by Guy Arnold
In a neo-patrimonial system, political accountability rests on the extent to which patrons are able both to influence and meet the expectations of their followers according to well-established norms of reciprocity. Although in Africa most of the political leaders at independence were new (young graduates), rather than ‘traditional’ (chiefs) elites, the parameters of the neo-patrimonial systems which developed after independence owed a great deal to what might be called ‘traditional’ principles of legitimacy. Among those (principles of legitimacy) the most significant had to do with a notion of accountability which involved a direct link with the delivery of resources to clients. In other words, the legitimacy of political leaders was perceived by all (from top to bottom) to rest on their ability to provide for their own personal constituents.5
In other words, patrons had to meet their obligations to their own groups or ‘clientele’ rather than act impartially as national leaders and they are able to do this by the way they use and deploy aid provided supposedly for national rather than more limited sectarian purposes. Working upon a national basis of poverty, competition for limited resources becomes fierce and this forms the basis of political rivalries for power. Leaders need to spend ostentatiously to demonstrate their power and ensure that adequate resources (from a limited pool) are channelled to their supporters. A natural consequence of such power or influence considerations is the neglect of investment in economic activities that will benefit the state as a whole. ‘The crisis which crippled African countries in the eighties was thus a result of the combined effect of diminishing economic wealth and the dissipation of political accountability which it brought about. As political elites competed in an increasingly desperate bid to have access to central power – still the fount of most resources – force became widespread.’6 In the West such practices are seen as corruption although this is too easy a way of dismissing a system that is only partly understood. In an African patrimonial society such practices are regarded as the necessary discharge by the elite of its duties towards its supporters.
In 1982 at the height of the world debt crisis Tom Clausen, the World Bank President, said of the world’s poorest nations, many of them in Africa, that they were ‘battered by global economic conditions beyond their control’ as they were hit by the recession in the industrialized countries, faced falling prices for their export commodities and demands for increased interest rates on their debts. Zambia, to take one example of the changing terms of trade, had enjoyed high expectations in 1974 when its principal export copper peaked at £1,400 a tonne and with cobalt provided over half the government’s revenue. By mid-1982, however, the price of a tonne of copper, which cost more to produce because of higher energy costs, higher wages and ageing machinery, had fallen to a low of £684. Similarly, the economies of countries such as Côte d’Ivoire and Kenya that were dependent upon agricultural commodities such as cocoa, coffee and tea were equally damaged by Western recession. Although Africa’s various regional economic groups such as ECOWAS, Communité Economique des Etats de l’Afrique Centrale (CEEAC) or SADCC aimed to improve trade among member states, in fact they made only a marginal impact since the economies of their individual members remained directed overwhelmingly to Europe and their former metropolitan powers. Moreover, their industrial and manufacturing sectors were too small and unsophisticated to compete with either European or US manufactures. Against this gloomy background African prospects for rapid industrialization fell away while both aid and export revenues remained static and no funds were available for major development projects. In theory, therefore, it was an ideal time to implement ‘back to the land’ policies although such attempts in the past had quickly been abandoned when economic conditions picked up. According to the World Development Report 1982, ‘Countries neglect agriculture at their peril – a rapidly developing agriculture is a necessary condition for economy-wide structural transformation and industrialization.’ However, before any effective agricultural growth could be achieved, most countries had to reverse the trend of the 1960s when agricultural output had declined by 0.2 per cent a year and the 1970s when it fell by 1.4 per cent. Large-scale migration from the rural areas to the towns had both deprived the rural areas of an essential part of their workforce and created new social problems in the towns. At the same time the problem of debt for sub-Saharan Africa was escalating and by 1982 the total of external debts consisting mainly of loans from the World Bank and its soft arm the International Development Association (IDA) or bilateral loans from governments had reached US$98,000 million. At the end of 1980, for example, Nigeria’s debts stood at US$5,000 million, those of Côte d’Ivoire at US$4,265 million and in both cases more than half these debts were on commercial terms. In 1982 Zaïre required US$771 million simply to service its debts and then owed US$175 million from the previous year in which it had failed to meet its debt repayment obligations. Funding to help a country overcome a balance of payments crisis produced no long-term returns as did funding for development projects and the decade saw an increasing number of countries – Ghana, Kenya, Malawi, Sudan, Tanzania, Zaïre and Zambia – turn to the IMF for rescheduling exercises. Meanwhile, Africa faced an ever-growing population that swallowed up many of the gains from successful developments while estimates suggested that the 1982 population of sub-Saharan Africa, then standing at 353 million, would rise to 1,411 million by 2020. Some real advances had been achieved and, for example, life expectancy at birth had increased by an average of 10 years or 25 per cent over two decades.
THE ROLE OF THE WORLD BANK
By 1990, after years of expanding activity, the World Bank had become the largest source of aid for Africa. It described the structural obstacles to development as follows: human resource deficiencies (inadequate training and education); poverty; environmental degradation; rapid population growth unmatched by comparable development; and the urgent need to speed up agricultural development and increase food production. The World Bank saw seven major areas as the keys to African progress: population control; environment; agriculture; the social dimension of adjustment; food security; education; and women in development. The Africa sections of the World Bank annual reports during the decade make gloomy reading. That for 1982, for example, records that four countries of East Africa experienced a marked decline in agricultural production: Zimbabwe by 19 per cent, Zambia by 11 per cent for its two export crops of tobacco and cotton; while Madagascar and Ethiopia had less steep declines. The East African region’s capacity to import was sharply affected by the severe decline in world market prices of copper (15 per cent), cotton (14 per cent), sugar (49 per cent) and tea (4 per cent). The combined index of six major primary commodities of the region, accounting for 52 per cent of total exports, fell by 10 per cent. The balance of payments situation in the region was grim and was reflected in the increase of arrears on external payments and a widespread decline in official external reserves. Western Africa suffered from depressed markets for commodities, high interest rates and stagnating levels of official development assistance. The region had been deeply affected by world recession since 1979. Growth of GDP for the region over 1980–82 showed increases in average per capita incomes in only two countries – Cameroon (26 per cent) and Congo (Brazzaville) (40 per cent) due to oil exploitation. In Côte d’Ivoire, Togo and Sierra Leone GDP grew at rates less than the population and in nearly all the other 18 countries, including Nigeria, a net decline in per capita incomes was registered. ‘One of the potentially most damaging effects of the crisis is that its persistence and severity make it difficult for governments to carry out structural-adjustment policies needed to foster long-term growth.’7 The recurrence of the word ‘crisis’ in relation to African economies became a commonplace of reports through the decade.
In the following year’s report, the Bank explained, ‘The economic crisis in the countries of the Eastern Africa region, detailed in the Annual Reports of recent years, continued largely unabated during the past fiscal year (1984). Per capita income
declined in the region as a whole and dropped substantially in a number of countries. Exogenous factors, as usual, played their part in contributing to these declines; but, most cruelly, what may turn out to be, for several countries, the worst period of drought in this century deepened the difficulties of the year.’8 As always, Africa was mainly dependent on its exportable commodities and the World Bank noted that the beginnings of economic recovery in the industrial countries had not brought about a general increase in the prices of the region’s major export commodities: copper rose 7.5 per cent in 1983 above the1982 price, cobalt fetched half the price of recent years, the price of coffee fell below the 1982 level or that of any year from 1976–80. Copper, cobalt and coffee accounted for over half the region’s exports. The Bank noted that over the previous two years there had been a turn around in the willingness of governments to reconsider domestic economic policies: ‘major efforts have been made to implement financial stabilization policies and to design adjustment policies that aim at renewed growth. This is particularly true in the case of Madagascar, Somalia, Zaïre and Zambia. But achievements under stabilization policies were not without costs – investment and per capita income have declined. These declines were the result of many factors, and they were exacerbated by the fact that efforts at stabilization were undertaken during a time when the external economic environment was especially difficult.’9
The World Bank’s efforts at self-exculpation ring false: the weaker the African economies, the more determinedly were they pressured into structural adjustments that the Bank and the IMF insisted upon. Dependence upon aid donors is made plain when it is pointed out that several, mostly low-income countries (Burundi, the Comoros, Djibouti, Ethiopia, Lesotho, Malawi, Rwanda, Somalia and Tanzania, for instance) depended almost entirely on official development assistance (ODA) for net capital inflows. This, moreover, was the case at a time when there had been no recent increases in ODA to offset the effects of the worldwide trade recession. In 1982, for example, ODA to Eastern Africa amounted to US$4.3 billion, indicating that absolute stagnation had taken place since 1980. The net flow of commercial loans to the region fell sharply at this time, declining from about US$950 million in 1980 to about US$350 million in 1982. The picture was much the same for Western Africa where prices for iron ore, uranium, phosphate rock and oil were depressed, with adverse effects in Liberia, Mauritania, Niger, Nigeria and Togo. Nigeria, the largest and potentially richest country in the region, was in a state of financial crisis for most of fiscal 1984 since both the production and price of oil dropped sharply so that export earnings and government revenues, as well as the external current account and the government fiscal position, weakened dramatically. Nigeria’s capacity to import dropped considerably as trade credits dried up under the impact of accumulated trade arrears. The drop in imports was equal to 5 per cent of Nigeria’s GDP and induced a decline in national income equivalent in real terms to 7.4 per cent.
There was little improvement in terms of trade for Eastern and Southern Africa during 1985 while the decline in aid flows continued and drought caused havoc in several countries. There is a relentless quality about World Bank-speak in such circumstances: ‘Nonetheless, it can be said that most countries now appear to have a better recognition of their need to revise the economic strategies of the past. Several have made real progress in formulating and in initiating the implementation of programmes of financial stabilization and economic reform. Progress in these areas is reflected in the fact that eight countries currently have active standby agreements with the IMF, and six countries have been assisted by World Bank operations in support of policy reforms.’10 With regard to Western Africa, the same report noted that world markets remained depressed for its commodities – uranium, oil, iron ore, cotton and rubber – and that West Africa was principally tied to Europe for its trade in such commodities. The term ‘crisis’ was applied to the region as a whole and most countries, according to the World Bank, responded to the difficult situation by putting into motion measures aimed at improving internal efficiency. Toward Sustained Development in Sub-Saharan Africa: A Joint Program of Action (World Bank 1984) made clear that without adequate external aid, African countries can hardly achieve the structural changes needed to resume economic growth. But little aid was forthcoming and so those countries in need stagnated. During 1985 a successful consultative group was set up for Senegal and donors indicated ‘they might be willing to commit some US$500 million annually in assistance’. Other groups were being planned for Mauritania, Guinea, Benin, The Gambia, Guinea-Bissau, Liberia, Mali and Togo. By the mid 1980s it had become clear that the pattern of aid to Africa was largely in the hands, and under the direction, of the World Bank and the IMF and that structural adjustment programmes were coming to dominate the aid process although a good deal of ‘back-sliding’ was to be expected.
It is worth looking briefly at particular economic problems in individual African countries. In the two decades after independence Côte d’Ivoire had come to be regarded as one of Africa’s success stories. Yet by the mid-1980s the World Bank suggested that its economy had been destabilized by the cocoa and coffee boom of 1975–77 that led it to embark on an ambitious public investment programme. This resulted in a budget deficit imbalance of 17 per cent in 1980 and a consequent reform programme in 1981. The deficit remained high during 1980–83 as a result of drought and deterioration in the terms of trade. Interest payments increased from 3 per cent of GDP in 1979 to over 10 per cent in the early 1980s though they improved over the period 1984–86 due to better terms of trade and cuts in the public investment programme.
A quite different problem in Ghana concerned the flow of finances out of the rural areas to the urban areas, a factor working against rural development.
For example, in Ghana it is widely recognized that commercial banks have served to mop up and transfer rural savings to the capital markets of the Accra-Tema metropolitan area, the national capital, and to a lesser extent to other large metropolitan areas such as Kumasi and Sekondi-Takoradi. Such capital drained from cocoa and food producers has been reallocated for foreign monopolies and other business interests which are located in the non-indigenous economy, that is, those economic sectors with very few spin-off effects on the petty commodity sector of the national economy.11
The pattern constantly changes and in the case of Kenya the picture is modestly encouraging. The annual rate of GDP growth slowed to 3.5 per cent over the years 1980–85, which was a period of drought, political uncertainty, including a coup attempt, and falling terms of trade (among the worst in Africa). In 1986, however, growth recovered to 6.4 per cent with higher coffee prices (for export) and lower oil prices (imported). During 1981–84 the budget deficit was cut as a result of cutbacks in development expenditure. But in 1987 declining terms of trade and higher public expenditure produced another economic downturn. In the case of Malawi, its structural problems stemmed from its undiversified economy: tobacco, tea and sugar from an estate sector accounted for 75 per cent or more of its exports so that it was greatly susceptible to external price fluctuations. For the years 1980–86 it had a growth rate of only 2.5 per cent, which was below the level of population growth.
Following the collapse of copper prices in 1975, the government of Zambia relied upon large increases in foreign borrowing and arrears in repayments to make up for the loss of copper revenues while the second oil shock at the end of the 1970s meant that Zambia’s terms of trade fell by a further 25 per cent during the 1980s. A growth average of only 0.3 per cent over the last years of the 1970s became negative in the 1980s and by 1985 imports in real terms were at only 25 per cent of the 1974 levels while gross investment had fallen to 10 per cent of GDP and per capita income was down by 35 per cent. By 1987 Zambia’s external debt had reached US$5.7 billion or four times GDP and debt-service obligations were equivalent to 70 per cent of exports, including repayment of arrears. By this time Zambia was facing the prospect of the depletion of its copper reserves duri
ng the 1990s.
Africa’s growing awareness of its individual and continental economic weaknesses led to the adoption by the 1985 OAU summit of a five-year (1986–90) African Priority Programme for Economic Recovery (APPER). African leaders argued that their economies had been penalized by an unjust and inequitable international economic system aggravated by continental disasters such as droughts and floods as well as domestic policy shortcomings. One result of the APPER initiative was the convening of a special session of the UN that adopted the United Nations Programme of Action for Africa’s Economic Recovery and Development (UNPARED). Much attention was also accorded to the issue of debt, which by then constantly hampered African development. By this time (1985–86) a dual pattern had emerged: on the one hand, African politicians demanded of the World Bank and other international institutions a more equitable approach to world economic problems that would better serve African interests; on the other, despite the Bank’s capacity to analyse Africa’s problems with apparent impartiality, they remained deeply suspicious of its remedies and the IMF-inspired structural adjustment programmes that had become the principal feature of the donor world’s reaction to African problems.