National development is broader than economic development: social and political considerations always come into play. How to deal with this in a ‘rational’ manner is the fundamental challenge of successful economic policy making.
“The advice you have given me, sound though it may be, is essentially from the economic point of view, and i have told you, on many occasions, that i cannot always follow this advice as i am a politician and must gamble on the future.”
Secondly, Lewis was perhaps a little too willing to play ‘Policymaker’. He also had perhaps a little too much faith in the superiority of the tools of economic analysis. By insisting only on what was ‘economically feasible’ in the formulation of development ambition and plans in Ghana, as Nkrumah alluded to, he risked failing to tap into the vast energy of a newly independent country (i.e. he did not appear to allow room for ‘innovation’).
All this combined to ultimately undercut his influence, as the Nkrumah government increasingly resorted to making key decisions without consulting him. Where Economic Advisors were careful not to play ‘Policymaker’, were sensitive to political and social considerations and accepted the limits of their own craft, the outcome was a lot more productive, all things held constant.
The Ford Foundation Economic Advisory Program in Kenya from the 1960s through to 1976 is a good example of this. The Program was unusual in many ways. Firstly, unlike many other programs, the Kenyan Program wasn’t run out of a university department. For much of this period, Harvard University’s Development Advisory Service (DAS), which would later become the Harvard Institute for International Development (HIID) and later CID (Centre for International Development), was the ‘administrator’ or ‘manager’ of choice for most Ford Foundation and other donor based ‘Economic Advisory Programs’. For all the 15 years that the Ford Foundation provided Economic Advisors to Kenya, these Advisors were hired in their individual capacities and mostly operated as such. An independent evaluation of the Program in 1977 described the situation: ‘‘The Foundation has had a general policy that the professional loyalty of an advisor assigned to a government is to the government itself, and that no matters of a confidential nature are expected to be divulged to the Foundation’s representatives. Edwards and subsequent advisors adhered strictly to this policy, a fact that continues to be fully appreciated by the Kenya Government. In addition, the advisors supplied by the Foundation were not considered to be a team and, although there was often a recognized senior economist among them, there was no designated team leader Throughout the life of the program, no professional meetings were held in which only Foundation advisors were in attendance, and no attempt was made to coordinate the views or advice of the advisory staff’’ (Ford Foundation, 1977, 6).
This arrangement more than ‘levelled the playing field’ between policymakers and their economic advisors. It meant that the Government was more likely to receive independent and unvarnished advice from each Economic Advisor as they were not encumbered by organizational ideologies or ‘positions’. From the outset, both the Foundation and individual Advisors were keen not to play ‘Policymaker’. Prof. Edgar Edwards’ (the first Economic Advisor in Kenya under the Program) early reluctance to assume an official position within the Kenyan civil service, set the tone and captures the overall nature of the program throughout its 15 years. ‘‘In July1964, a new Directorate of Planning within the Treasury was officially established with Edwards at its head, an arrangement that made the Foundation’s representative distinctly uneasy.
It was one thing to provide advice on economic planning issues, but for a Foundation employee to be responsible for the planning mechanism was outside the boundaries of its own definition of its assistance….This potential difficulty was overcome when Kenya became a republic on the anniversary of its independence, and a Ministry of Economic Planning and Development (MEPD) was created. Edwards became senior advisor to the Permanent Secretary of MEPD…’’.
Besides being reluctant to play ‘Policymaker’, Foundation Advisors in Kenya were, unlike Lewis in Ghana, very mindful of and sensitive to the political considerations of their policy bosses. In particular, they understood very early on that economic development plans in Kenya served multiple purposes, besides shaping government policy. ‘‘Plans serve several functions: they are a means of communicating economic accomplishments and intentions to the people; they fulfill the requirements of donors like the World Bank who wish to see projects in a larger economic perspective; and they serve as a guide for government action for the succeeding five years…More recently, doubts have arisen about the seriousness of Government intentions to use the current plan as a guide to action. One of the principal drafters of this plan felt that the document had become more of a political than an economic instrument. He doubted that Government seriously meant to pursue the rural development and income redistribution objectives stated in the plan, and he felt that balance of payments and growth estimates had been adjusted for credibility and political acceptability’’ (Ford Foundation 1977, 8).
The Ford Foundation Advisors also took a more humble approach to both their abilities and the strengths of the national development plans. Firstly, the Advisors recognized the impact of external factors on the Kenyan economy and allowed that a National Development Plan might not be executed faithfully due to factors outside Kenya’s control. Assessing the prospects of Kenya’s Third National Development Plan (1974-1979), an independent review of the Ford Foundation Program notes: ‘‘Another factor lessening the likelihood that the document as approved will be followed faithfully is the enormous influence of the outside world on an economy the size of Kenya’s. This was dramatically demonstrated by the drastic rise in oil prices, and the subsequent world recession, which occurred immediately after the plan was drafted, throwing its forecasts seriously out of kilter’’ (Ford Foundation, 1977, 7).
While they were reluctant to play ‘Policymaker’, the Ford Foundation Advisors acknowledged the limitations of their own process in the Kenyan development planning process. Kenyan policymakers, led by the Economic Planning Minister (and in the early 1960s, a Standing Development Committee of the Cabinet) played an active ‘policymaker role’ in setting national ambition and development objectives. Nonetheless, the Advisors had the humility to recognize that their presence could introduce a ‘bias’ in the process. With reference the Third National Development Plan: ‘‘it is quite possible that the plan does not fully reflect political realities in Kenya. Indeed, it would be surprising if it did, because the major drafting of this and all previous plans was by the hands of foreign advisors. The drafting was, of course, under Kenyan supervision, and both Cabinet and Parliament reviewed and approved the final version, but some departure from reality is inherent to the process’’.
The Kenya Government wasn’t as handsoff as the humility of these Ford Foundation Advisors might suggest. Throughout much of the 1960s, including when Sessional Paper no 10 of 1965 on African Socialism and its Application to Kenya was published, perhaps the most important economic policy document in 20th century Kenya, the planning process was led by Kenya’s first Economic Planning Minister, Tom Mboya, one of the ablest and intellectually capable cabinet ministers Kenya has ever produced. While the first draft of Sessional Paper no 10 of 1965 was written by Edgar Edwards, before it reached Parliament, it was ‘‘intensively reviewed and revised, first by an informal group chaired by Mboya with Mwai Kibaki, Ndegwa, Knowles and Edwards as members, and then by the Ministers sitting in the Development Committee’’ (Ford Foundation 1977, 3).
The Advisors readily acknowledged for example that Sessional Paper No 10 of 1965, to some extent, represented ‘‘the Government’s answer to the insistent voices in Parliament, led by Oginga Odinga and Pio Pinto, demanding more radical social change. The Sessional Paper sought to elucidate its philosophy that dignity, justice and equity need a firm basis of economic growth’’. It is this sensitivity to ‘political reality’ (i.e. intra-governmental, and in-country contestation of the ‘vision of national development’) that W. Arthur Lewis appeared to have underappreciated in Ghana.
In spite of the relatively functional relationship between Ford Foundation Economic Advisors and Policymakers in Kenya, the two still had significant conflicts. Like Lewis in Ghana, there were many instances in which the Economic Advisors felt that their advice was being ignored. Like Lewis, the Advisors in Kenya conceived of their jobs as using the tools of economic analysis (especially cost benefit analysis) to advise the Kenya government on what was economically feasible.
They lost as many arguments as they won this as they won on this stance. They key difference between them and Lewis is that the Foundation Advisors conceived of their roles as being separate and independent from that of policymakers. The ultimate decision making rested with Policymakers. This mindset allowed Foundation Advisors to ‘live to fight another day’. In the process, they helped keep the Kenya government on a sound economic management path.
To illustrate, Foundation Advisors in the early 1970s - Charles Slater, David Davies, and John Powelson – had been highly critical of various aspects of the Kenyan development model (import-substitution industrialization) that would come under heavy criticism from the ILO Mission Report of 1972 authored by Hans Singer, Richard Jolly and Charles Cooper: Employment, Income and Equality: A Strategy for Increasing Productive Employment in Kenya. By the early 1970s, Kenya’s strategy of import substitution and capital intensification had the result of promoting economic growth, while perpetuating the dualistic economy that the country inherited at independence. Over-valued exchange rates encouraged imports (especially of capital machinery which could also be labor-saving machinery) while discouraging exports (which consisted mostly of labor intensive goods from the agricultural commodities, which employed the bulk of the population. Low interest rates, encouraged capital-intensive production at the expense of the employment of labor. Tax incentives for investment and low import duties on capital goods had the same effect.
This mindset allowed foundation advisors to ‘live to fight another day’. In the process, they helped keep the kenya government on a sound economic management path.
Foundation Advisors had recommended changes to these policies before the ILO report but the government had ignored them. However, the Kenya government did change these policies between 1973 and 1976 (following the ILO Report), in order to enhance the competitiveness of its agricultural sector. The 1974-1979National Development Plan in Kenya was perhaps the first five-year plan in the world to be based on the ‘Redistribution with Growth’ paradigm following the landmark ILO report and Hollis Chenery’s influential 1974 book: Redistribution with Growth: Policies to Improve Income Distribution in Developing Countries in the Context of Economic Growth.
On the whole, the Ford foundation Economic Advisory Program and the relationship between Economic Advisors and Policymakers in Kenya worked well. Here is how the independent review of the Ford Foundation Program summarized its achievements: ‘‘they were able to help Kenya resist showy, plaque-hanging projects and inefficient turn-key operations by employing cost-benefit analyses. They were also helpful in curbing the strong tendency to tailor projects to meet donor requirements, to accept aid for imported goods that could be produced domestically, and to finance imports through aid even though higher costs would result… Such projects as a major steel-works and a motor car assembly plant were either avoided, delayed until the economy could absorb them, or reduced in scale as a result of economic analysis. In other cases, the economists lost the argument and the Government made large investments in dubious projects such as the fertilizer plant and sugar refineries’’ (Ford Foundation, 1977, 8). Selfcritically aware to the end, the Ford Foundation Program held that it was quite possible that its economic advisers were wrong in their judgments.
The Ford Foundation Economic Advisory Service Model has not been replicated anywhere in Africa since it ended in the early 1980s. The ‘Lewis experience’ was, and continues to be replicated in many African countries with the critical exception that nowadays, Economic Advisors do not necessarily have to worry about winning over Policymakers: many of them rely on aid or policy conditionality for this purpose. ‘Economic Advice’ today is mostly provided through institutional arrangements. For the most part, Economic Advisors represent ‘institutional views’ or positions. Their economic advice is often ‘tied’ - to grants, loans and other forms of foreign aid. ‘The policy advice’ being given is relatively uniform and predictable (i.e. one-size fits- all). For all intents and purposes, many Economic Advisors in Africa today (i.e. those aligned to organizations rather than ‘consultants’) are ‘Policymakers’ in all but name. This sums up what I call the poverty of development strategies in Africa. It diminishes the continent’s ability to creatively confront the full range of development opportunities and challenges it faces in the 21st century.
CONCLUSION
There are multiple pathways to successful economic development. A relatively diverse set of policies from a diverse cast of once poor but now developed countries has demonstrated this. These policies encompass elements of both ‘orthodox’ and ‘heterodox’ economics. Economically successful countries appear to be those that have found the right ‘mix’ of these policies in different sectors or industries at different points in their economic development, usually through the process of experimentation, innovation, learning and capabilities accumulation. Those countries that have struggled appear to have employed rigid or ‘dogmatic’ policies, devoid of experimentation, innovation and learning, both from their own economic histories but also the history of economic development in other countries.
After more than 50 years of first experimenting with dirigisme policies followed by those of the ‘Washington Consensus’ and then ‘palliative’ and institutional policies, the development debate is increasingly turning back to the merits of ‘industrial policy’, a key component of the dirigisme policies that many African countries attempted to implement in the 1960s and 1970s. Rather than govern fruitlessly in circles, African policymakers and intellectuals should have enough ‘material evidence’ now, from the history of economic development in Africa and in other regions, to learn that the process of economic development does not necessarily require them to choose one of these approaches over the others. Any successful development strategy will almost certainly require components of all of these approaches. What the ‘right set’ of policies is for any given African country at any given point in time is up to that country to decide, based on its independently determined national ambition and its prevailing capabilities and potential for technological, social, institutional, organizational and policy innovation.
On the balance of empirical evidence, it appears that any successful development in Africa will entail some element of ‘industrial policy’. The sooner African countries realize this and reformulate their development policies accordingly, the sooner their development ambitions or ‘national visions’ are likely to be met, and vice versa. However, whatever form of ‘industrial policy’ this takes, it will almost certainly be quite unlike anything implemented in Africa in the 1960s and 1970s if it is to be successful. Many elements of ‘palliative’, ‘institutional’ and ‘‘Washington Consensus’’ set of policies will have to be part of the mix of any successful development strategy in Africa. Most notably, the ‘‘Washington Consensus’’ has a key proposition that has gone under-appreciated by both its proponents and opponents alike: whatever else it means, ‘greater marketization’, must include the ‘market for ideas’, including policy, theoretical and empirical ideas that might be diametrically opposed to those proposed by the ‘’Washington Consensus’’. If for nothing else, such competing ‘markets for ideas’ should help strengthen the rigour and clarity of all ‘policy prescriptions’.
Should African policymakers pay attention to Economic Advisors? Absolutely. Should both economic advisors and policymakers be mindful of and work to avoid ‘white elephants’ and rent seeking in development policy and practice in Africa? Of course. Does this warrant more power to Economic Advisors over Policymakers? Absolutely not. Policymakers are subject to various checks and balances. The Economic Advisory function is just one, albeit relatively informal, part of the overall checks and balances that policymakers are subject to. What is ‘economically feasible’ should certainly be a key consideration in the determination of national development ambition. However, this should just be one, among other considerations. Just as important should be the question of whether any development policy being proposed has a demonstrable record of success either in a country’s economic history or elsewhere.
Policies that work only in theory and not in ‘practice’ should not be ignored out of hand (see the emphasis on experimentation, learning and innovation above), but they should be subject to ‘greater scrutiny’, during formulation, and should they be adopted, ‘experimentation’. It should not take more than 20 years before a country realizes that a piece of policy is not working.
Africa faces unique development opportunities and challenges. If it maximizes these opportunities it is more likely than not that it will consolidate its recent economic and techno-scientific gains and given material and sustained meaning to the narratives of Africa rising, lion states or silicon savannah. If it does not, the Africa rising narrative will constitute just another false start in African development.
We have assembled some of the world’s leading scholars in development to assess how Africa might consolidate its recent economic and techno- scientific gains and harness future global megatrends for its sustained economic growth and techno-scientific progress. They focus on different thematic areas: On the Emerging Africa Middle Class Prof. Michael Lofchie of University of California, Los Angeles reminds us that entrenched political oligarchies do not willingly surrender power and privilege out of a benevolent concern for the greater good. ‘‘African development challenge is not a scarcity of economic resources; nor is it a scarcity of policy options that will distribute those resources more broadly. Nor is it a lack of administrative capacity to implement alternative policies. It is the reluctance of dominant elites to adopt policies that might require them to share their privileges’’. The role that the emerging African Middle Class plays will to a large extent, determine the nature of development policies that African countries adopt and the resulting social, economic and political outcomes.
On Trade, China and Skills Development in Africa Prof. Alan Winters of the University of Sussex examines ways through which Africa might harness international trade for its structural transformation and economic development through a strategy focused on ‘mobility’. Dr. Sajitha Bashir of the World Bank examines how Africa might benefit from skills or capacity development from a more coherent strategic engagement with China.
On Biotechnology and Bio- Economies Prof Torbjörn Fagerström (Sweden), Dr. Roy B. Mugiira (Directorate of Research Management and Development, State Department of Science and Technology, Ministry of Education, Science and Technology, Nairobi, Republic of Kenya) and Prof. Lisa Sennerby Forsse (Swedish University of Agricultural Sciences) argue that biotechnology is a tool that Africa cannot afford to ignore. ’’Research in life sciences will have equal importance for society in the 21st century as research in physics, chemistry and electronics had in the 20th’’. Prof. Nwadiuto Esiobu, Professor of Microbiology and Biotechnology, Florida Atlantic University; and former Senior Science Advisor, Secretary’s Office of Global Food Security, U.S. Department of State, joins them in making the case for bio-based African economies.
Dr. Aime Tsinda, Senior Research Fellow, IPAR-Rwanda reviews policies that promote biodiversity informatics in Sub-Saharan Africa. On information and Communication Technologies Dr. Pádraig Carmody, Trinity College Dublin and University of Johannesburg and Prof. James T. Murphy, Clark University, assess the opportunities and challenges posed by the ’African Information Revolution’. They argue that whereas ’’an ICT enabled “Africa Rising” narrative has dominated much of the media discussion over the last decade, financialisation and informationalisation have not been inevitably or universally positive trends for the region’’. Prof. Mark Graham and Dr. Chris Foster of the Oxford Internet Institute, Oxford University look at the geographies of Information Inequality In Sub-Saharan Africa. Prof. Laura Mann of the LSE examines the ’Good, the Bad and the Ugly’ of Big Data in Africa.
She cautions that while the mobile phone will bring revolutionary changes in Africa, ’’we should not be naïve or complacent about whom is being empowered... behind every new trend in international development, there is a business opportunity’’. Prof. Mark Graham (Oxford , Prof. Laura Mann (LSE), Dr. Nicolas Friederici (Oxford) Prof. Timothy Waema (University of Nairobi) critically examine the Business Process Outsourcing Sector in Kenya. Dr. Mrinalini Tankha, IMTFI (Institute for Money Technology and Financial Inclusion), University of California, Irvine, highlights lessons from the Mobile Money Experience in Sub-Saharan Africa. Ken Banks, founder of Founder of kiwanja.net and creator of FrontlineSMS, examines the relationship mobile technology social innovations. On Rethinking African Agriculture Prof. Joseph Hanlon, LSE and the Open University; Prof. Jeanette Manjengwa, Deputy Director, Institute for Environmental Studies, University of Zimbabwe; and Prof. Teresa Smart, Institute of Education, University College London argue that commercial family farms are more productive than ‘plantation’ agriculture in Africa.
Dr. Ann Waters-Bayer, Chesha Wettasinha & Laurens van Veldhuizen focus on Farmer Governance of Local Agricultural Research and Innovation in Africa.
On Research and Science and Technology Collaboration Prof. Johanna Crane, School of Interdisciplinary Arts & Sciences University of Washington – Bothell highlights the challenges of global health partnerships in Africa while Prof. Clare N. Muhoro, Jess and Mildred Fisher School of Science and Mathematics, Towson University, and Science Partnerships Advisor, US Global Development Lab, USAID looks at Science and Technology Partnership options that might be beneficial to Africa. Angela Okune (Ihub), Denisse Albornoz, Becky Hillyer, Nanjira Sambuli (Ihub) and Leslie Chan (University of Toronto) tackle inequities in global scientific power structures. Prof. Sekazi Mtingwa, Emeritus Professor, MIT, makes the case for an ‘advanced light source’ in Africa.
On Natural Resources, Conflicts and National Security Langdon Morries (InnovationLabs) looks at the future of fossil fuels, Africa and the global economy. Bat-el Ohayon and Frank Charnas both of AfriQue Consulting Group assess the growing threat of terrorism in Africa. Prof. Jon Unruh, McGill University, revisits the concept of Resource Curse and conflicts in Africa while Prof. Ogaba Oche, Nigerian Institute of International Affairs, looks at the role of traditional institutions in conflict in resolution. Prof. Samwel Makinda of Murdoch University reviews security strategies in select African countries.
Disclaimer: The views and opinions expressed in this article are those of the author and not necessarily the views and opinions of the African Centre for Technology Studies (ACTS).
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