Sub-Saharan Afrita.K 8209 From Crisis to Sustainable GrouIil,W A Long-Term Perspective Study I ii 'po- \ NW=,,1- 5 ' 4*t ;-a 4__ ~' , .' IL ___ -I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~M 14~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 SC-~ ~ ~ ~ ~ w I I I I ERRATA SHEET Sub-Saharan Africa: From Crisis to Sustainable Growth p. 35 In Figure 1.13 data for non-fuel export volume are available only up to 1987; the ascending line from 1987 to 1988 is for the GDP index only. p. 65 In Figure 3.2 the colors of the second and third categories in the legend should be reversed: the darker orange for 1980 and the lighter orange for 1987 (English edition only). p. 73 In Table 3.2 the unit for Case II, no. 4, should be mtme. p. 177 In the second paragraph, the third sentence should begin "In addition the IBRD..." p. 216 The colors of the first and third categories in the legend should be reversed: the darkest orange for the category "< 300" and the lightest orange for the category '> 500" (English edition only). p. 269 In Table 28, second column from the right, the numbers are years and should not have commas (English edition only). p. 299 Add International Sugar Organization. Various years. Sugar Yearbook. London. Sub-Saharan Africa: Stock # 11349 From Crisis to Sustainable Growth ISBN 0-8213-1349-5 November 1989 Errata Sheet Sub-Saharan Africa: Stock # 11349 From Crisis to Sustainable Growth ISBN 0-8213-1349-5 November 1989 Errata Sheet I Sub-Saharan Africa From Crisis to Sutanable G-rom^,fii IBRD 21870 Eq;-I. d G. r- , . _ i. Tom, I ' *, - -- ... ;,-. , ; I I I , Sub-ahaan-Afic [memationi-I bodridane, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~ - *S * - r - j __, I_-.r_ , ~ ~ ~ - ,*, N,; " -_S i j, 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CO E 1989 * - AI -11 *J --s I Ihc NI,j 'jar _I I ,Jn r -.J I! aL- -;,ns1 *~ jh: r K I h r]. [eTc, 1 -I;. ire Ic w qt,I II ,r' L,N82,,-,f I, -.~ ~ ~ Cjr,;.1/ > * t C1, - Ii~~ ~ ~ Torrrittr.,l,rrr.rro I I * * (~~~~~ ~ ~~~~~~~~~~~ '-h. I kr,II U-. -e lh ~~~~~~~~~~ii _ _, _- r......~~~~~~~~~~~~~~~~~~~~~~~~~~~~ N,rr, OCTOBER 1989 Sub-Saharan Africa 0 0 From Crisis to Sustatnable Growth A Long-Term Perspective Study The World Bank Washington, D.C. ! ©1989 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing November 1989 The maps in this report are for the convenience of the reader. The denominations, the classifications, the boundaries, and the colors used in them do not imply on the part of the World Bank and its affiliates any judgment on the legal or other status of any territory, or any endorsement or acceptance of any boundary. The material in this publication is copyrighted. Requests for permission to repro- duce portions of it should be sent to Director, Publications Department, at the address shown in the copyright notice above. The World Bank encourages dissemi- nation of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without a fee. Permission to photocopy portions for classroom use is not required, although notification of such use having been made will be appreciated. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Publications Sales Unit, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. or from Publications, The World Bank, 66, avenue d'Iena, 75116 Paris, France. Coverphotograph credits (clockwise, from top right): (1) a chemist at a palm oil plant in Cote d'Ivoire (Ray Witlin), (2) a woman planting tree seedlings in Madagascar (Yosef Hadar), (3) a weaver in Mali (Yosef Hadar), (4) a self-employed father and son making charcoal burners in Zambia (Ed Huffman), (5) a boy drinking from a handpump in Lesotho (Curt Carnemark), (6) women voting in new officers for a village organization in Senegal (Nicla de Palma), and (7) a METEOSAT image supplied by the European Space Agency. Library of Congress Cataloging-in-Publication Data Sub-Saharan Africa: from crisis to sustainable growth. Includes bibliographical references. 1. Africa, Sub-Saharan-Economic policy. 2. Africa, Sub-Saharan-Social policy. 3. Nutrition policy-Africa, Sub-Saharan. 4. Agriculture and state-Africa, Sub- Saharan. 5. Economic assistance-Africa, Sub-Saharan. 6. Technical assistance-Af- rica, Sub-Saharan. I. International Bank for Reconstruction and Development. HC800.S825 1989 338.967 89-24925 ISBN 0-8213-1349-5 Contents Foreword by Barber B. Conable xi Definitions and data notes xiii Introduction and overview 1 What have we learned? 2 Outlook for the next generation 3 A strategy for sustainable and equitable growth 4 A strategic agenda for the 1990s 14 1 A thirty-year perspective: Past and future 16 Past patterns and trends 16 The deepening crisis 17 Factors behind the decline 23 The outlook for the next generation 30 The challenge 33 2 Sustainable growth with equity 37 A strategy for the next generation 37 Growth that is sustainable and equitable 38 Strengtlhening the enabling environment 47 Building capacity 54 The political and cultural dimensions 60 International dimensions 61 In conclusion 62 3 Investing in people 63 Toward human-centered development 63 Providing universal primary health care and reducing the population growth rate 65 Food securi.y and nutrition 72 Primary education: revitalization and universalization 77 Higher education, skill formation, and training 81 The design and efficient management of human resource programs 84 Sustained financial support for human resource development 87 V 4 Agriculture: The primary source of growth and food security 89 The challenge of transforming agriculture 89 Mobilizing the private sector 91 Harnessing technology 95 Protecting the rural environment 100 Providing rural infrastructure 103 Developing farmers' associations and recognizing the role of women 103 Redefining land rights 104 Can the challenge be met? 104 5 Industry, mining, and energy 108 Industry: Responding to markets 108 The challenge of industrialization 108 A future strategy 108 The current state of industrial development 110 Opening up market opportunities 112 Creating an enabling environment 115 Building industrial capabilities 118 Meeting the challenge 120 Mining prospects 122 Minerals: A mixed blessing 122 Potential and importance 122 Past experience 124 Higher investment in prospecting 124 An enabling environment for mining 125 Future prospects 126 Energy for growth 128 A 30-year perspective 129 A future energy strategy 133 6 Fostering African entrepreneurship 135 The entrepreneurial catalyst 135 The development of African enterprise 136 Entrepreneurs in the informal sector 138 Improving the business environment 142 Supporting entrepreneurial capabilities 144 Answering the need 147 7 Regional integration and cooperation: From words to deeds 148 Experience to date 148 A strategy for future regional cooperation and integration 150 In conclusion 162 8 Sustainable funding for development 163 Development expenditure 163 Mobilizing domestic resources 164 External resources 173 Development assistance in the 1990s 175 vi 9 A strategic agenda for the 1990s 185 The search for the high ground 185 A strategic agenda for the 1990s 189 Consensus building within Africa 192 Building consensus among the donors 193 Toward a global coalition for Africa 193 Bibliographical note 195 Statistical appendix 203 Boxes 1.1 Costs of conflict and destabilization in southern Africa 23 1.2 The cost of infrastructure deficiencies: The Nigerian experience 28 1.3 The promise of biotechnologies for Africa 31 1.4 Mauritius: From Malthusian gloom to sustained development 34 2.1 Madagascar's environmental action plan 46 2.2 Nigeria's lessons of adjustment 48 2.3 Telecommunication in the information age 50 2.4 Labor-intensive road maintenance 51 2.5 Private participation in infrastructure 52 2.6 Restructuring African railways 53 2.7 Reforming the civil service 57 2.8 Capacity building for economic policy analysis in Tanzania 58 2.9 Self-help community participation 59 3.1 AIDS: The demographic and economic consequences 66 3.2 Willingness to pay for improved water supply 68 3.3 Family planning: Zimbabwe and Botswana 70 3.4 Cost-effective nutrition interventions: producing a low-cost weaning food in Zaire 76 3.5 Integrating health and nutrition services for children under three 76 3.6 Cost-effective nutrition interventions: delivering vitamin A supplements in Burkina Faso 77 3.7 Botswana's food security program 78 3.8 Ethiopia: effective in-service teacher training 79 3.9 Training for employment 83 3.10 Malawi: successful community participation in water supply 85 4.1 Kenya succeeds in horticulture 92 4.2 Savings and credit cooperatives in Cameroon 94 4.3 Fighting insects with insects 96 4.4 Soil conservation and water harvesting in Burkina Faso 98 4.5 Bicycle transport: The "missing middle" 102 4.6 Rwanda: A case of successful adaptation 105 4.7 The growth of smallholder maize production in Zimbabwe 106 5.1 Mauritius' success in export-led industrialization 111 5.2 A Zambian-German joint venture 114 5.3 Madagascar exports high-quality children's clothing to Europe 115 5.4 How adjustment programs have affected the industrial sector 117 5.5 Ghana's Suame Magazine: Building indigenous engineering capabilities 121 5.6 A revival of gold mining in Ghana 127 5.7 Energy efficient stoves in Niger 130 vii 6.1 Emerging agricultural entrepreneurs in C6te d'Ivoire 137 6.2 Small-scale enterprises in Kenya 140 6.3 The diversity of informal financial institutions 141 7.1 The control of riverblindness 151 7.2 Rationalizing regional institutions 152 7.3 Ethiopian Airlines 154 7.4 Entomology research: A case study in regional cooperation 155 7.5 Regional networking to improve professional capabilities 156 7.6 Eastern and Southern African Management Institute (ESAMI) 157 7.7 Labor mobility in west Africa 160 8.1 Botswana: Managing commodity booms and busts 167 8.2 Burkina Faso: Cost-saving procurement of petroleum products 168 8.3 Togo: A promising partnership with NGOs 170 8.4 Rwanda: Banques populaires 172 9.1 The Nordic development paradigm 187 9.2 The Social Dimensions of Adjustment Project 188 9.3 The Sahel-A special challenge 190 Figures 1.1 Gross national income per capita in Sub-Saharan Africa and other developing countries, 1967-87 17 1.2 Diversity of economic performance in Sub-Saharan Africa 18 1.3 Structure of GDP in Sub-Saharan Africa 19 1.4 Merchandise exports from Sub-Saharan Africa, 1965-87 20 1.5 Volume and value of Sub-Saharan Africa's agricultural exports, 1967-87 20 1.6 Sub-Saharan Africa's share in the value of exports, 1960-85 20 1.7 External debt of Sub-Saharan Africa and highly indebted countries, 1970-87 21 1.8 Terms of trade and income effect in Sub-Saharan Africa, 1961-87 24 1.9 Sub-Saharan Africa and South Asia: Components of per capita income growth 26 1.10 Real effective exchange rate index, 1970-87 29 1.11 Export prices for five major Sub-Saharan African export commodities, 1961-87 32 1.12 Population and urbanization in Sub-Saharan Africa, 1960-2020 33 1.13 Recent economic trends in Sub-Saharan Africa, 1980-88 35 3.1 Central government expenditures on health and education, 1975-87 64 3.2 Mortality rates of children under five in selected Sub-Saharan African countries 65 3.3 Projected food gap: Alternative scenarios for Sub-Saharan Africa, 1990-2020 74 3.4 Primary school enrollment ratios by gender in six Sub-Saharan African countries, 1986 79 3.5 Universal primary education: Cost scenarios for countries with low enrollments 80 5.1 Value of mineral exports in Sub-Saharan Africa 123 5.2 Mineral production in Sub-Saharan Africa, Asia, and Latin America and the Caribbean 124 Tables 1.1 Typical costs in Sub-Saharan Africa and Asia 27 2.1 Indicative projections of employment in Sub-Saharan Africa, 1985-2020 41 2.2 Contributions to the growth of GDP in Sub-Saharan Africa, 1990-2020 42 3.1 Fertility rates in Sub-Saharan Africa and South Asia 69 3.2 Population and food security in Sub-Saharan Africa, 1990-2020 73 3.3 Financial requirements for broad-based human resource development for Sub-Saharan Africa 87 viii 5.1 Contribution of mining to selected Sub-Saharan countries in 1987 123 5.2 Total primary energy supply projections in Sub-Saharan Africa 128 8.1 Gross domestic savings in Sub-Saharan Africa 165 8.2 Military spending 168 8.3 Actual and projected macroeconomic framework for Sub-Saharan Africa 174 8.4 ODA requirements for Sub-Saharan Africa, 1981-2000 179 ix The co-authors of thi, report were Pierre Landell-Mfills, Ramgopal Agarwala. and Stanley Please. Mlembers of the core team included O-siman Ahmed. Zafar Ahmed, Robert Barad, Kevin Cleav'er, locel% n de long, Gladson KaNira, Barbara Pitkin, Ral Sharmna, William Steel, Kalanidhi Subbarao, and Gertrud Windsper- ger. The team wi'as assi-ted bv Moussa Kourouma. Waheed Oshikova. Sangeeta Parunioo, and Klaus Tilmes. The statistical appendi\ waas prepared bv Ramesh Chander and Sandra Gain, with the assistance of Smangele Nikhwanazi. ; 11Manv in and outside the Bank provided contributions, notably Claude Ake, jacques Giri. Paul Harrison. Goran Hvden, Sanjava Lall, Andrewv Lemer. Janet M\lacGallev, lean Rabes. Pushpa Schwartz, Kafle Wodacjo,and the membersof the World Bank'-sCouncilof African Advisers. In addition a large numberof African and non-Africani development professionals provided written inputs and con- tributed through about 20 workshops held in Africa and outside in the course of preparation of this report. Financial contnbuitions for African inputs and wvorkshops were made by the UNDP, the EEC. and the governments ot Canada, Finland, France, The Netherlands, Norway. Sweden, and the United Kingdom. The support staff was headed by Jean Ponchamni and included Barbara Dobrovodskv, Gloria Jackson, Patricia Nioran. and Tatvana Ringland. Clive Crook was the principal editor. Production for publication was directed by \Virginia deHaven Hitchcock, with the assistance of Eileen Hanlon, Catherine Anni Kocak. jeffrey N. Lecksell, V ictona Lee, Carolhne NicEuen. Jonathan Miller, Hugh Nees, Niartin O'Hara, ean Robinson. Mlichael WV. Rollins, and Brian J. Svikhart The French editon was translated under the direction of Jacqueline Ni. Gardes The Portuguese edition was translated by Transle\. Inc. Foreword Africa's continuing economic crisis presents an needed for Africa to achieve a sustained and sus- extraordinary challenge to the development com- tainable improvement in welfare. The report is munity-to both intellectuals and policymakers. offered as a contribution to a continuing process Responding to this challenge during the past de- of policy dialog and consensus building on pro- cade, the Bank has issued a series of reports on grams to meet Africa's development needs. Our Sub-Saharan Africa. These have increasingly con- hope is that it will be seen by policymakers in centrated on urgent measures needed to set Africa Africa and in the development community at on the path to recovery, as have the efforts of the large as a resource on which to draw as they development community at large. Yet the crisis grapple with the task of formulating specific long- has continued to deepen. As we approach a new term country strategies. decade, the moment has come to step back from Most African countries are now embarked on the immediate problems and take a longer view. comprehensive programs of economic adjust- How have the economies of Sub-Saharan Africa ment. The nature of these programs has evolved evolved during the first three decades of indepen- significantly as we have all learned from our ex- dence? What lessons have been learned? And periences and mistakes. We have come to appre- what are the prospects for the next generation of ciate that fundamental structural change is Africans? This report attempts to provide such a needed to transform African economies and make long-term perspective. them competitive in an increasingly competitive The report is the product of a prolonged inquiry world. The adjustment efforts must be continued that has extensively involved African researchers, and the reforms broadened and deepened. The private businessmen, and public officials, as well journey will be long and difficult, and special as a broad spectrum of representatives of the measures are needed to alleviate poverty and pro- donor community. In this sense the process has tect the vulnerable. been as important as the product. The report To achieve food security, provide jobs, and reg- builds on the many studies undertaken by the ister a modest improvement in living standards, United Nations and African agencies, as well as Sub-Saharan economies must grow by at least 4 to by other scholars. 5 percent annually. Compared with the region's Clearly no single report can hope to do full past performance, even that target seems highly justice to the diversity of African economies, the ambitious-but we believe it can be achieved. complexity of the problems they confront, and the And for growth to be sustainable, major efforts differing views on how best to tackle them. We do must be made to protect, not destroy, the environ- not pretend to have complete answers; our goal ment. During the next decade at least, agriculture has been to sift carefully through the evidence, to will be seen as the main foundation for growth. listen to the many viewpoints, and to set forth our Food production must expand twice as fast if best assessment of the policies and measures Africa is to cope with the new mouths to be fed and slowly overcome malnutrition. The key to tilateral institutions, the private sector and the food security will be to develop and apply new donors, official and nongovernmental-has never technologies, as well as to slow population been greater. We all share responsibility for the growth. future, and the problems are big enough for all to A central theme of the report is that although have a role in their solution. By working together, sound macroeconomic policies and an efficient African governments will hopefully achieve faster infrastructure are essential to provide an enabling progress toward regional cooperation and inte- environment for the productive use of resources, gration, which was a central theme of the Lagos they alone are not sufficient to transform the struc- Plan of Action and has been once again stressed in ture of African economies. At the same time major the 1989 "African Development Report" issued by efforts are needed to build African capacities-to the African Development Bank. produce a better trained, more healthy population Previous reports have all called for increased and to greatly strengthen the institutional frame- aid. This report is no exception, but clearly exter- work within which development can take place. nal finance must be- matched by improved poli- This is why the report strongly supports the call cies. In the long term, dependency on aid and for a human-centered development strategy made technical assistance must be reduced. But in the by the ECA and UNICEF. immediate future the needs will continue to grow, A root cause of weak economic performance in and ways must be found to mobilize these re- the past has been the failure of public institutions. sources, including measures to reduce Africa's Private sector initiative and market mechanisms debt burden. are important, but they must go hand-in-hand A wide measure of consensus already exists on with good governance-a public service that is objectives and, with goodwill and open debate, efficient, a judicial system that is reliable, and an the differences on policy can be progressively nar- administration that is accountable to its public. rowed. So let us strive together to reach common And a better balance is needed between the gov- ground-the high ground-that will permit con- emnment and the governed. Thus the report sets certed action on a strategic agenda for the 1990s out a range of proposals aimed at empowering and beyond-thereby ensuring Africa a more ordinary people, and especially women, to take prosperous future. greater responsibility for improving their lives- This is a study by the staff of the World Bank, measures that foster grassroots organization, that and the judgments in it do not necessarily reflect nurture rather than obstruct informal sector enter- the views of the Board of Directors or the govern- prises, and that promote nongovernmental and ments they represent. intermediary organizations. The growing convic- tion is that development must be more bottom-up less top-down and that a learning approach to program design is to be preferred to the imposi- tion of blueprints. The difficulties facing Africa are formidable. Barber B. Conable The margin for maneuver is slim indeed. The risks President of failure are devastating in human terms. So the The World Bank need for concerted action among all the partners October 16,1989 in development-African governments and mul- xii Definitions and data notes Acronyms and initials ISIC UN International Standard Industrial Classification of All Economic Activities CEAO West African Economic Community LSMS Living Standards Measurement Study (Communaute Economique de l'Afrique de MUV Manufacturers' unit value l'Ouest) NGO Nongovernmental organization CGIAR Consultative Group on International NIC Newly industrializing country Agricultural Research NRR Net reproduction rate CPR Contraceptive prevalence rate OAU Organization of African Unity DAC Development Assistance Committee of ODA Official development assistance the OECD OECD Organisation for Economic ECA UN Economic Commission for Africa Co-operation and Development ECOWAS Economic Community of West OPEC Organization of Petroleum Exporting African States Countries EEC European Economic Community PTA Preferential Trade Area for Eastern and ESAMI Eastern and Southern African Southern African States Management Institute SADCC Southern Africa Development FAO UN Food and Agriculture Organization Coordinating Conference GATT General Agreement on Tariffs and Trade SDA Social Dimensions of Adjustment Project GDP Gross domestic product SDR Special drawing right GNP Gross national product SFA Special Facility for Africa HIC Highly indebted country SITC Standard International Trade IARC International agricultural research center Classification IBRD International Bank for Reconstruction SME Small- and medium-scale enterprise and Development (World Bank) SNA UN System of National Accounts ICIPE International Centre of Insect SPA Special Program of Assistance Physiology and Ecology SPAAR Special Program for African ICP International Comparison Project Agricultural Research IDA International Development Association S&T Science and technology IEC Information, education, and TFR Total fertility rate communication TNC Transnational corporation IITA International Institute of Tropical T&V Training and visit system Agriculture UDEAC Central African Customs and ILO International Labour Organisation Economic Union (Union Douaniere et IMF International Monetary Fund Economique de l'Afrique Centrale) xiii UMOA West African Monetary Union (Union Data notes Monetaire Ouest Africaine) UN United Nations * Billion is 1,000 million. UNCTAD United Nations Conference on * Trillion is 1,000 billion. Trade and Development * Dollars are current US dollars unless other- UNDP United Nations Development wise specified. Programme * Growth rates are based on constant price UNEP United Nations Environment data and, unless otherwise noted, have been com- Programme puted with the use of least-squares method. See Unesco United Nations Economic, Scientific, the technical notes for the statistical appendix for and Cultural Organization details of this method. UNFPA United Nations Fund for Population * "World Bank data" refers to data obtained Activities from various World Bank files, including the Bank UNICEF United Nations International Economic and Social Database (BESD), some of Children's Emergency Fund which are published from time to time (see the UNIDO United Nations Industrial bibliographical note.) Historical data shown in Development Organization this report may differ from those in previous pub- UNPAAERD United Nations Programme of lications because of continuous updating as better Action for African Economic Recovery and data become available and because of new group Development aggregation techniques that use broader country UNSO United Nations Statistical Office coverage than in previous publications. UPE Universal primary education * Country groups and economic and demo- USAID United States Agency for International graphic terms are defined in statistical appendix. Development * The symbol .. in tables means not available. WHO World Health Organization * The symbol - in tables means not applicable. * The number 0 or 0.0 in tables means zero or less than half the unit shown and not known more precisely. xh, Introduction and overview Africal entered independence with high expecta- stood? Has the institutional dimension been ne- tions. Most people believed that rapid progress glected? Have the recent reform programs been would be made in raising incomes and improving too narrow or too shallow? Could the process of welfare. And indeed in the early years many Afri- formulating and implementing reforms be im- can countries successfully expanded their basic proved? Has the effect of external factors been infrastructure and social services. Much effort was correctly assessed? Are external assistance and spent too on consolidating the fragile new nation debt relief appropriate and adequate? More fun- states. damentally, is there a long-term vision that is both After an initial period of growth, however, most credible and energizing? African economies faltered, then went into de- These concerns-especially the last-lie behind cline. There were some exceptions, but Sub- this report. Drawing on past experience, it ex- Saharan Africa as a whole has now witnessed plores how programs and policies need to be almost a decade of falling per capita incomes, changed to attain sustainable growth with equity increasing hunger, and accelerating ecological in the next century. It is not sufficient for African degradation. The earlier progress made in social governments merely to consolidate the progress development is now being eroded. Overall Afri- made in their adjustment programs. They need to cans are almost as poor today as they were 30 go beyond the issues of public finance, monetary years ago. This situation has spurred many gov- policy, prices, and markets to address fundamen- ernments to undertake far-reaching reforms. tal questions relating to human capacities, institu- More than half have embarked on structural ad- tions, governance, the environment, population justment programs. The countries that have per- growth and distribution, and technology. sisted with reforms since the mid-1980s are Changes in perceptions and priorities, as well as showing the first signs of improvement. These in incentives, will be required to bring about im- give grounds for believing that recovery has provements. Above all, to channel the energies of started. the population at large, ordinary people should The experience of the first generation of Afri- participate more in designing and implementing cans after independence raises some searching development programs. Much of this will take questions. Does Africa face special structural time. But while the focus of the report is on the problems that have not been properly under- long term, the call is for action now to bring about long-run changes that will promote growth and reduce poverty. 1 Throughout this report, "Africa" when used is an This report emphasizes and embodies the pro- abbreviation for Sub-Saharan Africa. The data given on cess as well as the product. It is the result of an Sub-Saharan Africa systematically excludes South Af- intensive collaboration with both Africans and rica and Namibia. donors and, as such, tries to reflect the evolution I in African views from the Lagos Plan of Action in What have we learned? 1980 to the program of action presented at the United Nations in 1986, the Abuja Declaration of Overall economic growth in Sub-Saharan Af- 1987, the Khartoum Declaration of 1988, and the rica has averaged 3.4 percent a year since 1961, UN Economic Commission for Africa's (ECA's) only a fraction above population growth. By 1987 1989 report, African Alternative Framework to Struc- this region of 450 million people-more than dou- tural Adjustment Programmes. The attention to ble the number at independence-had a total human resources, technology, regional coopera- gross domestic product (GDP) of around $135 tion, self-reliance, and respect for African values billion, about the same as that of Belgium, which that informs these African policy statements pro- has only 10 million inhabitants. Growth was un- vides the main focus of the strategy proposed in evenly spread over time and across countries. the following chapters. There were three broadly distinct periods: 1961- At various stages workshops were held in Afri- 72, when incomes per capita grew; 1973-80, a can countries as well as with donor agencies. period of stagnation; and 1981-87, years of de- Many eminent Africans contributed to the cline. For some countries (such as Liberia, Niger, report's thrust and content. The report is intended and Nigeria) the decline in per capita incomes to help in the design of a future development since 1980 has been calamitous-well over 25 per- strategy for each African country. Policies and cent. As always there were exceptions-notably programs would then be formulated in detail on Botswana, which has recorded an annual growth a country-by-country basis. in per capita income of more than 8 percent a year Some answers are readily suggested by past for the past 26 years; Congo with 4 percent; and experience. But other issues, such as the apparent Lesotho, above 3 percent. delay in the demographic transition in Africa or Africa's deepening crisis is characterized by complex environmental questions, will require weak agricultural growth, a decline in industrial further research. Any report on Sub-Saharan Af- output, poor export performance, climbing debt, rica has to confront the continent's enormous di- and deteriorating social indicators, institutions, versity and the grave weaknesses of available and environment. Agricultural output has grown statistics. We are all only too conscious of our annually by less than 1.5 percent on average since inadequate understanding of many of the issues 1970, with food production rising more slowly covered. But the report cannot be simply an than population. Although industry grew agenda for research. It attempts to derive the ele- roughly three times as fast as agriculture in the ments of a future development strategy on the first decade of independence, the past few years basis of present information, however incomplete. have seen an alarming reversal in many African A long-term effort to improve African data is countries where deindustrialization seems to called for. Meanwhile the available figures, poor have set in. With export volumes barely growing as they are, do provide enough evidence to estab- at all since 1970, Africa's share in world markets lish the enormity of the problems, and they are has fallen by almost half. used where possible to formulate policy recom- In the 1970s, to maintain income and invest- mendations. ment, governments borrowed heavily from Although much attention is inevitably given to abroad. Africa's long-term debt has risen 19-fold Africa's failures, a lot can be learned from its since 1970 and is now equal to its gross national successes. These show what can be done much product (GNP), making the region the most heav- more powerfully than any theories. ily indebted of all (Latin America's debt amounts Responsibility for Africa's economic crisis is to only around 60 percent of GNP). Debt service shared. Donor agencies and foreign advisers have obligations were 47 percent of export revenues in been heavily involved in past development efforts 1988, but only about half were actually paid. More along with the African governments themselves. than 100 debt reschedulings have been negotiated, Governments and donors alike must be prepared and still arrears accumulate. to change their thinking fundamentally in order The crisis is taking a heavy toll in human terms. to revive Africa's fortunes. However, Africa's fu- In several countries expenditure on social services ture can only be decided by Africans. External is sharply down, school enrollments are falling, agencies can play at most a supportive role. nutrition is worsening, and infant mortality con- 2 tinues to be high. Open unemployment in the largely by the declining level and efficiency of towns, especially of educated youth, is also on the investment, compounded by accelerating popula- rise. And, threatening Africa's long-term produc- tion growth-and not primarily by external fac- tive capacity, population pressure on the land is tors. Many countries, especially the poorer ones, accelerating desertification and deforestation; did suffer severe external shocks. But the low fuelwood is increasingly scarce, and soil fertility return on investment is the main reason for is being leached away, although none of these Africa's recent decline. Africa's investment and trends has been accurately measured. Last, insti- operating costs are typically 50 to 100 percent tutional decay is symbolized by the poor condi- above those in South Asia-the most comparable tions of once world-class universities, the region. Weak public sector management has re- disintegration of paved highways, and the col- sulted in loss-making public enterprises, poor in- lapse of the judicial and banking systems. Over- vestment choices, costly and unreliable staffed and poorly managed public bureaucracies infrastructure, price distortions (especially over- are deadweights on the productive sectors. Many valued exchange rates, administered prices, and governments are wracked by corruption and are subsidized credit), and hence inefficient resource increasingly unable to command the confidence allocation. Wage costs are high relative to produc- of the population at large. In many places political tivity (particularly in the CFA franc zone), even instability, coup d'etats, and ethnic strife are ex- though real wages have fallen by about a quarter acting a terrible toll on helpless people. And the on average across Africa since 1980. Intermediate costs of destabilization in southern Africa have technologies (such as pedal carts and animal draft been enormous. power) are too little used. Even more fundamental The factors behind Africa's economic decline in many countries is the deteriorating quality of are much debated. Some see mainly external government, epitomized by bureaucratic obstruc- causes, others internal. Changes in per capita in- tion, pervasive rent seeking, weak judicial sys- come have three main sources: variations in the tems, and arbitrary decisionmaking. All of this terms of trade, growth in population, and growth adds heavily to the cost of doing business and in production (GDP). discourages investors. For the most part Africa is * For Africa as a whole the analysis in Chapter simply not competitive in an increasingly compet- 1 shows that the income loss from changes in itive world. terms of trade since 1960 has been smaller than the The postindependence development efforts gain. Other regions have suffered similar losses failed because the strategy was misconceived. and performed better. Declining export volumes, Governments made a dash for "modernization," more than declining export prices, account for copying, but not adapting, Western models. The Africa's poor export revenues. Low-income Afri- result was poorly designed public investments in can countries have been the worst hit, with sub- industry; too little attention to peasant agricul- stantial income losses in the 1970s and 1980s. ture; too much intervention in areas in which the * Population growth has steadily risen during state lacked managerial, technical, and entrepre- the past three decades. Now well over 3 percent, neurial skills; and too little effort to foster grass- it is outpacing GDP. In contrast, in most other roots development. This top-down approach developing countries population growth has de- demotivated ordinary people, whose energies clined. most needed to be mobilized in the development * The region's disappointing GDP growth is effort. partly a function of the level and efficiency of investment. Gross investment during the period Outlook for the next generation first rose (from 15 to 20 percent in the 1970s), then fell back to 16 percent. The incremental output Certain fundamental forces will shape the con- generated by this investment has dropped dra- text for Africa's development in the years ahead. matically from 31 percent of investment in the The world is on the threshold of a new technolog- 1960s to 2.5 percent in the 1980s. ical age-driven by rapid advances in information Although many African countries have seen systems, in the biological sciences, and in materi- their development efforts disrupted by sharp falls als research. High-speed, low-cost information in the world price of key commodities, viewed processing and communications are transforming over the long term, falling per capita incomes for the way the world does business. Good market Africa as a whole since the late 1970s are explained intelligence, flexible production structures, and a 3 fast response to new opportunities will give firms traditions of solidarity and cooperation; and in the and farms the competitive edge. Biotechnology international support it can count on. The time has and materials sciences will produce a dazzling come to take up this challenge and to put in place array of new products that may quickly make a new development strategy for, the next conventional processes and products in Africa generation. obsolete. Against this background, an improve- ment in raw materials prices is unlikely. A strategy for sustainable and equitable Genetic engineering, tissue cultures, and the growth like offer new opportunities as well as pose a significant threat. If Africa is not to be further If Africa is to avert hunger and provide its grow- marginalized, but rather benefit from these devel- ing population with productive jobs and rising opments, two initiatives are crucial. Africa must: incomes, its economies need to grow by at least 4 * Improve its science and technology training to 5 percent a year. This must be the minimum and aim at the highest standards for at least a target. The primary source of this growth can only minimum core of specialists be agricultural production, which is itself targeted * Forge new partnerships with qualified firms to expand annually by 4 percent. African countries and research institutes in the developed countries. could then not only meet their own food require- Africa must grapple with two major trends: ments, but also generate the foreign exchange explosive population growth and accelerating en- needed for development. The target growth for vironmental degradation. In 1983 the ECA industry-initially 5 percent rising to 7 or 8 per- sketched out a "nightmare scenario" that de- cent a year-is higher than for agriculture, as is scribed the consequences of continuing high pop- consistent with experience elsewhere. With all ulation growth and stagnant or declining other sectors growing at around 4 to 5 percent, it incomes. On present trends the sheer growth in should be possible to provide jobs for a labor force numbers is staggering: a continent that had fewer that will expand by about 380 million people be- than 100 million inhabitants at the beginning of tween 1990 and 2020. this century will have I billion by 2010. Without a To meet these targets, Africa must not only decline in fertility the population will double in 21 dramatically raise the levels of domestic saving years. This will place an unmanageable burden on and investment, but also greatly improve produc- social services and, in several parts of Africa (such tivity-by as much as I to 2 percent annually for as Burundi, Kenya, southern Malawi, Rwanda, labor and about 3 percent for land. This requires and the Sahel), will put pressure on the land that an enabling environment of infrastructure services can be relieved only by large-scale migration. This and incentives to foster efficient production and would cause mounting social and political ten- private initiative. It also requires enhanced capaci- sions. It also implies continued rapid urbaniza- ties of people and institutions alike, from the vil- tion; by 2020 there will be some 30 cities with more lage to the upper echelons of government and than 1 million inhabitants. Depending on eco- industry. These themes recur throughout the fol- nomic performance, these cities could be a force lowing chapters. for growth and modernization or a wretched de- For these targets to be achieved over the long stabilizing element, with their inhabitants rebel- term, the growth strategy must be both sustain- ling against squalid conditions in sprawling able and equitable-sustainable because sound slums. environmental policies can protect the productive The degradation of Africa's environment has capacity of Africa's natural resources and equita- domestic and international dimensions. Unless ble because long-term political stability is impos- halted, it threatens Africa's productive base. But sible without this. Equitable means, in particular, deforestation in Africa is also of concern to the rest that measures are taken to reduce poverty, espe- of the world because it threatens the loss of cially by improving the access of the poor to pro- Africa's rich biological diversity-an irreplace- ductive assets. able gene bank of immense potential benefit. It The long-term strategy proposed here envis- also contributes to global warming. ages a move away from earlier practices. It aims The challenge now is for Africa to reverse its to release the energies of ordinary people by en- present decline. The potential is there-in its vast, abling them to take charge of their lives. Profits poorly exploited resources of land, water, miner- would be seen as the mark of an efficient business. als, oil, and gas; in its underutilized people; in its Agricultural extension services would be seen as 4 responding to farmers, not commanding them. and regular maintenance, will require an annual Foreign investors would be welcomed as partners, expenditure of 5 to 7 percent of GDP, accompa- not discouraged. The state would no longer be an nied by measures to increase user fees, foster the entrepreneur, but a promoter of private produc- domestic construction industries, and reform ers. And the informal sector would be valued as a public procurement, the administration of con- seedbed for entrepreneurs, not a hotbed of racke- tracts, and transport planning. The consequences teers. of poor planning and the cost of neglect, ineffi- ciencies, and obsolescence are borne by a broad, Enablingenvironment but diffused, constituency. Systematic consulta- tion with organized interest groups, such as cham- Farmers and firms will be efficient only if the bers of commerce and industry, can strengthen incentives they face encourage them to be. The accountability and responsiveness. There is ample enabling environment that promotes production evidence that businesses willingly pay the full cost and efficiency has two parts: incentives and the of reliable services; without them, they fail. physical infrastructure. Both are crucial. Africa needs efficient cities to accommodate Experience worldwide convincingly demon- competitive businesses. Services can be largely strates that the countries with the highest growth self-financing. So can the upgrading of shelter, rates have kept their exchange rates competitive, which at the same time would generate a great avoided excessively protecting their manufactur- deal of employment. Pollution from waste dis- ing industry and underpricing their agricultural posal can be avoided by low-cost, on-site solu- products, kept real interest rates positive and real tions. wages in line with productivity, priced utilities to recover costs, and avoided high and accelerating Building capacity inflation by following disciplined fiscal and mon- etary policies. Structural adjustment programs Africa needs not just less government but better have reflected these themes, but as yet the policies government-government that concentrates its have been only partially implemented. They are efforts less on direct interventions and more on critical for Africa's recovery. enabling others to be productive. Every level of Exchange rate policy is perhaps the most con- government should take measures to improve the troversial issue. Overvalued exchange rates en- performance of public administrations and courage imports and discriminate against local parastatal enterprises. Institution building is a producers. A competitive exchange rate is essen- long-term endeavor that requires a clear vision tial to boost domestic production and employ- and a specific agenda. Several countries have al- ment. The key is to keep farm prices remunerative ready embarked on major reforms of central gov- and industrial wage costs internationally compet- ernment, for example, Central African Republic, itive. But for exchange rate adjustments to be suc- Ghana, and Guinea. They aim to create a leaner, cessfully managed, there must be tight financial better disciplined, better trained, and more moti- discipline and no artificially supported wage vated public service, with competitive salaries for rates. highly qualified officials. Special attention needs Neglected infrastructure-poorly maintained to be given to strengthening the policy analysis roads, inefficient ports, unreliable utilities, and the and economic management capabilities of gov- like-greatly increase the cost of doing business. ernments. Public enterprises need to be given Most African countries face this problem, but for clear mandates, managerial autonomy, and some the situation is chronic. To tackle this issue, monitorable performance indicators. Local gov- governments should give priority to rehabilitat- ernments also could play a greater role if allowed ing infrastructure over investing in new facilities. more autonomy and regular, independent sources Costs could be reduced by using small local con- of revenue, especially in managing the expanding tractors and revenues increased by raising urban networks that link the towns to their hinter- charges, especially for utilities. Determined re- lands. In rural areas local services, such as water forms in parastatal management could yield sig- supply, could be better run at the communal level. nificant improvements quickly. This too requires genuine delegation of responsi- Tackling the backlog of deferred maintenance bilities. and rehabilitation will extend well into the next Building private sector capacity should extend decade. This, together with the need for expansion beyond helping community associations. Local nongovernmental associations can be drawn into Africa's situation is unique. Never in human the development effort as intermediaries to pro- history has population grown so fast. If current mote grassroots activities. Credit unions and in- trends continue, Sub-Saharan Africa will have formal savings and loan associations (such as nearly 500 million inhabitants by 1990 and more tontines) could retail credit to farmers and than 1 billion by 2010. Africa will find it increas- microenterprises. Local consultants and profes- ingly difficult to feed itself, educate its children, or sional associations could also be mobilized. All find jobs for new entrants to its labor force. The this requires a deliberate, carefully orchestrated absolute numbers are not so worrying in them- effort by a country's leadership to build local ca- selves-there are still vast underpopulated re- pacities. gions. But the high rate of growth means that Ultimately, better governance requires political Africa's economies and social services must sprint renewal. This means a concerted attack on corrup- ahead for living standards even to stand still. tion from the highest to the lowest levels. This can Family planning is the cornerstone for im- be done by setting a good example, by strength- proved health care. Africa has some of the highest ening accountability, by encouraging public de- rates of maternal and infant mortality in the bate, and by nurturing a free press. It also means world. In the poorest countries-Burkina Faso, empowering women and the poor by fostering Ethiopia, and Mali-about one-quarter of all chil- grassroots and nongovernmental organizations dren die before the age of five. There is strong (NGOs), such as farmers' associations, coopera- evidence from Botswana and Zimbabwe that, tives, and women's groups. when family planning services are made widely available and especially when they are backed by Investing in people mass media campaigns and community-based ed- ucation programs, contraceptive use is high. The However well developed, institutions are only preference for large families has remained higher as effective as the people who work in them. Ed- in Africa than elsewhere, even when mortality is ucation and health were priorities in the strategies falling. Families remain to be persuaded that bet- developed after independence and must remain ter spacing and timing of births and fewer births so in the future. But better programs are essential. can reduce infant, child, and maternal mortality Previous attempts to achieve universal coverage and sickness. Most African governments now of- in basic health, education, and food security ficially support family planning, but there is an failed, partly because the efforts were swamped urgent need to match expressions of commitment by soaring population growth and partly because with adequate technical, financial, and manage- public expenditure was devoted to other priori- rial support. To reduce the population growth rate ties. But it is unthinkable that another generation from the present high 3.3 percent a year to an should go by without a determined effort to attain average of 2.75 percent a year for 1990-2020, the this goal. By adjusting priorities and by cutting total fertility rate will need to fall from 6.7 children and recovering costs, it can be done. Moreover it per woman to 3.4 by 2020. An annual budgetary can be done without setting aside the goal of better allocation for family planning programs of only quality. Improved science and technology train- 0.8 percent of GNP would establish effective fam- ing is a high priority. Costs can also be reduced ily planning programs in most countries. and efficiency increased by encouraging benefici- aries to participate in the design, delivery, and PRIMARY HEALTH CARE COMES FIRST. Major management of services. strides toward better health care are possible, even within the budgetary constraints facing African SLOWING POPULATION GROWTH. Raising the countries, if expenditures are redirected from GDP growth rate from the 2 percent of the recent high-cost curative medicine in modern hospitals past to 4 to 5 percent in the years to come would to preventive and community-based systems. -be a significant achievement. But incomes will Mass immunization campaigns are cheap and ef- improve little if population growth continues to fective against several major childhood killers. soar. Increasingly, African governments are com- And even very poor people willingly pay for ing to accept that population policy should be an health care if they demonstrably get value for their integral part of a sound strategy for human re- money. This above all means ensuring a reliable source development. supply of inexpensive drugs through better pro- 6 curement procedures and regular delivery to clin- produce low-cost teaching materials adapted to ics and health posts. local needs. The long-run goal remains to expand Two out of every three rural Africans are still enrollments-especially of girls, because female without safe water. Universal access to clean education has a particularly strong effect on fam- water, which is a prerequisite for better health, ily welfare. should be an integral part of the long-term strat- All this will require more money to be spent on egy. People themselves hold the key to achieving basic education. The first step, however, is to use this target. Where communities are involved in existing resources more efficiently. This could be designing, constructing, and installing water sup- done, for example, by moving to double shifts, plies and are made responsible for their mainte- increasing teaching loads, and strengthening nance, water projects tend to be more efficient, management of the school system. There is scope cost-effective, and hence sustainable. Once again to enlarge the education budget by charging fees, much of the cost could be recovered through user especially at the university level, and by redirect- charges. ing some of the savings to basic education. Total expenditure on education can also be increased by ATTACKING HUNGER. More and more Africans encouraging private education and community are going hungry. Severe food shortages were contributions for school buildings, equipment, exceptional in 1960; now they are widespread. It and housing for teachers. is estimated that about one-quarter of Sub- Radical changes are called for in postsecondary Saharan Africa's population-more than 100 mil- education if Africa is to equip its labor force with lion people-faces chronic food insecurity. In the the skills needed to survive in the new technolog- first instance, this is a supply problem. Expanding ical age. Resources should be shifted especially to food production is essential-the target is 4 per- science, engineering, accountancy, and other tech- cent growth a year-although that will be ade- nical fields. Education subsidies should be re- quate only if food trade within Africa is also duced, and a better balance achieved between liberalized. This rate of growth would be enough salary and nonsalary costs. Vocational training to feed the growing population (2.75 percent a should be better attuned to employers' needs, em- year), improve nutrition (1 percent a year), and ployer participation in course design should be progressively eliminate food imports (0.25 per- increased, and stronger links should be forged cent a year) between 1990 and 2020. An improved between the work place and training institutes. supply is not enough; the purchasing power of nonfarm families will also have to be sufficient. BETTER MANAGED SOCIAL PROGRAMS. Placing With the rising level of employment proposed in management responsibility for basic social ser- the target scenario, the number of low-income vices in local hands makes the programs more households unable to afford an adequate diet responsive to users, who in turn become more would gradually decrease. But recurrent droughts willing to contribute to their cost. The watch- will continue to cause famine for a residual core words for the future are delegation, community of the poorest. For this vulnerable group, sharply participation, and cost recovery. In this approach targeted food subsidies or food-for-work pro- the central agency provides technical support grams will be needed, supplemented by direct through a training and visit system. NGOs can act feeding programs for malnourished women and as valuable and cost-effective intermediaries be- children. tween the central agencies and community groups. A BETTER EDUCATED POPULATION. School enroll- Women and women's groups can make a major ments have been vastly expanded during the past contribution to improving delivery of social ser- three decades, but too often at the expense of vices. In Africa women are generally lead manag- quality. Improving quality is now the top priority. ers within the household; they are responsible for More must be spent on books and other materials. feeding the family; for providing water, educa- Raising annual expenditure on books at the pri- tion, and health; and for family planning. They are mary level from $0.60 per pupil to about $5 would also active in production of food crops and in cost less than 5 percent of the amount donors trade. Their role should be more explicitly recog- spend each year in Sub-Saharan Africa on techni- nized in design and implementation of human cal assistance. Countries also need the capacity to resource development programs. 7 SUSTAINABLE FINANCING. Even with the most and seek out specialty markets-in off-season strenuous efforts to put them to the best possible fruits, flowers, and vegetables, for instance. use, existing resources will not be enough. The Greater regional integration would particularly proposed strategy calls for doubling public expen- help expand trade within Africa in agricultural diture on human resource development-from products, especially food. around 4 to 5 percent of GDP to 8 to 10 percent- Despite the enormous range of ecological zones between now and 2000. This expansion can hap- across the continent, there is surprising common- pen only if donors are willing to share the cost and, ality in the kinds of policies needed to stimulate at the same time, if a greater effort is made to growth in Africa's agricultural sector. To achieve recover costs by charging fees, especially for the growth target, all African countries will need postprimary education. to create an enabling environment, harness new technologies, build capacities, and safeguard nat- Raising agricultural production ural resources. * An enabling environment for agriculture In contrast to the past, the future strategy sees means allowing prices to move flexibly in re- agriculture as the primary foundation for growth. sponse to changing market conditions; turning This is where Africa has an immediate compara- over input supply, marketing, processing, and ex- tive advantage. Agriculture accounts for 33 per- porting largely to the private sector and reducing cent of Africa's GDP, 66 percent of its labor force, administrative controls; promoting credit at com- and 40 percent of its exports. Moreover the links mercially attractive interest rates through private between agricultural and industrial growth are homegrown financial institutions such as cooper- strong. Farmers need the urban market, and urban atives and credit unions (as already exist in Cam- producers thrive in large part by selling to the eroon and Rwanda); gradually reforming systems rural population. Even taking full account of the of land tenure to enable titles to be registered (and environmental constraints, the scope for expand- in the interim codifying customary land rights), ing agricultural production is great, although it thereby increasing security and encouraging in- varies from country to country. The target is to vestment in land improvements; and upgrading raise output growth from the 2 percent achieved rural roads using small local contractors and local since 1960 to 4 percent-the level that will be community contributions. needed to achieve food security and to raise per * Harnessing technologies requires a new em- capita incomes, initially by a modest 1 percent a phasis on agricultural research. This in turn calls year, and eventually by 2 percent. This in turn will for rehabilitating national research institutions, require an annual increase in labor productivity of expanding the role for the international research about 1.5 percent. Since the area under cultivation centers, and establishing multicountry research could not be expanded by more than 1 percent a networks to pool research efforts on specific top- year without adverse environmental conse- ics. The core of the strategy must be a determina- quences (the average rate of the past two decades tion to improve research management and to link was 0.7 percent a year), the productivity of culti- research to the farmer by putting in place better vated land must rise by around 3 percent a year. management systems for agricultural extension, A 4 percent growth rate is ambitious, but not which will be more responsive than in the past to impossible. Cameroon, C6te d'Ivoire, Kenya, farmers' needs and more efficient than the present Malawi, and Rwanda have all achieved that or situation in most African countries where donor- more for extended periods. Other countries have financed projects have created many extension greater land potential, such as Ethiopia, Sudan, services in the same country. Zaire, and Zambia, to name the largest. At the * Building capacities is a need that runs same time a few-especially those in the Sahel- through all levels to produce better trained re- are unlikely ever to reach this target. searchers, extension agents, and farmers and to The overseas markets on which African agricul- strengthen rural institutions (such as farmers' as- ture depends will remain highly competitive. sociations, cooperatives, and women's groups) es- Long-term price trends cannot be expected to im- pecially by training managers. prove much. Only in rare cases-notably cocoa- * Measures to protect the environment are will rising African production be likely to lower needed to reduce soil erosion, deforestation, and world prices significantly. Nevertheless African desertification. Trees are being cut down 30 times countries will need to diversify their production as fast as they are being replaced. Possibly as 8 many as 80 million Africans have difficulty find- tuting market prices for direct controls. Success so ing fuelwood. In Ethiopia topsoil losses of 290 tons far has been limited. Indeed output has continued per hectare have been reported. Simple measures to decline. This is partly a necessary adjustment- can have a large impact. In Burkina Faso lines of a weeding out of misconceived production oper- stones successfully reduce run-off and collect top- ations that have no chance of becoming viable. But soil, communal tree planting in Ethiopia has for industrial production to respond positively to slowed deforestation, and Kenyan farmers have the reforms, there must again be an enabling en- terraced hundreds of thousands of smallholdings. vironment, together with measures to generate These efforts need to be multiplied across the market demand and build industrial capabilities. continent. The most pressing need is to plant more trees. AN ENABLING INDUSTRIAL ENVIRONMENT. Be- Although these ideas are not new, they are not cause of their high operating costs, African coun- yet widely applied. Controlled prices and restric- tries will have to be all the more determined in tive marketing, disorganized research, and weak using exchange rate policy, undertaking in- extension services, poor rural roads and few effec- frastructural investments, forging international tive farmers' associations, insecure land tenure partnerships, and providing incentives to raise and poor environmental practices are still the rule productivity if they wish to be competitive. Be- rather than the exception. Only by concerted ac- sides lowering the direct costs of business by in- tion will it be possible to achieve and sustain the vesting in infrastructure, governments need to agricultural growth targets on which Africa's fu- lower the administrative costs and financial risks ture development hinges. of private investment. This means moving from a controlling approach to a facilitating one, from A new start to industrialization protecting existing business to promoting compe- tition. The aim must be to reward efficiency and Since independence Africa's labor force has ac- innovation. Regulations and controls should be quired technical skills and industrial experience- removed unless there are compelling reasons to as workers, managers, and entrepreneurs. retain them. Indigenous businesses range from self-employed Although the public enterprise sector has ex- metalworkers making cookstoves from scrap panded industrial capacity in many countries, it is metal in Kenya to a firm making paper from sug- hobbled by poor management, political interfer- arcane waste in Ghana. African countries today ence, and weak financing. The private sector holds export not only processed raw materials but also the key to future industrial growth, but private manufactures, such as garments from Madagas- entrepreneurs have often found more enticing op- car, electronics from Mauritius, and car radiators portunities outside industry (especially in taking from Tanzania. The challenge is to build on this advantage of the scarcity rents created by con- base and achieve the industrial transformation trols). To attract investors, a stable economic and envisioned by African leaders in the 1980 Lagos political environment is essential. Governments Plan of Action. need to support private investors both in words Preparation for a Second Industrial Develop- and in deeds-and in particular by establishing a ment Decade for Africa, first formulated by the well-functioning judicial system that can be relied ECA and the UN Industrial Development Organi- on to protect property and to enforce contracts. zation (UNIDO) in 1981, has stimulated system- atic reevaluation of industrial policies and ExPANDING MARKETS. Industry should be devel- strategies. While deteriorating economic condi- oped in response to market opportunities. Thus tions impeded implementation of ambitious in- sustained industrial growth will depend in part dustrial investment proposals, it has become on a broadly based expansion of domestic de- increasingly evident that the earlier industrializa- mand for local manufactures. The key will be to tion efforts focused on state-led creation of capac- take advantage of demand and supply linkages ity without adequate regard to cost or markets. between agriculture and industry and to aim for The result was highly inefficient industrialization, complementary growth in both. Higher agricul- heavily subsidized by consumers and taxpayers. tural incomes raise the demand for consumer In recent years the emphasis has been on restruc- goods and farm inputs in the rural areas and turing that capacity (including divestiture of generate increased surpluses for processing, large, unviable public enterprises) and on substi- while the availability of appropriate, low-cost 9 manufactures stimulates farmers to invest in share of jobs and output. Estimates indicate that order to raise income and also provides them with these enterprises currently provide more than half the means to raise productivity. of Africa's urban employment and as much as The small market in most African countries has one-fifth of GDP in many countries. two strategic implications. Small-scale producers Unregulated and unrecorded, the informal sec- can play a special role in meeting localized de- tor is home to small firms in agriculture, industry, mand and providing competition; but rapid in- trade, transport, finance, and social services. It is dustrial growth will depend on penetrating not static and not necessarily traditional in its external markets. African leaders have correctly techniques, but it undertakes innovations and ad- placed priority on enlarging markets through re- aptations indicated by market forces. In the infor- gional integration. In practice, however, progress mal sector enterprises find a business has been far too slow. Greater access to neighbor- environment that is competitive, free from unjus- ing markets would be a stepping stone to markets tified regulatory constraints, and well-adapted to beyond Africa. Competition in regional markets local resource endowments and demand. These would stimulate efficiency and help prepare Afri- enterprises are also supported by a system of can producers to compete globally. grassroots institutions: on-the-job apprentice- ships that provide training and small associations BUILDING INDUSTRIAL CAPABILITIES. Industrial- that can represent group interests and improve ization in Africa has so far engendered too little access to credit and other resources. indigenous technological development to be self- But the capacity of Africa's small and starting and too few labor and management skills microenterprises as a seedbed for entrepreneur- to generate steadily rising productivity. The core ship and jobs remains limited by restrictive busi- of a future strategy to transform African industry ness environments and inadequate links with from infancy to maturity is a deliberate plan to formal markets. Governments can help these en- acquire the necessary entrepreneurial, manage- terprises to grow in several ways. rial, and technical skills. Incentives should focus * Improving the business environment. Regu- on in-firm training and adapting technology to lar consultations with private sector associations local conditions. Industry associations should be can increase confidence in the stability of reforms. encouraged to set up advanced training courses. Specific actions include regularizing the legal sta- Postprimary education should aim to furnish the tus of enterprises in the informal sector, eliminat- work force with technical and commercial skills. ing unnecessary taxes that stifle initiative, The business of manufacturing is learned removing excessive regulatory constraints, pro- mostly on the job. In Africa's case this should tecting property and contract rights, and ensuring mean in partnership with foreign investors, who fair settlement of disputes. have the skills as well as the capital. The transfer * Expanding access to credit. Banks should be of capabilities, however, is not automatic. It can be allowed to charge market-based interest rates that helped along by building links between indus- reflect the costs of small-scale lending. For the tries-through subcontracting, for example-and smallest enterprises, informal groups can provide by promoting local consultants. mutual guarantees that mobilize resources and use social pressures to ensure repayment. Fostering African entrepreneurship * Encouraging self-sustaining services. Trade and professional associations, NGOs, and grass- In the coming decades Africa's entrepreneurs roots organizations are often better at delivering face a monumental challenge-to find productive extension services and technical assistance than employment for a labor force that will surpass 600 government agencies. Policies that support sub- million workers by 2020-about three times the contracting links between firms and encourage present number. These jobs are more likely to be local consulting firms can improve access to tech- created in a myriad of small and microenterprises nology and inputs. than in a few large firms. Fortunately there is no * Stimulating local markets. Government pur- shortage of entrepreneurship in Africa. During chase of goods and public services, such as refuse the recent years of economic crisis, small firms in collection, transport, vehicle repair, and road the informal sector have provided a growing maintenance, can all be contracted out to small 10 firms. Improved infrastructure linkages and tar- mining companies using hired expertise, with the geted assistance programs can also help accelerate country itself bearing all the risk-has performed entrepreneurial responses to market incentives. poorly in the past and is better avoided in the future. All this applies equally well to oil and gas Unlocking Africa's mineral wealth production. Africa is well endowed with minerals (includ- Energyforgrowth ing oil), and so far only a fraction of this wealth has been extracted. But these riches are a mixed The demand for energy grows roughly in step blessing. Large revenues received by govern- with GDP-possibly a little faster in the lower-in- ments in the past have too often disrupted rather come countries. Without assured energy supplies, than promoted real development. The income has African economies will not grow. To achieve the been spent unwisely, compounded by heavy bor- needed 5 percent expansion in energy production, rowing secured on future revenues, which led to Africa will have to invest some $28 billion during an excessive debt burden. Massive distortions the next 10 years, equivalent to about 2 percent of have entered the pricing system and have ob- GDP annually. structed agricultural and industrial growth. The Africa has abundant energy resources, al- development of mines and oil wells will make its though these are unevenly distributed. Proven oil proper contribution to Africa's long-term growth reserves alone are equivalent to 120 years of cur- only if governments exercise tight financial disci- rent consumption. Less than 4 percent of Africa's pline, rigorously appraise new investment, and hydroenergy potential has been developed. prevent exchange rates from becoming overval- Known reserves of gas are equivalent to 20 times ued. current installed hydropower capacity; exploit- Very little mineral exploration has been under- able coal reserves amount to 135 billion tons. taken in Africa in recent years because transna- To meet Africa's energy needs, formidable tech- tional mining companies (the most important nical, financial, and environmental problems potential source of investment in mining develop- must be overcome. Careful planning will be ment) have found Sub-Saharan Africa the least needed to establish the least-cost mix of energy attractive place to operate. Unfortunately, for their sources. Opportunities exist to reduce overall part the foreign companies that do invest have costs through intercountry cooperation, using often contributed to the malaise by withholding Africa's oil reserves to earn more foreign exchange information and by failing to train local staff or to and making full use of natural gas, which causes build links with the local economy. Managing this less pollution and is difficult to transport to over- relation successfully-to the benefit of both par- seas markets. Large savings are possible simply ties-is another challenge for the future. from better management of power utilities and During the past two decades, African produc- more efficient energy use. tion of 10 major minerals has declined by an aver- Household energy poses a special problem. age of 2 percent annually, whereas that in Latin Four-fifths of Africans depend on woodfuels- America and Asia has grown. But with more fa- but well over 50 million people face acute short- vorable policies this trend could easily be re- ages, and the number is growing rapidly. versed. A feasible target would be to expand Measures to promote tree planting and to encour- output by 5 percent a year over the long term, age the use of more efficient stoves or alternatives, although it will take time to build up to that level. such as bottled gas and kerosene, are urgently It will require an annual investment (largely pri- needed. Charging fees for fuelwood and charcoal vate) of around $1 billion in exploration and de- would help, but means would have to be found to velopment, about five times present spending. As assist the poorest families. Measures to overcome before this will be possible only within an en- the household energy crisis should be an integral abling environment of competitive exchange part of each country's environmental action plan. rates; guaranteed repatriation of profits; stable, transparent, and equitable fiscal management; Closer ties among African states and an attractive mining code that clarifies recip- rocal obligations. In short governments need to African leaders have long recognized the need build a new, more balanced partnership with for- for closer regional ties. Most African economies eign investors. The alternative approach-state are too small to achieve economies of scale or specialization without trade, and their firms too greater regional cooperation across a broad range new and inexperienced to compete with estab- of issues, such as education, research, and water- lished overseas exporters without some protec- shed management. Consistent with the priority tion. But progress toward economic integration proposed for capacity building and technology has been disappointing. Official intraregional training, particular attention should be given to trade has hardly grown in 20 years. Nonetheless creating regional centers of excellence. the case for larger integrated markets is confirmed by thriving unofficial trade. Sustainable funding for development Only one trade group-the francophone West African Economic Community (CEAO)-has REORIENTING DEVELOPING EXPENDITURE. For scored some success. Thanks to lower nontariff output to grow at the target of 5 percent a year, barriers, a common convertible currency, a satis- Sub-Saharan Africa will need to raise investment factory compensation mechanism, and labor mo- from the present 15 percent of GDP to 25 percent. bility, trade among the members has grown to Total expenditure on human resource develop- around 10 percent of their total trade. That con- ment should be steadily expanded until it reaches trasts strikingly with the 3 percent for the larger 8 to 10 percent of GDP annually, about double Economic Community of West African States present spending (with donors meeting about half (ECOWAS). the total). Infrastructure spending should rise to If the goal of greater regional integration is to be around 6 percent of GDP. This would cover capi- realized, bolder efforts will be needed to create an tal and recurrent expenditure and ensure ade- enabling environment. First, there must be much quate resources for maintenance and running greater harmonization of macroeconomic poli- costs. In contrast to the past, the bulk of invest- cies, particularly exchange rate policy, which can ment in the productive sectors (estimated at 4 be part of a phased program of trade liberalization percent of GDP for agriculture and 3 percent for favoring African products over those from industry) would come from private investors. Rig- abroad. A top-down dirigiste approach-govern- orous appraisal of all public investment is essen- ments deciding which enterprises will go where- tial to raise the efficiency of investment. will work at the regional level no better than at the national level. Rather, integration must follow HIGHER PUBLIC SAVINGS. A significant effort is market signals. Second, experience suggests that needed to generate public savings by both raising the approach most likely to succeed will be prag- revenues and controlling expenditures and to do matic and incremental, allowing two or more so in a way that is consistent with the priorities of countries to move forward wherever opportuni- the future development strategy. Thus, progres- ties arise. For instance two countries with noncon- sively and as far as feasible, taxes on trade-that vertible currencies could agree to allow market is, on producers (and especially exporters)- clearing of their payments imbalances through the should be replaced by taxes on consumers. For open market operations of commercial financial example, higher tariffs could be charged for utility institutions. This would be consistent with the services and fees collected for certain social ser- Lagos Plan concept of phased integration. Third, vices. Revenue measures should be matched by needless obstacles to movements of capital, labor, much stricter financial discipline to limit waste, to and goods should be removed. Simpler adminis- ensure that spending reflects development prior- trative procedures, uniform national standards, ities, and to achieve a better balance between ex- and better commcnications would make a big penditure on wages and materials. The goal difference. (At present up to 70 separate steps may would be to lower the public wage bill, which be necessary to take goods across a border legally.) currently absorbs as much as 60 percent of reve- Infrastructure investments should still be made nues in some countries, and to raise expenditures only in response to established demand. Fourth, on materials needed for the staff to work effi- through chambers of commerce the private sector ciently and for maintenance. Savings could also can do more to disseminate market information. come from lower subsidies to the parastatals and The proliferation of regional institutions, cre- from reduced military expenditures. ated ad hoc over the years, has made coordination and financing difficult. Rationalizing these insti- MOBILIZING PRIVATE SAVINGS. Africa's tradi- tutions should be high on the agenda. This would tions of sharing and community-based develop- promote not only economic integration, but also ment provide an avenue for mobilizing private 12 savings. Contributions might be in cash or labor foreign savings would decline, and drop to 5 per- and be applied to a wide range of local community cent of GDP by 2020. projects, such as primary schools, health clinics, While average per capita income will grow by and the supply of drinking water. Strongly sup- less than 1 percent during the 1990s and overall ported by government, these grassroots initiatives per capita consumption will stagnate, the impact could make an important contribution. across income groups will vary. The top 5 percent There is also considerable potential for mobiliz- of income earners, who belong to the modern ing additional household savings through the for- sector, will contribute most to increased public mal and informal financial systems. In many savings, and consequently their consumption will African countries the formal financial system has be compressed, while the rest of the population- deteriorated in recent years. Reforms are urgently those working in the rural areas and in small and needed. These should aim to bring about market- microenterprises- will enjoy a rising level of con- determined interest rates and credit allocation, sumption of about 2 percent a year. stronger bank supervision, and adequate pruden- The proposed scenario for sustained growth is tial ratios and debt collection. The broad objective fragile. It is built on the assumption that targets for is to deepen and diversify financial intermedia- the key parameters (levels of investment, savings, tion. There is further scope, too, for encouraging incremental capital-output ratios, and the like) informal savings and credit institutions, which will be achieved. These targets are all ambitious. can extend financial services to farmers and to Some countries will not meet them. Some should informal sector enterprises, especially in remote do better. To the extent they fail, the outlook will areas. More attractive investment opportunities be that much bleaker. for the informal sector will, by themselves, pro- mote savings by those seeking to expand their Development assistance in the 1990s household enterprises-for example, by buying plows, oxen, or fishing nets. The momentum of the growth of aid during the past few years will have to be maintained during THE EXTERNAL RESOURCE BALANCE. If Africa's the 1990s if the reforming African countries are to economies are to grow, they must earn foreign persist with their difficult adjustment programs exchange to pay for essential imports. Thus it is and if the countries that have not yet embarked on vital that they increase their share of world mar- reform are ever to do so. Adding to the demands, kets. The prospects for significant increases in there may be some new entrants (currently classi- world prices for most primary commodities are fied as middle-income) to the list of IDA-eligible poor, so higher export earnings must come from countries. Moreover special efforts will be needed increased output, diversification into new com- in the I990s to reverse Africa's backsliding in areas modities, and an aggressive export drive into the such as food security, human resource develop- rapidly growing Asian markets. In the proposed ment, and infrastructure and to fund new initia- growth scenario the ratio of exports to GDP is tives in family planning and environmental targeted to rise from 19 percent in 1986--87, to protection. about 24 percent by 2000, and to 28 percent by The external resource requirements of Sub- 2020. To make up for the compression that has Saharan Africa could be met if the donor commu- occurred during the past decade, imports in the nity: early 1990s would need to grow significantly * Increased gross official development assis- faster than overall GDP-to about 33 percent of tance (ODA) during the 1990s at about 4 percent a GDP in 2000-and thereafter they would grow in year in real terms (which is below the rate step with GDP. achieved during the 1980s) Several assumptions underlie the overall re- * Put in place concessional debt relief mecha- source balance: an initial target GDP growth of 4 nisms (preferably debt reduction) so that debt percent a year, rising later to 5 percent; total in- service payments are at most no greater than in vestment of 25 percent of GDP throughout the recent years (that is, no more than $9 billion for all period; and domestic savings of 18 percent of GDP Sub-Saharan Africa). To this end, the middle-in- by 2000, increasing to 22 percent by 2020. The net come countries should be considered eligible for transfers (including all forms of financing) re- concessional debt relief measures. quired to close the gap are estimated to be 9 per- The above assumptions lead to a gross ODA cent of GDP by 2000. Thereafter the need for requirement of $22 billion a year (at 1990 prices) 13 by 2000. These estimates imply that if the critical If a new and more equal partnership is to make minimum needs for reversing Africa's decline are aid more effective, then the design and monitor- to be met, ODA needs to grow at 4 percent a year ing of macropolicy and the related aid program in real terms. The combination of low and declin- should be placed on parallel tracks. The dialogue ing per capita incomes create special difficulties would be as intense and disciplined as under for Africa that require special assistance efforts. structural adjustment lending. But it should be Furthermore,duringthisperiodtheremaybespe- clear that the reform program is the cial new ODA needs if more African countries are government's-expressed in its own policy pa- added to the list of IDA-eligible countries. If these pers and internalized through local seminars and efforts are not forthcoming, Africa's decline is workshops. Then donor support linked to specific likely to continue in the 1990s. If, however, the programs or project expenditures would reflect special programs of assistance started in the 1980s overall performance. Assistance should become can be continued for another decade, Africa far more selective among countries and be biased should be able to reverse its decline and level off, strongly in favor of sound and sustained reform and eventually reduce, aid. programs. Reflecting the priority accorded to capacity AID COMPOSITION. In line with the strategy pro- building, technical assistance will remain a crucial posed in this report, ODA should be increasingly component of donor support. But with about $7 focused on four priorities: per capita being spent annually, donors and recip- * Supporting public expenditures on physical ients are clearly not getting value for their money. infrastructure and human resource development. Most technical assistance is uncoordinated, im- As far as possible external financing should fund provised, poorly managed, and rarely fitted into "time slices" of sector and subsector expenditure a comprehensive strategy for capacity building or programs, including recurrent outlays for opera- institutional development. A radical reappraisal tion and maintenance. must be undertaken on a country-by-country * Using structural adjustment financing more basis. Greater use should be made of consultants selectively, although it will remain an important from Africa and other developing countries and component of aid in the 1990s and beyond. Policy much more attention given to transferring skills. lending should be given increasingly in support The long-term target must be to reduce technical of measures already adopted, rather than with assistance sharply. The first step is to replace long- conditionality based on promises of future action. term experts with short-term consultants. * Assisting private sector initiative at all levels and using NGOs to channel more ODA, particu- A strategic agenda for the 1990s larly for grassroots development. * Fosteringregionalintegrationbysupporting This report sketches a menu of options and the rationalization of regional institutions and ideas to guide the formulation of long-term devel- helping to cover the transitional costs of trade opment strategies. Its conclusions are inevitably liberalization within Africa. couched in general terms; they do no more than With these priorities, the suggested composi- indicate the directions forward. Each country tion of ODA would be 25 percent each for social must develop the approach that suits its particular and physical infrastructure and 50 percent for the circumstances. Debate, even over these general productive sectors, technical assistance, and pro- propositions, will continue among Africans and gram assistance. between African countries and their external part- ners. But the aim must be to seek the highest MAKING AID EFFECTIVE. The financing gap is common ground for joint action. large and growing. The aid required can be justi- Already a consensus seems to be emerging on fied only if it is used effectively and only if it is some important points. As a result, a strategic clear that the need for aid will eventually decline. agenda for the 1990s can be suggested. Neither donors nor recipients can accept a strat- * Adjustment programs should continue to egy that envisages permanent dependency. There evolve. Programs must take fuller account of the must be a credible commitment to ensure that aid social impact of reforms (and increase budget ex- funds do not go, even indirectly, to finance mili- penditures on human resource development), and tary spending, luxury consumption, or capital investment needs to accelerate growth and mea- flight. sures that are required to assure sustainability. The goal is not simply to achieve macroeconomic nance in Africa improves. Leaders must become balance but over time to fundamentally transform more accountable to their peoples. Transactions Africa's production structures. must become more transparent, and funds must * The strategy should be people-centered. be seen to be properly administered, with audit Human resource development and meeting basic reports made public and procurement procedures needs are top priorities. overhauled. * Capacity building needs to be deliberately The challenge facing Africa is exceptional. The pursued through institutional reforms at every cost of failure would be appalling. Much depends level of government and by measures to foster on the relation between African governments and private sector and nongovernmental organiza- their foreign partners. New and closer forms of tions and to enable women to play their full role collaboration should be devised to ensure that in economic and social development. policy is continuously reviewed. To facilitate this * An enabling policy environment that fosters dialogue, a global coalition for Africa should be private investment should be put in place. Greater created. This would provide a forum in which efforts to provide efficient infrastructure services African leaders in the public sector, private busi- are crucial, as is support to the informal sector for ness, the professions, and the universities and generating income and employment. their key partners could agree on general strate- * To overcome the nexus of weak agricultural gies that would provide broad guidance for the production, rapid population growth, and envi- design of individual country programs and on ronmental degradation, agricultural research and specific action programs for greater African coop- extension services would have to be strengthened, eration. family planning services expanded, and environ- The coalition could give particular attention to mental action plans adopted. reaching the high ground of agreement on actions * Regional integration and coordination to tackle the priorities identified in the following should be pursued through a series of pragmatic, chapters: environmental protection, capacity incremental steps to facilitate trade across bor- building, population policy, food security, and ders, labor mobility, education, research, and nat- regional integration and cooperation. And it could ural resource management. A first step would be provide impetus for channeling aid to these prior- to rationalize regional institutions. ity programs. Such a coalition would be a concrete * Special programs of assistance to Africa demonstration of a shared new resolve to work should be continued throughout the decade. together pragmatically to build a better future for None of these measures will go far, nor will Africa. much external aid be forthcoming, unless gover- 15 A thirty-year perspective: Past and future Past patterns and trends control prices, restrict trade, and allocate credit and foreign exchange. At independence Africans had high hopes of Much was achieved. Starting from a low base, rapid development. New energies were released African countries have significantly raised life ex- by the ending of colonialism, and African leaders pectancy and expanded literacy and health care. were determined that their countries should catch There has been enormous growth in the number up with the developed world. "We must run while of trained people, and major investments have they walk" well summarizes the spirit in those been made in Africa's infrastructure: roads, ports, early days. No time was to be lost in overcoming telecommunications, and power. The region has "ignorance, poverty, and disease." Africans were seen important successes, as well as failures, and encouraged to be bold by the many who argued has accumulated valuable experience in manag- that Africa could find shortcuts to development. ing development. Countries born with arbitrary The donor community shared this optimism and colonial borders have struggled to establish na- contributed substantial resources. tion states and to put new governmental struc- The first generation of African leaders adopted tures in place. In some-notably Angola, economic strategies that echoed the ideas of prom- Mozambique, Somalia, and Sudan-the struggle inent economists of the day. Industrialization was continues and takes precedence over economic believed to be the engine of economic growth and and social development. South Africa has been a the key to transforming traditional economies- further source of conflict and destabilization partly because the prospects for commodity ex- throughout southern Africa. ports were thought to be poor and partly because Overall economic growth in Sub-Saharan Af- of a strong desire to reduce dependence on man- rica has averaged 3.4 percent a year since 1961, a ufactured imports. Agriculture was relegated to a fraction faster than the increase in population. By secondary role of supplying raw materials and 1987 this region of some 450 million people- providing tax revenues to finance other develop- more than double the number at independence- ment. To implement these strategies, African lead- had a total gross domestic product (GDP) (at ers believed that government had to play the market prices) of nearly $135 billion, about that of dominant role. That view reflected their mistrust Belgium, which has only 10 million inhabitants. of foreign business, the perceived shortages of Economic growth initially was moderate-al- domestic private capital and entrepreneurship, though slower than the average for other develop- and an underlying distrust of market mecha- ing countries. The pace quickened after 1967. nisms. As a result, and generally with full donor Record commodity prices and high investments support, governments drew up comprehensive financed from export earnings, commercial bor- five-year plans; invested in large, state-run core rowing, and aid helped raise the growth rate. But industries; and enacted pervasive regulations to then, as the 1970s advanced, countries began to 16 Figure 1.1 Gross national income per capita tightly controlled, while others operate largely on in Sub-Saharan Africa and other developing market principles. The climatic zones span the countries, 1967-87 whole spectrum from temperate, well-watered 1980 dollars highlands to arid deserts and from dry savannah 800 - to tropical rainforests. Countries vary from tiny to vast. Five alone account for more than half the 700 Developin ~ counties inhabitants of the region. The population of Nige- 600 - Sub-Saharan ria is more than 100 million, while nine countries -' > ~ -Nfri.c have less than 1 million. Population densities are 500 - S4b-Saharan very uneven, with more than 246 persons per 400 - Af ,frAca excluding Nigeria square kilometer around Lake Victoria to less than 400 - l in Mauritania. Fifteen countries are landlocked, 300 - Low-income - , and six are islands. Incomes per capita vary by a developing countries - => factor of 20. Some countries have considerable onn - - ~ ~- S outh Asia 200 - . mineral or oil wealth, while others have almost 1001 1987 none. 1967 1970 1975 1980 1985 1987 Despite this diversity there are surprising com- Source: World Bank data. monalities in the problems facing Sub-Saharan countries: high rates of population growth, low levels of investment and saving (except in a few of stumble. By the middle of the decade Africa's the mineral-rich economies), inefficient resource performance had fallen below that of other devel- use, weak institutional capacity and human re- oping countries. By the 1980s output was actually sources, and a general decline in income and liv- declining (see Figure 1.1). ing standards. It is therefore possible to draw out Throughout Africa much of the modern sector common themes that provide a framework for has been in malaise for nearly a decade. In con- discussing the problems of Sub-Saharan Africa as trast, the nonformal sector (broadly defined to a whole-themes that will then merit further ex- include indigenous, mainly unregistered, enter- ploration country by country to take account of prises in both urban and rural areas as well as local specific country circumstances, a task that can be intermediary, nongovernmental, and grassroots effectively tackled only by country specialists. organizations) has shown remarkable dynamism. This applies to a broad range of activities in agri- The deepening crisis culture, industry, trade, transportation, finance, social services, and even regional trade and inte- Sub-Saharan Africa has now witnessed almost gration. a decade of falling per capita incomes and accel- Behind the broad trends experience has varied erating ecological degradation. Per capita food greatly from country to country (see Figure 1.2). production first fell, then rose, but remains lower Average annual GDP growth during 1961-87 than in 1980. Africa has lost a substantial part of ranged from 8.3 percent (Botswana) to minus 2.2 its share in the world market for its exports. Some percent (Uganda). Oil accounts for much of the African countries have surrendered some of the variation, with oil exporters. doing well or badly gains they made earlier in human resource devel- according to fluctuations in the oil price. Exclud- opment-notably in school enrollments. Open ing the oil economies, aggregate annual growth urban unemployment is a growing problem in initially rose but generally declined in the late many countries. 1970s and 1980s. In the past decade six countries-Equatorial These variations in country experience reflect Guinea, Ghana, Liberia, Nigeria, Sao Tome and the rich diversity in Sub-Saharan Africa. Even Principe, and Zambia-have slipped from the within countries there are often large differences. middle-income to the low-income group (as clas- The region contains a multiplicity of ethnic sified in the World Development Report). If overval- groups, languages, and religions. Almost no coun- ued exchange rates were taken into account, more try is culturally or socially homogeneous. Govern- would have slipped. In the early 1960s Sub- ments vary from working democracies that Saharan African countries had per capita incomes encourage debate and dialogue to authoritarian similar to those in other developing countries. But regimes that trample dissent. Some economies are African incomes began to fall behind in the 1970s, 17 Figure 1.2 Diversity of economic performance and, if present trends continue, they will be on a in Sub-Saharan Africa par with those of the poorest countries of Asia by Per capita GDP growth rate, 1961-87 the turn of the century (see Figure 1.1 above). Thirteen African countries-accounting for a Benin - third of the region's population-are actually Botswana F poorer in per capita terms today than they were at Burkina Faso d independence. Burundi o Several countries stand out in contrast against Cameroon . this picture of general decline. Botswana, Camer- Central African Rep. - oon, Congo, Lesotho, Mauritius, Seychelles, and, Chad o to a lesser extent, Gabon and Kenya achieved CotendIvore significant per capita income growth between Ethiopia 1961 and 1987. But in recent years the oil produc- Gabon ers experienced dramatic declines when oil prices Gambia, The - collapsed. Ghana - Africa's generally poor performance during the Guinea - past 10 years has been reflected in weak growth in Kenya - the productive sectors, poor export performance, Lesotho - mounting debt, deteriorating social conditions, Liberia E environmental degradation, and the increasing Madagascar F decay of institutional capacity. Each of these Malawi trends, and the reasons for them, is discussed Mali below. Mauritania - Mauritius - Weak growth in the productive sectors Niger - Nigeria - During the past two decades the contribution of Rwanda - agriculture to production has declined to less than Senegal one-third of GDP; industry (including mining and Seychelles l oil production) grew much faster, at 6 percent a Sierra Leone - year, and rose to 28 percent of GDP (see Figure Somalia 1.3). But these broad trends do not reflect any Sudan - fundamental transformation in Africa's produc- Swaziland - tive structure, diversification of exports, or change Tanzania in trade patterns. For the region as a whole, new Togo oil extraction simply made up for lagging agricul- Uganda tural production. Manufacturing remained at Zaire about 10 percent of GDP and contributed less than Zambia one-tenth to exports. Zimbabwe 2 During the 1960s agricultural production grew Sub-Saharan Africa - at 2.7 percent a year, about the same as population. Middle income - Thereafter agricultural growth slowed consider- Low income - ably, averaging only 1.4 percent from 1970 to Large countries 1985-half the rate of population growth. This Small countries - decline was due to many factors, including severe Oil exporters - Non-oil min. exporters - Drought prone - -3 -2 -I 0 1 2 3 4 5 6 7 8 9 Note: Large countries are Ethiopia, Kenya, Nigeria, Sudan, Tanzania, percent and Uganda. Small countries are Gabon, The Gambia, Mauritius, Sey- chelles, and Swaziland. Non-oil mineral exporters are Liberia, Maurita- nia, Togo, Zaire, Zambia, and Zimbabwe. Drought-prone countries are Burkina Faso, Chad, Ethiopia, Mali, Mauritania, Niger, Senegal, Soma- lia, and Sudan. Source: World Bank data. Figure 1.3 Structure of GDP in Sub-Saharan Africa (percentage of GDP) Agriculture Agriculture Manufacturing T 43% - Manufacturing \ 9% Other industry \- Other industry X 10% ..7%. Services 39% Services 40% 1965 1987 $73.5 billion (in 1987 dollars) $134.5 billion (at current prices) Note: Other industry includes mininig and petroleum. Source: World Bank data. droughts in 1972-73 and 1983-84. But it also re- Poor export performance flects the low priority accorded to farming by Africa's postindependence development strate- During the 1960s the volume of exports from gies. Policies kept farm prices low; encouraged African countries grew on average by 6 percent a labor and capital to flow into cities; promoted year. Almost all countries shared in this growth. cheap imports of foods such as wheat and rice, Since 1973, however, export volumes have re- which are preferred by urban consumers; and mained stagnant or declined significantly in most neglected agricultural research. of the countries. For Sub-Saharan Africa as a With population growing faster than food pro- whole, including oil exporters, the total volume of duction, higher commercial food imports and exports has declined, on average, by about 0.7 food aid have been necessary, although not suffi- percent a year (see Figure 1.4). cient. But lack of purchasing power and other During the 1960s agricultural exports (which distributional factors have meant that hunger has now account for one-fifth of agricultural produc- nonetheless become more widespread (see Chap- tion) grew at nearly 2 percent a year. But since then ter 3). they have declined sharply-by more than 3 per- Some of the other productive sectors did better, cent a year (see Figure 1.5). As a result Africa's but not by much. Although in the 1960s manufac- share of world exports for most of its major crop turing grew by more than 8 percent a year, this exports fell during the 1970s and early 1980s. For initial spurt did not last; the average growth rate example, between 1970 and 1984 Africa's world for 1965-87 was about the same as total GDP. The market share for three main agricultural exports- volume of mineral production, as measured by coffee, cocoa, and cotton-shrank by 13, 33, and exports, grew only 1.7 percent a year, no faster 29 percent, respectively. Of the six major agricul- than agricultural output, because of inadequate tural exports, market share rose only for tea. exploration and excessive taxation, which pre- The share of African exports in all world trade vented maintenance and modernization. Only pe- fell from 2.4 percent in 1970 to 1.7 percent in 1985 troleum output expanded substantially during (see Figure 1.6). Its share of non-oil primary com- the period, although output (again measured by modities declined even more dramatically, from 7 exports) has fallen by more than a third since its percent to well below 4 percent. The implications peak around 1980. Rising petroleum production are substantial: if Sub-Saharan countries had accounts for the 5 percent annual growth of indus- maintained their 1970 market share of non-oil pri- trial GDP during 1965-87. mary exports from developing countries and prices had remained the same, their export earn- Figure 1.6 Sub-Saharan Africa's share in the value ings would have been $9 billion to $10 billion a of exports, 1960-85 year higher in 1986-87. The difference is approxi- mately equal to the region's total debt service Percent payments in this period. In practice part of this 14 gain might have been lost because of lower prices 12 - " . '. resulting from increased supplies; however, r, Africa's competitors might not have expanded 10 - their exports so much had African countries been 8 stronger exporters (see Chapter 8). The structure of Sub-Saharan exports has re- 6 mained largely unchanged since the early 1960s. The heavy reliance on primary commodities (in- 4 cluding oil) persists; they accounted for 93 percent 2 -_ 0 -- Figure 1.4 Merchandise exports from Sub-Saharan 1960 1965 1970 1975 1980 1985 Africa, 1965-87 Source: UNCTAD data. Billions of 1980 dollars 40 - 35- of total export earnings in 1970, declining to 88 30 - Fuel percent by the mid-1980s. A few countries, such 30- // \ / < as Kenya and Mauritius, have partly diversified 25 - out of primary products, but they remain the ex- 20 Merchandise ceptions. The markets for Sub-Saharan African 20 - e exports have also changed little. Roughly half the 15 - region's exports still go to the European Commu- 10 - nity. African exporters have yet to take advantage of the booming markets of Asia. 5- Manufactures 0 - Mounting debt 1965 1970 1975 1980 1985 1987 In the face of declining commodity prices, many African countries resorted to heavy external bor- rowing to sustain levels of expenditures made Figure 1.5 Volume and value of Sub-Saharan Africa's possible by earlier booms. Sub-Saharan Africa's agricultural exports, 1961-87 total debt increased from about $6 billion in 1970 Index(1961=100) to $134 billion in 1988. By the end of that period 230 - the region's debt was about equal to its gross 220- national product (GNP) and three-and-a-half times its export earnings. Roughly 70 percent of 200- Hypothetical value with total debt, including short-term commercial trade 180 - constant 1970 volume credits and drawings from the International Mon- etary Fund (IMF), is at market rates. 160 - | \/Sub-Saharan Africa's debt has grown faster 140 - Actual value than that of other developing regions, especially 120 1 since 1980. Long-term debt has increased 19-fold since 1970 and is now the heaviest of all; Latin 100 - American debt, for example, is only about 59 per- 80 - Votume cent of GNP. But Sub-Saharan Africa owes less to 80 1961 1965 1970 1975 1980 19856 1987 private creditors (39 percent compared with 73 percent), and about a third of their private debt is Note: The dashed line shows that export value would have been pret,adaotatido hi rvt eti higher if export volume had kept up to its 1970 level, guaranteed by creditor governments. Sub- Source: FAO data. Saharan Africa's difficulties in servicing its com- 20 mercial debt have received relatively little atten- with stagnating GDP growth and drastically de- tion because its share in total developing-country clining per capita consumption. Their imports debt is small (about 10 percent) and poses no have been compressed even more than those of threat to the international banking system. The the countries eligible for the Special Program of exposure of private financial institutions in Africa Assistance (SPA), which have benefited, at least is concentrated in a few middle-income countries. recently, from rising official development assis- Debt service obligations, the real measure of tance (ODA) disbursements. Projected debt ser- debt burden, rose in the 1980s to a point where vice ratios are considerably higher than those of they could not be met. They stood at 47 percent of the HICs. A higher share of their debt is owed to export revenues in 1988. No more than a dozen official creditors, while their commercial debt is Sub-Saharan African countries have serviced their generally worth less on secondary markets. debts regularly since 1980. For the others debt service payments have had to be reduced, either through rescheduling or the accumulation of ar- rears. Altogether during 1980-88,25 Sub-Saharan countries rescheduled their debts 105 times. Debt service actually paid averaged 27 percent Figure 1.7 External debt of Sub-Saharan Africa of Sub-Saharan Africa's exports in 1985-88 (see and highly indebted countries, 1970-87 Figure 1.7). This represented only about three- fifths of the region's obligations. Low-income Percent Total external debt/GNP countries had an even higher debt service ratio- 110 - 30 percent, a crippling burden for countries where 100 - poverty remains so widespread. 90 D The debt crisis in Sub-Saharan Africa is not 80- uniform in its origins or its effects. By virtually Low-income g ~~~~~~~~~~~~~70 -Sub-S aharan Africa every measure the low-income countries face the 60 - harshest difficulties. Their debt ratios are nearly 60 c double those in the highly indebted middle-in- 50 come countries and more than triple those of low- 40 - income Asian countries. Because much of this 30- Midle-income debt is concessional (almost half of total debt in 20 Sub-Saharan low-income Africa compared with 5 percent in the 10 Africa highly indebted countries (HICs)), the usual debt 1970 1975 1980 1985 1987 ratios may overstate the real debt burden borne by low-income Africa. The estimated grant equiva- Percent Debtservice/exports lent in low-income Africa's existing debt is about 40 $17 billion. But even adjusting for this greater 35-/ concessionality, the bite that debt service pay- 30s ments take out of countries' capacity to import each year is clearly unsustainable in an environ- 25 - ment of low investment and stagnant GDP. 20 The debt burden of the middle-income coun- 15 tries in Sub-Saharan Africa is also more severe than that of other HICs. Although their ratio of 10 - M/Middle-income Sub-Saharan debt to exports is only slightly lower, these econ- Africa omies have a lower capacity to adjust to their debt overhang. Their per capita GNP is only about a o0 third that of the other HICs. Their economies are, on average, smaller. Their export structures are generally more rigid, with a higher share concen- Note HICs refers to the group of 17 highly indebted developing coun- tries, listed in World Bank 1988h, of which two are in Sub-Saharan trated in a few primary commodities; export Africa. Totalexternaldebtis outstanding and disbursed long-termdebt, growth has been erratic and lower on average. short-te fr debt (1977-87), and IMF credit. Debt service is interest and amortization for long-term debt. Exports are goods and services. Per- Their economic performance has in general been centages are based on debt in current dollars. much more negative than that of the other HICs, Source: World Bank data. 21 Deteriorating social conditions industrial countries are trying to dump their toxic waste in Africa. There is growing evidence of deterioration in Against this background of growing, continent- the social sectors. Primary school enrollment rates wide damage to the environment, certain ecolog- have declined since 1980, and life expectancy is ical zones have special problems. The Sahel and lagging well below South Asia's. The problem of areas bordering the Kalahari face encroaching de- food insecurity is becoming ever more daunting; serts and soil degradation accelerated by drought. in the 1970s the proportion of Africans with defi- Countries with tropical rainforests have to con- cient diets increased slightly (while the popula- tend with accelerated deforestation. Soil erosion is tion increased substantially). The adverse particularly acute in areas of dense settlement and economic environment of the 1980s has acceler- cultivation-for example, in parts of Burundi, ated the deterioration. In the 1980s barely a quar- Ethiopia, Kenya, and Uganda. ter of Sub-Saharan Africans lived in countries in which food consumption per capita was increas- Institutional decay and political instability ing; in the 1970s the corresponding proportion had been about two-thirds. In many African countries the administrations, Despite slowing economic growth, government judiciaries, and educational institutions are now spending per person in the social sectors contin- mere shadows of their former selves. This wide- ued to rise in real terms until the early 1980s. After spread institutional decay is symbolized by the 1981-83, however, these expenditures began to poor physical condition of once world-class insti- fall, reflecting the acute financial difficulties faced tutions such as the University of Legon in Ghana by an increasing number of governments. The and Makerere University in Uganda, by the break- cuts tended to fall mainly on nonwage recurrent down of judicial systems in a number of countries, costs. Spending here was already too low-in 1983 by the poor state of once high-quality roads, and a mere $0.60 on each primary school pupil by the dilapidation of once well-functioning rail- annually. ways. Growing open unemployment is becoming a Equally worrying is the widespread impression significant concern in virtually every African of political decline. Corruption, oppression, and country. This is partly a consequence of urbaniza- nepotism are increasingly evident. These are tion, which transforms rural underemployment hardly unique to Africa, but they may have been into urban open unemployment. A particularly exacerbated by development strategies that con- worrisome aspect is the mounting number of ed- centrated power and resources in government bu- ucated unemployed, in part a result of an educa- reaucracies, without countervailing measures to tional system that is insufficiently responsive to ensure public accountability or political consen- local needs. sus. On the one hand, in several countries the neglect of due process has robbed institutions of Environmental degradation their legitimacy and credibility. On the other hand, the proliferation of administrative regula- Within Sub-Saharan Africa's 21 million square tions such as licensing, controls, and quotas has kilometers natural water and land resources hold encouraged corruption and set the individual vast potential for growth. But the ecology of Africa against the system. is fragile, and there are clear signs of ecological Sometimes the military have deposed unpopu- degradation. The pressure of population is caus- lar regimes. But often this has led to more, not less, ing desertification to accelerate, because it forces state violence and lawlessness. Occasionally it has people and their livestock farther onto marginal led even to civil war. These disruptions have grassland. The productive capacity of land is fall- driven many to become refugees, both directly by ing because of shorter rotations, soil erosion, and threatening lives and indirectly by making overgrazing. Growing population also raises the drought and other natural calamities harder to demand for fuelwood and cropland, and the re- cope with. Sub-Saharan Africa, with one-tenth of sulting deforestation increases runoff and erosion, the world's population, now accounts for about a lowers groundwater levels, and may further re- third (or almost 4 million) of the world's officially duce rainfall in arid areas. Pollution is a growing recognized refugees. In addition the region has problem, especially in poorly serviced urban another 12 million or so displaced persons. In areas. And, to compound these problems, some southern Africa destabilizing policies have dis- 22 - - t _-,',,-Ti - ' :_5T_ Box 1.1 Costs of conflict and destabilization in southern Africa I The humnar .in-i ,c. inornic co4t ol contlict ind dt4traiIi- Ani.o3a s Incipient rvt-rrm- h.i%e been hampered by con- ,ZSitiOl in oeutIcrn -trl ha. o been -ta-gerinrig Stud e tinuinzng intabdlit', The int,rrulptic:n oI tran,port roilew in i unduriaken bM -[DtCC the ECA and LiJCIFF p-.int tk. NlaIa; ne.Ncet.tingth urilerr.o-tl% mea4ure.. ,el back the quarnilidbko arproachin- 2' lo 41' rercent or C P good progre-z mad. in -Iructirra .djUtstment in the earls jl annuL;A1 and v%,n grcater in 1`zanmbique ind Angola. 1"-ii- The c!ts oii adiur-rnent hie bven igniticantlk thenmiotde .l nt,d niti-,nr, increa3ed. especialli in Z,mbab:-e and Zambia IWVhile The - ct tr.:,- r ill cc.:tor, or ih -e.n-orimn M,lrhtar relornm rnea4ures conmbinwd with international support e spund in' hi- di' ertid e n. .rncuL- res.c:urce; rrnm sout Ihrn and inipriwed rcgioinal CurrI' IholIld help growth rate, -\1rica z ceI-.pnivnt and ha, cc.-n.ulm*d nearli, ril per to recokur thE accurnul.atkd lo>Ceno the pa3^ dec3de will , n cin .OI go-..rrinen \ppendiiure; in the countTic, c pert- depre-s3ggreS.teirncomn le%ektwt,r eartoncome. ncinm ihc %%.rt drt.abilizatwin ELportr ha%e -uttered The Io>-ot !ieˇ'ndhuman pctnritalded-squantifica- tihrrughout Ih, regi,in and Import co-t, have ri-en a- tion Apart tronm the hurman sultennp and miieor. the -- tr in-prtn.iuw ha' beendI-r1U`tLd torcing laindlocked death-hundred,otlth.u,3ndvolpe,:ple. thurirsen in ant :cunir.c. t-. uLI- cir:uituuu- r:.u- thirou h South AInc. indJchildmn-ortalat th srunted potent,ialfrnlm 3niinend Thir h.3 re,ulted in 1.t rtk nu,- and liulher co;tS lor malnutriiron.and thelack.'r progres; in and insomeca.ee i hc- *:.-untrr a,l muc h a. 4'-' prccnt highe r Inr Nialaii the virtual di4inte-gration oii educa3tn and health serx-ice u In dditi 'n iher1 ha. bL.-:ntthe ic-a-. 'sburden ctnereen; deli%er% 4 sttemrn haje imnmeasurabl% ;etbackthede-el- Ii. thc- r,nilhlon t! - million di4pl3c-1 per--n4. p ornpnt in -outhirn Airica Building natit'nal capacltle; hi a: h- ihr,d to tle-.l tlhe.r land and hon- in mittr ;o-nomic and .:-icial adminilrtation and creating: an tinmncil t-rnmi f.'r, th,- h-; s:eedvd I billkon dollars en-.ironnienr c.induci' e to entr,preneunal acti' its ha3e Llurin, the tv.i. .%.. er .md aLovt the contrbimt,.r.i cnt ben lar,el; precluded Lwause ecarco nianagerial talent nternali,.r.il ri-l1 hll.rlt -\gain \hz.a3nmbque and An- ha3 been viphon-i c lt Ink militit', and reliel operition; , ila ha%,. had t. be.ir ih, bulk ot thlk' cc-.tu. but the The pr.. peci tor est.blishing political stabilit- ha.e c.ipacit% ot neihbor'irin: countrew ha4 a31-i been srraintd grjdual3 fmnprci-.id hoi,-ver. r-cent dctl,dopnient; are l t ilai;i Ilre,-id- onit -,I nmo^i dennc-It pupulIted coun- ecpcalI encour.aiging The econoniies haee bee.Lin to tir, .n Attica I ho-tti o -omen-1 iii1 it.i 7i)l0ii irertLi4ees r-cer ritlectinx a rirng mornentumrol polic\ relorm Th,Ti loSt r--LUtCL- ie't-et t'eri .id foreC,one in- alnd nhanceJottr .rancc Ne ertlielthe' renain C-mL a .; c..niqti,nc.. ol dt,,.tbilizaticin hayt: turther highl\ %ulnerablq. tode;tab,lizauticn Further progre-. to- handc.app.d Ie-K 'e.t mc:.ni;-i I rIn Nl-.zanbiquc ih, capa. - %,ard peaice i eential to rrin,late the rtcover% o1 rccenl i, ot rhc LConi.rn% to respond -.-. time tar-rcaching ertt or Lar- into us-u-tained gro rth -..1.inli.. r,rirni- hiz bNer, ,-': ercli co,n.irainmd rupted the development of South Africa's neigh- confidence, and performance sinks even further. bors (see Box 1.1). The process undermines the very basis on which to build growth and to develop African responsi- Crisis of confidence bility for Africa's destiny. Many people in and out of Sub-Saharan Africa Factors behind the decline feel a growing sense of hopelessness. This crisis of confidence has been reinforced by the adverse Some lay the blame for the region's economic external image of Africa in the global media, decline on factors beyond Africa's control-bad which focuses mainly on Africa's economic, so- weather, weak world commodity prices, fluctuat- cial, and political woes-famines, desertification, ing international interest rates, and too little aid. refugees, human rights violations, coup d'etats, Others blame policies, especially poor manage- internecine violence, and health problems. Some- ment of public resources and inappropriate incen- times this image is projected from within Africa tives. Most recognize the importance of structural itself, in an effort to call forth additional excep- factors, especially high population growth. tional external support. Yet many in and out of Changes in per capita income have three main Africa feel that Africa may become too dependent components: domestic economic growth, popula- on external financial assistance and on foreign tion growth, and changes in the terms of trade. advice and expatriate personnel. The danger is Because Africa's problems are so frequently attrib- that pessimism can become self-fulfilling: weak uted to adverse external factors, the impact of performrance breeds disappointment, responsibil- changes in terms of trade is discussed before the ity is shifted to others, inaction undermines self- internal causes. 23 Figure 1.8 Terms of trade and income effect in Sub-Saharan Africa, 1961-87 Index (1961=100) All Sub-Saharan Africa Index (1961=100) Low-income countries 140 - 140 - Terms of trade Terms of trade 130 - 130 - 120- 120- 110 - 110 100 100- 90 90- 80 80 - 70- .,,7 . ., ....... , ., . .. ,, . .0 . ., ,, . ., . . ,, . 87 61 65 70 75 80 8587 61 65 70 75 80 8587 Income effect/GDP (percent) Income effect/GDP (percent) 12.0 12.0 8.0 ~~~~~~Income effect I. ncome effect 8.0 _ 8.0 4.0 - 4.0 0 0 -4.0 -4.0 61 65 70 75 80 85 87 61 65 70 75 80 85 87 Note: Estimating terms of trade is complex, and alternate methods may be applied. Here it is defined as the ratio of export and import unit Middle-income oil importers values derived from series in current and 1980 dollars for goods and Index (1961=100) nonfactor services. The "income effect" of changes in the terms of trade 140 in a given yearis calculated by multiplying the value of exports of goods Terms of trade and nonfactor services in 1980 dollars for that year by the percentage 130 change in the terms of trade index. The result is shown as a percentage 130 - of GDP in 1980 dollars for that year. Source: World Bark data. 120 - 110 - Terms of trade loo J14 . \V \11-Z The evolution of the barter terms of trade varies 90 - for different groups of countries and has changed 80 significantly over the longer term. For the region as a whole terms of trade fell sharply in the 1980s, 70 although the decline was from the historically 61 65 70 75 80 85 87 high level attained in 1981. Despite the fall the Income effect/GDP (percent) terms of trade were still higher during the first half 12.0 of the 1980s than in the 1960s-although by 1986- 8.0 Icome effect 87 they were lower. The loss in income caused by 4.0 deteriorating terms of trade since 1985 is far less 4.0 11 11 1|1than the earlier gains. Although declining terms 0 u* of trade result in depressed levels of income, the 4.0 U region has gained more income (at constant prices) since 1961 from terms of trade changes 61 65 70 75 80 85 87 than it has lost (see Figure 1.8). Except in 1986-87 24 the effect on per capita income growth has been recently, a fall in the proportion of its people who small-less than one-tenth of a percentage point a are literate, numerate, adequately fed, and year, on average, during the entire period, 1961- healthy, and this has had an obvious negative 87. However, unstable prices have made eco- effect on long-term productivity. While high pop- nomic management far more difficult. ulation growth contributes to the decline in per Several African countries have been hard hit by capita income, it is not a sufficient explanation. A persistently declining commodity prices; many crucial factor is also the low GDP growth rate, had little scope to shift resources to more promis- which, in turn, is a consequence of declining in- ing exports. The low-income countries suffered vestment rates and the low efficiency of sharply declining terms of trade in the 1970s- investment. partly because of rising oil prices. The 1980s brought them greater stability, but their terms of Declining investment trade remain lower than in the past. The steady increase in aid has only partially offset this. The Average investment rates were roughly the pattern for the middle-income oil importers is same in both South Asia and Sub-Saharan Africa more complex, with terms of trade rising rapidly until 1980-roughly 16 percent of GDP in the in the late 1970s followed by a general decline into 1960s, rising to 20 percent in the 1970s-although the early 1980s. This decline was at first cushioned in real terms Africa's investment rate was less by rising commercial borrowing, but these in- because of higher costs. Since then investment flows declined precipitously after 1983. rates have declined by a quarter in Africa, while Even so, many countries in other regions have continuing to rise in South Asia. Moreover the suffered similar terms of trade losses and have growth of investment in Africa stopped just after coped better. Africa's declining income must be the mid-1970s and has since generally declined, attributed in large part to a combination of high reflecting the drop in both the domestic and for- population growth and low GDP growth. It is eign savings rates. The domestic savings rate fell instructive to compare African per capita GDP as declining terms of trade and production re- growth since 1961 with that of South Asia, the only duced real incomes and as large public sector comparable large group of low-income countries deficits emerged. The foreign savings rate fell be- (see Figure 1.9). Until the first oil shock, per capita cause nonconcessional capital flows declined dra- GDP grew almost twice as fast in Sub-Saharan matically in 1984-85 and because worsening Africa. Since then, despite the fact that more than domestic economic performance reduced Africa's half of the region's GDP comes from oil-exporting creditworthiness. But foreign savings remained countries that benefited from the oil shock, per positive and, even at their lowest point in 1985, capita GDP growth has been negative, and in- real net capital inflows were only 8 percent lower creasingly so. During this timE, however, it has than in 1975-77. been increasingly positive in South Asia. On aver- The recent low investment rates point to diffi- age since 1973 annual per capita GDP growth has culties in restoring growth in the future (see Chap- been four percentage points lower in Africa than ter 8). Because its investment rates were in South Asia. comparable with those of South Asia until the 1980s, however, it is hard to conclude that too little Population growth investment has caused Africa's poorer economic performance since the mid-1970s. Low returns to Sub-Saharan Africa now has twice the popula- investment are what made the difference. tion it had in 1965 and more than five times the population it had at the beginning of the century. Low returns to investment The upward trend in population growth has greatly handicapped Africa's efforts to raise per Measured simply as the ratio of the growth of capita incomes. Had the region's population output to the rate of investment in a given year, growth followed South Asia's or Latin America's Africa's returns on investment have fallen stead- declining trend since the early 1970s, per capita ily. By the 1980s they were only about one-tenth incomes might now have been as much as 10 of the levels in South Asia; they had been more percent higher than they actually are, assuming than one-third higher in the 1960s and early 1970s. the same growth in GDP. Instead Africa has wit- If the returns were calculated by setting invest- nessed an increasing dependency ratio and, more ment in the late 1970s against growth in the 1980s 25 Figure 1.9 Sub-Saharan Africa and South Asia: Components of per capita income growth Average annual Population growth Average annual Per capita GDP growth growth rdte (percent) growth rate (percent) 3- 313 1961 - 73 3.1 3I 1973 80 3 - 2 °r v- 2. 2 1TLL N 1961 - 73 -L : | t 11 L 1973 -80 7 ' 21980 -87 -IL~~~~~~~- _____ i ~~~~~~~~~~~~~~~~-2.6 Sub-Saharan Africa South Asia Sub-Saharan Africa South Asia Percentage Investment rate Average annual Rate of return on investment of GDP return (percent) l35 - 24- M 1961 73 22.8 30,7 OM 1961-73 2016 t' N 2 II,,' ~~~~~~25 - 12 4 0 1 -_ - I Sub-Saharan Africa South Asia Sub-Saharan Africa South Asia Note: Ideally this measure (as well as the more conventional incremental This modification changes the levels of the rates of return, but the basic capital-output ratio) should use net, rather than gross, investment. Use conclusion regarding a sharp decline in returns on investment in Africa of gross investment means that the returns thus calculated can go down remains unchanged. In this calculation, however, these returns are also when the gross investment rate goes down, even though net returns declining in South Asia, although not as rapidly as in Africa. have not. In practice the depreciation figures necessary to calculate net Source World Bank data. investment are seldom available. Assuming a depreciation rate of 10 percent of GDP (which is on the high side), the calculated net returns on investment are as follows: Net rate of return (percent) Region 1961-73 1973-80 1980-87 Sub-Saharan Africa 83.8 23.5 6.2 South Asia 47.8 38.5 36.5 (allowing for some lag in the supply response), the not the reason; African exports have actually lost decline would look even larger. market share. The greatest fall in the region's What caused the returns on investment to de- terms of trade happened after 1985, and by then cline? Drought is not the answer; its effects on the stagnation and decline in GDP growth were production in the 1980s were hardly any worse already well established. Everything points to de- than in the early 1970s. Falling world demand is clining productivity. Africa's crop yields are 26 Table 1.1 Typical costs in Sub-Saharan Africa Costs are high partly because of Africa's partic- and Asia _ ular circumstances. Difficult topography makes Africa road construction and irrigation expensive. Low relative population densities and widely dispersed settle- Sub- Low- to low- Saharan income income ments (20 persons per square kilometer in Sub- Africa Asia Asia Saharan Africa compared with 146 in low-income Investments and construction Asia) also increase costs. Landlocked countries Irrigation 6.0-10.0 2.546.0 1.4-2.4 face even greater difficulties. Undiversified econ- (in thousands of 1984 omies short of skilled local labor depend on ex- Uollarb wer supplye) 55-106 35-60 1.8 pensive imports of skills and goods. But a large Urban water supply 55S106 35 60 1.8 (1985 dollars per unit) part of the explanation for Africa's present eco- Vocational school 5.0 3.0 1.7 nomic crisis also lies in poor public resource man- boarding (thousands of agement and bad policies. Together these have dollars per place) undermined the efficiency of the private sector Roads 250 190 1.3 and have added greatly to the high cost of doing (thousands of dollars business in Africa. per kilometer) Recurrent costs POOR PUBLIC SECTOR MANAGEMENT. Because the Primary education 92 17 5.4 state is dominant-public expenditures in 1986 Transpdollarta per pupil)were more than 27 percent of GNP (compared Transportation Road maintenance 4.8 2.2 2.2 with only 19 percent in low-income countries out- (thousands of dol]ars side Africa)-its interventions strongly affect the per kilometer) overall efficiency of resource use. There are count- Rolling stock cost 0.09 0.04 2.3 (dollars per ton/per less examples of badly chosen and poorly de- kilometer) signed public investments, including some in Wages which the World Bank has participated. A 1987 Central government 5.5 2.0 2.8 evaluation revealed that half of the completed (multiple of per capita rural development projects financed by the World income, median annual, 1977-82) Bank in Africa had failed. A cement plant serving Unskilled construction 1.91 1.35 1.4 C6te d'Ivoire, Ghana, and Togo was closed in 1984 (median, dollars per after only four years in operation. A state-run shoe day, 1989) d 1 = -- ~ - -- ~- - factory in Tanzania has been operating at no more Note: Country coverage varies by indicator, depending on than 25 percent capacity and has remained open available data. Source: World Bank project files and various reports. For only thanks to a large government subsidy. details see the background paper by Singh. Data on central African governments and foreign financiers government wages are from Heller and Tait 1984. (commercial banks and export credit agencies as well as donor agencies) must share responsibility. Foreign financiers and suppliers promoted capital smaller, its cropping cycles on irrigated land are exports with attractive credits, and poor coordina- fewer, its transport costs are higher, and its utili- tion among donors caused duplication and waste. zation rates for factory capacity are lower. Governments also agreed to-and often pressed Higher investment costs have contributed to for-grandiose or inappropriate investments. lower productivity. Investment costs are usually Moreover the rapid increase in foreign exchange more than 50 percent higher in Africa than in resources-about fivefold in nominal terms be- South Asia (see Table 1.1). Part of this difference tween 1970 and 1982-tended to relax investment may reflect overvalued currencies in Africa, al- criteria and undermine financial discipline. The though the effect of exchange rates is reduced to region's public enterprises expanded tremen- the extent that investments are more import-in- dously during this period. Governments (and do- tensive. These costs have risen in the 1970s and nors) have preferred to invest in new buildings 1980s as infrastructure and institutional con- andequipmentratherthanmaintaintheirexisting straints have become more binding. Costs of op- facilities and to hire new staff instead of giving erating and maintaining investments are higher, their existing staff the resources they need to work too, in Africa-often more than double South effectively. As a result the capital stock has deteri- Asia's. orated, and many investments yield little or noth- 27 ing. Poorly maintained and managed infrastruc- rates (see Figure 1.10). The inability to meet debt ture has added enormously to the cost of doing service obligations in the 1980s disrupted interna- business (see Box 1.2). tional financial relations. Increasingly stringent price controls and the growing currency overvalu- PRICE DISTORTIONS. Large state monopolies, ation affected traded goods most. Real agricul- controlled prices, and centrally allocated credit tural prices declined during the second half of the and foreign exchange have been common. The 1970s as real effective exchange rates rose. Public departure from market prices and the resulting enterprises began to run bigger operating deficits, inefficiency in resource allocation have grown and before long the banks that were called on to worse as governments have tried to use adminis- finance them were showing losses. trative measures to cope with tightening foreign These events hit producers hard. Overvalued exchange and shortfalls in public revenue. The exchange rates, together with export taxes, under- failure to adjust policies promptly to the decline mined export performance from the early 1970s. in primary export prices following the boom years The region's market share in the major non-oil of the mid-1970s, to the shrinking nonconcessio- commodities declined sharply. nal flows in the early 1 980s, and to the rising debt These price distortions caused longer-run dam- service payments on earlier borrowing deepened age, too. Farmers chose not to invest in soil fertil- the crisis. ity, mining companies undertook little Widening budget deficits prompted more bor- exploration and depleted their reserves, and man- rowing and higher taxes in the first instance, not ufacturers underutilized their capital assets. At less public spending. The deficits fueled inflation the same time governments let the physical infra- despite price controls. Because parities were not structure deteriorate. Because countries lacked adjusted, real effective exchange rates appreciated flexible, diversified, and dynamic economic struc- steadily after the first oil shock, and parallel ex- tures, their budget and balance of payments gaps change rates increasingly diverged from nominal became unmanageable. Governments, forced to C;-d >G,IP:_ . r-- - . : zE2 i.l;.; S2.J Bo.x 1.2 The cost of infrastructure deficiencies: The Nigerian experience ' Rec-nt reisarch n Nizena ha- dernclnsrrited that p-or acro -iftatts bv firm size and by r% peotf ervice E\pen- t intr tstructur, ;erx Ic.. ha% e imp,4.ed hewv .milion man dLture k% 3i highe5t on electriClh generatlon-almo..t tour ! ufacturing enterpris.e- To ci ercome these deficiencies. times rhat for borvholeJ and nrealmVrt icliclnes firms h3v e had to in;ur conviderable e\penses AIthouRh. all 1Th . r the urnr .rudie1 v ere ;cnnecied to the pci..er grid alltlc.sexnrh nurefhan9Ciempl\eeshadtheirc.Er Boxfigure 1.2 Nigerian enterprises m ith their own E standb% generaror- and had inesed. on .vierape infrastruclure $1300i1) ielt an e%ch.anige rate cit 5 na!ra Fer dollar,n i their o%n poi er tacilties Ut nirms %%ith tft er than 20 ernplc.%1es onlk oneithird gen,erated their n pl-er,-r j tVater suppI c. a srrrilarcase 1\ hilernoneorthe hsmall enterprises w3a- ale to nstallitsoi n supply too fercome , f i 1 i3 1 - poor pubhlic %%ater *ervict, 14 percent ol tirmrs *ith be . _ tu.e:en 2uand 0Oemplo%eesdid Morethin nr-ohirdcl ot d larger enterpnres ithose . ith ni.re than ltil emplo% ee*l " had in e;ted n pri%atet Lv)reholes 4 - % Poor publhc telephone .nd posial .ern ce are stt an- other;.nstrintor0n business Frins ha3%etrie dtool er ome the diticutities b% using messenger m.rtorc%les ;or radio '* tr3n-mitter- As the- size or tirms increased. lc did their '-' i relianceon their own-nsuppll Lit uch t?ienices Th,eimpor- , l 1 tance attiched tcommunlcaioli;s 5cr ice,s was3agreatas ,_ lor% .iter uppl Or largerfirmi.stc,OI percenthadrheir t . -'.'' - -'' 1 I on, n radio tran,rnitters. - 4.l SI . S The squd% ho%% ed th)t although the capital alueor For cr !nir r-b.onij.c.., p pr. 3te t3aclities ' a- about 1t percent ct the tot.l value .- B . ri W sicr machirier and eqiuipmen tlor large nrm;. it %. .a on a% trr lage 25 percent lor small irims This share varied %%ideJ l . -_ Lec jnJ i rd - . 28 income, were several times those in Asia. For in- 1970-87 stance official Tanzanian wages, which were rela- Index (1980=100) tively low for Africa, were more than double those __________________________________ in Sri L anka. Adjustment is well under way. The Interna- 130Su-SahranAfi tional Labour Organisation (ILO) reports that real wage rates in Sub-Saharan Africa have fallen by a quarter since 1980. This is a brutal but necessary 110- adjustment to reflect labor underemployment 100- caused by a growing labor force that has out- 90 ,,...fi, `, stripped job creation and by the need to become excluding Nigena internationally competitive. Devaluation has 70 helped to bring the dollar cost of African wages close to its competitors'-in Ghana, Guinea, and Tanzania, for example-although official wage 9 70 1975 1980 19887 rates in tCFA franc zone remain high. Market forces have kept real wages in the infor- Note: Group averages weighted by 1985 GDP in dollars. mal sector more closely linked to productivity. Sub-Saharan Africa here includes only 30 countries. Until recently, these forces did not touch govern- Source: IMF data. ments, where much of the educated labor was employed, nor the parapublic and large-scale pri- vate sectors, where rents created by trade protec- retrench, often cut back first on social expendi- tion and subsidies helped to finance wages that tures, thereby further eroding the human resource were higher than labor productivity would other- base. wise justify. Now in several countries public sec- tor wages are barely enough for subsistence, and HIGH WAGE COSTS. Because the direct and indi- the wage structure has become highly com- rect labor content in final production can exceed pressed. In those cases the correction has gone too 50 percent, Africa's high cost of labor relative to far, and productivity has plummeted as a result. its productivity matters all the more. High salaries are a legacy of colonialism. Real wages in the first THE MISSING MIDDLE. A unique feature of Afri- half of this century reflected abundant natural can economies is the dualistic character of con- resources, plentiful private venture capital, easy sumption and production. Intermediate access to protected markets, trained and experi- technologies are scarce. Transportation is mostly enced expatriate managers, and stable colonial by motor vehicle or on foot (see Box 4.5). In some administrations. Expatriates, employed to com- countries there are surprisingly few bicycles, pensate for the shortage of skilled African person- mopeds, carts, and the like. (Burkina Faso, where nel, were paid above European scales. As Africans the moped is ubiquitous, is an exception.) Africa acquired comparable skills, their salaries were has nearly 7 cars for every thousand inhabitants linked to (but remained lower than) those of the (Zimbabwe has 30, Cote d'Ivoire 17, and Senegal expatriates. After independence the pay of skilled 13); the Republic of Korea has only 6, India 2, and nationals was brought closer to that of expatriates, Bangladesh 0.3. When farmers modernize, they and unskilled wages, at least in the formal sector, switch from the hoe to a tractor; few use oxen, were increased through minimum wage even where the tsetse fly is absent. On the produc- legislation. tion side there are countless microenterprises and But what seemed justifiable and sustainable at a few medium to large modern firms, but not independence became less justifiable with the in- much in between. Almost everywhere one looks creased availability of educated Africans and less there seems to be a "missing middle." Investments sustainable with less experienced management and operating costs are higher than they would be and less efficient infrastructure services in an in- if appropriate technologies were used more. Con- creasingly competitive world. In most African sumers with little alternative tend to spend heav- countries at the beginning of the 1980s public ily on imports. All this adds to the high cost sector wages, measured as a multiple of per capita structure of African economies. 29 DETERIORATING GOVERNANCE. At indepen- breakthroughs have already created new oppor- dence Africa inherited simple but functioning ad- tunities to trade long-distance services, such as ministrations. They were managed largely by accounting, tourism, or education. The ability to expatriates and were not geared to the develop- transfer funds instantly anywhere in the world ment role assigned to them by African leaders. has already led to a 24-hour-a-day global financial The responsibilities of the state were enormously market. Industrial applications of information expanded. But at the same time the rapid promo- technology are starting to change the face of man- tion of inexperienced staff and the gradual politi- ufacturing and the division of labor within the cization of the whole administrative apparatus led global economy. to declining efficiency. A combination of admin- Certain labor-intensive service industries could istrative bottlenecks, unauthorized "fees" and thrive in developing countries with flexible links "commissions," and inefficient services imposed to knowledge-based markets abroad. But a conti- costs on businesses that have progressively un- nent with a weak telecommunication system and dermined their international competitiveness. tightly regulated service industries will be iso- The gradual breakdown of the judicial systems in lated from the mainstream of progress. Africa's many countries left foreign investors doubtful prospects for competing effectively will depend that contracts could be enforced. The ones that did on greater efforts to create an efficient basic tele- invest insisted on large profit margins to compen- communication structure and to obtain access to sate for the perceived high risks. Authoritarian global information networks by building links governments hostile to grassroots and nongov- with international partners. ernmental organizations have alienated much of Advances in biotechnology also hold enormous the public. As a result economic activity has potential for Africa and could raise its agricultural shifted increasingly to the informal sector. Too production and protect its population, crops, and frequently ordinary people see government as the livestock from disease (see Box 1.3). In contrast to source of, not the solution to, their problems. the Green Revolution, which required irrigation and focused on just a few crops, the biorevolution The outlook for the next generation can reach the entire rural population. At the same time tropical countries, which control around 70 What kind of environment will Africa face dur- percent of the earth's biogenetic resources, may ing the next 30 years? The future is likely to bring seek to barter the increasing value of their bioge- accelerating technological change; new patterns netic pool for economic development. Partner- of industrial organization, competitiveness, and ships with private companies in the United States, trade; mounting pressures on the world's ecolog- Japan, and Europe that attempt to forge globe- ical resources; and a demographic outlook that spanning alliances uniting capital, research capac- threatens to blight the region's prospects for a ities, marketing channels, and access to biological better future. Their impact cannot be ignored. resources suggest new patterns of technology Most important, Africa should not turn in on itself transfer. However, the commercialization of bio- and risk being completely peripheral to the global technology also poses risks. Laboratory produc- economy. tion and product substitution can threaten the markets for Africa's traditional export crops. The The technological revolution extent to which companies can claim property rights to biotechnology applications will influence The world is on the threshold of a new techno- the spread of new crop varieties in Africa. logical age, driven by advances in information Advances in materials sciences will be no less technology, microelectronics, biotechnology, and far-reaching. Optical fibers made from silicon materials sciences. This will have implications for have virtually replaced copper in telephone ca- virtually all sectors, not just those considered to be bles. Current research promises fuel-saving en- high tech. gines based on high-temperature ceramics. The Fast and cheap communication and informa- accelerating substitution of advanced materials- tion processing will transform business and ad- superconducting substances, optical transmission ministration. Global information networks will fibers, advanced plastics, metal alloys, and so integrate markets and facilitate the global man- on-for traditional raw materials will put pres- agement of dispersed industries. Access to ideas sure on minerals producers. The implications for will be the key to competitiveness. Technological Africa will vary according to the ability of its 30 Box 1.3 The promise of biotechnologies for Africa ' The L irecl IA- c-i biot,cchnolo'% i,r planntipr,.pigatw.n and pr-Iduiictio 3nd trade Tliii nrr3N puL.t a3 threat lo Alrtc. - bretdin, coitid drarnatrcall r.l c-rop pFrn.JuLt:ti% tn .ipnrr.l, po Lro 'rat.r -proiluctcd i,nill.) r.i4cni, It r t 0' Er.all t,hul prducri.n n dv-' elIping countriesI IC-Lit the lteihhood 'It i* ti anilla bean tarmer, in lttadaga;s 0 L cultur lechniqueC are :r.atin, mir. drouthi. an..1 iac it' diubr Andit - ' urt r,ilal tha cun-iJnerI 'ciLA1i` ea.> *r.ils.anL '-.-rtltene 1' . a'.v3 i. 11 p:iIni. .'nd ;r.und * .;'n tixt' .; cho.,:. bet:e'. piKer''a A- -A3nd bi, xttk.. bean' N 3 nut. Plant gen.,ti tDgme rmnt mray rliI r .r u lclr e nraI i ih. in ib, ittd Sr.ite Another c-n ern in'.ohe thee tn. %,ilh I s. calteir.e in! resp .nz'llt n. ne., cn,nLumenr pri'. .nz.lti.n nt rt C.ir;h r ult; The c.:rrent pract'c. oF orter,rie .2; or iaC tsr Ir. .'.in tr, ~Psies , hich make paltrtine lhrzt-zererati.:n biotc. Inolvg pr'du;.i to i;r N rclireltairon Bettvr tcrmenenta.i-n t, hniquc in cs".. m:r an, further u4t: il bioncered n matcral .itl I- 'lid nkdl:d -uch i9 pr. n-.cnrtllud ur ir . . r tin .r ' l .. mlrel mit iut-ur - cnMpettil.n. Fi t d lop. pmn* counrire~ ,l p ro'. the nuirri,indala ' ct crop- EnLr', ci tranc:. r maN rhi- mth ilso .nIt311 h,zh th l,nmrn .oee- tor %% ' ht.. 'i Ira.L the reproducti. capacit\ I. like-tc.' G: kantel. .%ill ninke it harder t:. dt Ctnmniti rie. crop %arctte'. t 1 I s eng,ntrt,d .accinc; nmi oi%r,'on.ir itr% pano-n3 a tliu; n..lliildt_rs The ;- ide .prcad ci trtbution I no. %, pertng up i;ein-ti rzt ri-. nc. areai eickdal rL. botenctnnercd plnt rm utrial n',m decrva e rhc gcneti j l 4 e.rch .r nion, . clJoral annbod i, prc entI' thc taste I dit:crst%h :nd wima moke crop- incr. ta mghl % ulnerable to n tro"% inci: brunch of biikchno..,r,, i.. .'p t od .re.-Alt m ne'.. -diea,-aes ii niorc uccurjlr nim di.ul te-t. and diano,n'L: Nvei,t -c- A ile'.lte Atric.n ri,p;n.e t;. these :'mptritiLv- ci't. if. cin- a sain4t killer dizc.-:; are t. im- d'veloped Nnd nan;ic mu-r be bated -n aclo'-e mr:.n!trrnc ci bimtcchno s I n tor ted bL 'twrc' . IIm .nI na. s! nulanc.: u-I u ncn r- lcizcal trend1 niore 'nrnt irhearch and d- elrnpment .tc tood aninml [ted and tiel thIIroutl1 tit,irot'ial :0nVCr- part ncr-hip- ". it l\er;t, rn onmpa nies ind I lie dlc-% elcip- i ,- thi, inij mer r *M ul-Ctuie producl At Ili*- amne tim.: Attira %, ill Tht,commer-ial u-,uit nu,, btc'indu,Ir!3l products rma' n-l.d dranm,1ic npr..etnt,.n in it, ,eenie-Jucation and a re-ult in ci r.umanu.still, dnt-hrent p..tt rn~ a.rIr:utur.l agricultural trutnin, exporters to adjust to shifts in world demand. these management practices contrast sharply with Policies that favor efficient production methods, previous industrial country concepts that focused the development of new raw materials, and in- on mass production and economies of scale and creased exports of food and manufactures will considered labor as a cost factor rather than as a help to reduce the region's dependence on pri- resource. mary products in declining demand. Africa can draw important lessons from these new perspectives on technological progress and Changing industrial organization and managerial competitive advantage. The introduction of "best- practices practice" production systems may offer the most cost-effective and rapid way for Africa to improve A new perception of technological progress as its competitiveness quickly. With a critical mini- a function of organizational flexibility and access mum of complementary technical and managerial to information is emerging and is forcing a reas- skills, the pursuit of better product quality and the sessment of organizational structures. New busi- new forms of industrial organization may be par- ness methods, derived partly from Japan's ticularly well-suited to a variety of labor-intensive experience, may be more relevant to Africa than sectors such as textiles, clothing, and light assem- developments in high-technology machinery. bly. The transfer costs are low, consisting mainly These innovations include "best-practice" pro- of improving the skills of the labor force. More- duction methods, such as flexible specialization, over the benefits of longer-term technological in- total quality control, and "just-in-time" inventory novation may not materialize unless flexible management. Collectively, they improve a firm's production management methods have been in- ability to respond to shifts in consumer prefer- troduced in the meantime. Africa will have to ences, often at lower cost and with higher quality. overcome enormous hurdles to exploit this poten- They may also transform relations between firms tial, including making up the skill deficits in the by extending longer contracts to fewer, more reli- work force, providing appropriate incentives for able suppliers or by promoting cooperation be- organizational change, and raising awareness of tween potentially competing suppliers. Overall the links between information, technology, and Figure 1.11 Export prices for five major Sub-Saharan African export commodities, 1961-87 Index (1961=100) Cocoa, Coffee, Cotton, Copper Petroleum 340- - 700 Cocoa --e Coffee Copper - 600 280 Cotton - Petroleum _ l \ / \ ! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 500 220- - 400 160 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-300 100 -~~~~~~~~~~~~~~~~~~~~~-. - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 40 = f ~100 1961 1965 1970 1975 190 15 1987 Note: Prices deflated by the manufacturers unit value (MUV) index. Source: World Bank data competitive structures. Much will depend on the attracted credit from commercial sources quite region's ability to make partnerships with firms easily. However, the debt crisis and Africa's poor and institutions in the more advanced countries. economic performance have frightened most lenders away. This situation is not expected to Evolving patterns of production, trade, and finance change in the near or medium term. Fundamental changes must occur, including the establishment Far-reaching changes are also occurring in the of political confidence, before these channels open global pattern of trade and production. The Pacific up again. Equally, capital flight will be reversed Basin is elherging as the fastest growing area for only when confidence has been restored. Africa's world trade and capital flows. By 2020 it will best option for obtaining nonofficial finance is to probably have become the center of economic create conditions that are attractive for direct pri- power. Sub-Saharan Africa, historically focused vate investment, since by definition such finance on the North and the West, will need to also look would be linked to expanding production. Steps to the East from now on. must also be taken to reduce Africa's debt (see Africa will be affected more than any other Chapter 8). region by the likely slow growth in demand for primary commodities. Any hope of a revival of African megatrends economic growth predicated on the recovery of primary commodity prices would seem to be mis- The UN Economic Commission for Africa placed. The price forecasts for Africa's five major (ECA) was among the first to dramatize the long- primary commodity exports up to 2000 do not term consequences of recent trends. In 1983 it show any significant increases. Except for oil, presented a "nightmare scenario," which under- prices are currently close to their long-term trend, lined the urgent need for fundamental reform. and, while sharp fluctuations are to be expected, Since then the outlook has deteriorated further. it,is most unlikely that there will be significant or lasting gains from the terms of trade (see Figure DEMOGRAPHIC TRENDS. The two key assump- 1.11). However, Africa can and must seek to ex- tions underlying the ECA's scenario were popula- pand its market share wherever it has a compara- tion growth and GDP growth. The alarming tive advantage. vision portrayed by the "nightmare scenario" Commercial capital flows are unlikely to be comes from the extremely rapid and immense much help either. Many African governments en- increase in the number of people who will popu- joyed a favorable credit rating in the past and late the continent if current rates continue. Africa's 32 population would double every 20 years, reaching national attention is especially focused on the ef- I billion in 2010. Even if fertility follows the declin- fect these processes are having both on the rate of ing pattern in South Asia, Africa's population will habitat loss and species extinction and on changes reach 1.7 billion by 2050. A turnaround in fertility in the global climate. The global impact of envi- behavior will not occur easily and certainly not ronmental trends in Sub-Saharan Africa can be over a short period. This makes the "nightmare expected to command increasing attention in the scenario" more than a bad dream-it is a very real future, as environmental issues become increas- possibility. ingly prominent in world affairs. The consequences of the soaring populations Sub-Saharan Africa is endowed with an abun- are striking (see Figure 1.12). During the next 30 dance of wild plants and animals. It is home to an years the rates of entry into the labor force will estimated 300,000 species out of a global total of 5 more than double and will exacerbate an already million. The Tai Forest of C6te d'lvoire, the Mon- acute employment problem. Rapidly growing tane forests of East Africa, and a small slice of populations will also soon lead to a switch from Madagascar are among the most biologically di- land abundance to increasing land shortage in verse areas of the world. Many plant and animal several countries. Land-to-people ratios, already a species in Sub-Saharan Africa are unique to re- constraint on agricultural development in several stricted locales. For example, more than 6,000 places, will worsen. Ecological degradation will flowering plants, 106 different birds, and half the accelerate. world's chameleon species are found only on the This exceptional demographic surge will be ac- island of Madagascar. companied by massive pressures for migration- The disappearance of Africa's plants and ani- both national and regional-creating social and mals has implications beyond the extinction of political tension. Most of the migrants will settle species. It means the loss of genetic material for in the expanding urban centers, creating megacit- the future development of crops, medicines, and ies. By 2020 there are likely to be about 30 cities industrial products. The reduction of Africa's for- with more than 1 million inhabitants. Several can ests and other vegetation cover can also contribute be expected to exceed 10 million. to large global climate change. The widespread burning of forests and scrub to clear land adds THE GLOBAL VILLAGE. Desertification and defor- large amounts of carbon dioxide to the atmo- estation in Africa are increasingly of worldwide sphere, thus contributing to global warming. If concern, just as the heavy pollution coming from deforestation were slowed, these emissions industrial countries is of concern to Africa. Inter- would be reduced. If reforestation efforts were accelerated, the role of these forests as a vast car- bon sink, which removes large amounts of carbon dioxide from the atmosphere through photosyn- Figure 1.12 Population and urbanization thesis, would be enhanced. in Sub-Saharan Africa, 1960-2020 Even though Africa's contribution to global pol- MUinDS Of Sub-Saharan Afic, 96-20lution is minor compared with that of the indus- Mill20ns of rersons trial countries, the twin threats of loss of biological diversity and global climate change are of increas- 1,o, 0 73 i ing international concern. They present an oppor- o v.i j tunity to mobilize international resources to 80' l -reduce the poverty that drives deforestation. 60- The challenge 40.l Africa's crisis is deep seated. But while great problems lie ahead, Africa also has important as- 20' sets on which to draw. First, despite the popula- tion pressure in certain areas, its land and water 1960 1990 2020 resources are vast. Agricultural production, with Note: Figuresfor 1990 and 2020 are projections based on the right technology, could be greatly expanded. decliningfertilitsrate. The considerable mineral potential has yet to be Source: World Bank data. tapped. Africa has massive energy resources in 33 gas reserves and hydropower potential. These re- ing conditions and opportunities that goes be- sources-are unevenly distributed across Africa; for yond an existence predicated simply on policy the most part they are not where the population distortions and the general poor performance of is. That is the region's first challenge: to realize the the largely statist, formal, modern sector. vision of pan-African cooperation by allowing This locally based dynamism has channeled the freer movement of supplies and people. continent's traditions of community welfare into Second, women in Africa, although more fully self-help-as in Kenya's harambee. These move- involved in production activities than in many ments, often supported by foreign nongovern- other developing countries, face innumerable ob- mental organizations, are now active in many stacles to the true fulfillment of their potential. fields: education and training, health care and Given the right opportunities, they can have much - family planning, village water supply, agricul- greater impact on the development of the conti- tural production, storage, marketing, nent than in the past. agroforestry, housing, slum improvement, and Third, the informal sector has great vitality. small enterprise development (see Box 2.9). They African traditions of solidarity can be of tremen- have been effective intermediaries between grass- dous value in mobilizing populations at the com- roots organizations and those providing public, munity level. The widespread practice of sharing commercial, and private forms of support. among people can be used to mobilize private Fourth, Sub-Saharan Africa's vast endowments savings for local social investments. Informal en- of diverse flora and fauna and its spectacular sce- terprises have demonstrated remarkable dyna- nery and fine beaches make tourism a very prom- mism and can be counted on to continue to be a ising sector, as a few countries such as Kenya have significant source of income and employment. In already shown. Africa's biological diversity is of country after country the informal sector has ex- enormous international interest. Considerable re- hibited a resiliency and a responsiveness to chang- sources can be attracted to ensure its protection Box 1.4 N'lauritius: From Nlalthusian gloom to sustained development Tle scciLoeconcrnlc 4trucrure or Mlaur[iiLIt in the varl comipetitve k.aSc rates E .ports reprm.int o3 per:ent t l%'lrrilshad the^an'e rrgr.cdAientvrpoor pr pectsa. m.r3nn GDP but he econorni ha moved a3%a% tromr it earlier orhEr countrie- .nAtric3 ha%ti toda% Population i'a. dependence oin *uiar N1.anulactures-nora.tl% te\tiles- growing at almnot 2 . percent a %ear and per cap,t.i in noi% account tcr 39- percent ot e ports Spurred b% contin- comr- i-3S bareI, rinins ir !ln'4 the crudle birth rate iva; uing grow%th in per capita incomr 13 percent a %ear on 3r- thE tc.tal tertilit- rate %, aIS 4 i 3nd the intant .rt.iht a3 erage berx ,en li3nd losrin% entmrntnJJdomertic rare . .4 O populatnon e\plo,c'n or that inainitude S3'. ings ha:. e bren gro- ingi nd are nof% abo: e 2c1 PeTcent i vuld lriAt .ilr,es-c:ale economric Ind :ocial rqpercu;. .t CDr Domestic polwii:vi also prwomoied eitible sions For e\.rmple. the t%orkinr-agt popuiatio.:n agd 15 de%etopment-spaltilI% bi dinrninihingtherareot urb3n ears and oiern iaj protectedl to increase b% S.ome Su popuiation gro', th sectorallv. through ta orableagrneul- percent during ,5 -72 Thi; combintdJ% ith io! saing; tural pricingpolic and.intergEnerational% throughcon and in-verment ratr- ibelove !2 and 1I percent respec- ser%ati%e debt 3nd borro%wing policie4 tie :nd cnJ porrs ,-clu.. oc tba-ed on .ugar rnade the Lindimin,shed vmphsi c.n programs to.nr human re- pro.pectar4rogrirowingour ot the.iciouzoircle ot po%erm sourcedeeiopment includingperhapsthemmostsuccess- qiIte Poo r tLil population program in the region his pl3ced The Suistaned pursuir ot sound maceroccv.rimnc 3nd Nlauritiol amnong the top pertkrmer4 kn Sut-S3haran Ar- populatiOn pc.lrci. jrmong other, ha!. completel' trans- ric; its Population groLs th rate 1 percent :, tear durinn tormed ihe outlitok The impnort repl3cenivrit striregv toi- II.t--, s the lowe.t in the region vw irh life E\pectan;% lobed in the t%cils , ,a nct \. table lonig-term option. at -,v era IQ95Th Other he31th and iertlit\ Indicatcrs alo a Itough Ii did enable industrialists toacquire e'.penence 4hoI' si4niricnt impro%ement a crude birth rare or IQ and allo ed a nEr iJdu;tTil! culture to tr:e rort To build I ,1A7 a t:tal iErItlrN rate Lot 2 2 I n an inmant mortatIt\ on thise,perience ncenrire, ha e been pror ided to0%er- rate ot 24 l197 1 and a chi!d death rate of 1 l -4 do%, n sea m3nuracturing tirm, t. locatt labr Lnten,i%e 3ctir i trom 4 in lQn'5 Enriolnient ratios oi 10ll percent tor pn- tie, In Nlaunhu, and to convert Imported r3i\ m3teria3l miar schc.ols and abo. e 90 percent tor second.irr educa into ini-lied gcs--d- tor e .pc.rt The siructurE ot the econ- tron are h!gh tor 3 de. eloping countrT %% ith kllauritius . oimm has a- a result 3aso been transtorni&d The countrs level or per c3pita Income Nlauririu, ha- shown thai the h.as tAken ad\antage ot opportunities in torld markvets right polrcies can orercorne poor initial conditions and aid hace\plitedt ir reourc:ter.do.u rnents--anadequate ,_ork an economic transtormatton ntrta4ructure anda lhteraieand adaptable labor torce paid :ro34wj ; E-._-"- ' .... ---- - - - - - - 34 and more generally to protect the environment Figure 1.13 Recent economic trends (see Box 2.1). in Sub-Saharan Africa, 1980-88 The history of economic development has wit- nessed some remarkable transformations. Coun- Idex (1980=100) tries once considered economically weak have 120- later prospered. Within Africa several countries have done consistently well since independence 6 (see Box 1.4). There is no insurmountable reason 112 - why the others cannot succeed as well. 108 Agproduction Since the mid-1980s Africa has seen important / changes in policies and in economic performance. Although per capita incomes declined more stee- 100 ply in the two years 1986-87 than in 1980-85, this 96 must be put in the context of other important signs l .:[ 0.011e of improvements since the mid-1980s. The large 92 fall in regional per capita incomes in 1986-88 was 88 - 1980 198 1 1982 1983 1984 1985 1986 1987 1988 caused by a combination of especially sharp dete- riorating terms of trade and continued high pop- Source: FAO and World Bank data. ulation growth. These negative factors swamped the growth in domestic output. Comparing the nomic basis for renewed growth. Nonetheless past four years to the early 1980s for Africa as a stronger efforts to improve domestic economic whole, however, there is some indication of better management may help to sustain these recent performance. The region's aggregate GDP grew at improvements. 2.1 percent a year on average during 1985-88, About half the countries in Africa have adopted reversing the 1.2 percent annual decline of the major policy reform programs during the 1980s. previous four years. For 17 countries, accounting Initially these programs mainly addressed the for a third of the region's population, output grew short- to medium-term macroeconomic imbal- faster than population during this period. For ances. Over time they have evolved significantly, some the annual rates of growth were impressive: with measures being introduced to tackle the un- 9.1 percent in Mauritius, for example, and around derlying structural constraints. Exchange rate ad- 5 percent in Ghana and Kenya. Terms of trade justment has been crucial to this objective. In declined largely because of falling oil prices, response, their real effective exchange rates began which have since stabilized. Preliminary data for to decline in the early 1980s, following a decade of 1988 show that the terms of trade improved for the growing divergence from those of other develop- non-oil-exporting countries. ing regions. A combination of nominal devalua- On average, agricultural production and ex- tions and market liberalization led to rising real ports have grown faster since 1984 than during the agricultural prices in many countries, especially previous two decades. Even when the recovery for export commodities. The immediate response from drought in 1985 is excluded, recent annual to these price increases has been dramatic in some growth rates appear well above the longer-term cases, as for cocoa in Ghana, for instance. In other average of the 1970s and early 1980s, thus reflect- cases the response to reforms has been slow. Many ing a positive response to incentives, although countries have also seen a realignment of real good weather also helped. Africa's most recent factor costs; real interest rates are becoming less export performance is encouraging, with non-oil negative, and real wages for both skilled and un- export volumes rising in aggregate by almost 10 skilled labor are continuing to decline. In some percent during 1985-87, in sharp contrast to the countries, such as Tanzania, real wages are now declining trend of the past 15 years. Moreover, less than half of their 1980 levels, although in Africa's declining share of world markets for non- others, particularly in the CFA franc zone, adjust- oil exports began to reverse in 1984 (see Figure ment is still delayed. 1.13). Economic performance has also been spurred The improvements are often small and could be by large increases in aid. In 1987 net international reversed. Africa's undiversified economies re- capital flows were 10 percent above the 1975-79 main especially vulnerable to external shocks. average in real terms, and estimates for 1988 point Past low investment rates have weakened the eco- to continued increases. 35 The social impact of these improvements is dif- many countries policies need to be reoriented rad- ficult to assess. Up-to-date data are patchy. Better ically. Each country is unique, and there are no delivery of public services will in any case im- magic answers. Many factors-the pace of techno- prove conditions only after a lag. Nonetheless, the logical advance, the weakening market for pri- evidence from several African countries suggests mary products, and the changing structure of that real per capita spending on public health and world production-are beyond the control of Af- education services is no longer falling. In coun- rican policymakers. A long-term perspective is tries in which adjustment programs were adopted essential. The necessary decisions are hard-for early with strong donor support, per capita expen- donors as well as Africa's governments-because ditures may now be rising. big changes will be needed in the way aid is dis- Africa's economic problems cannot be solved pensed. Above all each country will need to estab- quickly or through a single focus on capital accu- lish a development strategy appropriate to its own mulation or economic adjustment. Africa's pro- particular circumstances. duction structures need to be transformed; in 36 Sustainable growth with equity A strategy for the next generation end countries concentrated on import-substitut- ing manufactures, and industrial investment was Governments have been struggling to reverse largely state-led. The strategy failed in part be- the relentless decline in African living standards. cause it was based on poorly adapted foreign They can succeed. Indeed, if Africa is to avoid a models. The vision was couched in the idiom of major human catastrophe, they must. In their dec- modernization-meaning the transfer of North- larations at the UN Special Session on Africa in ern values, institutions, and technology to the 1986, the region's leaders clearly recognized the South. In recent years, however, many elements of need for radical reform. This chapter draws on the this vision have been challenged. Alternative debate taking place within Africa and on the ex- paths have been proposed. They give primacy to perience of the past three decades. Building on agricultural development and emphasize not only measures already initiated, it describes the main prices, markets, and private sector activities, but elements of a long-term strategy to set Africa on also capacity building, grassroots participation, the path to recovery and growth. decentralization, and sound environmental prac- tices. So far such ideas have been accepted and The need for new measures tried only halfheartedly, if at all. The time has come to put them fully into practice. The nightmare scenario projected in Chapter 1 Both in the broad conception and detailed elab- is not far-fetched. Indeed, without resolute new oration of the development strategies adopted measures, it will almost certainly come to pass. Yet after independence, non-Africans played an Africa has unexploited land and minerals and a overly dominant role. There are now a significant population that can be mobilized to develop them. number of experienced African policymakers During the past five years broad-ranging reforms who will decide future strategy. Nonetheless an have been widely initiated, but these are no more important supportive role will remain for Africa's than a beginning. The reforms, although coura- external partners. Self-reliance and the assertion geous, are incomplete because they fail to address of African leadership should not mean cutting fully the long-term constraints. The challenge for links with the global economy and turning away African governments is to forge comprehensive outside assistance. Yet, partly as a consequence of and coherent programs of action that will attract its policies, Africa is in danger of being increas- broadly based support. ingly marginalized in its participation in both the To be credible, any new long-term strategy world economy-Africa's share in world trade should be based on a hardheaded examination of has fallen from 3 percent to less than 1.5 percent the lessons of the past. The first generation after since 1960-and in global strategic decisionmak- independence assumed that development meant ing as superpower competition in Africa ebbs. For achieving Northern standards of living. To that Africa to become isolated from the mainstream of 37 global development would be disastrous. The increasing production. It was soon appreciated rapid development of the world economy, the that, to bring about real and enduring develop- huge expansion of population, and the dangerous ment, a transformation of the production struc- pressures on the global environment are leading tures was required and, furthermore, that the irresistibly to growing global interdependence. capacity of people and institutions to deal with Africa and its external partners have a compelling change must be enhanced. This means strength- mutual interest in building a stronger and more ening institutions and investing in people. A start equal basis for collaboration. has been made, but much more remains to be done. Development in this widest sense is the Keyfeatures of afuture strategy theme of this report. It is consistent with the human-centered strategy recently recommended To ensure Africa's future welfare, the next gen- by the ECA. Both reports see people as both the eration must first build solid foundations for sus- ends and the means of development. tainable and equitable growth: sustainable, Building capacity is also a prerequisite for because care must be taken to protect the produc- greater self-reliance, the dominant objective of the tive capacity of the environment, and equitable, Lagos Plan of Action. Self-reliance, so essential for because this is a precondition both for political Africa's long-term development, has an evident stability and ultimately for sustained growth. The regional dimension. In the past the rhetoric in focus here is on access to assets and poverty alle- favor of greater regional cooperation and integra- viation, not on the distribution of wealth. Creating tion has been insistent, but the actions disappoint- wealth, in contrast to rent seeking, is seen as es- ing. The time has come for determined and sential for growth. By giving the poor access to pragmatic action; Chapter 7 sets out specific pro- assets and promoting their productivity, a higher posals to this end. level of growth can be ensured. These aims will take time to achieve. Institutions will need to be Growth that is sustainable and equitable strengthened and capabilities enhanced. The task will require sustained effort and far-sighted polit- Even at current levels of per capita income there ical leadership. are many opportunities to meet basic needs more To prosper in an increasingly competitive effectively. Over the longer term, however, wel- world, Africa must radically improve the produc- fare cannot be steadily improved unless economic tivity of its labor, capital, and natural resources. growth significantly exceeds population growth. This requires two things: This is the clear lesson from countries such as * An enabling environment of sound policies Ethiopia, Ghana, and Tanzania. What are to be the and efficient infrastructure and services to foster sources of economic growth? To what extent will productive activities and private initiative. Africa's soaring population and accelerating envi- * A much enhanced capacity, from the village ronmental degradation compromise its develop- to the highest echelons of government, to cope ment? And how can growth be made equitable? with change. Weak capacity in both the public and private Sources of growth sectors is at the very core of Africa's development crisis. In the most fundamental sense develop- There is a growing consensus that ment depends on the capacity to initiate, sustain, postindependence strategies pinned too much and accommodate change. Africa's governments hope on rapid state-led industrialization. Domes- were grafted onto traditional societies and were tic markets were too small for the capacity created, often alien to the indigenous cultures. Its econo- while the state proved to be an uninspired entre- mies were dualistic, with modern sectors that re- preneur and a bad manager. In contrast almost mained highly fragile. Many governments proved everywhere the informal sector has been a thriv- unable to cope with the political stresses of rapid ing success-in part because it escapes govern- modernization and the unstable external environ- ment regulation. This is a measure of the vitality ment of the 1970s and 1980s. and potential of the neglected African entrepre- The structural adjustment programs of the early neur. The earlier strategy also neglected agricul- 1980s aimed to improve resource allocation pri- ture, a sector in which Africa has a clear marily by correcting distortions in prices and mar- comparative advantage. Exploiting Africa's land kets. But these programs only set the stage for resources offers the best immediate opportunity 38 for raising incomes. Over the longer term and with industrial policies will need to be overhauled in policies that foster private investment and entre- the early 1990s. The key is the transfer to Africans preneurship, the industrial sector could undoubt- of industrial skills: management, marketing, tech- edly contribute increasingly to Africa's economic nology, and finance. This can occur most easily growth. But it is to agriculture that Africa should through a collaborative partnership with local in- look for the primary foundation for growth dur- vestors who have the necessary expertise and ac- ing the coming years. cess to markets. This in turn implies a radical Agriculture currently provides 33 percent of reappraisal of the current industrial strategies. Africa's GDP and 40 percent of its exports. Yields The precedents in Asia and elsewhere are well are far below potential. Even when full account is established, and there are already good examples taken of the environmental limits to land exploi- in Africa of what can be done. tation, the scope for expanding production is African entrepreneurs able to participate in great. Of course this potential varies among coun- such partnerships are emerging in increasing tries. Over the long term it must be assumed that numbers from the indigenous informal sector. The people will migrate away from the arid lands and explosive growth of the informal sector has gone that the resulting inflow of labor will spur growth largely unrecorded in the national accounts data. in the better-endowed areas, as it has in C6te For example, Zaire's value added in the manufac- d'Ivoire during the past 30 years. turing sector is estimated to be possibly 25 times Chapter 4 argues that agricultural growth can the official figure. Policy has often discriminated be doubled to 4 percent a year-as it must be if against the informal sector, yet it has been the African living standards are to improve. This tar- most dynamic part of most African economies and get is ambitious. Industrial growth, starting from is by far the largest source of new employment. a much smaller base, could be significantly higher. Although agriculture and industry constitute But neither sector will prosper unless the linkages the first and second sources of growth, other sec- between the two are strengthened. In most Afri- tors could also make vital contributions. Africa can countries these linkages are weak because of will need to exploit every opportunity. Mining, oil poor infrastructure and the failure to gear produc- production, and tourism all have good potential. tion to rural needs and to overcome the fragmen- Mining in the 1980s contributed 13 percent to tation of rural and urban markets. Sub-Saharan Africa's GDP and earned some $8 Savings in the agricultural sector provide the billion in foreign exchange in 1988. But growth has basis for capital formation in the cities, and sur- been limping along at no more than 0.2 percent plus earnings in the urban sector are in part chan- annually in the 1 980s, a tenth of the world average. neled back to rural areas. In Kenya, for example, Here, as in manufacturing, attracting private in- urban workers remit an average 21 percent of their vestors will be a decisive factor. Despite known earnings. Migration from the countryside pro- reserves richer than those elsewhere, the major vides labor for urban industries, while some mining companies have preferred to invest out- workers in industry and in the nonfarm sector side Africa, where they found conditions more return to work in agriculture, thus bringing a new attractive. There has been comparatively little se- dynamism to farming. Agricultural growth stim- rious exploration in Africa during the past decade. ulates the demand for consumer goods and for The same is true of oil. Chapter 5 suggests policy agricultural inputs produced by industry, and in reforms that could help the sector eventually to turn industrial growth stimulates the demand for achieve growth of 3 to 5 percent. Equally, how- food and for inputs into agroprocessing ever, the exploitation of mineral and oil resources industries. should not be viewed as an easy option. It is no This stress on agriculture does not imply a substitute for fiscal discipline and sound policies. minor role for industry. African industry has per- As Nigeria and Zambia have shown, poor man- formed disappointingly during the past 25 years; agement of oil or mining revenues can easily un- growth in output has slowed particularly in recent dermine the foundations of long-term years. But with sound policies there is no good development. reason why the rate of growth of industry should Despite huge worldwide expansion tourism not recover in the 1990s and rise gradually toward has made very slow headway in Africa. Global 8 percent a year during the next two decades. In spending on tourism is about $160 billion and individual countries, of course, higher rates of growing at 15 percent a year. Africa's share is just growth are possible. For these to be achieved, 2 percent, and falling. Nonetheless a few African countries have booming tourist sectors. For exam- increasing numbers live in urban areas where ple, Kenya's gross foreign exchange receipts from there is much less demand for child labor. With tourism are more than from any single commodity development, intergenerational income flows export. Tourism is also an important revenue from children to parents are gradually reversed. earner in The Gambia, Mauritius, Senegal, and the For a major region Africa's situation is unique. Seychelles. Africa's tourist assets are remark- Its population growth rate is the highest seen able-and, in countries such as Ethiopia, Mada- anywhere, at any time, in human history. Whereas gascar, and Tanzania, largely unexploited. in Asia and Latin America better health care and Europe's resorts are rapidly reaching saturation, extension of education have been accompanied by and the market can be expected to continue ex- falling population growth, in Africa the reverse panding vigorously. Europeans are increasingly has been true. In 1960 African and South Asian looking for recreation farther afield. Unless Africa population growth rates were around 2.5 percent becomes more welcoming, tourists will travel in- a year; Latin America's was reaching 2.9 percent. stead to Asia and Latin America. Today, South Asia's and Latin America's have As in tourism, so in industry and agriculture: fallen to 2.1 and 2.5 percent, respectively-but the challenge is the same. Markets exist, but the Africa's has risen to 3.2 percent. Even if fertility competition to satisfy them is fierce. In the years fell tomorrow to two children for each African to come this competition will get even tougher. family, the continent's population would con- The pattern of demand is changing as is the tech- tinue to expand for the next 60 to 70 years. On nology to supply it. Only those flexible enough to current trends it will double in 22 years. No region adapt will succeed. Comparative advantage is of the world has ever managed to develop with so swinging in favor of those with good market in- high a rate of population growth. telligence, a grasp of the relevant technologies, Each year Africa's school-age population in- and a capacity for rapid response. Abundant labor creases by 4 million (3.22 percent). There is a cor- is no longer enough. responding increase in the number of mouths to Taking all this into account, the recent decline be fed, bodies to be clothed, health services to be in per capita incomes can be arrested in the 1990s provided-all just to maintain the existing level of and the foundations laid for modest growth there- health, education, and nutrition. The public and after. It will require fundamental reforms and a the private purse are thus depleted. Too little is new vision of the contribution to be made by the saved or invested to improve living standards. rural sector, of the route to industrialization, and For Africa as a whole land is still abundant, but of the strategy for human resource development. in some countries the transition from abundance But it will also require measures to slow the rise to scarcity is already affecting agriculture and the in the region's population. environment. This transition took centuries in Eu- rope and Asia. It is taking place over decades in Slowing population growth Sub-Saharan Africa. The image of Africa as a con- tinent of vast empty spaces is less and less true. In Raising Africa's overall GDP growth from the 2 some places the pressure of population on arable percent a year achieved during the past decade to agricultural land and other natural resources is 4 to 5 percent in the years to come-the target already intense (for example, in much of the Sahel, proposed in this report-would be a major Burundi, western Cameroon, Kenya, eastern Ni- achievement. But if most of that is eaten away by geria, and Rwanda). It is true that many areas are surging population growth, per capita incomes substantially underpopulated. Some could easily will hardly rise. Significant improvement in living support much larger numbers, but here too very standards cannot be achieved over the long term high population growth makes it difficult for peo- unless population growth is slowed. On current ple to escape grinding poverty. The urgency of trends Africa will increasingly be unable to feed curbing Africa's population explosion is not due its children or find jobs for its school leavers. The to the present size of the population, but rather to burden of dependents on active workers is over- the unmanageable rate of increase. whelming if half the population is under 18. Tra- The link between accelerating population ditionally children contributed significantly to growth and environmental degradation is espe- farm work; if children are to attend school, as they cially worrying. In several countries overpopula- should if they are to become more productive tion is putting unsustainable pressure on adults, that can no longer be true. In any event agricultural land. In many places traditional farm- 40 ing land is already overcultivated, and more frag- Employment and wages ile land is being exploited to meet the needs of the growing population. Without agricultural mod- Rapid population growth is causing an acute ernization the result is rapid desertification, defor- employment problem. The creation of jobs for the estation, and loss of vegetation cover. With sound rapidly expanding labor force must be a central practices and technological innovations Africa objective. Nearly half those who will enter the might eventually accommodate several times its labor force in the next three decades are already present population. But this will take time, and, born. Therefore, even if the population growth meanwhile, high population growth spells rate during 1990-2020 slows down to 2.75 percent, disaster. the labor force will continue to grow more than 3 Few Africans are yet persuaded of the advan- percent a year. If the unemployment rate by 2020 tages of smaller families; they see land as abun- is to be no more than 10 percent, employment will dant and labor as scarce. But these conditions are have to grow around 3.4 percent a year. In other changing. Family size is a highly personal and words about 380 million new jobs (more than sensitive subject. In most cases it will be necessary twice the current level of employment) must be to bring down infant mortality rates if parents are created by 2020 (see Table 2.1). to be persuaded to accept a smaller family size. Agriculture occupies about two-thirds of the Each country must, of course, attune its policies to labor force in Africa, and it will continue to be an its own culture and economic circumstances. important source of new employment during the Often donors approach the issue in inappropriate next generation. For instance horticulture, dairy- or ineffective ways. But the demographic realities ing, and forestry could expand rapidly, and all facing Sub-Saharan Africa remain: exceptionally these activities are labor intensive. However, there high population growth is compromising eco- are limits to agriculture's capacity for labor ab- nomic growth and family welfare, adding to envi- sorption. To achieve food security throughout the ronmental degradation, and thus seriously continent, average per capita food consumption jeopardizing Africa's long-term development. has to increase by about 1 percent a year during This nexus of rapid population growth, the 1990-2020 (see Chapter 3). For this to occur, and slow modernization of agriculture, and conse- to provide for the needed growth in agricultural quential environmental damage is a stark reality exports, value added per worker in agriculture that must be faced boldly and urgently. It implies has to grow by about 1.5 percent a year. Thus an a change in fundamental societal values as pro- agricultural growth of 4 percent would imply em- found as has already occurred on other continents. ployment growth of no more than 2.5 percent a The future strategy would be gravely deficient year in agriculture; this would enable the sector to were it not to include measures to slow population provide jobs for almost half the increase in the growth (see Chapter 3). A reasonable target would labor force. be for Africa to follow the rate of fertility decline Only a fraction of the new workers who come already achieved by other developing countries. on the job market each year will be able to find This would result in an average population employment in the modern sector, even under the growth of 2.75 percent a year for 1990-2020. most optimistic of scenarios. The public sector is Table 2.1 Indicative projections of employment in Sub-Saharan Africa, 1985-2020 (millions of persons unless otherwise specified) Annual growth rate, 1990-2020 1985 1990 2000 2020 (percent) Population 423 497 677 1,107 2.8 Labor force 198 230 318 610 3.3 Employment 168 199 279 549 3.4 (employment rate, percent) (85) (87) (88) (90) - Agriculturalsector 131 148 190 311 2.5 Modern wage sector 10 12 17 32 3.4 Small and microenterprise 27 39 73 206 6.0 Sources: ILO 1988, World Bank 19891, and World Bank data. 41 chronically overstaffed and needs to be trimmed essary to create effective demand for agricultural back rather than expanded. In some countries products. budget constraints are already forcing cuts in pub- Wage legislation has a direct effect on job cre- lic employment. Large-scale modern industries ation in the modem sector. Governments have will be important sources of employment only in typically attempted to set minimum wages higher a few countries. However, much simple manufac- than market-determined wages. Such regulations turing-for example, furniture, clothing, and are widely ignored in the informal sector, but, household goods-can be undertaken by small- where wage legislation has been effectively en- and medium-scale firms. Employment in these forced, it has led to higher costs and lower com- firms and in construction could be important. In petitiveness. Experience shows that this the longer term it is to these expanding modern legislation reduces overall employment. enterprises and their supporting services that The impact of wage controls is well illustrated countries must look for new jobs. But in most by the experience of Kenya, where real wages countries they will fail to absorb more than a quadrupled between 1949 and 1968 (to several fraction of the new workers who come onto the job multiples of average rural farm incomes) as a market each year. At best, wage employment in result of wage fixing. Later the government ceased the modern sector as a whole can be expected to administratively raising private sector wage rates grow at around 3 to 4 percent annually. and allowed the labor markets to function. Within This leaves small and microenterprises, now a decade the wage rate for unskilled labor was mainly in the informal sector, to absorb about half little higher than the mean income of farmers, the new entrants to the labor force. Construction which broadly eliminated the urban income bias. to meet the fast-expanding demand for housing is The effect on employment was striking. In the likely to be an important source of jobs, especially decade before 1968 urban formal employment ex- through owner-managed businesses that employ panded at a sluggish 1.6 percent a year; in the just a few laborers. The same is true of much decade after 1968 it grew at more than 6 percent a construction of infrastructure, such as school year, only part of which can be explained by buildings and clinics, as well as small sewerage, greater public sector employment. In the 1980s rural road, and other rural and secondary-city government policy has been to allow official wage infrastructure. A myriad of other activities and contracts to rise by no more than 75 percent of services can be imagined. inflation. As a consequence real wage rates in the Overall, employment in small and private sector have continued to fall. microenterprises will need to grow on average by The policy conclusions are clear. Experience 6 percent a year. It would be reasonable to assume suggests that, except on grounds of health and that value added per worker in these areas will worker safety, governments should resist interfer- grow at least as fast as in agriculture (1.5 percent ing in labor markets. If left alone, they work well. a year) and that the small and microenterprise The political imperative is to interfere, but the sector would grow by 7.5 percent annually, thus economic logic is not to. Minimum wage legisla- contributing about 1.5 percent to overall GDP tion, regulations restricting the ability of employ- growth-about the same as each of the other sec- ers to hire and fire, and related interventions tend tors (see Table 2.2). Such growth will also be nec- to raise costs, reduce competitiveness, and con- Table 2.2 Contributions to the growth of GDP in Sub-Saharan Africa, 1990-2020 (percent) Sector Small and Agriculture Modern wave microenterprise Total GDP distribution (1987) 33 47 20 100 Growth of employment 2.5 3.4 6.0 3.4 Growth of value added per worker 1.5 0.2 1.5 - Sectoral growth rate 4.0 3.6 7.5 - Contribution to GDP growth 1.3 1.7 1.5 4.5 Source: World Bank data. 42 strain the growth of employment. Equally, for their agriculture have also had the best relative countries in which public sector salaries act as success in equipping their cities and developing pacesetters-which is common-wage rates fixed their urban networks. Conversely, the countries at higher than the market rate will tend to raise that have stifled or neglected their agriculture also wage costs in the economy as a whole. This is no have the most dilapidated urban infrastructure longer true in countries such as Ghana, Liberia, even when they have benefited from large sur- Sudan, and Uganda, where real wages have col- pluses from extractive industries. Agriculture and lapsed, but it still applies in other countries, espe- urban development go hand-in-hand. cially those in the CFA franc zone. During the next Yet many African governments have pursued generation the rapidly expanding labor force will macroeconomic policies with a distinct urban tend to drive wages down. In these cases any bias. Their past trade and credit policies have attempt to obstruct this process administratively encouraged the establishment of large-scale, cap- will fail in the long run, at the cost of lower growth ital-intensive industries that locate in large cities, in production and employment in the short run. while agricultural procurement, food subsidy, If farmers and firms are to raise their production and exchange rate policies have tended to keep and employment as intended, they will have to be food prices low for urban consumers at the ex- competitive both at home and abroad. This means pense of the farmers. Partly as a response to this letting wages and salaries reflect labor productiv- urban bias, Africa's urban growth has been mark- ity in agriculture and industry. Thus, as part of the edly faster than average for developing countries. future development strategy, pay should largely Efficiency and equity call for a neutral policy be determined by the market. framework. Indeed adjustment processes pres- ently under way in much of Africa are dramati- Urbanization and migration cally reducing urban policy biases, with a marked impact on urban incomes. In Tanzania farm in- The corollary of rapid population growth is comes rose by 5 percent in real terms between 1980 rapid urbanization. This, of itself, is not alarming, and 1984, while urban wage earners faced a de- since urbanization and economic development cline of 50 percent; in Ghana, during the same are mutually reinforcing. People migrate in re- period, farm incomes stagnated while urban in- sponse to economic opportunity and should not comes fell by 40 percent; in C6te d'Ivoire the ratio be discouraged from doing so. As cities grow, they of urban to rural incomes fell from 3.5 in 1980 to generate economies of scale and, through com- about 2 in 1985. In Nigeria higher farm incomes plementarities, achieve a higher level of produc- have caused workers to return, at least temporar- tivity than the rural areas. Cities foster ily, to farming. modernization and change and consequently are Whereas in the past urban dwellers in many the nerve centers of the development process. African countries have benefited from subsidized Nonetheless they must be in economic balance investments in infrastructure, urban enterprises- with their rural hinterland. and especially the small- and medium-scale ones Agricultural growth creates a demand for trans- that provide the bulk of new employment-are port, processing, and various other support ser- nonetheless suffering from inadequate and unre- vices. Through increased cash incomes it also liable infrastructure services. To ensure the effi- creates a demand for urban goods and services. cient functioning of Africa's cities-and thus The associated multiplier effects are typically very future economic growth-the key urban services strong as further increases in income and employ- need to be made self-financing, and local govern- ment are generated in the towns. This leads in turn ments have to be allowed to mobilize more of their not only to increased demand for agricultural own resources, rather than relying on transfers products but also to greater efficiency in the pro- from the central government. Past investments in duction of agricultural inputs. Improvements in certain primary cities-Brazzaville and Lusaka to transporting, storing, and marketing agricultural name but two-also seem disproportionate when products allow farmgate prices to rise while con- compared with the poor infrastructure in second- sumer prices fall. ary and minor towns. The-benefits of urbanization Comparisons during the past 30 years suggest depend partly on the efficiency of the overall that countries that have pursued policies leading urban network linking farmers to the domestic to sustainable development and diversification of and international markets. Thus it is imperative 43 that the infrastructure needs of the secondary deserts, species of flora and fauna lost, and water towns are given due weight in public investments, and air polluted. These are losses not just to the as has been done in Kenya. present generation, but to all future generations. Since population will more than double be- Environmental sustainability is a critical issue that tween 1990 and 2020, certain areas will be subject cuts across all sectors. to intense population pressure. To accommodate Environmental management and economic de- this growth, migration between countries must velopment are intimately connected. The environ- occur. Based on past trends and differences in ment consists of intricate ecological systems. Trees resource endowment, rates of such migration may and grass, for example, not only provide fuel and range up to 1 percent a year. fodder, but also build soil fertility, prevent ero- This would be nothing new. Africa's popula- sion, provide water catchment, ameliorate climate tions have always been highly mobile. Even with changes, and provide wildlife habitats. These sys- the imposition of colonial boundaries, consider- tems are the underpinnings for human welfare able migration occurred between territories and and survival. over long distances. Since independence C6te Sub-Saharan Africa's environment is easily d'Ivoire has accommodated more than 2 million damaged. Eighty percent of the soils are fragile, 47 people from the Sahel. The willingness to accept percent of the land is too dry to support rainfed migrant workers has been of great economic ben- agriculture, and average rainfall varies from year efit both to C6te d'Ivoire and to the countries of to year by an enormous 30 to 40 percent. In many origin (see Box 7.7). Migration gives low-wage areas population pressure is pushing farmers onto farm labor to the former and substantial remit- marginal lands and causing deforestation, severe tances to the latter. On present demographic soil erosion, and declining productivity. Poor trends it is vital for countries to facilitate rather families cut whatever wood they can for essential than frustrate migration. fuel. The result is ever-widening circles of bare and infertile soil around settlements, ever more Sustainability time and effort required simply to obtain fuel and raise enough crops to survive, and less time and Sustainable growth calls for a development energy to improve welfare. Where environmental strategy that does not compromise the welfare of abuse leads to loss of arable land, wildlife, and future generations. Until recently, public policy water supplies and even to local climate change, and donor programs have largely neglected the the effects are felt in declining incomes and a issue of sustainability. Instead spurts of growth diminishing quality of life. Inevitably the poor have been based on external borrowing, inflation- suffer most. ary financing, rapid depletion of natural re- After a while environmental damage may reach sources, and the degradation of ecological a critical point. In the Sahel expanding popula- systems. Such growth cannot last. tions and accelerated deforestation have triggered When growth depletes capital, it must eventu- a cascading decline in biological and economic ally slow down. Capital, in this context, includes productivity and have created what is now the not only plant, machinery, and infrastructure, but world's largest area threatened by desertification. also natural resources such as land, water, and Hardship is widespread as people seek refuge in minerals and human capital in the form of knowl- the cities. The Sahel's urban populations have edge, health, and social organizations. Thus, to quadrupled in the past 20 years. Air and water ensure sustainable growth, the future strategy will pollution in these areas and their growing de- need to emphasize both sound environmental mand for raw materials (such as fuelwood) in turn management and human resource development. accelerate deforestation and environmental Unlike physical capital, human capital grows degradation. through use. Moreover the health and education This downward cycle can be reversed through of parents improves the health and education of sound environmental management. Strategic tree their children. planting, for example, can significantly reduce Properly managed, renewable natural re- pressures on the land. In Rwanda communal for- sources can last forever. However, there is a per- ests, village nurseries, tree planting, and vasive tendency to consume or destroy them agroforestry have helped to provide fuelwood, through overuse. Throughout Sub-Saharan Africa fodder, and erosion control for the rural popula- forests are being cut down, crop lands turned into tion. Throughout Africa the rural populations 44 should be mobilized to plant trees around their efits in resource conservation, this seems amply homes. justified. A compact might be envisaged in which For some countries the costs of environmental donor assistance would be provided if credible degradation could be clear and immediate; in programs of environmental protection are imple- Kenya, for example, one-quarter of the nation's mented. Without such programs assistance can- total foreign exchange earnings come from tour- not in any case expect to achieve lasting benefits. ists mainly attracted by its wildlife. In other cases the impact of natural resource depletion and pol- Equity and poverty reduction lution on economic growth is less clear. Many costs take years or decades to appear. Traditional Growth does not necessarily reduce poverty or measures of economic well-being, such as per ca- provide food security. Thus the future develop- pita GNP, fail to capture them. At the same time ment strategies of African countries need specific- spending on pollution abatement, for example, is ally to address poverty alleviation and better counted as consumption rather than investment. income distribution as issues in their own right. Rapid population growth and a declining re- These strategies need to address two critical source base lead inevitably to conflicts over re- needs: first, how to make the poor more produc- source management. Environmental issues tive and, second, how to provide productive as- involve externalities. Powerful groups will try to sets to the poor. Earlier policies tended to favor the impose environmental costs on weaker ones. De- urban elite at the expense of the rural poor and veloped countries may try to transfer the costs of men at the expense of women. Establishing a neu- their environmental problems to developing tral structure of incentives is an important first countries. The export of toxic wastes, for example, step toward a fairer society. In addition ensuring must be vigorously discouraged. better access to food, clean water, health and nu- Earlier approaches to environmental manage- trition, education, and sanitation for everyone is a ment were based on environmental impact assess- central objective. Improving human capital is an ments of individual projects and on investment in effective way to promote social mobility and more programs such as pollution abatement, afforesta- equal economic opportunities. tion, or water management. These are useful, but In the 1970s increasing attention was paid to the inadequate. The project-by-project approach importance of meeting basic needs, not just for tends to address the symptoms, rather than the welfare reasons but because a work force that was root causes, of environmental problems. Future deprived would not be able to generate growth. strategies should look beyond projects to the The economic crisis of the early 1980s diverted broader issues and explicitly recognize intersecto- attention from basic needs programs. This was a ral links and intergenerational concerns. To this mistake; every effort should be made to protect end a few African countries are preparing national basic needs expenditures in times of recession. environmental action plans, which describe how The challenge now is to make up for lost time. Also population growth, land tenure, livestock man- important to long-term equity are measures to agement, and other agricultural methods need to improve the access of the poor to assets, especially change to attain sustainable growth. A wide range for women. Throughout Africa land reform and of people and organizations have been involved credit for microenterprises are good examples of in these discussions. This should help to secure a this. consensus on the actions that are needed and Structural adjustment programs already incor- broad support for their implementation (see Box porate components intended to assist the poor 2.1). (see Box 9.2). For example, higher agricultural Government's awareness of environmental fac- prices benefit the rural areas in which most of the tors and the willingness to take politically difficult poor live. Several countries are planning to help measures will largely determine whether the deg- redundant workers through food-for-work pro- radation of natural resources will continue to grams. But more needs to be done. Above all it is threaten economic growth in Africa. Integrating essential for governments to maintain, and as natural resource management into country eco- soon as possible expand, expenditures on basic nomic planning will require political courage. To health and education. overcome the financial and institutional con- The issues of growth and equity underlie the straints, substantial concessional assistance from dualism that is found in most African countries. abroad will be needed. Since there are global ben- Public sector employment has expanded enor- 45 Box 2.1 Madagascar's environmental action plan The Nla lag3,a go%ernment has initiated decisik eaction to in a range otl disciplines trom a great 1arier Lit public. torestall the serious environmental degradation that nou- emnLipublic and pr!titmeoreanization, Furthermc.rea tast threaten, the countr,'s long-term de%eiopmerit. With multimedia campa!gn has been launched to mncrea.e donor asistance it ha, prepared an erw,ironmnnial act.ion -:it,rene-k ot the enk ironmtnt at all le%elk of Nlalagas, plan with five L?e, ,ets ot mea'urtc aimed at saciets En% ironmental iasies are being prin2re%ilel' n- * Limiting detorc-iation and soil en-ion rroduced into primnark ,econdarv and urn'er-it; educa- * rrotecting \ladaga>car unique biltogical patrrnionrk tion * Monitonng en ironniental trend; * Quick prongress. n tr.mo ,tudile. to action Studies h3ae * Educating tht populatior orn en-. ironm,ntal i-.uev alrcad% led to actions in tht hleld pilot operltions. the * Controlling urban pollution. prep.ration 0at maltr ine'tmcrt program and propi- Nladaag3car ,a, mnitallN endo%%id ed ith abouIt 1:1 Per- ak tc-r roes and institutionil retormi cent ot toresied 13nd a nd an ewceptionall dt%er'e flora The pla,nred ine-tnieit program includ&, %aterhevd and taun3 Noti einli lo percent ot for-t land i, lett It man.gement prolectl to prot.ct large irrigation ,cheme, current trends are not re%ersv d Nladagasc:ars narural h%dropot'er damn ard rt-er. Nrs the de%clopment otl tre-r,te will dis1rpear altocether %irtimn about ll, %ear' enmir.:nmental i niorriv n ;* tem, imapping remrte Thit- voulci cauiecalatnitous soil erosionarid an irrexe rs- senmine and C3dasrTal ree_.rdsl to impro re,our,e- man- Ibie decline in it, e\ceptonal biolog ic. l di% ersitt v. hich 3gencnt: and educatii:n program4 Among ihe le:al and %iould repre.enr a permanent t- to tuture generation; pilIc; changes being elaborated arc land legi;lation and As; acreqluencordetoretattion. land iertilitv is steadil t a\ation to ncrea,e land ,i:curitx and thu. to provide decreading % hule in; esrment and maintenance costs t1r incentives lr rtorqtat.ion 3nd conswer%ation pr3chces. major irrigition -cheme- and dam- hav increasetd dra- procedure- or si. trem3ticall, screening l3rge invest- maticall The annual cotot oenrvirimental damagt3 e is ments and the monitocringot eLiidangcred .pecies emtiniated io bebert.et n 5 and ! per,eni ot GNP Ni3d3gascar; drirke to Protect it; umi.qe biological di- The environme ntal action plan ha' been conct ,ed a; v er;it i; uIt iong-term global concern and ha- stimulated an on-going proces; i ith three teatures. ;trong donr s .. i.t ill al,oc bring economic benefits * Stror.g poilih:o l C:omnlltmernt Inihated b5 the prim.: in the tcirm ot .:clAogical tourism A large iour,sm prolect minisrer the plian ha, etllechic political tupport and i, %ihich %%ould open parks under strict control has been connsiderd an integral partolitladagancar cdevelopn-cnt imtiatted with Prn .atetundinm TOurTim inlilcreatemuch- program A National Charter lor Entironment is being needed eniplo% mentopportunities in addition togenerat- prepared lor appro; at b% the NtioUnal As;en'bl \ Al- ing re'. rnu- tr.m tlaariOil arid f-ee thoughdonorshate,trongl% supported ihego%ernnient Y,o tar Ghana Lesotho Nlauritius. and Ri.anda have initiatne.the haebeen nomore th3ntl ,csi tot a . also begun tc develop en' inroment3l 3action plan! and nahonal proccess. other countriw' have e; prested their interv-t in doing so * Intense participation and communcation To prepare Thei ;%ill bonetit iro m Mladagascar;^ pioneering: eftorts. the plan about I ;i1 leal spccialvi;t ha% e been mobilized mously since independence. Educated Africans Corruption is not, of course, unique to Africa. But have assumed that they would be found jobs in perhaps Africa can least afford it. the civil service, in the military, or in parastatals- The rapid growth of population during the jobs that paid better than others elsewhere in the 1990s implies that even the ambitious targets pro- economy. Public sector pay often set the standard posed for agricultural and industrial growth for firms in the formal private sector. Public would leave room for only limited improvements spending would be better devoted to meeting in per capita incomes. Moreover the increased basic needs than to creating unproductive jobs level of domestic savings required would mean and providing social welfare to a privileged mi- that per capita consumption would remain stag- nority. nant. However, the strategy would still imply a Allied to these concerns is a growing recogni- significant increase in income and consumption of tion that many officials with power over scarce the vast majority of the population working in inputs (such as import licenses or foreign ex- agriculture and in the informal sector providing change) have prospered unfairly in recent years. goods and services. The squeeze would come They have sold these inputs at parallel market mainly on the consumption of the top 5 percent prices, sometimes in collusion with firms from belonging to the formal modern sector and to the developed countries. "Rent-seeking" and the cap- recipients of "rents." Beyond the 1990s even this ital flight that goes with it have undermined de- top 5 percent of income earners can expect rising velopment and corroded the fabric of society. levels of consumption, although it is important 46 that these increases are related to real increases in producers and the prices consumers pay for im- productivity. ports-exchange rate policy can tackle some of Africa's major barriers to growth. Strengthening the enabling environment An active exchange rate policy ought to be part of any long-term program to boost production The first element of the proposed two-part strat- and employment. For farm and factory employ- egy is to strengthen the enabling environment. ment to increase rapidly, external and internal Chapter 1 makes clear that low productivity lies demand for local products must rise. A devalua- at the heart of Africa's economic problem. A fun- tion raises the price of imports, which switches damental reorientation of the pattern of incentives demand from imports to local goods. Exchange seems essential. On the one hand, consumers need rate adjustments are a simpler and more effective to be more attracted to domestically produced way to promote domestic production than tariffs goods; on the other, new entrants to the labor or other trade restrictions. market should no longer aspire to employment in After independence most African countries the public sector and nowhere else, but instead adopted levels and patterns of personal consump- seek to use their skills in industry or agriculture. tion in the modern sector that could not be sus- Policies on pricing, the exchange rate, and taxa- tained at prevailing levels of productivity; this tion can be attuned to this goal. was especially true of public employees. Tanzania was a notable exception in holding public sector Reoriented incentives pay in check. In some countries, such as Ghana and Uganda, general economic collapse has Economic distortions in African economies forced a brutal fall in consumption. A better way have had a pervasive and damaging effect on to bring consumption into line with productive patterns of household consumption, income dis- capacity is an across-the-board "tax" on all forms tribution, and growth. The countries with rela- of consumption that, directly or indirectly, require tively high growth rates have avoided the worst foreign exchange. This, in effect, is what an active of these pitfalls. Specifically, they have kept their exchange rate policy implies. The most obvious exchange rates competitive, avoided strong or dis- result would be a greater demand by the prosper- criminatory protection of their manufacturing in- ous for domestic goods and services-household dustry, avoided underpricing their agricultural workers, drivers, and other personal services- products, kept real interest rates positive, kept real and a corresponding drop in their demand for wages at levels justified by productivity, applied imported clothes, electronic appliances, and the cost recovery in pricing infrastructure services, like. Such a switch would be wholly beneficial and avoided high and accelerating inflation by since it would generate employment and save following disciplined fiscal and monetary foreign exchange. Admittedly consumption hab- policies. its are difficult to change in the short run. Im- Structural adjustment programs are helping to ported products easily come to be regarded as reduce distortions in many countries, but much conventional necessities, and the vested interests more remains to be done (see Box 2.2). Chapters 4 of suppliers and consumers accumulate around and 5 return to the question of incentives in agri- them. In the longer run, however, consumption is culture and industry. Exchange rate policy is so flexible. central, however, that it merits further examina- Exchange rate policy can also stimulate regional tion here. economic integration in Africa-an important po- litical objective and a necessary condition for sus- EXCHANGE RATE POLICY. Discussions of ex- tained growth. Greater trade among African change rate policy usually focus on the short-run countries will not happen as long as foreign goods macroequilibrium. Devaluation has therefore are made cheap by an overvalued exchange rate. come to be associated with austerity. This ignores In theory fiscal measures such as tariffs and export its structural implications. Import-intensive pat- subsidies could substitute for devaluation. But terns of consumption are largely attributable to their administrative and economic shortcomings exchange rates that discourage domestic produc- are evident. The extensive and porous borders of ers. By influencing a country's internal terms of African countries offer many opportunities for trade-that is, by raising the return to domestic smuggling. The best way to make imports from 47 Box 2.2 Nigeria's lessons of adjustment Nigeria s ecn.ronil\ iit4hrate; th. dwitortions; cariced bi a .on.oil e\p,irt- pariicularle ca;and other a,riculrul Cornrnodir\ bomn thi. p-csiitic imnpact )tdeci4t..ego%ern- productr h3; er-cen-harpr.-b\ -i0percianta\earin in 1 ment action to reorient !n,enttie-. and th, need to rn.der- and ivSS atc- the advevre ociat impact otf :diusrurmert mea,uret Incontra-rii-tothe prtgr.in.' ettucti enets in impro%ing Shai-pl\ ri,ing oil pnces boosted e\port4 trom SI4 billion in eti,cinc\ i hsfnot\trledJ a .1'-eoi ptriatem ;est l'Y Ito'2n billic.n in 10Sil %thileGNP pcr ipta rose trorn ment-the k,e% to tulure crc... th T. re% ieE pratMe in. est $3-i' to more than SI t01lil Rmsing public e\lyenditr-uri ru- meni tht aUthcritie; h. o%e recontl ltib,ralized the eled h. oil re\ . nues vhiftrd producti.n tronm gncuiture re,ula1or; n' ironment br pr% itt nim -itrnt'including to seL ices IN hen the price of oil collapved so did relr-.ino rs,triction- on direct tore.rn intvetrn-nr I nd Niger3 S tpi)ri receipit R\ lthSn th,e; ;,i-re doi nr tio !ha ubeAunl ttocon.n.cr, a1iat7 nalor public enterpri,e-and 4 billion i hile e\terrial debt ri--e tormii5 billion in lu,i I to pr- atiz minor on-e $25 billion in l%nS Real mpnorts contractedt at an jiera3. Partl% becau e of the: ,Iuggi.hne . or pnvrite inen t annual rate ot 'no percert Grot. th rat.e tuirned 4harplI ment GCDP groith ha' bar.-.. kpct up w,th population rleganit 2nd GNP per capita tell to'3?i) 1zro.etmh and per capili income' hatic stignated LInem- Atrerinlknsi; public debak thegoxe%rnm:entadopted pho inentrernarnshizh beau,ethe tot torce igroi-.ng a program i lsberalze the econ'm ardnoie o mtnrkvet la;ter than enipto, ment although the e,iuaton ha' been prvce- b% pirtialls alleviated b, i srrng mngrition back t- the l3nd * Introducing 3a n.irketidEterrmined e\ch.inge rate -te - hi-a take di antaceot the !ntreased tcontOMIC .ppi.rtuntties tem in the rural ,cetiir Real i% a ii hich tell 1\ mort than ;¶ * Eliminatingi niporilicen-ing 3nd litbrtnn;ne,portr;ee. percent in l2-So. declinud b.. an idditijnal Ii) percent ul.ltilon in ILJS7 iard 3 puor har. e-t in I-S- raichet,d up prices. a Removingv pri-e cointrot- and AbNlkhing agricuttiral Relaxed financ,il p-liee. in earl. l e\aeerbated the;s markeing bo-ird- pr.ce pr,s;ure, Althl-uh c,il ^er\iIe aie vrt m-1 * Adopnng LiFpportmig rn.net; and rtical pol ic% crea sed n earl ,s ! 4iarp h3lrp ri,Ing tc.,1d prices more than The pricZram initiated m I"n h.is transformed the croidd thit gmn In lmd-IS tiscal -tabilization and a incenth e -tructure ot the econirmi A teurtold deprei!a- gi od harx,st s*1-.ed the incrca-e in tNod prici- until the Mt tion it the currenc, *harplv incra.s-d the rclarnvet prices tir't part i:.i l;S Bur Frices ther. began t.- risc 7uickl\ in ot internahonallk traded _e. ds This h.Is rei.italized the part retlecting e\.change rate depreilation and reduced treecropsector but a- tarniers shjited producti,unt,!i, ard go. erminent runding of the lfrecin e\change mirket The U e\ponr- 3nJ dub,tntutcd lor import; lord pnrcev ro;e. 'o,iil inpictot the,e trends ha-e bcen har,h %%hich mrde tood production more proit3ble Tht;e im- e. u-r.il It-son! emer_e tfrm Nigeria- s eperience - A proved incenti., for a2riculture ha,erew. red tle strong Mlost prciminent - the need or prudencc in spending the urban bias that h id dei Eloped during th, oil bi,rn pr:iceeds ot a coimmodrt boom. Cuttine public pending E\cliange rateadtustmcni t:nd trade reoirm Ihala rod'- ii hen .1 bOLiM ends s dlilttlult a3 is Ad3atin gIrI- ltrucrure ' re-cted tcreizn echange to here it i nioirc producti% ,t in ecounon;\ to tioer -pendingq Liuc; Thesk1 dificulties IS13nutacturing timms ha' : ^, itched lrcini a'entLI' iper- dlt Ia\ d Nigeria . resp0nr.se to the collapse ot oil ri' enu,e atirn aind other mpirt-dependent tnes- of production to and Itd to a buildup ot toreign debt that it could not ach\ities ba;ed tn local material- Alter et \,t,rs if ser-ice I te r,d Ic -r, i-thatde.alu ,trincan ucct-- contra,ti,n 3t an aer.irge rate l. 4 percent a %ear. namv tull.r prniiote irq,culrural production aiid enhancL the t3aturing output btegan gznro ing again in lOS The ne.. etticuenc% cit re-cur.e u- Third ei:iugh tinie must be ,'.change rate and pnce rtgimt hav,e improvedt resciurce al3-ed ior macroo.2c:.nrnni: nle.a-urte to haie an eftect u-e in the econoin% and encouriged eNport Althi;uch Sp-cc- police- undermine i e,tor cointidcnce and de- inmetirrcnt and import level, have contilnued to decline pr%c the econrnn ot in etimrEnt. essential i,r its re-:lI% - since the pronr3rn was :idopt-d. Output la-s 'tartted io ern Finall adtustmenrt niust be rieJd as an ongoing reco%er In the tiE %ear, fromnt101u' t. 1W. real non-cll proce>- and unles fiscal disciphnli is niaintained. ntl- output \ccluding, 3grniciture. dropped ; p,,rcent Klor tlien can ea-il underrmine the relornns and caust undue than halil ot this los;s v%as recouped in C1i-5 anti Ic055 cical di,tre-, dJ^pite a 30 percent deline in rt,. ral Alue ot rmp.:-ri outside Africa less attractive than those from tries such as Guinea-especially for breaking within Africa is to keep exchange rates away from highly overvalued currencies. Other competitive. countries, such as Botswana and Malawi, have For all the above reasons active management of successfully adopted more managed systems. the exchange rate is central to achieving sustained A managed system is particularly relevant growth and greater regional integration. The pre- where a country has abundant inflows of foreign cise form of exchange rate policy can vary. Oper- exchange from oil or mineral sales or from a wind- ating a free market in foreign exchange, possibly fall caused by a temporary peak in the price of using an auction system, has been useful in coun- some other export commodity, or even from a 48 high level of capital inflows (see Box 8.1). In these poor. In many countries much of the population situations a free market in foreign exchange will lives more than a day's travel from an all-weather result in a currency that is overvalued, as judged road. Average road densities are one-half to one- by the need for long-term incentives in favor of third of those in other developing regions. Fewer domestic production. The aim should be to make than 20 percent of attempted telephone calls are farm prices remunerative and industrial wages actually completed; in many countries the figure internationally competitive. for international calls is less than 10 percent. Short- Effectiveness of exchange rate adjustments will ages of drinking water and problems in waste be thwarted if the patterns of consumption and disposal are all too common. In Zaire, for example, production are not flexible enough to redirect ex- urban infrastructure services reach less than half penditures from imports to domestic sources. The the urban dwellers. Further, lack of maintenance problem of the "missing middle" in the consump- is eroding the infrastructure base. Urban buses are tion and production systems in Africa thus con- out of service as much as 90 percent of the time. tributes to the slow response to exchange rate Private motor vehicles are reported to last only adjustments. Government action to promote "in- three years on Zairian roads. Road maintenance termediate technology" would be an important equipment in West Africa typically operates at element in the overall strategy for structural between only 30 and 60 percent of capacity. Gov- adjustment. ernment-owned civil aviation services are frag- Financial discipline is essential if nominal de- mented and suffer from lack of coordination. The valuations are to result in real devaluations-that examples are endless. All this greatly raises the is, if they are not merely to cause higher inflation, cost of doing business in Africa. as happened in some African countries. Timing is There are many reasons for the poor state of vital. Governments should, for instance, take ad- Africa's infrastructure. First, except for railways, vantage of improvements in their terms of trade independent Africa inherited a very meager base. or of bumper harvests. This implies the opposite Second, public infrastructure agencies have per- of the conventional (and politically convenient) formed badly and have generally failed to develop view. It requires governments to recognize the a professional cadre of managers and technicians. central importance of exchange rate policy for Third, policies have failed to emphasize financial long-term development and to see a short-run viability and service quality; underpricing has led balance of payments improvement as an opportu- to decay and scarcity. Prices for petroleum prod- nity to devalue rather than an excuse to do noth- ucts, kept low by administrative controls, for ex- ing-or, even worse, to revalue. Indonesia ample, have resulted in waste and shortages, skillfully followed such a strategy in 1978. especially in the rural areas. For exchange rate policy, as for the manage- Sound infrastructure is particularly important ment of other key prices, the objective should be for cities and towns to develop and function effi- to avoid major distortions, even when fully mar- ciently. In Africa, as in other parts of the develop- ket-determined prices are not feasible for eco- ing world, rapidly expanding urban centers are nomic, social, and political reasons. Experience crucibles of acculturation to modernity and to the also suggests that when the country starts from a market economy. The earlier development strat- situation of high distortions, the process of adjust- egy gave prominence to the primary urban cen- ment has to be managed carefully with regard to ters. In many instances it adopted distorted timing, pace, and scope to avoid disruption. The pricing and investment policies, which stifled the benefits of liberalization operate primarily links between urban centers and their hinterland. through changes in relative prices, with resultant As a result the urban networks that are vital for changes in the flows of new investment, and they the development of domestic markets were not are easier to bring about in an environment of established. Postindependence strategies have economic growth. Thus, adjustments and growth also done little to develop the institutions that are have to go hand in hand. necessary to manage urban growth, particularly local government. Given projected population Improved infrastructure pressures, the long-term trend toward rapid ur- banization will not abate despite the drive to mod- A key component of the enabling environment ernize agriculture. And since efficient urban is good infrastructure. Despite the heavy invest- networks foster both urban and rural develop- ment in the past, services remain extraordinarily ment, provision has to be made for a faster expan- 49 sion of infrastructure. In this, policy should recog- ing. During the past 15 years donors and govern- nize the role of secondary towns in supporting ments have begun to address the problem of road agriculture. maintenance, but lasting results have been In the coming information age rapid access to achieved in only a handful of countries. Some data and new ideas worldwide will be the key to have developed innovative labor-intensive meth- national success. This is as true for Africa as any- ods for road maintenance in rural areas (see Box where else. Improving and expanding the tele- 2.4). phone service is therefore an essential component Faced with tight budgets, the huge backlog of of the new development strategy. Recent studies maintenance needs, and rapid urban growth, how on the relationship between the supply of tele- can governments hope to provide essential infra- communications services and economic develop- structure services? Several broad recommenda- ment have shown benefit-cost ratios of five to one tions merit consideration: and in some sectors even higher. In Africa less * Give priority to rehabilitation instead of in- than one person in 300 has access to a telephone. vestment in new facilities This coverage is half that of Asia and one-six- * Make greater use of the private sector teenth that of Latin America. The figures under- * Improve cost recovery from public services state the difficulty because the service is generally * Ensure consistent long-term financial sup- poor. At any time between 20 and 40 percent of port. the connected lines are out of service for lack of maintenance, and the service is unevenly distrib- RESPONDING TO DEMAND. Political and commer- uted, with remote areas often lacking any service cial interests both in Africa and in the donor coun- at all. So large is the unmet demand that a well- tries find it advantageous to expand facilities and managed telecommunications sector could easily especially to undertake the large projects that pay for itself and generate substantial surplus rev- were typical of past infrastructure programs. But enue for other uses (see Box 2.3). too often overly optimistic forecasts of demand Neglect of road maintenance multiplies the and revenue have been used to justify investments eventual cost of repair by 200 to 300 percent and that later proved unviable. Pressure to construct increases costs to vehicle owners and shippers by new roads that will benefit only a limited constit- up to 50 percent for paved roads and much more uency should be resisted while portions of the for gravel and earth roads. It is estimated that $5 existing network are deteriorating. Responding to billion is required to clear Africa's maintenance proven demand itself poses problems of phasing and rehabilitation backlog and that a further $700 and sequencing. Infrastructure improvements million is needed each year to avoid further dete- with high rates of return deserve priority. These rioration. This will require big changes in spend- include telecommunications and rural roads serv- Box 2.3 Telecommunication in the information age in an increaszm41 - nt,rrination-dri en -.orid Atrica a be a rea-0na3t:1 target r;r hub 5aharan Africa and %would comperitnvecss % ill depend on it abilht to 3cctS-S and require an meetmienlot t3round3 $SOih million each %ear, e\change Intormat.rn globallk hilormirac. are dr3mant- or about 1) 5 percent ol GDP This tare.t is modesl crnm- call improvin, d.ecisinnmaksn- proc ;ssc rawi ng pris par,-d ;vith the hc3adlng e .pannion takhn; place in the du:ti% ities. and rran-tormning the map or comparati% do elopedc ountrie- Europe currontk allocates 1.1 - per- ad vantage. N.u t%-chnc,loes-t.rm perc. ial: nputers cent ot GDP i hiie itrica tigure is onl ' 3 perceni. and teleiacsirimles to di,ital n.utorkl-are re%olutionmz- To meet ihiv challenme. the tradiiw nal approach to ing the w%ax the .%orld d;ee bu,iness None -r thl equip- XlLcommunicarbon-,n .lArica %,,ill need to be rethought ment can be us,d II the basic telecommunl icinon nEt-w or- E . sting public monc.pokhsare alread% Xo. erwhellmed and is not in place AtprEscnt Atrica 5unm,tdemnand tlorline4 lack thb managerial. technical and tinancial resourcei to iS estimated at more th.in ni! percent ol current inmialled cope. The commercialization and in ~ome aspects the c3pacit\ prl atization ot tklee-mmunicantnr ser;r%ices %ould be a Experiencevewlheri -uggeursth3t a haGDPeroieth more ettectie ,a-% to mobilize the resourct4 and ;knIl rate o0 4 percent, the number oi in:lephc:.r lints *hould 11iat are nceded The ben ltit.co,t ranic4 ot eood communi- e\pand b% Ill peroent in recent X :ars th-e e%pansion rat. cation are sic high and the economic ios-e cau,ed b% the has bpen perie ninnialk To n;e upmh;O b -Li lh 3 1 current poor ter i.e; 4o gre-,t that 3 read, iniere'.t on the percent annual gren' th r3te in thv number -it hne, v- ould part o, the pnm atc seci,.r is a-sured 50 Box 2.4 Labor-intensive road maintenance Ro,3drehabilitatic.nandm.tntEna,nce kheoherottrurnk or rehabilitation in th r D,rrict Roadts Inpro%ement Pro- teederroads generall. retirs heaailm 'n tls equipment gram ~Viteihl3 Lactelackt !toreiene.,harn ta3i~ Igmanx sun- ~h3n.i ha- decided ic. u-c labor-ba;ed method4 trir trie- such equipment lea; bven .car:e In it- place labor- aboul 29 pcsrcent oft it, 3nnual io:der rjad rehabilitation ba.ed technrique can ;ai.. tiorei'nv'ch,n. eand zencratw and n-,aintenancl. Federr rl ..ib iould be rehabilitated I; lob percent m.re :hv3pIl thin tho le dont: N conventional In The Gambia a pilct proltcct on lator-ba-ed moiinto- m nlhcdi v ith tup to .i 41I percnti a% ing- in toreign nance ha hoi n that vmph.Ning small-;caie % llave- chang 5mAlI contraci...r; after tour ronth ot practicial ba4ed contracto.r- lboth men and i,%nmeni i tca;ible arnd trainin ltoll.--t.:d b t% 1-. month, ot trial coritractu. can economic. Thr ;niAlI contrackt,r~ quickk le:rn. d the nrc n;- r each prodlu - :n a%era4e t"o kilornetrcr oI high- t-sarsi kill- and ettvcti%eh or,!nied X lrker~ I r thr cialltti fr.i .l road a nionth Th,- emploN ab.ut 200 pb-. Thvu- t a> povsile becaue vimpltited pro..cdurv> for per,on; Ac-ut 3i to 41' perct:nt n oment da compared the at, arclinc . ontrol and pai-mont -)f crrlrractf and ior n tit iboujr 1ii r^crv under thocapiral-initrlil e method nionitorng perfornianci and producth ith *:.erer detel- :aget contribult to ca h varning. ihcli ~hmulate the oped rural eccnomr Ntnolten uch nirmr ha%, bevn trained in Othere,arnple o t ;;e rtullabor-inie.ruralr.oad the %Ncrld Bank LiNiP-trnanced prole, t e\ecuted bi the rehabilitation procranis e\iit in Ghana lken'.i and ILCiSpondins noquipmnt .whnmied btractor.tral. g Nialalwi Labor-ba-ei rechrnque~ %%ere ~uC-t tull, ud l r-. and manual cornpaction eLiUipmcni co;rng nabout in the Kenma Rural Accc,i Road. Prr:Lct and the- Mincir lIt 11 p1e0' r contrictor cmnpared with the$l 1 milionto Roads Protect Malaa'E i ba al-: dcm rnn4traied th iobilir r .ii million nr,eded b\ Xas:h contra -tlr under the capital- and ettecti%enei- cil Iibor-intenikv techruqu*- tor road nt,n.Lv mrthc.d ing areas with good agricultural potential or services has forced individuals and companies to towns with strong economic links to the agricul- invest in electric generators, boreholes, radio- tural hinterland. equipped couriers, and the like. This demon- strates both the scope for private services and the USING THE PRIVATE SECTOR. Infrastructure is willingness of users to pay for them (see Box 3.2). long-lived and, as a rule, inherently monopolistic. Programs for the sector should consider ways to Governments must therefore take overall respon- promote such interaction. sibility for it. But an important distinction can be Many governments are already relying more on made between the facilities and the services they the private sector. Their policies range from out- provide. The private sector can play a useful role right privatization to divestiture of ancillary activ- in managing the services, even when government ities (for example, stevedoring and freight builds and controls the facilities. Box 2.5 describes forwarding) and management contracts. In some cases of private sector participation in water sup- cases public agencies have narrowed their role to ply, solid waste disposal, and public transport. In intermediation and planning-as in Malawi, Nigeria a privately owned power company serv- where the housing project agency is being recast ing the Jos Plateau sells electricity to the National as a lender rather than a developer. Contractors Power Authority. However, subcontracting to are now used for road maintenance in several private firms is a viable option only if the govern- countries, such as Ghana, Madagascar, and ment respects its contracts and pays its bills. Senegal. While recognizing that local governments are the appropriate managers for infrastructure ser- REDUCING COSTS. Although experience varies vices (see "Strengthening local government," from country to country, the unit costs of infra- below), most countries would also benefit from structure investments in Africa are as much as greater reliance on the private sector. Nowhere is - twice that in Asia and even higher for mainte- this more evident than in transport. In Khartoum nance services. This is partly because domestic the informal bakassi continue to operate profitably markets are small and fragmented. But it is also while the public bus fleet accumulates deficits. So because of poor methods of public procurement it is in many cities. Wherever private operators and contract administration, low labor productiv- have been permitted to enter the market-and ity, and the dearth of indigenous machine shops where monopolies and restrictive practices were and other support. Some African economies are held in check-transport services have generally too small to support a construction sector that can improved. In many countries the failure of public undertake major rehabilitation and development, 51 so it makes sense to foster the emergence of firms use of urban streets. In Abidjan, for example, new that will serve subregional markets. Measures to parking restrictions recently increased rush hour do this would include harmonizing the regula- capacity in the central downtown area by about 30 tions that apply to public procurement. percent. Reducing the cost of infrastructure is vital if Africa has so far failed to take full advantage of African producers are to compete successfully in- the available small-scale, labor-intensive proce- ternationally. Most infrastructure agencies have dures for developing, maintaining, and supplying opportunities to cut costs without affecting the infrastructure services. Attempts to use appropri- quality or the volume of their services. Cost reduc- ate technologies have been too quickly aban- tion programs require careful monitoring and, doned. The comprehensive programs launched above all, strong commitment from senior manag- under the UN Water Decade to develop hand- ers. Sector agencies under financial pressures pumps for rural use and to design low-cost sani- have seen that such programs are needed; for tation have shown that the keys to success in this instance, the managers of Africa's railways are area are extensive field testing and a multidiscipli- struggling to rehabilitate their bankrupt systems nary scientific approach. Regulatory obstacles (see Box 2.6). Greater use of infrastructure is pos- and institutional weakness often frustrate the use sible with better management and modest invest- of new technologies; this is true of containers used ment. This applies to the turnaround time for for transport, for example. wagons, to the berthing time for ships, and to the .;i Box 2.5 Private participation in infrastructure r Pri%ateenlerpris can provrde intra tructure cr,tcicteIti- -oIlectinn andJ di poing Lome municipal ohd wa te in 2 ctentl% a; the lollo%wing ca e denmonsrate. 1 74 \n annual ta\ ;p cihcall.i designaled lor Lw-iste HI Pr.'.;.e Ikl *1110 1 . SUC;esLtul pri - ie prc.v ion ot colicction and applied to tht properties ;erxed Is the i jntra4tructure !S denlOnStr3ted in Co( cl l.o.re % here principal .urce rnmen r :-enue to paF Ilte con.- drinm,ing i,aler is supplied b% tht Societe de Dislriburti.n pan%. and th; municipalirs s ex\ellcnt performance in i d Eau de la Cole dR loire iOC)DECI, t1. 13111 cites and reveiu-e c h!tction t- one ot the re1s.ii lor the 4uccess of lok.ns-Iron! Abidjan ; ,\tEnste piped nehtork to \eli- the operation Li bseted s -t.n in malilcr tlo: n; CODECI I.ointh oi-ned ;OTENIA 4arted i iih i one. .earrene%.able contract to Ih- prit3te It Lriar intere-l. the iovtrrnment 3nd a Frtnch col;: t ;ran;port and disp.oe eo the lull range or a rte; nirm SODECI ha. operated under a s; ;trm b;-a d on Ihe and i b noo collect: 3nnuall% an a' erage ot 5-I 1 tlns French ap. rnai,ic model in k hich tht public iuthorLri ot t a,te The compan% ha, maintained responsible di,- - handtle- the consruction o the s; tem but contracts ut p° pal tand.irdt and ha- eslabhi;htd a good record ot iN It4 operahon. r-aintenance and collechton o ch.arge, to a n. ironnmentil imptr,- cen,et largemn rit practices 2 pnrale operator. the rertinri This arTangement ha, re- hbae been s ound and the cempan has N rot' n steadik centl\ been e\tended to a coiicvssson contract that aiko andproliuabl.k ubilanil r ercache.edbE man- I make S;ODECI reponsible bor in%esmenl in e\panding ulacturinZ collection quipment locall under hcen,e. the .;ater s-;tem lnve,tmtnt plans need to b appro%ed No% atter ne3rlh, 1t- ear t ,u;cce,taLl oppraion. bk the to0Lrnnment -(ITErgA ha;obtained tinanrcalsupporr trom local bank- E 4(eCIEC[ re%enu,: deri%e lrom a tee that i' abour ngm intiruton,.and, tud',ng ropo toe\pandoper g one-third o0 the . -,ter tarnt Althoug.h the tari.l tructire attions to other cities n Tog,land abroad i pro%ides bor a l, ier tarilt lor small con umer; Lhich Pri/ I rt 'L Ic I - a . u, r~ /irt [rit tae bus op r3tors are s help- the poor to allord t\ater o%erfll It 1i set to rellt-t mniaing a br akthrou h in Accra. Ghana in pro dinrg total cost1 linancinig or debt ierx ic: and cash generator nnmuch-needed putlic iransport A zmall pr'.atE tirm. tor ruture inm e,tment; The %%ater larilt 3nd the ree mre slarted bN ) mrchanic in m S1 purchased monme old buses relatedcothe -olunimco i% att r-old io a-livuumer4railthr th3t wer auctlioned irib% a stte-o ned bu, companr than la\pa.;er p3a tror [lhe erucc receited and -incc Thebusrx v ererehbtililatedintheintormal ector.,ndptrt con4umpton iS metered. %.1ler lo;;es are l .. SOCDECI into; sr%ice Ntm the lirm h.3aabi.'ut4 4buze, that pr iklde ha,c1ons,ttentlk sho%%na proIiland hast\panded rapidl regular pa3ienger ,cnrict- un man% routes in Accra The because il UFpIIEie water at stand3rds among thc highe,t tirm ha3 a .tatt-to-bu. ratio ,it tn c-3boul one-iourth ot mn We,t AfTica Ihe ,t1tt-o-bu; r3tio ot tte-ou ned bus companies The RfVtI1 CllcIIt,L;ll Another v\ampl Ik th h colltctinr o 'ucce- ot lhi prin 3te tirnm in pro% iditg ellic:ent ser'ice, municipal aste b% a pri% 3te compan% in Togo I he pri. at 3 prolit t ihin f-, ernment tarilt Ict ek is a good 1i\am- %ate Togolewe Reru;e C.ollection Compan\ i§-0-ENIAi ple-e poi.c% nraker. trN ing to reorganize atlaie-ot ned bus -; 3 lrirmed a; a Togoles pril atcorporation u ith French compinies mire ethi:,enlI\ technical participation 3nd tinancial ;upport and beg3n 52-W _ -m;LC! Box 2.6 Restructuring African railways R3ilwav,s.,hich wereoncethebackboneol,Arrica'strans- Railt%a',4could hatean important role to plas in meet- port sNstem. are not' in a cnhticl 'ituation ing the mncrea,r in irclht and p.s-rncxr tranepo rt d& * In 1*6-19%. on]; two Sub-Saharan Alrican r3il%a .s m3nd resulting trom conomic rcco er; The'$ should out ot 22 appear to have denr ed a modest inancial *ur- operate i ith Ile relianct on mandator; alloc3tion t plus. Large dencirt are the rule In 1NY. out ot nine rail- troight talic It iell-nianaged . ih% oc-tild bK able t.- %%avs tor w%hich reliable dat3 are a%3al3ble .one had comptte u lih pmnate lruc,er, and buse- and '1ler alter- operating costs ofQlilpercent,aneither,;i. percent ne,ces nati%enran,it rout,e; or lanlcledl countrics ol revenue. The raile a', .cak marketing and poor coninierci3l * Sub-Saharan Africa ;s railwaY tTatric has enerall been services are otten a result of being imc-nopotl esacer- dechning both in absolute terms and in traltic; shares bated b'. bureau-crahc manageement and tack orlaLAtonomr Ghanian r3ilwvas- carried around 2 h million tons o. To- turn thil ituation around the railica$- , iill need to freight in the earlK 1970s and onis 1) 4 million tons b% the de%elop capibilities tor rrategIC planning an:al' is L.t mid-198i.ss. Nigerian railwavs lost 33 percent ol trattic demand marketing .md iraltic co-ring. Special markets trom jO7Q tc 1j.&6 In Sudan 41t1 percent ort sports were can bK round *uch as Erxing as lorg-haul carrier, in earned bv rail in 14.s0. but bl' IN$o the rafl% al s 'hare had transilt ransportation lot whch bt-tnernrmodal oordi- rallen to 5 percent nation with ports and maritine Iran port s ssential * Ratlwasvs have generaliv had ditticult conrcilling Railwa% deticits arei result ot inacdqiaate Itructure of theirpax roliand havenotad;usted their workiorcesin lne tarit- and can lead hi continuoc1 reliance on ;ub-idie; with declining outputs Stafl costs ot raile a', s absorb up Progress to%ward tinancitl ia iltaih n%ill require that rail- to 75 percent of re%enue in the worst caaes.and 47 prercnt w%a% manamrent bK granited a nuch higlherr eree at inthebest wthile 50 percent isco;nsideredastheacceptable autonom\ in tarilt-5ethng and pricing in controlling all maximum, given other costs Also staft productivih 1s co-F coniponenti and in personritl m.n3gag3ment Also the low A lQSo stud' showed that in 10 trancophone Alrican role and conmposLhon of raailwa board anrd the . 3zt nuni- countries, the average productiv it% ot their raile 3a - "as berot contT01 Iand regulatl ns need t''bere intd to inipart about 1IS percent below that in Asia and Latin America J3lnvN cohesion. and accountabiliht. In se%eral -ongoing * The consequence ot inadequate maintenance is low rethructurinn etitortl in Ciabon htnsa and Sene3al 'uch availabiliht cif loxomotive and rolling stock. often below in,titutional retcrrni- reard; have been enshrined in per- 01) percent %%ith some i%stems well KIlow 40 percent tormance contr3cts negotited bei"een the ratlwaN man- Alihough badly in need of revenues rail%sa;s are unable aenement and the go%ernrrent These- ill succeed onl; it to take up tonnage offered b! shippers because oa lack ot. both parties strictl% adhert- to thEir cornmitnt nts under and pcor maintenance ot equipment th, pertormrndne contract; RECOVERINGCOSTS. Except perhaps where facil- nance, only 60 percent of the tolls are collected, ities are underused, there are no good reasons for according to recent estimates. Such figures are charging the users of infrastructure less than it common. By contrast, recent rural water-supply costs to provide the service. In fact these services projects-which users themselves have helped to may sometimes be priced above long-run costs to operate and maintain-have collected charges recover some of the consumer surplus; most of successfully. these services are consumed by the higher-income Operational discipline is also needed to mini- groups, so this approach would also be equitable. mize capacity losses and service leakages. Accu- Often cost-based pricing alone can increase rev- rately metering water and electric power, enues by 20 to 30 percent. Adjusting the charges enforcing motor vehicle regulations, and monitor- for water, electricity, roads, and telecommunica- ing shipping and air traffic may be particularly tions so that they better reflect marginal costs can cost-effective. These measures can add the equiv- increase public revenues by between 5 and 10 alent of 40 to 50 percent to the capacity of many percent. For water supplies special arrangements systems at relatively little cost. may be justified to protect the very poor. Setting prices properly is only part of the an- MAINTAINING THE CRITICAL FINANCIAL COMMIT- swer: fees and charges also have to be collected. MENT. Financial uncertainty has added to the Revenue-gathering in Sub-Saharan Africa has problems of planning and maintaining infrastruc- been notoriously poor. Frequently this is because ture. World Bank studies find that erratic pay- people cannot see what they are getting for their ments by governments to contractors are one of money or because they subvert the cost-recovery the main risks facing indigenous construction process for personal gain. In Tanzania, where the companies. In several African countries utility roads have deteriorated because of poor mainte- companies have trouble collecting fees from min- 53 istries and parastatals, and contractors are not and life expectancy. Since then, however, it has paid on time for road maintenance. In some cases seen reverses in these as in other areas. Vocational cash shortages are to blame since they lead finance training is poor, and labor productivity remains officials to divert funds to seemingly more press- very low. A high priority for the new develop- ing areas. This is a costly mistake. It increases ment strategy must therefore be to restore mo- future demands on government funds and slows mentum in human development. In particular the economic growth. Timely and reliable funding is quality of African education and public health essential. Earmarking revenues-although unde- must be improved. Where access to education, sirable in principle-may in practice be needed to training, and health services has been widened, it protect infrastructure assets and to build fiscal has generally been at the expense of quality. discipline. Education must be relevant to the real needs of The gulf between current spending for infra- African economies. The allocation of spending structure in Africa and the amount needed to among primary, secondary, and tertiary educa- develop and maintain a system to support eco- tion, between academic and vocational training, nomic growth is huge. Africa cannot achieve sus- and among the different disciplines must likewise tainable development unless this gulf is bridged be related to development needs. Above all, edu- through a long-term commitment of public funds. cation should aim to engender an analytical frame Annual infrastructure investment equivalent to at of mind and receptivity toward technology. least 4 to 6 percent of GDP on average is warranted Another aspect of capacity-building is training in most countries, and $10 per capita annually for excellence. To make progress every country (1980 dollars) may be a suitable absolute mini- needs a technocratic elite of entrepreneurs, civil mum target in all but the poorest nations. Spend- servants, administrators, academics, and other ing for normal maintenance must keep pace with professionals. Although few in number, they will new investment. An additional 1 percent of GDP be important catalysts for development. With is needed annually over 10 years to catch up on technology advancing rapidly, Africa will need the substantial backlog of deferred maintenance. scientists and technicians if it is not to be left behind. This question is addressed in Chapter 3. Building capacity Public versus private institutions An enabling environment creates the condi- tions for higher productivity, but growth rates The postindependence development strategy will be raised and sustained only if African capac- accorded the state a lead role in producing many ities are much enhanced. Capacity-building has goods and services. This approach foundered on three distinct elements: the weak capacity of public institutions. At the * Human development, especially the provi- same time, far from promoting the private sector, sion of basic health, education, nutrition, and tech- the state often actively curbed private initiative, nical skills including cooperatives and grassroots organiza- * The restructuring of many public and pri- tions. These policies have been partly reversed, vate institutions to create a context in which but where to draw the boundary between the skilled workers can function effectively private and the public sectors remains controver- * Political leadership that understands that in- sial and must be settled on a country-by-country stitutions are fragile entities, painstakingly built basis. up, easily destroyed, and therefore requiring sus- The debate is not simply about the division of tained nurturing. responsibilities between the state and the private Often African countries have been lacking in all sector, but also about the division among the cen- three elements. Too frequently national institu- tral authorities, local government, and local com- tions have become politicized and hence used for munities. The goal is to reduce the number of tasks narrow, sectional ends rather than to achieve na- performed by central government and to decen- tional objectives. tralize the provision of public services. Many basic services, including water supply, health care, and Human development and labor productivity primary education, are best managed at the local level-even at the village level-with the central In the first 15 years after independence Africa agencies providing only technical advice and spe- made impressive gains in literacy, public health, cialized inputs. The aims should be to empower 54 ordinary people to take charge of their lives, to likely to succeed when they are given clear and make communities more responsible for their de- attainable objectives, day-to-day managerial au- velopment, and to make governments listen to tonomy, and unambiguous performance indica- their people. Fostering a more pluralistic institu- tors, which permit the supervisory body to tional structure-including nongovernmental or- monitor progress without undue interference. So ganizations and stronger local government-is a far in Africa this has rarely been the case. means to these ends. Development takes place through institutions, The state has an indispensable role in creating a including markets, whether private or public. In- favorable economic environment. This should, in stitution-building in the widest sense is essential fact, be its primary concern. It is of the utmost andmustforthemostpartbenurturedbygovern- importance for the state to establish a predictable ments. But few African governments have paid and honest administration of the regulatory much attention to the task. Agencies are created framework, to assure law and order, and to foster or disbanded without much attention to the inter- a stable, objective, and transparent judicial sys- relationships and respective roles of the different tem. In addition it should provide reliable and institutions involved. Once created, they are often efficient infrastructure and social and information allowed to decay as their initiators move on. The services-all preconditions for the efficiency of turnover of senior staff is frequently kaleido- productive enterprises, whether private or state- scopic; yet prolonged inaction in the face of urgent owned. problems is also common-and equally damag- The division of responsibilities between the ing. Thus, to overcome these weaknesses during state and the private sector should be a matter of the next generation, governments need an explicit pragmatism-not dogma. Often public services strategy for institution-building for both the pub- can be provided by private contractors at very lic and private sectors. competitive rates-road maintenance, transport, water supplies, refuse collection, and public vehi- Bettergovernment cle repair to name but a few. At the same time consumers have sometimes been exploited by pri- In the words of President Abdou Diouf of Sen- vate business monopolies. What matters is reli- egal, Africa requires not just less government but ability and cost-effectiveness. There need be no better government. Despite reforms in the 1980s preconceptions about the "right" type of organi- Africa's public administrations remain woefully zation; appropriate incentives count for much weak. The principal causes are: more. * The uncontrolled expansion of staff in the Most state enterprises have a poor performance civil services and public enterprises, which have record, although there are some notable excep- often functioned as welfare agencies for unem- tions (see Box 7.3). Managers have suffered from ployed school leavers political interference. But it has also proved diffi- * The rapid promotion and turnover of poorly cult to devise incentive systems to motivate em- qualified staff who have little in-depth under- ployees and managers when entrepreneurship, standing of either the institutions they manage or commercial judgement, and risk-taking are of the broader context in which they are expected needed. Increasing recognition of these problems to function has spurred a worldwide trend toward privatiza- * Difficulties faced by managers in motivating tion. If Africa wishes to remain competitive, it and disciplining their staff owing to the social and should not resist this trend. State-owned enter- political context in which they operate prises will still be appropriate in many cases, es- * Insufficient appreciation in government that pecially in providing utilities and some public public agencies work best if staffed and run by goods. In some cases the private sector lacks the professionals according to objective rules and capacity to take over, but in time and with imagi- criteria nation privatization can work. * In an increasing number of countries the Much can be done to strengthen the perfor- compression of civil service pay scales at the ex- mance of those state enterprises that are retained. pense of higher level staff. Efficiency has less to do with ownership than with Recognizing the urgency of this problem sev- the conditions under which enterprises operate. eral governments-notably Central African Re- Experience shows that state enterprises are more public, The Gambia, Ghana, Guinea, Mauritania, 55 and Senegal-have launched, although not yet takable. Despite the many competing claims on completed, comprehensive programs of adminis- the public purse, in countries in which civil service trative reform. The key measures include: wages have collapsed, systematic progress must * New and clearer mandates for the agencies, be made over time to reduce the numbers of public with staff planning based strictly on need employees and to reallocate the savings to im- * Staff testing to help select the best qualified prove wage scales if performance incentives are to candidates and the release of redundant staff with be restored. compensation and assistance to enter the private Staffing is but one aspect of the problem, albeit sector a crucial one. Complicated staff and financial reg- * Better personnel management, with compet- ulations that are barely known and erratically ap- itive entrance examinations, regular staff apprais- plied contribute to a gross lack of accountability. als as the basis for promotion based on merit Overspending and misappropriation of funds (rather than patronage and longevity), and accu- occur routinely and pass unnoticed because of rate personnel records that correspond exactly to poor accounting and the lack of audits. Even when the payroll audits are conducted, they are rarely acted on. * Selective improvements in the pay structure Such laxity can and must be stopped. Administra- to attract and retain highly qualified staff. tive reform takes time and persistence, but it can Public employment accounts for more than 50 be done. Guinea's administration, which was percent of nonagricultural registered employ- enormously weakened during the 1970s, has suc- ment in Africa, compared with 36 percent in Asia cessfully instituted far-reaching reforms and has and only 27 percent in Latin America. Chronic laid off 16,000 civil servants in the past two years. overstaffing has damaged performance severely, The Gambia's government has gone even further partly because staff are badly deployed and de- and has still maintained its political support; de- nied adequate material support and partly be- spite heavy redundancies, it was returned to office cause idle staff undermine the morale of those in a free and open election held soon after the who want to work. Many ministries in Africa reforms (see Box 2.7). would probably function better with a fraction of Despite overstaffing and growing numbers of their present staff. Often the application of exist- educated unemployed, there is a great shortage of ing regulations-dismissing persistent absentees, competent officials, especially at the higher tech- requiring retirement at the mandatory age, laying nical levels. This is partly because of poor training off temporary staff when they have completed the and partly because many well-trained nationals task for which they were hired-would reduce join private firms or emigrate. For example, 10,000 staff substantially. Pressure on the wage bill can highly trained Nigerians are reported to be work- be eased by eliminating ghost workers, double ing in the United States. With the right incentives payments, and automatic promotion. Merit-based it should be possible to persuade many to return pay systems, which relate bonus payments to per- home. So producing skilled people is only half the formance and not status and which pay a greater battle; the other half is to recruit and retain them, part of salary in that form, help to motivate staff. not so much by high pay (which can be ill-af- In many African countries compensation for forded) but by ensuring that they have productive civil servants has been severely eroded during the jobs, satisfying work, and secure conditions. past decade, if only by inflation. This erosion has often affected positions requiring higher skill lev- Effective economic management els disproportionately, precisely those where the greatest shortages exist and migration occurs. By African governments have depended heavily many measures of internal and international com- on external agencies and foreign consultants for parisons, compensation levels were too high at the analytical work on which key policy decisions independence, and in a few cases they may have have been based. If governments are to become to fall further. In a growing number of countries, more self-reliant, their capacity to undertake this however, compensation has fallen below levels work for themselves must be improved. In the necessary for the government to compete for in- 1980s governments had to design adjustment pro- dispensable skills and for government workers to grams to attract external support-notably from support their families on their official income the IMF and the World Bank. This stimulated a alone. The adverse effects-low morale, moon- demand for policy analysis, but progress was lighting, and petty corruption-have been unmis- slow. Governments should plan ways to build up 56 Box 2.7 Reforming the civil service Li., Civll *cr' ice reform is high on rhe agenda tor mans Atri prersonnel action is.uch a- hinng pro.mntiori tran.ier r 1 can governments such a- the Central Atrican Republic retirement, i promptil r iorded n th, per.onnel irtr- The Gambia. Ghana and Guinea In these tour countries nl.3tion s. lem and the fM roll sn1iultaneoull. adiusted. ivil rsenice, ha%ee'panded %erN tlat and hae;erncd in 5, crtating a personnel data ss-tem linked Lu thc pa; roll part au weltare progrcam in a pn-od ot ecenonmc declin, g;. urnment~ have been able to pre;tnt rsalarN a ments . Consoquentl% the ,alan bill ab-crbcd a 'er; large part -t ltonont\i stento runauthorizedper-onriel Mloreo,ercomn- F 4overnment re%emnuc 1 BI QIn C Guinea . ! Itit" ci; II puterizatIon permits rcgular Lpdat in and quick lerifica- fi ernantswn agesaccnunted tor3 ipercentolcurrentespen nn. in The Gambia the ;tatt audi it %%as tlollcied b, the Jiture,. In TheCGambia the civil .erx ico dcubled beDceen rigorou; nionilonng ot 4al:l;, pa; ments and :ontrol ot I974andlQ4S4 InGhanathecii,il sErx icc increaseda3tarate ncu% hinng and ;imilar niea~ures are being instituted in lisehmes thegroi' thol the labor marlet-14 percent each Ghana 3nd Guine.a ;earbetween IY. and l n .2.lntheCentral.Arrican Reput- Fourth basic and mtn*ri ice ltrainin- Is bting de,i:nei B lic civil ern Ice salarie- ab,orbed re3 percent ils current in the cc.nte\t of a -omprelinen iE ci;il snirxicc human revenues. Recent hiring thce2ee haleMhped tocontain ih, re 'ourc: plan and clcarl\ link-d to planned -:areer de%El- z'agebill, butthth remainunsustainable Th,cappinqgot opment Mfore peciiical; to 'oercom, t;eaknes inper 4 3 ge andprmotionsha;edemotivated tati h mu sonnel management npecralized in-,erxice training I' rale a, alreadJvtenr potor GcneTall prolducti;it; u a- being provided to personnel stall In The Gambia andi estremel, low di.eplnei a- largele lacking and o% erall Ghani the tat3t audlits .cre undcrtal,ern H selec-ted oUti- there u as little accountiabiith cial%. wvho ou cr tirrtensive-training i taifm- To tackle ihi, situarion the lirtt tep has been to con- ~ pect.in and 1oh anals si, techniqoe+ U duct a stall census to-. eliminate troni the pa; r;.li departed Filth, the r,hatblir3hon o! a ci% It eri ice also- required ii -taff ighostsi overage nmplo\ st'-. and unwarranted pro- the reform c't the -tatutvr\ and leeal trrme%s"rk The i mohon~ and allo%% ances and to determine preciselY the oblectc ts ii to re; ise and simplit the ci% II ertIce code numbers and deploi mentotcitIl seri ants In The Gambia pro-.nncl tartutic and emploirment conditions to rellect more than 21 perct oIt Ithe I -iI enr- e -as identitIied a the need t.r a streamlined mnrvale'a . and cost-conscious -upertl`Ious rcll:.t- ng such a censu- and was subs- ci; II ,cr ice Linkud v' thin in Tlh- Gambia was a re\ sinon quentl\ retr,nched. The Central African Republic t,rrmi- t thle civil ersi pa; 3nd benefiti trucrure and related nated automahc recruitment olgraduates and introduced re% ard s; :icms special honus,s and allowanct's1 aimed comppvtiti\ entrance e\am, a cenaus allo wed sa; in,s ot at harmonizing special arlr3ngement- and linking salar 7 to 5 percent Lt the itage bill prcmiumst ili% idual pertfrmance in Ghana based on A; a second step staf a3udit, have been und rtilaenr t cemparalor ;ur\-v% pa' i:; naiproved in two ws 3% r t - match stati requirermenl toaactual sLttming thereb; estab- higher-,kill lev%ls to rev-ersc a ser ere brain drain out otl : hishing 3ppropnalt--tatring ,trucwurt and identir. inc Zovernment and to Il! crrical lon -tanding acancies . -urplus statf Toensure that thet most cc.mpetent -ntia ere In 31a tour ca'cs rcolrm in'.-olvt-d la; ing-oll stalf The t retained. Guinea required all ci; 1 oer' ants to be tested. A' ucce;; .;t the retorm hinged .n the pclitical skill i ith a result 14 001) stall have bcen placed -n idministrahse ;%hlch this ta,k !,as approaclhe. In The Gambia a stall lease pending retr.rnchmeni and 0(ltsilt hawe opted totr re,eitlement ;cheme to a'sinr redund.ant emplo;ees as .; early retiremenit (Ghaa carried out .; stemar: lob in- put in place and n Gha;na a r,ieplo;ment committee s a- ;pection programthat ins oed uptoLi ljob inspsctor anl e-,libh4hed to help fornier ci; ilt erl,ants ind arntul pri- remm- ed sonle 4 1-1 Wii civil serx-ants Inr'm the past-'ll I.- er vale' stctc'r emFIc; nment In C(-u .[ the go'vernment has sv-o sears Introduced a redeplo;, ment program as-istedi b% a credit L Ti) avoid c'stl. r peai- ot -efnl5 and compntenc; tc ,ts schrme adrnin,tered b'. local bank, the third step has tren to le tlsp and nanta!n an etle- The- inmplem.rntaltiin o: c isil serx nic retorm is a oI ng nMe personnel infrmation * 'rem to provide up-io-d.ils and pc.ltcall- ditticitti r;c-.- se urm participated in workine partie; and ad%ii;Ed e,amples in Africa in h hich lacult- and re-earch econo! on th, hormahon ot the Economic Reco%er% Programme mists are conmbutin sigmticantl to national economic; nd e\ternal n. Ctiati.r,. Donors -urnded polic-, and prol- policN analhsi;. lt E;oncmi Research Bureau slarted in ecthtidieslon intlahontarift retormns.arldcropmarketing 14i,5 with Rockeleller Foundation support a %.t AallEd a; %%ell as hecollechonand anal% si;ct data on parastaral intialhb eXp3triate; v hiletTrnzanan- i er tsentabroad performance and ¢(x rnm.nt recurrent colsts LIDSAI tor posigraduate training. econormists have also promntkd informal discuslion ol This etorl io creatt a cenier or e\cdllence as set b3ac Filici op ior.r b% or)aniinnge orksthop~-. ith setnior gov b% the phasing out oi Foundahon support in 1471. Core ernment o.ttic3ks in iQN ihes launched a quarterlN pub- staft were attached to pbs in the public ser% ice and e\pa- lication re% et in ;;conomnc rTends and coritemporar~ tM3ites lett. Thisdecline wa4 reverstd it 1'7- % hen '% -e- Foht 1\ 5s;ues. den agreed tc sponsor technical support and trainine tor All this proved pos;ibl tor three reasOns First. the the bureau and tor the economics taculLt at ihe Uni er;tir stron* toundltions laid 21.1 %e ar ago % ith e\ternal sis ot Lund kinc:e ut3mained the ta.iculr\ thr: .igh the lOQ7is 3nd helped The current program 31so provide- for 4hort-term producealar4eenoughs .condgtnierahb,nt l ell-trained stud\ visIts s.abbatical leavetor senior statt assignments economisrt to prov ide 3 cniical mininmUM ams- Second. bs 0islring protessors 3nd eqLipment As a re-ult the the authorities .ought an .pen debalm on dilicult pohic. UDSM now% provides more thanr a dozen TanzanIan pro- isues ;nd --ere . ilring to drxi. on nianonals out4ide fessional economist4 i ith .trong capabilities tn indepen- g!oernment to reintorce policA raming c3pacir. fhird. dentresearchandpolc\ anal\sli there a3 increa,ing av arente4s b% donors that local es- These ULDSKI eccnomnits have beer incr asinzk prt%sarea kn A ledgeablri:3d;csrt-tecti%ere,urce tr drawnintopolics workb% rhegvternmertinrecent% sers their ow n program worK The% were ;econded to go'.ernment and para,iata[l. These technocrats provide the continuity when should be redirected to give priority to the needs governments change. To improve the quality of of decisionmakers. This issue is discussed more the work and to ensure that the structure will fully in the Statistical appendix to this report. survive periods of neglect, the pyramid must ex- tend beyond government. This can be done by Strengthening local government developing analytical capacity in universities and other independent research institutions, as well as In most countries urban growth has far out- in economic consulting firms. The donor commu- stripped planning and administrative capacity at nity has made a useful contribution to institu- both the central and local levels. The task of meet- tional development by building up this ing mounting infrastructure needs has increas- nongovernmental component-mainly through ingly fallen on local governments. This is as it private foundations for research into long-term should be. Alhough weak and underfunded, local development. Several countries have institutes of governments are best suited to meet the needs of this kind, which are scarcely used by govern- local communities. This is as true for the rural ments. Tanzania is an exception; its university areas as it is for the towns. The initiative shown by economists played a valuable role in preparing its Rwanda's communes in mobilizing citizens for economic reform program (see Box 2.8). road improvements, tree planting, and soil con- The aim must be professional excellence, and servation illustrate the potential. Developing one way to promote this is by building profes- competent and responsive local governments is sional links between economists within Africa. central to capacity-building. It implies stronger The creation of a professional network of econo- powers to raise revenue locally and a clearer del- mists in East Africa is an important step in that egation of authority and responsibility. Many of direction, which could well be replicated else- the problems of the towns and rural communities where and in other disciplines (see Box 7.5). can only be solved locally; solutions imposed by Policy analysis is very difficult in the absence of central authorities are likely to fail. The objective reliable and timely data. Africa's statistical ser- should be to capitalize on the energies and re- vices are woefully inadequate. Most need compre- sources of the local people. hensive upgrading and increased funding as a Decentralization in Africa has so far mainly matter of urgency. Their data collection activities concentrated on strengthening the field agencies 58 of central government. This has been justified by vious regime. The new approach should try to the fear of corruption and inefficiency in poorly reconcile efficient government with the common supervised local governments. But a change of desire of individual Africans to be independent heart is now apparent. Francophone West African economic operators and of social, religious, and states have embarked on fresh efforts at decentral- community groups to play their part (see Box 2.9). ization; Nigeria is reappraising its local govern- This latent local capacity can readily be tapped by ment systems; and Tanzania is in the midst of removing administrative restrictions and provid- reviving local government. These are all moves in ing positive support. the right direction. They need to be extended and The objective should be to release private ener- reinforced. gies and encourage initiative at every level. At the grassroots level this means village and ward asso- Fostering private sector capacities ciations; at the intermediate level, various local nongovernmental and cooperative unions and Recognizing the drawbacks of relying too heav- other organizations; and at the national level, ily on public bureaucracies, future development chambers of commerce and industry, trade asso- strategy could make greater use of the private ciations, umbrella NGO organizations (such as sector. Often, despite considerable hostility from CONGAD in Senegal and VADA in Kenya), and central government, local entrepreneurs have professional associations of bankers, doctors, law- shown remarkable vitality (see Chapter 6). In yers, accountants, and the like. Such groups and Guinea, for example, private traders continued to communal actions can build on the African tradi- supply the population with essential goods even tion of self-help (see Box 8.3). when severely harassed by officials under the pre- Box 2.9 Self-help community participation LnducLi :.hich mein; brotherhordol Sir, ad hili i4 the h;ll anid a nur.cr% - hool e r eLuLlil Thenexlprorect a.a, ; nam0! a prntjtak oc er th.I i-hlping p-ir arhan . ouih tile rotrildinot o5ri iou-- ds&tro%!ed b a hea% - lloodl In k.L t1o find Z.inlultT1, ment throush tralningr.and aupmenied he th prLr i,ior o p it l.trint- tl.ipath, and ;omrnunitl> io alter ,ite Po% ertr and pror ide 1; .-ct a . road A third prol% r pro-r dLd h.uming tor about n 4111 hou.ming tarted bh a Catholic a rton group it begin it, lqu:tior re,id.-nt; 1 Srm I II-"i h-.ues e.cre built at an .rk1 . in b t ttering .heller arnd lod .t cling Fark- * crage 61,r ot .tk; th[r,n $'1 I per h.ou-. including .elt- mg bo. ;. ho lil ed olt tipF on the ,treeE; 't Nar.:.bi To help lahor-tar le- e:pen. i c than the geo crnment-a- 1pro ide -ocation;l training tor the bo- s. it doeeloped a3 ,i.kitd lot -c-.t hie *-and- er'ls houling Alth,.ugh ;villagI, potechnic *%-'*m hich later e oled into. ; a orn.. am e haltli-rr in standard thcV are much better than %Er% ,uce,tuc ;Fpr nice-hlp pror3na Linder thbi pr0- the tl1mni; cardt.ard and Paper dJ elling. that tht: re- grin, L ndugu pas s rougehlN halt ot tile wi to rile place'd tradertmn rr iil,ng in- train rhemand h3iase. loped ..irnple The range ca Lindurzu a-ti.t itite grel TrI ing to S t t buinoev irain.n s;pectcall; lorn hc Etrainer, Apprin- the root, 1 irporr it be:anlr in. oh ed in primnarschool tice. are required to atl nd clase- to ac;quire a minimun c-ducation 3dIIlit , rac3 cli,C tonr %. ormen and rhe Pr- ot theorelical kno le.1ge .nd at the end .,I theappr ntice- si4on ot ba ic heltih eor' ice, inc nme-gencrating acti i- Ihip perio.d thes take rrade ieSti g4,en b thht go'. errnmnt li-s 1r o-.nien ;nd nuths inclUded the tormarion ol a The% gencrallk paF. *h>,e ie.t; alter rinfe mninth; im;tead rLoop,ratir e ic. all tenit .ilv..ied trom Nairobi main oI the 1tr' cear- that i.- normal lor tho,t %ho art, nd the jump 13% earl% I i Llndueu participated in mor. than 2i go% ernments ; %llaiu poli technicm;s prorans andi neLded to rethiiLk it, role and the locu' ot 1 Relaredtltrainint Lncdu,u robtecti'. itocreagimn- it.. future Inorir.id to concentrate on emplor mEnt iul emplok Tnr.n tor thc %outh~. to tind -ource; 1 rncom ... g x eni:ration throuh continuation ol training and rmal- it -.:relted it- o'.% n training ind produ:hon uniitm in carpen. entcrpri;e deJ elopmni. 1.1. -co;t h,,u;ng and oniniu- 4I tr', metal'.rcirkinv n-oior mechanic-, .nd tailoring X %c- nat d--ealopment through the hormation .1 irnkrest tl hicle rnjintenari;c: coniract trom ik Nort%.-ean a,d cro-LlP- ' .enc; INiNRAD, ia4 ,o -ucce-trul thai an indep,nl I oda Ihe Lindaga S'ciet' ha;s salaricd ,tati ol more nmaintenance t.kiti irn liS.h thar, lisi.i h n..IanI a nd ti..o or thkre %.llunteers Its Ilus;7 L*r,dug u . n%ol%.rment in hou4ing proileci .tarted in budget a;ra more than sI million almrn t haltot w-hich i. 1%3 tollo%inpg a large tire in ne c-I N airobi - ,ljm r derirled Iron: itl incoime-produ.:ing actiitiest. among i' tlages with nommun!t[ participation in plinninc and then a .:rilt .hcip in one ol \Virobi 1e-ti-do arva; and j elt-help contribulton, n r construction iork .Ibout 0 .5 . grok inm number orncri.ultancie. to oui,idegroupS t, ho one-rnom mud-and-.. attlI h,ius¢- a z.cond cr.Mnmurita dra.v. on Lindugau er%perience and kno.-ho%, 59 The political and cultural dimensions traditional sector, despite its strengths, should not be romanticized. On the contrary, the aim must History suggests that political legitimacy and indeed be change, but change that is securely consensus are a precondition for sustainable de- rooted in a country's social context. velopment. A sound strategy for development Customary institutions are not stagnant, but must take into account Africa's historical tradi- rather constantly evolving in response to the tions and current realities. This implies above all changing environment. Tobe successful, develop- a highly participatory approach-less top-down, ment programs need to take fuller account of a more bottom-up than in the past-which effec- country's social context and cultural dynamics. tively involves ordinary people, especially at the Each country has to devise institutions that are village level, in the decisions that directly affect consonant with its social values without losing their lives. sight of the basic objectives. In some spheres, how- ever, there can be little compromise. The family Modernization and ethnic ties that strengthen communal action have no place in central government agencies, African intellectuals have emphasized in their where staff must be selected on merit and where writings the widespread failure of the public and private monies must not be confused. postindependence development strategies to build on the strengths of traditional societies. Empowerment of women Modernization theories in the early years of inde- pendence tended to make rigid distinctions be- That women play a central role in development tween modern-that is, "Western"-societies and is becoming increasingly recognized. They are the premodern or traditional societies. Modern soci- principal producers of food, the managers of ety represented "progress." The approach led to household resources, and the custodians of family many mistakes, especially in land reform, live- welfare (see Chapter 3). This is a case in which stock projects, consolidation of rural populations, tradition and development really do seem to and integrated rural development. clash. African women face a variety of legal, eco- Future development strategies need to recog- nomic, and social constraints. Indeed some laws nize that, far from impeding development, many still treat them as minors. In Zaire, for instance, a indigenous African values and institutions can woman must have her husband's consent to open support it. For instance the persistence of primary a bank account; the new civil code presumes that group loyalties, although often deplored by out- a wife's property will be managed by her husband siders, has been a significant force for develop- unless he is proved incompetent, and, although ment. Communal culture, the participation of she may manage goods acquired in the pursuit of women in the economy, respect for nature-all her profession, her husband is allowed to usurp these can be used in constructive ways. The infor- them if he deems it in the interest of the household. mal credit systems successfully draw on custom- Such legal constraints have confined many ary values and patterns of social organization (see women, in their role as economic agents, to the Boxes 4.2 and 6.3). Many indigenous cultivation informal sector. practices, such as mixed cropping, were once Future development strategies should favor much criticized but are now seen to have technical women. Government and donors should help merit. More generally, while the modern sector women's groups to contribute more fully to eco- has been in malaise, the informal sector, strongly nomic and social development through training rooted in the community, has been vibrant. In and access to credit and by giving them equal particular it has shown a capacity to respond flex- status in their dealings with formal institutions. ibly to changing circumstances. This is not to lessen the importance of the mod- Governancefor developnment ern sector. Certainly if agricultural growth is to be raised, higher productivity through the adoption Underlying the litany of Africa's development of modern agronomic packages, tools, and ma- problems is a crisis of governance. By governance chinery is essential. Other sectors need modern- is meant the exercise of political power to manage ization too. But increasingly it should be a modern a nation's affairs. Because countervailing power sector that supports the traditional sector, rather has been lacking, state officials in many countries than one that aims to replace it. Nonetheless, the have served their own interests without fear of 60 being called to account. In self-defense individu- accounts outside Africa. The cost is not just the als have built up personal networks of influence waste of funds, but also more seriously the pro- rather than hold the all-powerful state account- found demoralization of society at large. able for its systemic failures. In this way politics Corruption can be countered in several ways. becomes personalized, and patronage becomes The elimination of unnecessary controls greatly essential to maintain power. The leadership as- reduces the scope for "rent seeking." Transparent sumes broad discretionary authority and loses its procurement procedures, scrupulous and prompt legitimacy. Information is controlled, and volun- accounting, the publication of audits, and the vig- tary associations are co-opted or disbanded. This orous prosecution of those misusing public funds environment cannot readily support a dynamic all contribute to financial propriety. External economy. At worst the state becomes coercive and agencies providing aid have a right to insist on arbitrary. These trends, however, can be resisted. such measures. Donor governments also have a As Botswana has shown, dedicated leadership can responsibility to prosecute their own firms when produce a quite different outcome. It requires a they pay bribes to obtain business; regrettably so systematic effort to build a pluralistic institutional far the United States is the only developed country structure, a determination to respect the rule of that has outlawed such practices. A free and vigi- law, and vigorous protection of the freedom of the lant press-all too rare in Africa-is as important press and human rights. for good governance in Africa as elsewhere. The Intermediaries have an important role to play; two countries with the best economic perfor- they can create links both upward and downward mance in Africa-Botswana and Mauritius-both in society and voice local concerns more effec- have effective parliamentary democracies and a tively than grassroots institutions. In doing this, vigorous free press. they can bring a broader spectrum of ideas and values to bear on policymaking. They can also International dimensions exert pressure on public officials for better perfor- mance and greater accountability. The National If Africa's efforts are to succeed, the interna- Christian Council of Kenya has played this role for tional environment must be supportive. Four as- some time. Others are now emerging in several pects are particularly important: countries. The intermediary's role can be politi- * A renewed effort to promote regional inte- cally controversial, yet it is essential for greater gration and cooperation citizen involvement. In relating to the local orga- * A growth-oriented, liberal trade environ- nizations, it is the intermediary that must exercise ment restraint. A common mistake is to ignore local * Sustained and assured long-term financial leadership, often on the grounds that it is exploit- assistance ative, but there is little empirical evidence to sup- * Reduced donor dirigism. port that view. On the contrary, studies show that Africans have long seen greater regional inte- working with existing leaders produces more ef- gration and cooperation as prerequisites for sus- fective development programs. Better informa- tained development-and rightly so. But real tion is crucial for generating greater public progress will be made only if there are new initia- awareness. Too often political consciousness and tives (see Chapter 7). This report does not address participation are stymied-sometimes deliber- the issue of South Africa. Nonetheless it is reason- ately so-by lack of information about govern- able to assume that solutions will be found to the ment policy. problems that have divided the peoples of that region and that South African economic coopera- Curbing corruption tion will eventually transform the prospects for the whole of southern Africa. The extent of corruption is largely determined Growing international trade is essential for Af- by the example set by a country's leadership. And rica to expand and diversify its exports. Africa is once bad habits have become entrenched, they are a beneficiary of the generalized system of prefer- hard to undo. Unfortunately foreign aid has ences under the General Agreement on Tariffs and greatly expanded the opportunities for malfea- Trade (GATT), while the Lome Convention grants sance exacerbated by the venality of many foreign African countries virtually free access to the Euro- contractors and suppliers. Hundreds of millions pean Community market. Thus market access for of dollars have been siphoned off to private bank manufacturers is not a problem. However, Afri- 61 can countries do frequently encounter obstacles to these programs is the lack of local capacity, both trade in the very agricultural commodities in private and public, in their design and execution. which they could be competitive, such as beef. The Too often conceived by outsiders, the reforms are dumping of dairy products in Kenya severely not adequately internalized and do not inspire damaged its dairy export prospects; US restric- commitment. A deep political malaise stymies ac- tions on cut flowers did the same. Protectionism tion in most countries, and the citizenry sees the that keeps out African products serves the inter- elite as self-serving. Governments have failed to ests of neither the importing nor the exporting rally the people for development. countries and should be vigorously opposed. Africa has abundant resources. It could achieve Equally, the newly industrializing countries an economic growth rate of 4 to 5 percent a year- should be encouraged to open their markets to the target proposed-if bold actions were taken. African produce. Future country strategies should: To reduce and eventually eliminate Africa's de- * Continue to pursue adjustment programs, pendency on foreign resources must be the goal. which should evolve to take fuller account of the Aid has negative, as well as positive, effects, not social impact of the reforms, of investment needs the least of which is enabling hard decisions to be to accelerate growth, and of measures to ensure postponed. The development community must be sustainability vigilant that the negative effects do not become * Stress capacity-building through a new predominant. In the medium term Africa's mini- drive for human resource development, espe- mum requirement of foreign assistance will re- cially a radical reorientation of education and main high (see Chapter 8). It is important for training to improve quality, relevance, and cost- donors to ensure the continuity and growth of effectiveness and through the adoption of a sys- their support for countries willing to undertake tematic approach to strengthening institutions, sustained reforms. Prompt and far-reaching mea- both public and private, by paring down over- sures to reduce Africa's debt, as outlined in Chap- blown public agencies, directing their activities ter 8, are also essential. from controlling to promoting development, and In assisting Africans to develop their own capa- fostering nongovernmental intermediate and bilities, donors should be willing to be flexible. It grassroots organizations is increasingly clear that the approaches applied * Foster an enabling environment for produc- in the North are inadequate even for tackling tive activities by removing unnecessary regula- northern problems: the war on poverty has not tions that add to the costs borne by enterprises, been significantly more successful in some north- keeping exchange rates competitive, and ern countries than in the South. Development strengthening infrastructure services practitioners from the North have often prepared * Overcome the nexus of weak agricultural programs for the South without the participation production, rapid population growth, and envi- of local officials-or still less, that of the general ronmental degradation through enhancing agri- public. These programs often inspire little com- cultural research and extension services, mitment from the countries involved and as a promoting family planning, and elaborating and result have often been ineffective. New and more implementing country environmental action effective aid modalities are discussed in Chap- plans ter 8. * Pursue regional integration and cooperation to overcome the fragmentation of African In conclusion economies . Forge a genuine partnership between gov- The central objective of the future country de- ernments and donors that builds on all these ele- velopment strategies is to transform production ments. structures, to reverse the decline in institutions, The following five chapters address in greater and to build the foundations for sustainable and detail the main issues that will arise in putting this equitable growth. The recent structural adjust- strategy into effect. The report then discusses fi- ment programs are important first steps in the nancing needs, the role of the donors, and the right direction-but much more is needed, and steps that are needed to build a global coalition in greater care should be taken to mitigate their ad- support of a jointly agreed future development verse social impact. The fundamental weakness in strategy for Africa. 62 -~~ Investing in people Toward human-centered development rent trends persist, the basis for long-term devel- opment will be undermined. People are both the ends and the means of de- The future development strategy calls for a new velopment. Although improved health, nutrition, commitment to developing Africa's human re- and education are ends in themselves, healthy and sources. There are two immediate priorities: to educated human beings are also the principal improve the quality and relevance of education at means for achieving development. every level and to redirect public resources to- Measuring development in terms of access to ward basic education and health care, including basic health services, education, and food is more family planning. For the longer term, and by 2020 satisfactory than using most other yardsticks. So- at the latest, African countries could realistically cial indicators, such as life expectancy, reflect aim for universal food security, primary educa- more accurately the condition of most of the pop- tion, and primary health care. ulation than per capita incomes because of their much broader distribution across households. Synergism in human resource development programs Kenya, for example, with a GNP of only $330 per capita, has lower infant mortality and higher pri- The components of human resource develop- mary school enrollment rates than, say, Cote ment programs are linked in a mutually reinforc- d'Ivoire, with a GNP of $740 per capita. ing way. Family planning, for example, is more Narrowing the gap in access to basic services accepted when overall mortality is relatively low between Africa and the more developed countries and levels of education relatively high. Family is a more feasible goal than narrowing the gap in planning improves maternal and child health by income. The gaps in access to basic needs have allowing the spacing of births. Similarly, clean considerably narrowed during the past 30 years water and sanitation produce more benefits when and can be narrowed even faster in the next 30. provided along with health education, which im- Countries such as China and Thailand made proves hygiene, and nutrition education, which much progress toward meeting their social goals promotes better dietary habits. Providing clean by devoting about 5 percent of GDP to health and water reduces infection in children and boosts education when their per capita incomes were no nutritional status. higher than those of present-day Sub-Saharan Af- Healthier children are more likely to attend rica. school and to learn than the sick or malnourished. Africa has made impressive progress in human Education, in turn, enables people to understand development since independence, but there has health problems and to act in their prevention and been a disquieting setback due mainly to fiscal cure. In general the incidence of mortality is found difficulties and expanding populations. If the cur- to be lower among children of educated mothers. 63 A mother's knowledge, in particular, about inex- Figure 3.1 Central government expenditures pensive health and nutrition measures such as on health and education, 1975-87 immunization, oral rehydration, breastfeeding, Percentage of GDP and hygiene can have a significant effect on a 10 child's survival. Educated and healthy parents are 9 Zambi the most likely to have educated and healthy chil- 8 / dren. Similarly, raising educational levels en- 7 Kenya hances agricultural productivity and contributes 6 to the effectiveness of agricultural extension and, 6-Tanza therefore, to food security. A healthier population . can produce more food and generate higher in- 4 . .- comes, which can lead to further improvements in 3 ...... nutrition, health, and education. Improved access 2 - to health and education are thus crucial for Sub- I Saharan Africa's long-term development. 0 1975 1980 1985 1987 Poor quality of, and declining access to, social Source: World Ban k data. services The quality of social services varies throughout Sub-Saharan Africa, but it is generally poor and How can universal food security, primary edu- has declined in the 1980s. Urgent corrective mea- cation, and primary health care be accomplished sures are required. Improvement in the quality by 2020 in Sub-Saharan Africa? First, it will be and content of education is especially important imperative to reverse the decline in per capita to support sustainable growth. incomes and to achieve a modest but sustained In most African countries human resource pro- improvement in living standards. The targeted 4 grams have been geared to meet the needs of the percent a year GDP growth rate would generate elite. Health, education, water supply, sanitation, comparable increases in public revenues for in- and other services for most of the poor are either vestment in human resource development-itself nonexistent or represent the efforts of local com- essential to sustain the projected growth. Second, munities and NGOs, poorly supported financially fertility rates must be lowered, without which and technically by the state. Few government ef- improved access to, and the quality of, education, forts have been made to elicit community partici- health, and other services necessary to accumulate pation-and this in societies that have a long human capital and social development will be history of group decisionmaking. Africa's social constrained. Third, although all levels of educa- indicators will improve only if public policy and tion and health care require more resources, rela- money are focussed more on delivery systems that tively more public resources need to be allocated respond to the basic needs of a wide spectrum of to primary education and primary health care beneficiaries, especially the poor. services. With a targeted GDP growth of 4 percent With the recent decline in public resources a year, additional public financial resources will caused by Africa's poor economic performance, continue to be available for hospitals, curative social services in many countries have deterio- medicine, and higher education, but their relative rated as budgets have been cut (see Figure 3.1). share in total public budgetary resources should There is evidence also of stagnating or falling decline. Moreover, given the prevailing overall primary school enrollment rates; infant mortality budget constraints in many countries, there is an rates in some poor countries continue to be very urgent need to tap additional private sources of high. Where there are serious inequalities in ac- funding for higher education and curative health cess to public health and education, even a small care. Parallel measures need to be taken to reorient reduction in aggregate social expenditures may higher education toward effective and relevant have a disproportionate effect on the health of skills training. Fourth, serious efforts have to be poorer households. Therefore it is important dur- made to reduce costs, promote cost sharing, en- ing fiscal crises to protect public expenditures on courage people's participation in service manage- basic social services. ment, expand outreach, and raise the efficiency of 64 social services. Fifth, mainstream programs must sects) that transmit diseases. Only large-scale- be designed to reach both genders effectively. Fi- and expensive-efforts can control diseases such nally, additional resources should be committed as river blindness and schistosomiasis. Cam- to the social sectors. paigns have reduced their prevalence, but many of the control efforts have lapsed since 1970. Be- Providing universal primary health care sides reinstating disease control efforts, programs and reducing the population growth rate are also needed to efficiently administer the drugs that have recently become available to reduce the Critical health threats intensity of infection and to control morbidity. The declining availability of food has worsened In 12 out of 29 countries for which data are malnutrition. Moreover high fertility leads to low available, the maternal mortality rate is higher birth-weight babies, who have the poorest chance than 500 for every 100,000 live births, compared of withstanding malnutrition and infection. For with 44 in China and 90 in Sri Lanka. Each year those who survive childhood disease, morbidity about 150,000 mothers in Africa die and roughly remains high; an estimated 200 million Africans the same number suffer permanent disabilities have chronic malaria and live disabled lives. Be- because of complications from pregnancy and tween 1979 and 1983 life expectancy declined in childbirth. The infant mortality rate for most of nine Sub-Saharan African countries. Sub-Saharan Africa ranges between 100 and 170 On top of all this has come the AIDS epidemic, for every 1,000 live births, compared with 33 and which is likely to strain the capacity of already 32 in Sri Lanka and China, respectively. In many weak health sectors in the countries to which it countries deaths of children under five represent spreads during the next decades (see Box 3.1). The close to half of total deaths. In the poorest coun- potential cost of caring for AIDS patients is high, tries, such as Burkina Faso, Ethiopia, Mali, and in addition to the indirect cost to society of the loss Niger, only 70 to 77 percent of children live to the of labor and family caretakers. It is also likely to age of five. In most countries progress toward divert resources from the treatment and control of improving child survival is slow. The progress other diseases. achieved in seven countries is shown in Figure 3.2. Africa also faces some of the gravest-and most Improved health care intractable-general health problems, especially tropical endemic diseases. The environment fa- The economic crisis facing many African coun- vors the survival of vectors (such as airborne in- tries has not only depressed already low incomes and poor living conditions, but has also dealt a blow to the ability of the health care sector to cope by constraining public expenditures on drugs and Figure 3.2 Mortality rates of children under five medical supplies. Safeguarding budget alloca- in selected Sub-Saharan African countries tions for health care, especially for the provision Rate (per 1000) of primary health care, is essential if health ser- 400- vices are to achieve their potential contributions _ I ,- . , , to improved health, productivity, and develop- -; i - I_I ! '-'> t ment. These might be best accomplished in many 300 - - | ! " African countries, if people-individuals, fami- lies, and communities-take responsibility for 200 : || 11 L I -L m their own health care. Government, NGOs, and the private sector need to provide support for these efforts. Communities must be consulted and 00 1- encouraged to participate in setting their own f. :priorities and in the design and delivery of health care programs. a - a i In many cases the new investment in health care Malawi Nigeria Zaire Kenya has not been distributed equitably nationwide. Note: The mortality rate is the number of deaths of children Poor communication and transportation keep under age five per 1,000 live births. meager services outside the reach of most of the Source: UNICEF data. population. Clearly, priorities must be reassessed 65 Box 3.1 AIDS: The demographic and economic consequences The t%Vrld Hedlth Organizatiorn iV HOr esti,mnatc that To combat AIDS re'uriens aire likel to be d.,erted more than 3 milihon people in Atrica are miected b% the Ironl the tre.itment and control III other Important di- HR v-irus 3nd that 30 percent ol thIhe - Il et ole into ea;es At the Nlaina-iemiT- hospital in Zaire. %Ithici has AIDS cases im a tew% years The couritrie, med attected in 2 1i11ijl bed- 50 pterient o the mncdJal or 'urgical pahents the central belt Cot AtTica art? Burundi ker'a R1- \.nd test pl-liti e. andi 2-5 percent 4T deaths are AID[S-relatud i Tinzania Uganda 3nd Zaire Surie,; is n the,e countries AIDS C reatm,nt ilso itill increase demand tor lorergn sho,e seropo-;iti%e pre% alence rate- from S to 21' perceni excharce br pharmleeurrcals The IVHO E-,ential Drugs r among urban adult; and high,r rates among high-risk Program rt-;s racing t%en mire acute -hortages as in- groups. crea3mg numbers of AIDS patient, set- teatnment tor AIDS can tpread quickl in Africa The pree alencte ol recurrcntinrecntonr., Iiicharenioreresista..nt.totTeatment . sewuallv lransnmitted d-e3a e, i5TD1 I retlects d-!de^pr,ad and require higher le eks ol drug u,e E high-risk se\ual behavior which also lacilitatte thetiran,- Tliere are olher cost- AIDS predomminantl allects mission Li Ihe HAB virus In Bancuit Central Atricatn Re- ettingand niddic-aged pople i their pnre producri e public seroprepralenceamongaduIl4rose trom 2 I percent sears Anione Acricrn adult, the hlche,-t proportions Vl in ILIS,to7. percent iniu> 1........S.. Amrong prc.stitults in Kens. miectcd people are b,tte nn In and I ,ears old A Cost ir rose trom 4 to 5Q perceni in ti . ears -rud! prepared lcor Zaire esinrace, the nunmber or heaIth% The mortalct, rate trom malaria is higher thar. that ae3r- saed tIc.r cach c3se !t HRX prFvented a- nr'2 on related to Al.IX.bnt rhedeathrate and infantmortalit in aitr rate The%alueo tl these lealtlt\ ears ould be S'.5I2 particular could rn-e during the ne:t dec3des 3s a rc-ult n urb3n areas and $S' in ru r3l area; tWeighting cost b; ot the AIDS pandemric Ditirent rn-:-dels shoe- thi rude tl Ipeticlitd4eeltil moput in rural or urban Irta i I e de3th rate rising tronm 21 o t-tI percnt or-ver h-hat , %% ould an a %e ra.g e mdnirrct :o -t .)I *4.,Cii .:or 21) time; the dJrect othere. iSte be in ornl he oor thrredtcade, Inlant morcalih iost or each AIDS ca,t rates could ri-e ti' percent or more The impact ot AiDc-;nnot be, protcated it ith prucision Thv treatment ot AIDS patients *t il increa-e demand but the urgent need t.-.r A[DScontrol i- clear Str3ategie- to onr %%eak health care s% stems in the c ountrito it %% hich it conmbat AIDS depend on the vpecitic c-pidemrologv oi spreads In a co;!t ana i-isv in Zaire tie co'ts ol traIting AiD.S -.ithin th. courtrxcor-c Trned The iollinA are AiDS ranged itr-mna lt ot $1 32 torach p3titnt tin Public necessan cOmponent, Health Center tacilittes to a3 high ot $1 5s3 tr prirn3te- * Pro-T.rams integr3lad ithl ei.,-ting prim.ar health care tre3tment'. A *e iglited at erage i r) percent o- patient; talmix planning programs. maternal 3nd ctlild heailth ,er- attend public ta-iliriees 25 percent are intured and - per- I ces and STD conirol progr3an; cent use pritate cacilitiesI ields an average co-It oc $22a * Ertectite 3nd continued coun-eltng of peopte * ho ic-tst for each AIDS pat-ent Nlultipin mz the number ot people pc-smhtw lor the AIDS iru, to reintorce behax ioral pat- hlkel tros-e-k AlIStreatmEntb\this ateragecist gitesan .ern, that could rtduce the sprad- t intetetion eshmateoi total direct innual coc-t oi $4:- million , 2111 * Quick diagnosm. arid ettech e Ireatrment ot 1STD %ic- To tInance this. rhe national health budget I *ould ha% e to tin, it hoarc es pec, ilt li,lerable to HR 1A Targeted con- ncrease bs 5S percent in 10cef and up to 244 percent in don distribulion ha' been etrective in Kent3 and lTee I0110 Cost sharing mar reliev-e some- ot the burden but it condoms to pro-tiutle- have enant lot' er intec:tiln rattc will b te-o great alter 20`1-tobt borne tT Ithout ub,lide- * Inrortrt,3iLn and educa,tion cam,paign; tarˇeted to Thus AIDS ha, budgetar% implih,:3hons apart trom the c:ootl-a.c riopulatiions e\uallv ictt e people and ph%,ical ,tran, -n thehealth careei';erl ;\ -reim. pro]tirutev and the coverage of services broadened. Besides, drug procurement and distribution program; its consideration should be given to increased pri- Essential Drug Program ensures a regular supply vate and NGO involvement in nonprimary levels of essential drugs for most of its rural population of care, especially curative care. The large of 20 million for about $0.30 per person a year. amounts (relative to income) being spent by peo- Better storage and security would also reduce ple on private health services, often of dubious costs. A study in Cameroon found that 35 percent quality, make cost sharing seem feasible for public of medicines were lost from central medical stores and NGO health care systems too. because of bad storage and expiration due to poor Rationalizing drug procurement and dispens- inventory management and control. Big savings ing could reduce costs. Improved procurement can be achieved too by better prescription prac- methods can save 40 to 60 percent on budgets. A tices and by improved compliance with directions study in Mali showed that l15 to 20 percent of the for drug use. In each area the most effective roles drug budget could be saved if the procurement for the public and private sectors and the NGOs strategy for one widely used antibacterial drug- should be considered. injectable ampicillin-were improved. Tanzania Rationalizing the use of labor in the health sec- provides a good example of an effective low-cost tor could raise efficiency. Delegating simpler pro- 66 cedures to less-trained staff, particularly in hospi- than 30 percent of the population lives-took al- tals, would allow doctors and nurses to devote most 60 percent of the annual drug budget in more time to complex and unusual problems. In 1979-80, 70 percent of the Senegalese physicians, rural Africa community health workers are the 60 percent of the midwives, and more than 40 front line of the health care system; their often percent of the nurses. Donors contribute to this weak performance could be improved if links to curative bias in health care by supporting capital- higher levels of the health sector were strength- intensive large hospitals in urban areas. Yet the ened to provide efficient training and supervision. irony is that the urban poor may have no better Also many superfluous unskilled workers (such access to effective health care than the rural as groundkeepers and janitors) could be reduced population. without affecting the quality of health care. Expenditure on hospital services has been dis- Primary health care services can expand more proportionate to that on primary health care, and rapidly with cost-effective delivery. For example, the consequent burden of large hospitals on recur- preventative activities can have large-scale results rent budgets is often overwhelming. For example, at low cost. Many maternal deaths can be averted the cost of operating the main hospital in Brazza- by community-based family planning, prenatal ville equals the total Congolese expenditure on care, and delivery of infants. Traditional birth at- primary health care. There are exceptions to this, tendants can be trained to identify high-risk moth- however. For example, since 1972 Tanzania has ers and refer them to adequately staffed and limited hospital construction in order to channel equipped health facilities, which could reduce resources to basic rural and community health birth-related injuries or illnesses and improve services. As a general rule for future development these mothers' chances of survival. By encourag- strategy, investment in new hospitals or in ex- ing birth spacing, breastfeeding (which provides panding existing hospitals for curative services passive immunity to the newborn, as well as nu- should be made only if it can be demonstrated that tritional benefits), and appropriate weaning and public health would not be better served by in- feeding practices, infant deaths can be reduced. creased expenditures on primary health care, in- With a small cost (and supervision) immuniza- cluding the facilities necessary for their support. tion is effective against the main childhood killers. Much-needed improvements in hospitals (and For example, one measles shot costing $0.06 is 95 elsewhere in the health care system) will require percent effective in preventing the disease. The improved management and training. Basic health total cost of immunizing one child against the six centers are needed to encourage people to seek target diseases-measles, polio, whooping cough, care at an early stage of sickness, which would diphtheria, tetanus, and tuberculosis-is esti- thereby reduce the crisis morbidity situation that mated to be $5.00. Rapid strides have been made prevails in most hospitals. through the Expanded Programme on Immuniza- Pressures on women's time have an adverse tion campaign in developing countries, yet only effect on the efficacy of health care. Women are about one-third of children in Africa are immu- limited in their ability to travel to service points nized against these diseases. There are variations (for immunizations, for example); thus outreach among countries; Botswana, The Gambia, and clinics may be more cost-effective than they ap- Tanzania have almost reached their target of 80 pear to be when the cost of women's time is taken percent coverage, while Kenya may reach it in into account. Apparently low-cost health inter- 1991. In many countries, however, serious efforts ventions, such as oral rehydration therapy, may are required to speed up the coverage, and signif- have hidden costs in that they divert women's icant management reforms are necessary to make time from productive activities. Therefore policies these programs sustainable. that free women's time will have to go hand-in- Most countries in Sub-Saharan Africa endorsed hand with community-based health care the Alma-Ata declaration on Primary Health interventions. Care, supporting the goal of "health for all." Yet Improvement in health care delivery in Sub- the influence of urban and upper-income elites on Saharan African countries is contingent on safe- public policy and the lack of health policies to guarding and improving budgetary allocations to redress distribution problems have skewed the the sector and increasing the efficient use of these distribution of resources away from the rural poor resources. In health care a little money can go a and more preventative services. For example, in long way. According to the World Health Organi- Senegal, the Dakar-Cap Vert region-where less zation (WHO), depending on the level of infra- Box 3.2 tVillingness lo pa) for improv ed water supply In urban arta3 middle- and upper-mncome hi'u,ehold' hold,ile; thanillinaira or13per1capita per monthipa t% picallv rec-k- %utiidizcd piped '%aier Hic.u,lold- as much a' 1 s percent ot inc;me dur,ng the dr~ sea..n -' without municipal t%ater zer\ ice particularlk the poor vr,us ' to lpercentr the upperin:oniehouseholds In otten purchasek%aterIron pri%'tc higlatgh pricc- Addis Abab.ithe urbanpoor sp.,nda highroportiont thu- incurring an ependtture 3moiunting to:. somettm.. their inconmm on % t.:r¸ more than 3 percent ot incone Private %%aier eriding i; `\ hat people are ..i.;wlell pa mig t- not the sanm as th. inetiteient and e\pen;t\e in ntnisha. Nlgeria an !mpur- amount th,\ are ;i'.'-z to pa. in studt o-'t hou,vehotds tant market to" n in m\ -t Arrica ikith a populato 0t %,illingnerstop3p ,nthe N al1a,i tr,ct ot ;outh.rnT3n about 71)1)i1H-i only -1-,ii hou'-ehoid, tor about ; ioi. iii zanit Aavestimatedathatm v. mor cillIgto pax o peoplel had tunctioning ctinn;tetons ti the public " ater th3n s per., iii ot their in-rre yr t.-.:tter irom pubic tap; -uppl.. in 1-7. \.i,t ot the population obtained ater in thtir diltace trom an elaboraL arnd -eIl-l urganizLd prti ate sector *- Man tictors beIJde inco. me detormine hoi% much 3 teni Appro\imitelt 2-5 tan-ker truck; purch.;-e i%ater hli,Ar 'old i. illIng to pax tcr inipro, .ˇd.J.... -aen upplp Ii trokn about 20 pri..3te borehole, and -ell it t. households .-t inmportarnt dtli-irninrt 1t the tine Twent collecting 3nd bumin-,e4 e-lquLipped i, ith i it,r i,nrace ta,f.it.Es a,ter irom Le Ot n v- ;ragc iur.cr n the mans cii i%hich then resell th. % ater b, ihe tucket to Net\ :la di4trict were %t illing to,pa\ 'l) percent niore than n. mdi iduals men ton tmpro. ..d I; aNtr rC r, ice -1 men ireejuentl, v. Alk This; pro\ide a reliabcl rrlati cl, high-qualith *atn:r .ehihciur adacl tLlectitat.Irot ntraitional surces ,. .uppl .buithepricei-high Tranportinn; 1iterbn tatiker tnd .i bucket it ,I aten iron ,rdors otien c;. t; 50 to, 1 Cii. truck and on toot Is in..ttcient and tank,er .itner, ha'e plerceni oa t a 1a - "a in alrltuottre Cton,ind rino thc been able to cc.nrrot price; HoueItholds itvrc pF. ing or. oppcrirtun,ri .-st ot lab.nr pent incollecting kiater it - not t av ?eragr 1210 h0ut nakra a da-; lii'i> iil in tI",- % ib!tut 24 u rprisng thit p., 'or p, o.. opIe r, - ll,nc to, pa a ubItant,al i ; times mort than the re% Enue ot the eater utilirt wxhich pnrtion .it their incorme th.r A ater c.pite limited c3sh supplied onrly 1 mill..n gallon, a itin-halt ot r. on ,our.:e;. - a amountsupplded b theL endcing stem E%,nduring the 1 tlihneness- to pa, also dl,pcnd~- on the perception rains ,ea-,._n hou,ehold %,ere pa\ ing about 51 Oilii naira a-utl entitlmerit me. .y, it at.r tr.om z' %rrm,nt Thu.e -. a da i-lt 2.0i'li to the. .nding ei -tcn mt h,ich N more th3n v- hi no. lngnrn bei cd that it th.l -t3te s re-pon4ibiiri IOtinit; the rn\ enue -ii th-e3 iater utiliti In total. hou,c- ti pretiie % iter t,ere\ .llingtopa- 14 percrt mrorc than hold. in Onitsha wecre pa, Ing it ater %etnd0rs abo-.ut twE ice thl*;.: i. hi) rilt tt it ,t as the Aovernnment * resp-;i4iibdit% the annual operartin and maintenance co;ts oI a net IThert. ! thus 3 nred to.r g.e ernnient; ntri unls to institure L' pipFed distribut!oio s, stem and Ti percent .i the totil an- -Ound co,t -hring practice- but also to make a spc;ial nual co,tv o. a nc 5% . ,tem ,er% ing the cit\ .t (Clnit,ha eMicrt tv chinge poplec; perception th3i ire. itater t, a --A P.eoor household; pa. more tor it ter than the niddlc- h3,i rhi and upper-inconiegroup; InClnitsha li. -incomne hous-- structure development, it should be possible to This puts great physical strain on the water carri- provide essential primary health care with a recur- ers-women and children-who tend to be the ring cost of $10 per capita per year. For even the most nutritionally vulnerable. It also means time poorest countries with GNP per capita of around lost that could be spent on childcare, crop cultiva- $200, the public expenditure for gradually achiev- tion, food preparation, education, or other activi- ing universal primary health care would be no ties that could improve health. Unlike the health more than 2 percent of GNP, increasing to 3 per- benefits, the economic benefits arising from time cent by 2000, provided measures for improving savings that improved water supplies contribute efficiency are adopted. are measurable; recent research has established that these benefits can be substantial. Water for better health Although coverage has increased in the 1980s, an estimated two-thirds of rural Africans are with- Access to safe water, accompanied by improve- out access to improved water supplies. Until re- ments in sanitation and personal hygiene, contrib- cently, the high per capita cost of water supply utes to better health. Not only the quality, but also systems has been a primary obstacle to increasing the quantity of water can affect health. In many Africa's water supply coverage. Improved tech- parts of Africa families devote inordinate nologies have reduced the per capita cost of safe amounts of time to collecting water. In the Lesotho water; the capital cost of handpumps and simple lowlands, 30 percent of families spend more than gravity-fed systems is estimated to be about $5 a two-and-a-half hours a day collecting water. In person, although there are regional variations. eastern Nigeria it can take up to five hours a day. Low cost does not necessarily ensure success. Peo- 68 ple hold the key to success. Women, in particular, ens national efforts to improve the quality of life have the incentive to make water programs work and productivity of the population; and exacer- since they are generally the most affected by poor bates the problem of declining per capita health access to water. Wherever communities are in- care expenditures. Policies to improve health care volved in the design, construction, installation, have to go hand-in-hand with those to reduce and maintenance of water supplies, water projects fertility levels and vice versa. are more efficient, cost-effective, and hence sus- tainable. In Malawi nearly 1 million people have Reducing population growth access to clean water through systems that are owned, built, and largely maintained by the com- The total fertility rate (TFR)-the number of munities they serve. And consumers seem willing children born to a woman during her childbearing to pay for safe water (see Box 3.2). With commu- years-in all African countries (except Mauritius) nity participation and cost sharing, an expendi- is significantly higher than in developing coun- ture of about 0.5 percent of GNP (net of cost tries with comparable levels of per capita income, sharing) would ensure widespread access to safe life expectancy, female education, and contracep- water. tive prevalence rate (CPR) (see Table 3.1). This reflects not only the high econornic value of chil- Health and fertility dren in rural Africa, but also the many sociocultu- ral factors that determine the fertility aspirations Better spacing and timing of births as well as of households. Knowledge of the latter is scanty. fewer births can reduce infant, child, and maternal The high economic value of rural children in the mortality and sickness. A baby born within two African context, however, is understandable. years of its mother's previous delivery has a 90 Rural Africans spend long hours farming and per- percent greater chance of dying during its first forming other household activities. Children con- year of life than one born two years or more later. tribute labor in cropping, livestock herding, As child survival rates increase, fertility rates de- fetching water and fuelwood, and child rearing. cline; parents no longer have too many children to As the frontier for fuelwood recedes and water insure against future deaths. Declining fertility and soil resources are depleted, the need for chil- through family planning leads to healthier dren to share the increased work burden intensi- families. fies. The problem is further aggravated by the Unregulated population growth strains the ca- prevailing high levels of infant mortality. The pacity of social services throughout Sub-Saharan nexus of population, poverty, mortality, and the Africa. It imposes a burden that takes its toll on environment is complex; hence population con- individual, household, and state savings; weak- trol policies must be integrated with policies that Table 3.1 Fertility rates in Sub-Saharan Africa and South Asia (percent unless otherwise specified) Per Infant Total capita Life mortality rate Female education Contraceptive fertility income expectancy (per 1,000 (enrollment rates) prevalence rate rate (dollars) (years) live births) Primary Secondary (most recent Region and country 1987 1987 1987 1987 1986 1986 estimate) Sub-Saharan Africa Botswana 5.0 1,050 59 67 109 33 29 Kenya 7.7 330 58 72 91 15 17 Mauritius 2.1 1,490 67 23 106 49 78 Nigeria 6.5 370 51 105 . .. 5 Zimbabwe 5.9 580 58 72 126 37 40 South Asia Bangladesh 5.5 160 51 119 50 11 25 India 4.3 300 58 99 76 24 35 Nepal 5.9 160 51 128 47 11 15 Sri Lanka 2.7 400 70 33 102 70 62 Source: World Bank data. 69 Box 3.3 Family planning: Zimbabwe and Botswana | Zimbab%we and Boisi-. ana are the leader- in timili plan- thaniSlii3 month' The ZNFT`C ha- al-bee-n rteponsible ning in Sub-Saharan \r,ca Their programs 3rt 3a' ailablk lr an impre'-ii e JEC i intorm3ti.-n educarion and corn- ic mi4t :litzen' Kn-. 1kde. ot modr rn contract-prion i- muncationi -traikg- and ni.nit.rir', ', aluatin 3nd * eidv-pread 3nd rni el4 o i mdern conriarcepti.e u.em--in re'e.,rch unit l-o% "i, percent in Zimbabwe and 32 pe:rcent i Botbh - RecLnti' the gcernnm-:r't i,th help romm th. World ana-arethebet in Atrica Borh 4,tm no" to beachie% in.c P 'nk-as-it,td health pril,ct dt:iAded tooricr imii' plan- a siwniticantd,ci,ne in rertilitx Iel; rngn -cf ices through i, net%, ork or health ta-cililte' N ti the ttec. countries h3ae tolc-t- ed d itercnr ap- L.. hich are. exected t. be--nm, the main pro idvrs Coot-r proaclies. llu'trat'nrg that lhere is noblueprint tr succe" dinatinn 3nd c,..'perai3on bete:Dn ZNF-PC nlmd health in thi- tield and that 3ill trategie- mu,t ltart tronm the per;innelaregd \e erth-ls theoutreach ;', ,ten'. ha j unque;ituationoreahocuntr-v Bothcourilnes ho-eler remained the backbone ct the Zimbkb%%e lmil', plinning *hare a lat-,irabl mL, ct bakl,-roundti eatirs including pro-ram in rural are:.i 5 goyd-ic-t- ellent eoconom,c: grnoth and F-er capita in- Bot.- ana l !o;\-ke% program ditt-er, in almo,tr C,tr | come-. esceIlent inira,trucrure and administrait' e s% s- respect It ha; ne' ,er hA an ndependeni tamil. planning tvms hi_h le'el;otteducation and me-dernizationanmong a---eiattcn and rhego-rnmenmt a3; and.s . irtuallk the ', their populition- tlIc loiz ,tlevel; ot mortalit' in Sub- ,olc pro-:i&dr ot tamil pl13ning.n ,ri tee; and accourlted Saharan -\trica and stron,,; goernrner't omrnitment to Crabout "5 pr- ter aeeti etontroc.p LiSt,. in 's.s Famil', P- tamil% pianiningilirhoiLtgh ftt!Il3l1, 01l a, 3-ahevalthinltr- plannin- ,4 e-r i, are ba-ed in Jini,-' and deli' ered en- cnt ionl tirel' through ;n iniecrat-d Maternal and Child H1alth Zinibabmt has an imprs!%c tai-nitl planning pro- 'NICHi-F3mrln P.-inn,ng proeramn ichih oprat,e in gram Becau,e c,I the t.tccesstul hi,thorA ol a nongos ern- tr. health tacilit, Clinic nur.e-, do the bulk oI t3mi', ment. l itamit' planning is , tat flit the neot, . planningo irk There i, ka rudinmentar' cutrecli net- indepr-rldenlt co0erninent leeti-d to -rk , ith thi, a--- hrkih c,-nmunit, -,eIcted torker--t3anl % elltire ciaijon n,-i. a para-t3tal bed\ called the Zimbab-.e Na- Lducator-, ho are uppLose-d io earn out prte'entine tiunal Fimil'r Plannine Council ZNFPC. and to 4ne it h,alth 3cri. itic' in their'. dl.lges and do' -orrmani.l plan- mu.:h )I the res pn'ibii Itinr deli'ering .ind1 -roniotinig nimng prc.rnotion rettrra nid suppl% in- ln practice rno-t tai t3nl plannng ,e-rict-,. The g.%v erinnint no' rutid; ttork mainl', in mICH linic:' a' a4-,.rant; to nur,e; 4 jO about 71' percent ot ZNFTI'C budget. although there has Boit,anra ht31hh 'erx' i.e netn-lrk i. ,.- good and b been ,igntiicant donor 'upport-m.;inl tromn the L_S * de4pread-ii petrcent ot the pF-pulatiin Iv-e , ithin I- Agene' - r Internati,-nal Doe,elopment .and to a le;;'er kilomettrs 't a health I ict r, -thai acc- : - toamilk plan- t-.Atent the UN Population Fund ning ser\tes 1i not 3 con'tratnt lor mott people more The ZNFT(- njn' 3 netwvork at tamil' plannine clinic, 1`rious )omt- is the Linadqu3ie covi-ra? and quali- .-.t IEC but more important aconimmutl' -ba-ed distributoincut- ac:ti t- tor b0th heolth and ta3nil', planning coupId reach procram %% itch emploi' c, abour l:ll coimmunitk -rc .Aiti thh latk ot 'er ic. etgared t- nien and to teenagerv Icattd educator- and distributor- and accounts !.r about ncithtlr oi hich nermnall ire MC, F HI crrx ice, No%e erthe- hattilltamill' plariting trv-ice; ILrogram orker'; cnn V- the program ha, aic-. td ide'pread kn',' lvedge r9; trate -oled on tanil' planning 3nd are ie ell paid I mret and acceptance ,-i the benetit s ;o lanilh planning help to reduce women's work burden, protect the throughout most of Sub-Saharan Africa, however, environment, and control infant mortality. it is unlikely that the fertility reduction assumed in standard projections will occur. To achieve Required efforts World Bank projections, CPRs would need to rise from the current 0 to 10 percent to 50 to 60 percent The Bank's standard projections assume that by 2020. In the few African countries where this the TFR will fall in Sub-Saharan Africa by 50 per- represents no more than a doubling or a trebling, cent within the next generation, from 6.7 in 1990 it should not be an insuperable problem if strong to 3.4 by 2020. This implies annual population governmental commitment is forthcoming. In growth rates for the next three decades of 3.0, 2.6, others that have weak family planning programs, and 2.1 percent, respectively. Even so, Africa's it represents up to a tenfold increase in the CPR population will exceed 1 billion by 2020. during the next three decades. In all cases far more During the past two decades many non-African strenuous efforts in female education and com- countries have reduced their TFR from around 6 munity-based family planning are needed. to 3. Zimbabwe and Botswana seem determined More than three-quarters of African govern- to do the same (see Box 3.3). All African countries ments have expressed their commitment to family should strive to obtain similar results. Consider- planning, but few countries have matched these ing the inadequacy of family planning programs expressions with adequate technical, financial, 70 and managerial support to promote and deliver up. In 1985 about 35 percent of couples in Chogo- family planning services. At the 1974 World Pop- ria used modern contraception, compared with 8 ulation Conference in Bucharest all Sub-Saharan percent nationally. In a rural project in Zaire the African countries (except Botswana, Ghana, and rate is roughly 25 percent compared with a na- Kenya) were satisfied with their fertility and pop- tional average of 3 percent. In Zimbabwe the rate ulation growth rates and thought that population increased from 14 percent in 1980 to 36 percent in growth did not contribute to their economic de- 1988 with an intensified national program. There velopment problems. Most found family planning are, however, cases in which demand could not be acceptable as a way of improving maternal and created (such as Ghana), even when women had child health. By 1986 only Chad, C6te d'Ivoire, the required knowledge about the supplies of con- Gabon, Guinea-Bissau, and Mauritania were pro- traceptives. In such cases more needs to be learned natalist or gave little support to family planning; to achieve better results. seven countries had explicit population policies Even with present levels of demand for family by 1989, and five (Ghana, Mauritius, Nigeria, planning, the CPR in Africa could be increased to Uganda, and Zambia) had declared specific tar- 25 percent compared with present rates of 0 to 10 gets for fertility reduction. Even so, support needs percent in most countries. To do so will require a to move from expressing concern in policy docu- significant expansion of family planning services, ments to acting and committing public resources. helped by the private and commercial sectors, Besides Mauritius, Botswana and Zimbabwe which can also provide information and training. are the only African countries to achieve a sizable Among urban and educated groups the main decline in fertility-from high rates of 8 and 6.9, objective should be to publicize where to obtain respectively, in 1965 to 5.7 and 5.0, respectively, in services and to raise awareness of the benefits and 1988. They have the highest rates of modern con- risks of different methods. Among rural, unedu- traceptive use in Sub-Saharan Africa among mar- cated, and more traditional groups the aim should ried women of childbearing age-36 and 32 be to prepare for the arrival and acceptance of percent, respectively. Government policies have modern family planning services. Family plan- played a key role through education and ensuring ning programs can be extended by mobilizing that family planning services are widely available. community and women's groups. The key, as Experience has shown that official endorsements Kenya shows, is to get both education and commu- of family planning have to be buttressed with nity-based family planning to women. clear fertility reduction goals and followed by spe- The scope for stimulating demand through in- cific operational strategies to ensure success. formation, education, and communication (IEC), so successful in other regions, remains virtually Demand for family planning unexploited. IEC activities include mass media campaigns, talks by health workers, campaigns in Only 3 to 4 percent of couples in Africa use schools and workplaces, promotion by outreach contraception. Pockets of demand for family plan- workers, and seminars and study trips for high- ning are emerging, however. Field investigations level officials and religious leaders. The private suggest that roughly a third of all African women sector can also play a part. In Kenya, as in India, it desire child spacing; younger, more-educated offers effective and innovative family planning women want fewer children. In Ghana, for exam- programs for company employees, as well as for ple, women aged 40 to 44 want seven children, but the community. Over the long run it would also those aged 15 to 19 want only five. On average be necessary to address the major research needs, African women with at least 10 years of education especially how to create demand and to make want three fewer children than women with no services more efficient in small, scattered commu- education. Finally, 25 to 50 percent of maternity- nities and among people with little education. related deaths are associated with abortion, which suggests an unmet need for family planning Supply of family planning services services. There is increasing evidence that where family Studies have shown that increasing the avail- planning services are available, contraceptive use ability of services raises the level of use; in Taiwan is high. In Chogoria, Kenya, a rural area of 200,000 in the mid-1960s, for example, each 1 percent in- persons, a pilot program provides accessible crease in the number of family planning health and family planning services and follow- fieldworkers produced a 1 to 2 percent decline in 71 fertility. According to the Contraceptive Preva- cultural factors, including their husband's wishes. lence Surveys and Demographic and Health Sur- This suggests the importance of reaching men, veys carried out in Africa during the 1980s, 30 to either at the workplace or through other means, 40 percent of women not using modem family such as the agricultural extension system. It also planning cited lack of access (such as ignorance of suggests that women's groups would be a good methods or of where to get contraceptives or the channel for delivering family planning services high costs) as their reason for not practicing because they foster solidarity among women and contraception. may help them make fertility decisions on their In many African countries information and ser- own. vices do not exist outside the big towns. In a few countries, notably Botswana and Zimbabwe (see Costs Box 3.3 above), most urban and rural communities have easy access to family planning services. Oth- What would a large-scale family planning pro- ers, including Burkina Faso, Kenya, Mali, Mozam- gram cost? Based on recent experience, bique, and Tanzania, are gradually introducing Zimbabwe, spending 0.6 to 0.8 percent of GNP such services nationally, but progress is slow. annually, could reduce fertility by 50 percent from In Africa most family planning services are de- a rate of roughly 6 in 1985 to about 3 in 2010. livered through, or integrated with, the public Botswana could halve its total fertility rate of 6.5 health care system, usually as part of maternal and by 2010 by spending annually an average of 0.8 child health care. IEC is handled in parallel by the percent of its 1986 GNP. Annual costs of 0.6 to 0.8 health and educational systems. This can be suc- percent of GNP are not only modest, but are also cessful where public health and education net- more than offset by the savings in education and works are strong and widespread, as in Botswana health budgets and in food imports that lower and Zimbabwe. In many countries, including fertility would produce. most of the poorest and neediest, the public health care system (like other social services) is so weak Food security and nutrition and limited in coverage that it cannot deliver widespread and effective family planning Chronichungersapspeople'sproductivityand services. increases vulnerability to disease. Food security Thus the rapid expansion of access to family has deteriorated since independence in Sub- planning in most parts of Africa will require Saharan Africa, and severe food shortages, excep- strengthening and expanding public health care tional in 1960, are now widespread. Food security systems as well as developing alternative and sup- at the household level is directly influenced by plementary channels to deliver family planning agricultural performance. In many countries mal- services and IEC. These include private family nutrition is seasonal and increases before the har- planning organizations; nongovernmental health vest, when food supplies have dwindled. The gap care networks (such as missions, employers' in food intake widens further in years of drought. schemes, and private practitioners); other non- Recurrent famines in the 1980s have graphically governmental groups working in development illustrated the high degree of food insecurity in the (such as women's groups and community-based region. associations); non-health-based government out- In terms of energy value food consumption in reach networks (such as agricultural extension Sub-Saharan Africa between 1965 and 1986 aver- workers and community development workers); aged 2,100 calories per person per day, or about and the commercial sector (such as pharmacies, 85 percent of recommended requirements. It is rural general stores, and market traders). At the estimated that about one-quarter of Sub-Saharan same time efforts must be made to relieve both the Africa's population-more than 100 million peo- environmental degradation (for example, loss of ple-obtain, on average over good and bad crop soil fertility, deforestation, and depleted water years, less than 80 percent of the daily calorie resources) and the overall work burden on supply recommended by FAO and WHO. In women, which can fuel the demand for additional drought and other bad years the numbers would family labor. be even larger. In some African countries women prefer to The Sahelian countries and the southern central have fewer children but are discouraged from region (Botswana and surrounding areas), where adopting family planning because of many socio- rainfall is meager and unreliable, form a core area 72 of food insecurity, but all subregions have coun- the demand side is also necessary, however, espe- tries with the same problem, albeit with varying cially for households with low or fluctuating in- intensities. Apart from those vulnerable to peri- comes or purchasing power. odic droughts, such as Ethiopia, there are coun- tries in which income distribution is particularly Projected food needs skewed and a part of the population is very poor, even though the agricultural base and national Assessing the food needs of African countries income levels are strong (such as Kenya). Food for the next 30 years is difficult because any such insecurity is also common in countries with civil projections have to be based on assumptions wars (Angola, Ethiopia, and Mozambique); coun- about the prevailing levels of calorie consump- tries with poor infrastructure (Uganda and Zaire); tion, future population growth rates, and future those with large poor urban populations (such as production performance. It is, however, necessary Zambia and perhaps Sudan); and others in which to estimate requirements in order to project future economic management has either stunted growth needs for imports and food aid. The methodology or not supported equitable distribution of its ben- used is outlined below. efits. The average daily calorie consumption in Sub- Any public program addressing minimum food Saharan African countries in 1986 was about 85 intake must distinguish between chronic food percent of the nutritional requirement. Although shortages (that is, trend-level shortfalls) and tran- in eight countries in 1986 the average calorie in- sitory food crises caused by crop failures, eco- take was 80 percent or less of the recommended nomic crises, and civil disturbances. Further, intake, for the purpose of projection it is assumed within poor households, women and children are that no country had an average calorie intake less more susceptible to malnutrition, which suggests than 80 percent of the required minimum in 1988. that interventions should be designed to reach To ensure universal food security, the average specific vulnerable groups. consumption of calories is assumed to rise to at To provide universal food security by 2020, ac- least 110 percent, as is the case of countries that tion is needed on both the demand and supply have achieved near food security, such as China. sides. Improving agricultural production is im- This is because purchasing power is never evenly perative, because widespread access to food is distributed, and the better-off consume more cal- ensured by agricultural growth. Public action on ories than required for good health. The gap be- Table 3.2 Population and food security in Sub-Saharan Africa, 1990-2020 1990 2000 2010 2020 Case I 1. Population (millions of persons) 500 700 1,010 1,500 (with constant fertility) 2. Food production (mtme) (at current trend growth 90 110 135 165 rate of 2 percent a year) 3. Food requirement (mtme for universal food security 100 160 250 410 by 2020) 4. Food gap (mtme) 10 50 115 245 Case 11 1. Population (as in Case I) 500 700 1,010 1,500 2. Food production (at 4 percent annual growth) 90 135 200 300 3. Food requirement (as in Case 1) 100 160 250 410 4. Food gap (as in Case I) 10 25 50 110 Case III 1. Population (millions of persons) (with total fertility 500 680 890 1,110 rate declining by 50 percent to 3.3 by 2020) 2. Food production (mtme at4 percent annual growth) 90 135 200 300 3. Food requirement (mtme) 100 150 220 305 4. Food gap (mtme) 10 15 20 5 Note: mtme = millions of tons of maize equivalent. Source: World Bank data. 73 tween requirements and regional-level food sup- Figure 3.3 Projected food gap: Alternative scenarios ply is derived under three alternative sets of as- for Sub-Saharan Africa, 1990-2020 sumptions: Millions of tons of maize equivalent * Production grows at 4 percent a year, and 260 population growth gradually declines to 2.75 per- 240 - cent during 1990-2020. 220 - Case I * Domestic production grows at 4 percent a 200- year and population at 3.3 percent. 160 - * Domestic food production and population 140 - grow at 2 and 3.3 percent, respectively. 120 - These alternatives are shown in Table 3.2. The loo - Case H1,,- sharp widening of food imbalance in the latter two 80 - cases (see Figure 3.3) shows how crucial it is to 60-- maintain a production growth of 4 percent a year 0Case III and to reduce population growth in order to en- 0 . sure long-run food security throughout the 1990 1995 2000 2005 2010 2015 2020 region. Note: Case 1: a 2 percent annual growth rate in agricultural production A growth rate of 4 percent a year in food pro- and a constant fertility rate. Case 2: a 4 percent annual growth rate in duction allows for an average population growth agricultural production and a consant f declting Certility ratec of 2.75 percent during 1990-2020, a 1 percent an- Source: World Bank data. nual growth in per capita food availability, and a 0.25 percent growth to reduce dependence on food imports. Even if domestic food production farmers in access to credit, extension, and research grew 4 percent a year, food imports would double and development. Reform of financial institutions from about 10 million tons to 20 million tons by through liberalization of lending criteria and re- 2010, but then would decline to 5 million tons by payment procedures would also increase the pro- 2020. Food import needs would have to be met ductivity of women in agriculture and their through a combination of commercial imports income from trade. and food aid and in ways that will not discourage Chapter 4 examines the critical issues of agricul- domestic food production. tural policy, including the technological and insti- tutional needs that must be addressed if domestic Supply side food production is to grow at a high rate. This chapter emphasizes that the pervasive discrimina- To meet the growing food needs from tradi- tion against agriculture in general, both for food tional crops, complementary improvements are and export, has to be reversed. Although aggre- needed in the technology for processing and stor- gate growth in production may ensure long-run ing local foods. Rising demand for foreign grains food security for the region as a whole, it may not in Sub-Saharan Africa is due, in part, to their faster be achieved for every country; food trade within preparation time; this characteristic will become Africa is therefore essential (see Chapter 7). increasingly valued as urbanization proceeds and as women face more demands on their time. Vari- The demand side eties of grain amenable to central processing and easier transportation need to be developed. Im- Even if food supply improves, the distribution proved storage means a regular supply of foods to of income and wealth and regional concentration local markets. of production may leave large segments of society A large part of the food insecure population in without the purchasing power to buy enough sta- Africa consists of small farmers-often women- ple foods. The long-run solution is to improve in isolated parts of the country with high transport income and employment. costs and little or no access to markets. In most of In the short to medium term, interventions such these cases increased production of food and as food subsidies or programs to support employ- greater stability in availability are likely to be the ment and income may be needed during crop only ways to provide assured food security. Food failures, in addition to direct nutrition support security considerations on the supply side indi- programs to overcome chronic maternal and child cate the need to redress the biases against women malnutrition. Women constitute a large portion of 7I-1 the vulnerable population, and they should be essential micronutrients, and poor sanitation and helped to participate in employment and feeding water supplies all affect nutrition. So do specific programs. In many countries subsidies have been behaviors, such as how mothers feed children and misdirected, often for political reasons, toward treat diarrhea, how household income is con- urban residents who are not poor. Food subsidies trolled and spent, and how food is selected and must be sharply targeted to vulnerable groups. prepared. These behaviors appear to be indepen- Given weak institutional and administrative dent of income levels attained by most in Sub- structures, it seems imperative to introduce self- Saharan Africa and are compounded by poor targeting into programs by using economically health. This explains the persistence of malnutri- (but not nutritionally) "inferior goods," such as tion despite rising incomes, as in The Gambia, coarse grains. Following the Indian model, "area Kenya, and Rwanda. Until progress is made in targeting," which restricts programs to regions in lowering birthrates and increasing food availabil- which a large percentage of the population has a ity, hope for nutritional improvements must rest history of food insecurity and malnutrition, can be primarily on family-centered interventions to tried. Food subsidies managed by government are modify feeding practices. inconsistent with the objective of removing the Nutritional risk begins before birth. Millions of state from food marketing. Therefore, unless food African women are malnourished and suffer from aid is made available directly to vulnerable chronic iron deficiency anemia, which, along with groups, such as those hit by famine, the link must malaria and intestinal diseases, weakens their be broken between the provision of subsidized ability to cope with the physical demands of preg- food and food aid. New initiatives are necessary. nancy, childbirth, and breastfeeding. Undernour- For example, the counterpart proceeds from the ished pregnant women are more likely to have sale of food aid (through commercial channels low birth-weight babies, who, in turn, are suscep- and auction) could be used for food subsidies and tible to infection, disease, and early death. If the income supplements for vulnerable groups. If ef- infant dies, the mother stops nursing, and ovula- fectively targeted to the food insecure, the expen- tion resumes prematurely, which enables the diture on food subsidies could be modest. mother to get pregnant sooner than if the infant Income support schemes for low-income had lived. The next baby will be weaker, and so groups can provide cash or food in return for work the vicious circle continues-maternal malnutri- or as a transfer. There is no single prescription. tion, infant death, and high fertility. Income generation through public works, which Children who survive the neonatal period add to infrastructure, is particularly relevant in enjoy a few months of adequate nutrition during Africa. Payment for labor should not be above the breastfeeding (which is nearly universal in Africa, basic market wage if public works are to meet although declining in urban areas). Between 6 and targeting criteria. The cost to government of such 18 months is the most critical period for child schemes is variable, ranging from $0.50 to $5 or survival, partly because 0-3 years is the time when $10 to increase income by $1, depending on the the highest percentage of energy intake (approxi- wage offered and the costs to participants of trav- mately 27 percent) is needed for growth. Solid eling to the site. food is often introduced too late, too few calories The absence of discrimination in wage pay- are offered, or feeding is infrequent. The resulting ments can attract women to public works inadequate food intake, combined with diseases schemes, as happened in the Maharashtra region (often due to unhygienic feeding), constitutes the of India. Such productive employment of women classic interaction between infection and malnu- helps improve nutritional status, especially of trition that explains much of the high child mor- children. Public works have the potential to help tality in Africa. women whose livelihoods in traditional activities Nutrition strategies should be directed toward are being increasingly threatened, although only overcoming poor dietary habits and specific defi- Botswana and Mauritania have implemented ciencies. Nutritional status can be improved at such schemes. any level of food availability. Women are obvi- ously the main (although not the exclusive) audi- Nutrition programs ence for nutrition education programs, especially those on the value of breastfeeding and young Suboptimal feeding practices, household con- children's needs at weaning and beyond. Growth straints from pressures on women's time, lack of monitoring serves both as a screening device and as an excellent way to impart nutritional informa- in Tamil Nadu State (see Box 3.5). Notwithstand- tion. At weighing sessions mothers (and fathers) ing the differences between Africa and Asia, the can be shown how to identify and treat the causes management systems developed in the Tamil of inadequate growth. Beyond better information, Nadu project could be replicated in combating other supports will be needed, such as energy- malnutrition in Sub-Saharan Africa. The Iringa dense foods for children to make extra meals un- project in Tanzania has achieved similar results in necessary and time-saving devices for women. nutrition improvement through social mobiliza- Direct feeding programs are also necessary for tion and community involvement, such as making malnourished children. A project in Zaire exem- effective use of local media, although more could plifies a low-cost approach to nutrition interven- be done by integrating complementary services. tions (see Box 3.4). Such programs should be Given the prevalence of serious (second-and-third established with primary health care provision; degree) malnutrition among 20 to 30 percent of the growth monitoring should identify children in child population (age 1 to 5) in Africa, the cost of need of extra food as well as disqualify those who nutritional programs comparable with that in no longer need it. Tamil Nadu would be about $200 million annu- Direct feeding programs need not be expensive, ally, or roughly 0.1 percent of the GDP of Sub- if effectively targeted to those children most at risk Saharan Africa. nutritionally. India has developed such a system i ,,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- Box 3.4 Cost-effective nutrition interventions: producing a low-cost wseaning food in Zaire The U ,geni tr International Peielc'pment i AID' in thil '.ried re ith hu-,ehˇild mn.-me CERE% AP v.a ihE p Zaire u ed d. naletiood n, hElp \ ic-toria A;'rttd Pr.od- .onk manutaciurdr it.an. n iood abl: to ntaint3in rt I.:n .i uct- 1 AP' 1 Pritt a:kmpan% reduce the .'-t ot Irrn-L priee Juriang rhL lortizn e:.:h:.ngc criil b.-3au.sc it vai tactulrinr CERE% VF a nutrint.u-u tood rn.rure dc .n,d nmade Entirjl trom io-ul' ;.nurrodati,, The comnierc31 j tor c%anrng hiLlr,n and , :m.er. at ri-l. c!t mnintrTition 3ile^ ct CEREi i'e\P\p.-nd.i thlnk. in part ti thtr marlket M[D.s;;itc:d \ -APin purch n-3 n .1r.,r\truer %u ii,h ii a, dt.elopimcrnt ouect ot th, 4o%,,mrnmnt d,;rrvbution, 15k : sub-eq+.,nih u-id t,- manke v eanir.g tood tr.-rn loc.alli rEdiuein : th, ri4 I t.:. pri%ae in% tor; in nutrition pr.! 3 i produc,d to.-.-d In e,;h.,ng. tlor this equipntni % AP grani- thts;ordinari anuun-ali:.cal bu,,ne,sa:o ve rr . .u ri. d to -ellitz cninnS tod at,ndr n Kilt t . f rm.. .. n ri td .!dIa enZairc .... thr puLt.c -d ltor N.CC) t_C1dn pro-ramr. in tht puthli a lo,,i -coiit nutriniou. i-anin.d t-d that helps por urbarn \ICH .:Iinic.- 3a-lMn13rn-e,.arn kn i baird on mrnthern meet tamik ndntrtinnal necdeaik a3n1 ineyr-pr 1ood aid w:vrr .and l.oca*.. iloi. ,\ ?mied :nd .old it ...pri,C -I'el. Bo\ 3.5 Integrating health and nutrition services for children under three ind3 Tatiil Nadu pr.eci init,ated inl ICsil .iarzer,d pro4rani had redu,ed milnutrtir.mi in Tanil N udu bs tohclldr.:n , .- mon- k !orid andp.d.rnt;d .sn.,i rur lna ;pF°\mia_tli 5i p,rh::nt ai a3i annual c--t 01 u! N l p r i- onlen Kse a-;p.c- . t the proec:t u:er;a gri,. th mont- bonit'lc.ar%-.ich,e'.1 incidsnt.all ,n aeriod uit x.- I n .rine s %tem t--- ernab moth,er- ind heathti .L -*rk_rz t. n.nii,: decline ih, pr.or.,mn iL;; i !attributable t;,the id.ntilh childrEn ho he. LErt nutntlilnall il r.4k ,hort- tr_innrlg ind i lit ntnricnr dlivcr. * .tern t. it thhr- ternm 5uppleenlontar- l:dJin- to bcip werio.iu4l mnalnour- - u ,hraininua3nd.-u .:.n ct tuper%-olthenurnrionolok- * iKd childrn reachan.Luc;prtb3e pattern it !veichtgain cr- r.i, th monit,,rine proeied to te -n .3curate tood *uppltenn- t, nvJbh,cr 3t rik rnlorhLr* .ith a -creenn - c ic it n-r .tni , :hitdrcn at rtesutEt riw- and nialnouri4hcd child inr % ho had lo-t a child irDd a -orn- in ~tlectri.e ;-oh,l;c lor dLI.C.Mrtn~rnwth.sr4 to nr-aina'n ii prehenm.. ,--mr,unr .-;t1ron- pr.-,r3nm rhat nchJded both ibkir children * nutr,tio-n tbrouizh pcrmanent beh.av,,,r racc-io-ltae in;tru:t-hnand ni- mcdi,) chnir4ea Finatlt on-mat-rnvkchildiren sred. nttrerd the - Ninei th'u;anJ ;0nmmun,ti nuirnti-un cxnter-4 %%rc e-- pr L-, ra m rn-u l nincdilte.F, r , i deupplrmentar% rd tatlizbed in tour c tar- 3h , t.uttkd t! a l,icallt r,ruit. a 3 pre :riFtior or mr1natrition :.mnmunih~ firnttin r L ri..r i' h. hid .:ei nr rh. rh-: pr-rc. v. i -0 --t-:tt5.5tite ta:;-* It .:I.:l: t.- i.-ihth Z rid a as *uii-dercd :, mod.l mether The eoted heneticiarie-! innimized the ned lor tt,od -uppic. - , ,.rl .r ie. reinltorc.:ed b, healit- outre.-ich anr irtc rral rile ot'- t1, d tt ...t. . t t r, t. pr.blenii carl, tIimilted ver'. cc:- rcin thr;ic.lth dte p'rtnenr Th-.:den r- z. ~tid ;uppl.:rmentrt r edin to: *hort-t.:rn therapeutic rtm- childrct. m.nthik ind prc-. !d td id br %iU d3l ' t.r chtl- eLd until thc motherc.riu Id Ita. ron her- in. and wa; *drin- h-!I I. cre not 4ro,' nc Epeni .p-,r edtI.h !t.ntici nft connunirt ia vik en irelirnitar% tind'nm indic.ate that aittr t-..en ;ar, th, 76. ::---- - - -- -- --. --;- --A-- Box 3.6 Cost-effective nutrition interventions: delivering vitamin A supplements in Burkina Faso In 197 the ,okrnniEnt ot Burl,ina F3;,' the LUN Interna- HEI,n Keller lnternational aretrain,ng Burkinibetrainer- tional Children - Emrrgenc; Fund L UNICEFi. and Helen etio i, ill in turrn tr.uin pro% incial idnJ wkal go% ernnent - k0lIer International initiated a pilot project ti) drisncall health -,orker, and ^;hoolttacherr reduce C itamin A dei !t ie nc. ; hich tan le ad to b i nine;k * E ncurLia ging the pr-d ucl on ot I'11a m ian A-rich toc.dsi In The% de% eloped a.t,--v-earaction plantobeiniplemented communiu h and ;ch'cil nardr.en al.ng i itlh nutritil.n ed- i in tour of the countr- pro-vince; This plan in%olk e, ucation and a broad public education campaiprn it prc: D*a Dotribunng megidosei. ot v- tamm A. three tinme 3 mote their consunmptioun 3 sear, to I mlllion hhildrtˇn under age li and to approi- From the beginnrng the got emnment ha.l bon trnnql% R matelk 2&Otii.iij omeneatt:r1he% ei%ebirth The ,apsu conmitted to this eltort The protect ,a, to b epanded pro Lded b% LNICEF. are dihibuured b% % lre health t . Icur more pro% inces in the toio%% ing %ear and eVtentu- orlkerr n and inic Ptr LinnriJ Ill. na tionwide Similar ,t trto tJddre, i ramin . A .4r- - * Training Zo%errnient health %%orker, hoi, tcdetectand cienc% .re lot beine mplmcnrted in Nl13.rrania Nig,'r treat vit:rmin A dchci,ercx tierophthalmial UNICEF and Sudn. and the enlergenc; rone ol Ethio,apA - ~ ~~w--~~~--- -. - s-~ i o a 6 -L.--a:s K w F ->.aTUx2.si- E Micronutrient deficiencies are a serious nutri- tratively feasible, as Botswana's experience shows tional problem in Sub-Saharan Africa. Three con- (see Box 3.7). ditions are widespread. Blindness (xerophthalmia) is caused by vitamin A defi- Primary education: revitalization and ciency, which is also linked with pneumonia, mea- universalization sles, and diarrhea in children. Iron deficiency, the most common cause of widespread anemia, un- Increased investment in education can acceler- dermines work and health and may also affect ate growth in several ways. For example, educated psychological functioning and cognitive develop- farmers have been found to achieve higher pro- ment. At least half of all women of reproductive ductivity levels than those who have not gone to age, more than 60 percent of pregnant women, school. Research has also established that a and about half of all children under 12 years suffer mother's education enhances the probability of from anemia. Iodine deficiency, also widespread, child survival. Cost-benefit studies during the is the cause of goiter among 30 million Africans past decade in 16 African countries suggest that and of cretinism among half a million more. the social rates of return to investment in educa- These disabling conditions can be overcome at tion are 26 percent for primary, 17 percent for only modest cost, and African governments could secondary, and 13 percent for higher education. plausibly aim to eradicate them before 2020 (see Education is intrinsic to development in the wid- Box 3.6). The iodizing of common salt costs $0.04 est sense; empowering people, especially the a person a year and the addition of iron another poor, with basic cognitive skills is the surest way $0.05 to $0.09. Since centrally processed grain, to render them self-reliant citizens. which could be fortified with vitamins and min- The goal of universal primary education, how- erals at low cost, is little consumed outside urban ever, has often been interpreted as simply expan- areas, micronutrient supplements could be pro- sion of enrollment. This will not serve any vided in rural areas alongside health services, purpose if quality is not ensured. In Africa not such as immunizations. This is a cost-effective only are enrollments stagnating, but the quality of approach, since young children, who are immu- primary education is low and declining. Tests on nized, and the reproductive-age women, who ac- reading comprehension, general science, and company them, are the primary targets. mathematics suggest that many African students Thus a comprehensive approach to food secu- are learning very little. Ensuring quality is, there- rity would involve not only the critically impor- fore, an important prerequisite to expanding tant programs to augment domestic food enrollment. production, but several other programs targeted One reason for the low quality of primary edu- toward vulnerable groups. The cost of a compre- cation is the low expenditure on educational ma- hensive food security and nutrition program may terials per student-$0.60 per student a year in thus range between 1 and 2 percent of GDP for Africa, or 1.1 percent of recurrent primary educa- different countries. Such an approach is adminis- tion expenditures. This situation has been aggra- :7r / Box 3.7 Botswvana's food security program - Bot'..ana ha1 t1 S malnuMIrUtiOn than an, other drought gvsted b; %illiaeconirnitteei l he \lini7trr oI \.ricilture prone countrx in S1outhern Atrica tha-ink, to its COmpre- adLnuini,tt,rthetarmrtlItt-land recoter e programthrough. hensite 1.'d 4-ecuratt program. 5niceitsit inception in he the eten;,on ind .ettrinart cer%.icEs A bai4c ,eed pack- e.;rh lSu9 . the program ha, eliminated st vere nalnutri agc i, g,c.ren to all tarmer, and lo0t -cost drati pi.tr is - tionanongchikirn underhveand has reduced nmderate pro% ided to tho,e ,hc hate ti cr no3niml3. Tc. protect undtrnuitrton sutb-tntialt% de-pite a -erie- oF droJic hi tarmer- andpastoraih,tr prodit.ctt c.pJcilt oldercattle \ears and driasti: tall in local gr.3ri prediuction. ire purchased at .i lio.-.r pri.cL 1. rcdu.ce razMing pr.s-urev : The principleunderl ,ing thedesuign organization.and and to protIdt hou-Eliold In:ome Thece measures help rnm_nagemtnt ot tht prognram t as to e\pand the cap3cir; mirnizehthneed tor emer %nc camp- ard rc--ltlemcnt ' andJt1cilitv oltin'tiruhon concerned *.ithditterent as- although in m,me .earz the tritntii\ to rcduce grazin Z pecks ot tood ,ccurm Thi proia3m comprise, pressure, *ere not 'uitt.irnt rk * Direct teetding through primar% ,cht.'ls ain healh Program c imporents 3re`toirdin3ttd ban interNlln- \ (t ner5 isterial DrouLght C_ommittele. -c Iced bh st:.t ct ih, NI n- * Additi,nal i,3er 'uppI% ,tnrr 01 Finance and Eeteltopm.n .irinine Thi, S * Emereencuc public -.hork ,cher- t p Pro ide ,hort- C.mmitec ilsoha,an important rle, in mTnit..rn. mn ts term ,upplenieitar\ income rLr, .nd :ropping c:cnditiin. and in prca din, Mirk * Farmn lpponr and rehabiltatton preram~ to'% petdtte trning inntcrmatintothenceriedm mi,tri' The in- - revoert en tr drutight oh ement or man. ministries ha- enabled BotJ,.: arni to The program in.-lves -c'eral ministries The Nlinitr, handl' -irought- readle-; t the lt'cl ot tcreign 354r- olc LoculCt.n ertinienttad L.nUs haiid-eanoid aild nimp.ri' t.t11ec Allthough Iti -tting ri t, -it r . -i, 1 gOle local purchases and dJitriution to ;:hool, aind health in m1.ibilit% -,It retp,.-n-c arc- nmore aluable tacilitie T'he Nlini4trx .t Health mornitLrs the nutritton The bti,dgetarx r. st t th,; interr. enttc.r, ha3 aried sirtIticn and org mize, on-sire tcldn, in clinic; and the % ith tile -ci erit% of the droaught. In lci\2-S total cost Nlnisrnr e-t Education o%cerset_ the te-dinri ot primars ct cluding tiood atd. amrounted t.o 34 percent ot all dJi el - chool children I\ htn there is no.drought a linited teed opmente\pe,nditurt and ini l% Sit n, a- Is pter:rit The ing progr3nm reacht, tiung school-agechildren pre- do.nor-runded ;haredroppedl trenm 33prcent in 1%2'-5 ;i school childreii and pregn3nt and 13t.-ting ic nl-n tii cpercent in 1"M-4s The aluoe'tlcd aid ichich i3as - Duringadrouchi the pregrant i, depped tip to teed trig a ll chic entl.:ornr.iatc b'. t dn.irs a, coak-ut percentot children up to IliJ ear, aind vulnerable group- c d tot.al ct-re31 c.-n.tsiLmpnrin or alttoc.,i 3" kilogram- icr each b3ai Its ltoed :upplie4 conic mr'tl. frim lcod aid but percon in hIU - h.her thanthi aerageto!rall5bata1ran - then Lupplle- cannot be ;ecured lui.kih -ni.tigh the Atrica and Jen inr nan1 other 'much poor,ri drought - government purihh-es toedgrainsn .n the international proneLcountrie-. : market out ot it-ca,sh rese-rie- tlmh-e art nimbur-ed later E a.n.-, an i r t.- ,OTit e tent a -ptc:ial case \o,t Ci the b-% d.-ni r 3gent,i. s The \ lint,trt ot Mineral Rs ource,and p.pul3ttn10 is-oncentr ited in the cou ntr - eastcrn region I\ ter Attjirs hind ieSdonme-ti\1c water suppl% in contulta- The regul.iriN o't drought predispose- the got ernntent to ti ton . ith local cot ,rnnlent ard tra dumestl, i3ater take stabili.3tion mea-ures-. The ceuniri relat. El-I high supplied as nece-san through ienipor-irs drilhingorether nirionAl inc.me. gi'o-l toreign t\change positicrn and means;. The i hok countrr i-cot ertd 'o th3t no commu- ree.c r elromm tiineral ret ienue' prot dea htlpt-ul ttn3ncial : nir is. without rea,onabl, i,e,t- to Later b;se tor the program in p3rticulir ti r fle'ibilit% in impOrl- 1 v prot ide short-ternm upplementar\ in-.me labor- in b.loo N,rnithelu-ss Bc.t''.ina- ca, derrmon,trate, that mitens',.e protects are . in. aible i all rural -trlernenti intitutionalized support -. tem, can be! dJeeloped ton Each vear riifiii ito cit. 1.1-1l pe -.ple et-rn ca,h t.. ate*rim F'ro. ide toed securit. building localii nrirtructure or tronm other acit% tle, nue!- A vated in recent years as salaries have been pro- Enhancing the quality of education will also tected relative to other parts of the budget. It is require raising the professional competence of estimated that the minimum requirements of teachers while keeping the costs of teacher train- books and materials cost $5 per pupil a year. But ing down. This can be done. Some countries have the problem goes beyond money. It is also due to shortened the duration of preservice training (as the limited national capacity of most African in Burkina Faso), while others have incorporated countries to develop low-cost teaching materials distance-teaching techniques in preservice train- that are pedagogically sound and relevant to the ing (as in Nigeria, Tanzania, and Zimbabwe) and national curriculum. Depending on individual innovative in-service training (as in Ethiopia) (see circumstances, countries will need to develop na- Box 3.8). tional skills at least in the areas of adapting and Improved testing can help monitor the quality editing materials and, in some countries, in writ- of schools and ensure that students are develop- ing, publishing, and printing their own materials. ing cognitive skills and not merely engaging in |! Box 3.8 Ethiopia: effective in-service ieacher training In Jo43 Ethiopia in-ifutted a 11.1 Yar D telopment Plan. huill and Ahout 11.0 .uikr.-q pedlago,cfl centers. Thee; *ihich a. lined-a high Frioril t. educatio.n. The long- cnlter prov idictlhcx-l ~upL.r- i-inand In-~r n.e 1t-cher termobjecti et *er'isa.hie%eunlier31I prim.r educa- trTninrg urellrat educit nal upr -rl ice- tion to di-tribute educational ipportunities nore In lussreacher trainingintiture gradLi.ed rmreuhan equiabii bewleen nural and Urban a ra;.and l emrpha- 4.21ii0 leachorr. compared k.ith . 20Li gr.du.ue, liM O e ,1r- size practical 41ilk. Tle go ernmnent -upphled ne%s betoire.Btc.3.zei ltheir prro.mit\ tolo .al hool,.teadiher ;chiol rei i-ed currinulum- dJitributed new tehol,;- are able to attend *unimer or hort arwe- to upgrade and de%eloped training .%.tvrn their sl,illk v Ithout incurrin, large travel c;-t. Thereiornil-o tnattuted pt,% incial ped3oogicalcen- This model ha le4on4 toroth~rrbecaue it encourage Ij l ter and regional te.clier tTaining The po% ernnient il nox the training ot lox31 per4onnel aoid' oSercentr..Iizd' dc%Eloping the administrative and planning capacitvY l .lt`rTinini progr3m; nd is condl. 1iv tu rnalsin - r,gional and o; r.ipa 'adminivtrat3 v;bre-lion l cvuca- leacher tratuinm re pon eto ;pecttc, local conduttion1 tional otihcez. 4e%n teacher-traIning jn4jtutc~ hi., been rote recall. Quality can also be improved by ensur- In 1983 girls in Sub-Saharan African countries ing that curriculums and teaching materials meet accounted for only 44 percent of the students in the needs of the African environment. Finally, primary school, 34 percent of the enrollment in using the local language in the first years of pri- secondary school, and 21 percent of those enrolled mary school may also contribute to quality. in higher education. Female students are more Although improving quality is paramount and likely to drop out than male students, in part the immediate priority, the long-run goal is also to because of the demand for female labor within the expand enrollment, especially of girls. There is household. Illiteracy is much higher among wide variation in gross enrollment ratios-from females. Niger and Somalia with ratios of 29 and 20, respec- The gender gap in education comes at a high tively, to Kenya, Madagascar, Togo, and Zambia cost. Evidence shows that the mother's education with ratios of around 100 in 1986. Female enroll- is perhaps the single most important determinant ment ratios are generally lower than those of of a family's health and nutrition and that educa- males even in countries with high total gross en- tion enhances agricultural productivity. Thus, rollment ratios; see, for example, the situation in since most agricultural subsistence producers are six countries shown in Figure 3.4. women, basic education can be expected to im- prove their incomes, opportunities, and decisionmaking power within the household. Figure 3.4 Primary school enrollment ratios Further, even a few years of learning at the pri- by gender in six Sub-Saharan African countries, mary level has been shown to lower women's 1986 fertility either directly, by increasing awareness of Ratio contraception, or indirectly, either by reducing the 130- 120 - demand for children because women perceive en- FM Male hanced earnings opportunities or by raising the - Fema' arigso 100 - E=l Total _ age of marriage and thereby reducing the number of childbearing years. 80 . 0 E For many countries improved quality and ex- panded enrollments in primary education imply an increase in total expenditure on the education 40 - 1. _ -1 - 11 || ll sector as a percentage of GNP, as well as a gradual G_inea Senegal Be| n . ote d'Ivoire Togo increase in the relative share of primary education 20 - in total education budgets. There are, however, significant differences among countries. Some countries may reach universal primary education EthIopia Benun Togo (UPE) well before 2020; others may not. Figure 3.5 Note. The primary school enrollment ratio is the number illustrates the recurrent budget implications of of children enrolled in primary school as a percentage of the primary school age population. achieving UPE with an improvement in educational Source: World Bank data. quality for five low-income countries with low Figure 3.5 Universal primary education: Cost can be reached well before 2020 with only modest scenarios for countries with low enrollnients additional expenditure. Gross enrollment ratio Although a reduction in cost for each pupil in 140 - Zimbabwe primary education appears unlikely in most Afri- 4.2% can countries, there is some scope for using re- 120 - Case t sources more efficiently. In certain circumstances 100 - Kenya 3.6%, double shifts can be introduced, teaching loads 100 , Kenya31% increased, and distance-teaching techniques im- 80 - plemented, although care must be taken to ensure 20 / that quality is not jeopardized. Planners in Sene- 2.9- gal, for example, expect to raise by 6 percent the 17% number of students enrolled by 2000 through a 40 2 1.7% double-shift system in 20 percent of the over- 1 --__~L~---~ V - @ crowded classrooms. In Burundi double shifts 20 have helped lower unit costs to $35 (compared 1980 1990 2000 2010 2020 with the African average of $52), without any noticeable adverse effects on quality. Increasing Note: Figures on the graph are actual (1983) and projected (1990-2020) class size is another way to reduce costs, especially expenditures on primary education as a percentage of GNP. For com- parison, actual (1983) expenditures are given for Kenya and Zimbabwe, the rural areas. Finally, as Kenya's experience which have already achieved gross enrollment ratios greater than 100- shows, interactive radio can be used to improve Case 1: expenditure on primary education as a percentage of GNP remains constant at estimated 1990 levels. Case 2: expendituie on the quality of teaching and to enrich the classroom primary education as a percentage of GNP increases to accomodate a environment. gradual increase in gross enrollment so as to achieve UPE by 2020; this case includes a provision for quality. The low-enrollment countries are For every 1,000 children who enter primary Burkina Faso, Ethiopia, Mali, Niger, and Somalia, whose per capita school in Africa, only about 600 enter the final incomes range between $130 and $290. Per capita incomes for Kenya y and Zimbabwe are $330 and $580, respectively. year. Dropouts and repeaters increase the cost for Source World Bank data. each completer of primary education by an aver- age of 150 percent; in many low-income countries the cost is more than doubled. Students repeat years in the highest levels of primary school to enrollments. These projections are based on four better their chances of getting qualifying marks on assumptions. primary completion examinations to enter sec- * A systemic provision of $5 for teaching ma- ondary schools. The change to a separate test for terials is added to the public recurrent expendi- entering secondary school has been shown to re- tures for each primary pupil (observed in 1983) to duce the number of repeaters. In some cases drop- enhance quality ping out and repetition may be due to impaired * The revised country-specific expenditures mental abilities resulting from poor nutrition and on each pupil remain constant in real terms micronutrient deficiencies. In such cases appro- * School-age populations grow in line with the priate interventions, such as targeted school-feed- standard fertility reduction, and GNP grows at 4 ing programs, complemented by supplements of percent a year micronutrients, could improve learning abilities * Substantial community contributions are and reduce dropout rates. available to build schools Most African countries face a growing demand Given these assumptions, it is projected that for the limited number of secondary school places. these countries would have to gradually increase Here too expansion should not take precedence recurrent expenditures on primary education over improving quality. The key lies in reducing from 1 to 2 percent of GNP to 3 to 4 percent of GNP costs, especially through measures directed at to achieve UPE by 2020. Case 1 shows that if the teacher training and utilization. In many countries present level of expenditures continues, these capital and teachers are seriously underutilized at countries will fall short of the goal even by 2020. the secondary level; the student-teacher ratio is 23 These projections do not represent a uniform pol- to I at the secondary level compared with about icy recommendation for all countries. Some coun- 30 to 1 in South Asia. Making use of distance tries that have nearly achieved UPE are already teaching in secondary education is another way to spending 3 to 4 percent of GNP on primary edu- reduce costs, as Malawi has shown. Finally, in- cation (such as Kenya). In these countries the goal creased cost sharing is imperative, provided bur- saries are offered to those from the lowest income graduates, however, the rate of return may have groups, based on merit. Given the paucity of pub- fallen recently. lic resources, private resources should be mobi- Notwithstanding the growing number of grad- lized for investment in secondary education, as is uates and the rising rate of unemployment among being done in Kenya. Although the scope for ra- them, there is a scarcity of skilled workers in fields tionalization, cost reduction, and cost sharing is such as science, engineering, auditing, and higher- considerable in secondary education, it is even level accounting and management. Despite the greater in higher education. large share of government budgets going to higher education, the number of expatriate teach- Higher education, skill formation, and training ers as well as technical experts in science, mathe- matics, and other professional fields remains high; To survive and compete in a competitive world there is apparently an excess of graduates in some in the 21st century, Africa will require not only disciplines and too few in others. literate and numerate citizens, but also highly One explanation for the shortages in high-level qualified and trained people to perform top-qual- skills is the brain drain. The United States alone ity research, formulate policies, and implement had more than 34,000 African students in 1985, programs essential to economic growth and de- many of whom are unlikely to return to Africa; velopment. Institutions of higher learning must be there are reported to be more than 70,000 trained able to produce, at an affordable and sustainable Africans who have opted to remain in Europe. cost, well-trained people in academic and profes- Underlying this migration was (among other sional disciplines applicable to diverse African things) a fall in real incomes of 16 percent between work environments. 1980 and 1985, which increased the attractiveness of overseas salaries. Other factors include unfa- Higher education vorable working conditions and political instabil- ity. On the positive side, migration of skilled A new spectrum of scientific and technological workers within Africa also has been significant, knowledge is unfolding outside the continent. especially into C6te d'Ivoire, Gabon, Kenya, Nige- Universities in Africa will have to develop a few ria, and Zimbabwe, which indicates a growing world-class postgraduate programs in sciences market for skills within the region. and engineering if these countries are to have The quality of higher education is low and pos- access to the new frontiers of science and technol- sibly declining. One reason is the low and declin- ogy. Unfortunately, given the present state of ing quality of primary and secondary education. higher education in Africa, the continent is unable Another reason is the shrinking of resources for to prepare itself to take advantage of the expand- nonsalary inputs (such as physical plant and ing frontiers of knowledge. At present higher ed- equipment) on which only 2 percent of total recur- ucation in Africa is confronted by an rent expenditure on tertiary education is being inappropriate mix of outputs, overproduction of spent. The immediate consequence is that aca- poor-quality graduates, and high costs. demic standards of many graduates are unaccept- Since independence, special emphasis has been ably low. As a result Africa is falling further given to higher education. African governments, behind in its stock of high-level skills and in its acutely aware of their dependence on expatriate ability to manage its economy. And yet the di- skills, have spent lavishly on universities and lemma is that by the beginning of the next century, training centers. Enrollments for higher education the quality of African higher education must be have increased from a few thousand in 1960 to half much better than it is today if African develop- a million today. The aspirations of people for ment is to become self-sustaining. higher education are high, and governments have For Sub-Saharan Africa as a whole the cost for responded to this demand. Public subsidization each student-year of public higher education was has been so high that the direct private cost of $3,655 in 1979-80 and ranged from $895 in Soma- higher education has been kept close to zero, lia to $11,081 in Zimbabwe. As a percentage of which has further fueled demand. In the past the GDP per capita these costs are six to seven times private rate of return to higher education has been higher than in some Asian countries and nine about 30 percent (higher than anywhere else in the times higher than in some Latin American coun- world), but the social rate of return has been only tries. Wastage, proliferation of small institutions, 13 percent. With the growing unemployment of excessively large staffs (especially nonteaching staff), and the nearly universal policy of charging many countries have invested in skills-training no fees all contribute to higher costs. In Nigeria, institutions. Few have, however, a coherent policy for example, only 10 to 20 percent of the actual and institutional framework for effective, relevant costs are recovered from tertiary education, vocational education and training. whereas 30 to 40 percent are recovered from pri- The efficiency and quality of vocational training mary and secondary education. The subsidized are improved by training oriented toward meet- allowances for housing, food, transportation, and ing employment demand, increasing employer health care for each student of higher education, participation, and strengthening the transition as a percentage of the average public sector salary, from training to work. Apprenticeship comple- amounted to 62 to 63 percent in Benin and Burkina mented by theoretical training off-the-job has Faso, 43 percent in Cameroon and Niger, and 24 been successful in many countries. Experience percent in C6te d'Ivoire and Kenya. A similar shows that this can be effective for both larger situation prevails in most other countries. Not firms in the modern sector and the smaller enter- only does charging no fees lead to an increase in prises, in which the bulk of new jobs will be cre- publicly borne costs, but it also contributes indi- ated (see Box 3.9). rectly to high costs, since beneficiaries have no Response to employment demand is central to incentive to contain nonessential expenditures. vocational training, including apprenticeship, To meet the crisis in university education, radi- and to improving the quality of training. A first cal measures are needed to improve quality, re- step is to create a national training agency to fi- duce costs for each student and graduate, nance and administer training in collaboration constrain output in fields that do not support with industry. It could focus on a range of nonfor- economic development, and relieve the burden on mal training activities and be located in the min- public sources of financing by increasing the par- istry of labor to facilitate flexibility in staffing and ticipation of beneficiaries and their families. If the responsiveness to employers' needs. Existing vo- principal objective of improving quality is to be cational schools and training centers should be achieved, additional resources will be required. consolidated and reformed to conserve scarce re- Given the current budgetary constraints, these sources and enhance quality, and only those re- resources will need to be found mainly through sponsive to labor market demands should be the reform of the higher education system itself. maintained. Curriculums should be broadened to Only by implementing policies to decrease unit include such areas as management training so as costs, constrain output, and expand cost sharing to be of assistance to enterprises. Some countries by beneficiaries will it be possible to free the nec- with strong modern sectors will be able to recover essary resources to restore quality. part of the costs from employers or individuals, In the longer term, improvements in quality can but in most countries costs will be met from public be realized and sustained by establishing pro- revenues. grams or centers of excellence for postgraduate The training scheme now being devised in education and research. These could concentrate Mauritius reflects many of these elements. The staff and resources to achieve a critical mass in objective is to respond to short-term labor market priority areas. By establishing such specialized signals through rapid adjustments in the size and high-quality programs and institutions, African content of training. Short-term, nonformal train- governments would provide able students with ing will be administered through an autonomous an attractive alternative to foreign study, create Industrial and Vocational Training Board, gov- incentives for university researchers to pursue erned by an Industrial and Vocational Training their work on the continent, and thereby also ad- Council composed of representatives from both dress the serious problem of "brain drain." To government and industry. The scheme will be economize and to ensure high quality, these cen- financed by a 1 percent payroll tax levy that will ters of excellence should be developed on a re- be matched by government budgetary allocations. gional basis (see Chapter 7). Where civil services are chronically overstaffed, governments need to reassess their approach to Vocational training training. The intake of the training institutes needs to be curtailed and training reoriented to upgrade In response to the pressing need to provide the the skills of incumbent civil servants. Public ser- work force with skills for specific occupations, vice training should also be linked to opportuni- Bo\ 3.9 Training for employment M e Forrmil eduk.ti.-in ard ,,:ational ;sool in mmust -.l Sut- 5chb-ne in Ni m ,ri.i L 1.itict:ed b% Ni., r., Dr3ci:r..,: Lt S Sah.,ran AFrica are orienttd to. ard the niodJrn -och ir Emnplo% nlnrt Ill , h. in- t,ir-t e.eir t. ..r.ain f' tUi ph-eopr niL ndhcn; ir,ace^-lblt rnan pople I Ia'S-,l Lc.: vlUll' pLr;tladl:.d pul-l arid parlstta I ; . i nd are a .nsnderahIebud:Letar\ Ltran -on the go -rn- v nterpr!;s and prI iite 1 uctnr nlo! r in.:Lid f. ni,.r r ment Thetr:iningiitere is inaJdeuakt toprepareo chool mal -.vt. r .- .rkI.,hp to IA. on, ippr j-et Fl filr' : r t a l. lr- or tlc. %-.-.rk lace A-;uch, prirmnoton o'! ir:oninz t or.te pr,.l i,l- tifnc I I.0id t. ic y uO.l rt It "t1' nair..A w '. qtemI that s.flit'ino on -the-jtb e,.perienric % ith thevret- nionth tor .ach tra,n-e an rd I'i ni ira a % ', ir ti th. trairtr r NA al tT.,ifnlin ha%e .onndrabke potentiai to pro.I& tde i ir c.cti Itrainee Leti Ii- trai ni n % eel andl tn r, 'uit-i crui.tA rni--nt nr middle in §uL'-Smhran A'rTica I hi; mrg plert lrnlam.n are 1 ii.gd 3nJ chL.Jd b. winitt-r, t 5 LSi e^F'nr;!.ci*1 -o -iLen tht unrelenting detinior.iphi: prre- lI-,.t nc-n Cerx\ Iv:. .iL'.- ti lu cr'Atlrl - qtuoali t, ure-. i' hichi are Lbound t contilue io denine the gap The Nicerianr .nlmplt dtn.nimr nIt r [he pt.!:n1[31 itir telt%et:n thout %' ith sob- ,nd thi j,-bl1 DeteriL-r.;tir,g o-hann ir, dvyrinnd r,rnt,d ;trti Jr-i -the ecoriornic conrditon5andrldovl% borproudcti%itI-, and kil tmprn.p or prn ldc-- trainin, 3nd tlt trainL%- . rk; t.-.r 1OL cl ornt-mntbrd iith decdinin; public ,ecl.,r em,lo Ii.cr .l.te Bcttcr u-Li .,I n.rnml train n, instituti,ln- nient Lurthr aggra%atM the probln mt labor ab4orptIi,n nnoid rurrther loi runito-i tlhu; alloinnmir appren I InnLIt ali c methIiod- ar. ric-,Jd tL train pLOPI cIcti ec tli ,::. f ipplenntI practicd atIr.i rning 1rid nleliorat l the tii el; in i %% ih1e 'petruni of tli itu -LaIprW- e Ihe Luihti pwr, sent -.carc ilt ot qriilitiEd traincr- Tr.tning in-tietuJltn; itrarine and oltter incentL ¢; or seltt-nipl mnient -lIttr and trraincr bKn:t ttFrnni h: iti act sith 3nd, te:dbwk trainin, tr,irn cnerpri,; A chanz. ir.rm the prw:--ent pre;er% icc tormal trairing T re ;re .thor ;mIar niti :,ti . *. T , ha- ,.-t.ihn d 'i stern ro%%ard on th* lo-ob and n--erm-tce training in the r. N a! ocatinatrira Ining ; nt,rlter- n aprt ritprentioe. i- iork place complevnented t-' lheOretica.l Irining tI .uld shitb, pr, id inrc2 u0pl-L'itnlrn tlrhe..rr.il tr.nljin - and i require pri ite s;ctor iL ol enienl and loc3l etlort- I ;Li,t. th;. suppl i ig r oac hing mn itirea I; lir ,nt rr,pie- and an ri c ratt and tworker :rganl?31ttn; I hile r,taining c-r. rall Ad izorl, :ppr, r.c, i i tor.iic Nev t -' rnm r tra,n- public manrzrement. i Iramnin Cir.c:sucdapprentici. hip ng -re al:. tths-rd in pr.ponni- '.ok ement. .-nd tooptimizc conntruction 3nd operaton.al te 1.: rap mainrtnance.re isonien i et .nk li tpercent or technique- The project wa3 confined initialk to, areas planning COmm,rteev-ihich make decision.onr re;Fon %%here gra'.ih-fted piped %%ater could be used. and the x ibilitie; and de-ivn-and -rt repair ieamu are %o.'mcn tvchnolog% could be ea;il, maintained. it hav no%% been ThE go%,rnmnnt ha; hulped co;mmunit.e to pro%ide e\tended to differeni condtion*. %%here ground%safer i^ nearl, I million peopleo t ith reliblearid 3cce.-ible -. afer a% ailable. supphIz The vuccov ot the prog;ram ha4 encouraged The program has defined the responsibilitks of co-m public ht-alth isorker' t.r begin cormplementars health munith and go%ernment .sell. The communite4. %shic:h program, ishich tnzuro thai thL health effect;s o ihe organize and mana4c ih, %%ater f.icilitiet are r¢.ponsible improvev at.-r *uppl\ are rcalized cir idntmfi ing -ite; olecting is ater comniitlee .irgani;- users can determine the cause and the responsibil- ity for action. If money is required to maintain or cal developments in their field. The interface of the repair the facility or to provide books or medi- centrally provided technical services and the local cines, there is no need to wait for the central staff and management is best developed through government to appropriate money. Users are programs based on regular visits and interaction more willing to contribute to the cost if they are between central agencies, trained local people, directly involved in the management. and beneficiaries. This training and visiting (T&V) Encouraging decentralized participatory man- method is used in agricultural extension and con- agement does not imply an idealized view of local veys information on production techniques to a communities. Elites and powerful vested interests wide group of people. The T&V approach, suit- can subvert the wider interest. But in an imperfect ably adapted for human resource development, world user-oriented management is more likely to could help to reach those with least access to social be responsive to the needs and demands of the services in a cost-effective manner. intended beneficiaries. This is particularly impor- The T&V system is particularly amenable to tant in Africa, where the availability of experi- health delivery because there is already a range of enced managers for highly centralized agencies is low-cost technical innovations that can be effec- limited and where group effort and community tive against the main causes of mortality and mor- action are entrenched. bidity among infants and children. One such Centrally managed agencies have an important innovation is oral rehydration therapy to counter role to play in supporting local groups with tech- diarrhea. T&V workers working one-on-one with nical services. This is well illustrated by the cases community members can teach women about the of Kenya, Malawi (see Box 3.10), and Zimbabwe, nutritional needs of their children and family which have well-run water supply programs. In planning. By using local people as community these cases centralized engineering services pro- health workers, who are trained at regular inter- vide technical guidance, support, and supplies to vals and work under close supervision, the mes- locally managed user groups. In primary schools sages of the T&V system are more likely to be and in family planning, health, and nutrition ser- accepted. A cost-effective T&V system was imple- vices, local staff need to be kept abreast of techni- mented successfully in the Tamil Nadu nutrition 85 project in India, in which a small number of low- Women as lead managers paid workers was locally recruited and trained. Implementing reforms and quality improve- African women are the lead managers within ment programs requires a well-functioning ad- the household for providing food, nutrition, ministrative system that can provide schools with water, health, education, and family planning to teaching materials and health centers with medi- an extent greater than elsewhere in the developing cal supplies, as well as supervision and support. world. They have always been active in agricul- In many African countries health, education, and ture, trade, and other economic pursuits. Women food security are handled by various parallel ad- are guardians of their children's welfare and have ministrative structures that have little functional explicit responsibility to provide for them integration among them. These administrative materially. structures limit the coordination of activities and But women's economic capabilities, and in par- programs. Horizontal integration is needed, espe- ticular their ability to manage family welfare, are cially at the village and community levels, to max- being threatened. "Modernization" has shifted imize the synergistic relationships among these the balance of advantage against women. The sectors. legal framework and the modern social sector and producer services developed by the independent User charges African nations (and also most externally spon- sored development projects) have not served Encouraged by donors, many governments in- women well. Legal systems have discriminated in sist on providing water free. But because there are land titling, by putting newly registered land in no funds to install or maintain pumps or taps, men's names (in their purported role as head of there is no water. Consumers must either pay a household), often overriding women's traditional high price to private water vendors or walk long rights to land use; similarly, payments for family distances to find water (see Box 3.2, above). This labor under contract growing schemes are typi- is an all too familiar story also in education and cally made to the male. It is often more difficult for health services. Whatever the merits of free social women to gain access to information and technol- services, the reality in Africa is that it means inad- ogy, resources, and credit. Agricultural extension equate provision or no provision at all to many and formal financial institutions are biased to- people and particularly to the poorest and most ward a male clientele, despite women's impor- vulnerable. If universal primary education, pri- tance as producers. Women have to pay higher mary health care, and water supply are to be prices for finance and for material inputs such as achieved by 2020, then each country must reexam- fertilizer (or have to do without them altogether). ine its policy toward user charges. Female education affects family health and nutri- In UNICEF's 1987 report, "Adjustment with a tion, agricultural productivity, and fertility, yet Human Face," the need for a case-by-case ap- there is a wide gender gap in education. Lack of proach is emphasized. There is scope for partial resources and pressures on time and energies put cost recovery, especially for such services as water enormous constraints on the ability of women to supply and sanitation. Full economic cost recov- maintain their own health and nutrition as well as ery from beneficiaries for nonbasic services-such that of their children. as university education and nonessential health As a result, women are less well equipped than services-deserves to be encouraged. Selective men to take advantage of the better income-earn- charging can be practiced for such services as ing opportunities that have emerged in Africa. secondary education, curative health services, Despite the facts that food and nutrition are and residential piped water. In all cost-sharing women's prime concern in Sub-Saharan Africa schemes, however, exceptions have tobe made for and that they are the principal participants in cases of extreme economic hardship or outstand- agriculture, women's independent farming has ing merit. Cost sharing is a means not only of been relatively neglected. By contrast, women's contributing modestly to the cost of social ser- family labor contribution has increased, but goes vices-perhaps 10 to 20 percent of total costs can unpaid; in industry and trade women have been be met in this way-but also of empowering the confined to small-scale operations in the informal beneficiaries to demand improved services and of sector; however vibrant these operations are and fostering a sense of individual and community despite the trading empires built up by the most responsibility for their delivery. successful female entrepreneurs, women's aver- 86 Table 3.3 Financial requirements for broad-based human resource development for Sub-Saharan Africa (percentage of GNP) Immediate required Required Comuonient of huntan resource develovoment 1985 actual exoenditure bit 2000 Food security interventions 0.5 0.5 Nutrition .. 0.2 0.2 Universal primarv education and quality improvement 1.3 1.5 2.2 Family planning .. 0.8 0.8 Water and sanitation 0.5 0.5 Primary health care 1.35a 2.0 2.5 Subtotal 5.5 6.7 Other related investments Science and technology .. 0.5 0.8 Secondary and higher education 1.7 2.5 2.5 Total 4-5 8.5 10.0 = Negligible. a. Total health care, including primary and nonprimary. age incomes are relatively low. Women are also delivery, to reduce unit costs, and to improve user handicapped in access to formal sector jobs by charges, a doubling of annual investment in peo- their lower educational attainments, and those ple from about 4 to 5 percent of GNP to about 8 to who succeed are placed in lower-grade, lower- 10 percent of GNP is called for in the future devel- paid jobs. Lower income prejudices their ability to opment strategy to 2000 and beyond (see Table provide for their children's welfare. 3.3). This is higher than in countries such as China, Alongside these disadvantages in the "public" Republic of Korea, Mauritius, and Sri Lanka, (income-generating) realm, women are facing in- which managed to ensure broad access to human creasing pressures domestically. The natural fuels resources by spending about 5 percent of GNP. and domestic water supply necessary for health But in Sub-Saharan Africa populations are widely care and food preparation are becoming increas- dispersed, and infrastructure is generally poor. ingly scarce, expensive, and time consuming to Significant variations in resource needs among obtain. Women are obliged either to devote more countries have to be expected, given the variation time to stretching available resources, or to draw in the levels of human resource development al- more on the labor of children, or to cut down the ready reached in different countries. level of feeding and nurturing. Time-saving de- In conclusion, the recommendation to increase vices, such as light grinding machines, efficient domestic and donor expenditures on human re- cookstoves, reforestation schemes, and, probably source development programs must be seen as most important, more abundant water supplies part of a broad strategy in which programs to can be a highly cost-effective way of relaxing some develop an enabling environment to stimulate of the constraints on women in their household growth in the productive sectors of agriculture nurturing capacity. By taking account of the diffi- and industry are to be formulated and imple- cult circumstances in which women have to man- mented. In summary, the strategic agenda for the age household resources, it may be possible to 1990s should aim to: increase the efficiency and cost-effectiveness of * Double total spending from 4 to 5 percent to human resource development interventions. 8 to 10 percent of GNP from now to 2000 and beyond to achieve universal primary education, Sustained financial support for human health and family planning, food security, and resource development nutrition-a substantial part of these funds may be expected to be contributed by donors Even if all the necessary steps are taken to im- * Improve the quality of all services, especially prove the efficiency and effectiveness of service education and health care 87 * Improve the effectiveness of expenditures * In implementing programs, increase the use by appropriately reallocating resources within of community-based NGOs and women as lead each sector, by targeting resources toward the less managers in all areas of human resource advantaged, and by sharing costs development. Agriculture: The primary source of growth and food security The task facing African agriculture in the 1990s rapid growth in food imports, an average of about and beyond is formidable indeed. It must cope 100 million people in the early 1980s were under- with the needs of a rapidly growing population. It nourished-many more in years of poor harvests. must achieve sufficient growth in foodcrops not Severe food shortages are now widespread; merely to maintain output per person, but also to drought and famine have been common in the reduce food calorie deficits and to lower food 1980s. Such transitory shortfalls are even more imports. In the process it must be a major em- damaging against a background of chronic food ployer of Africa's growing labor force and com- insecurity. pete on world markets to earn the foreign The agricultural potential of African countries exchange that Africa needs to fuel its economic varies widely. Central Africa, humid west Africa, growth. And it must do all that while reversing and southern Africa have large cultivable areas the degradation of natural resources that threat- and low population density. In contrast, most of ens long-term production. This challenge requires the Sahel, parts of mountainous east Africa, and a transformation of agriculture. the dry belt stretching from the coast of Angola through Botswana, Lesotho, and southern Mo- The challenge of transforming agriculture zambique all support unsustainably large popu- lations, and hence need food imports. To cope Transforming agriculture and expanding its with these difficulties, the productivity of cultiva- productive capacity is the prerequisite for im- ble land must be raised. Where land is still abun- proving living standards in Sub-Saharan Africa. dant and labor scarce, increased labor To achieve food security, as set out in Chapter 3, productivity is required. Land scarcity is more food production will have to grow at about 4 common-and is becoming more so as the popu- percent a year. Beyond that, to raise incomes and lation expands. Many African countries or regions meet Africa's import needs, the production of ex- have large surface areas but considerably less cul- port crops must grow by no less than 4 percent a tivable land. A recent FAO study showed that year (see Chapter 8). Thus Africa must set its target only 30 percent of Africa's land area is capable of for long-term agricultural growth no lower than 4 sustained production of rainfed crops. About one- percent a year. quarter of this is used. However, much of the rest This will be no easy task. During the past 30 is under primary forest that ought to be conserved years, agricultural production in Sub-Saharan Af- for environmental reasons. rica has risen by only 2 percent a year. Agricultural The FAO reports that acreage expanded by only exports have declined, and food imports are in- 0.7 percent annually during the past 20 years. creasing at about 7 percent a year. Despite the Assuming that the rate of expansion cannot be any 89 higher in the future, productivity must rise by within Africa. All this would require a better qual- more than 3 percent a year-three times faster ity of produce, more aggressive marketing, and than in the past. The necessary productivity gains less government interference. Farmers would can come only from technological change. This play a bigger role in shaping agricultural policy will involve a more intensive use of chemical and and rural development. Increased income, im- organic inputs; the integration of livestock into proved social services, and food security would farming systems to use animal power and ma- make rural areas more attractive and would en- nure; the introduction of new higher-value crops; courage further development of dynamic farming better irrigation methods, hand tools, and crop communities. storage techniques; and improved animal and Despite the enormous variety of ecological crop husbandry. The policy environment will zones, microclimates, and soil conditions-each need to make these changes profitable to farmers. requiring its own specialized crops, seeds, and Better rural infrastructure, particularly roads, farming techniques-throughout Africa there is a would make it easier for farmers to obtain inputs remarkable commonality in the principal policy and market crops; it would also give rural fami- measures required to spur agricultural develop- lies better access to consumer goods. Greater se- ment. Specifically those measures aim: curity of land tenure would encourage investment * To increase the role of the private sector in and land conservation. Improved financial ser- pricing and marketing agricultural products and vices would help farmers to save, or borrow, for farm inputs and in improving financial interme- investment. Better educated and healthier farmers diation services for farmers are more likely to aim for higher productivity and * To identify and disseminate new technolo- to conserve resources. More thorough investment gies to increase productivity appraisal would help governments to avoid envi- * To improve the security of land tenure and ronmentally damaging schemes, such as large ir- enhance environmental protection rigation and settlement projects involving * To develop rural infrastructure in order to deforestation. A combination of incentives and strengthen rural-urban economic links and im- sanctions is needed to deter businessmen from prove marketing supplying environmentally damaging chemicals, * To encourage rural peoples and associations, from logging destructively, and from dumping including women, to play a greater role in pollutants into rivers and groundwater. decisionmaking Migration from areas of high to low population * To promote regional cooperation, especially density should be encouraged, although this in food trade and joint research. alone will not solve the problems of the highly The first two priorities-involving the private populated countries. The less populated areas- sector and harnessing technology-are the most for example, the rain forests of central Africa and important. But too few African governments or the arid and semiarid areas of the Sahel and much donors are addressing them. The unsuccessful ag- of southern Africa-are unsuited to supporting ricultural policies of the 1960s and 1970s are still significantly more people. That is why improving common today. They include: the productivity of land is so critical for Africa. * Administering prices, input subsidies, mar- What, then, is the long-term vision? In the years kets, and input supplies through the government ahead African agriculture can be transformed. * Financing farmers through parastatal agri- Africa's plentiful labor, proximity to Europe, and cultural credit banks seasonal patterns give parts of the region a com- * Financing rural development through gov- parative advantage in the production of several ernment-managed regional development projects crops. By 2020 better educated farmers could be * Marketing export crops through parastatal using land, labor, and capital much more effi- enterprises, usually dealing with a single com- ciently. A vigorous private sector could process modity and market agricultural produce efficiently, and * Providing irrigation through medium- and rising investment could combine with new agri- large-scale government-managed schemes. cultural technology to steadily raise yields. Addi- These policies have depended excessively on tional domestic and foreign markets for new as public administrations unequal to the task. Issues well as traditional products could be opened, relating to land tenure, the environment, the role which would permit, in particular, trade in food of women, and the need for capacity building have been neglected. Governments have relied kets, where prices were uncontrolled, expanded heavily on technical assistance. And the farmers as a result. This reduced the negative impact of have been left out of decisionmaking. Progress is poor policy on farmers, but it did not eliminate it. more likely to be made if farmers are put in con- Price stabilization funds established to even out trol-and allowed to market freely; to invest prices have rarely succeeded. When the funds are freely; to establish their own cooperative credit, in surplus, they tend to be diverted to other pur- input supply, and marketing enterprises; to man- poses, so that when deficits occur, there are no age their own irrigation facilities; to own the land funds to cover them. One way forward is to put they work; and to take responsibility for protect- the stabilization funds under the control of man- ing the environment. Africa's future is at stake. agement boards representing producers and con- The best minds must be put to work, the best sumers so that governments cannot have access to policies and practices must be sought, and a new the funds. This approach is being tried in the sense of urgency must drive efforts on every level Central African Republic. to accomplish the task. Often governments have kept farm prices (in real terms) artificially low by allowing their ex- Mobilizing the private sector change rates to become overvalued. Alongside price subsidies for imported wheat and rice, this In agriculture, as elsewhere, many African gov- distortion accelerated the substitution of imports ernments have put little trust in the market. They for domestic produce. The markets for locally pro- believed that markets would fail because they duced traditional foods (such as sorghum, millet, would be controlled by rapacious traders-often roots, and tubers) have consequently been com- foreigners or people from ethnic minorities. And pressed. These policies have also reduced the in- they thought that profit margins would be exces- centive to process traditional foods into forms sive. Most governments, therefore, imposed con- more acceptable to urban and high-income house- trols on the marketing of key crops (cereals in holds. An overvalued exchange rate has the same much of East Africa and export crops in West effect on export crops as it does on import substi- Africa). Private trade was often banned outright. tutes-reducing their local currency value and Government participation in, and even monopo- discouraging production. lization of, agricultural marketing and processing Flexible prices, reflecting demand and supply was widespread. The state-owned enterprises in local and world markets, are the best way to concerned were frequently costly and inefficient. signal to farmers what, how much, and when to Where the private sector was left to operate produce. Local prices would then be free to rise largely unhindered, as for tree crops in Kenya, when supply is short-helping to stabilize both food crops (other than rice and wheat) in West farmer income and supply itself. A market-ori- Africa, and livestock in many countries, market- ented approach can also insulate governments ing remained relatively efficient. By suppressing from the political pressures to keep consumer private marketing and processing, governments (and hence producer) prices low. As for export have blocked the potential for African entrepre- crops, if farmgate prices reflect world market con- neurship. For their part, public sector agricultural ditions when the world price of an export crop is agencies have failed to seek out new export mar- low, farmers will have an incentive to switch their kets, new crops, and new product lines and tech- efforts to other crops with relatively higher value. nologies. Domestic prices of export crops fixed by govern- Most African governments have long regarded ments prevent farmers from making an economi- volatile prices as a deterrent to investment in ag- cally rational response to changing world market riculture. In addition volatile producer prices for conditions. food are seen to lead to volatile consumer prices, Flexible prices call for a marketing system in which may harm poor consumers. In response which private traders are allowed to compete. many governments have tried to stabilize pro- When trade is monopolized, governments may ducer prices. In due course the aim became not feel compelled to set minimum prices to protect merely to stabilize prices for farmers but to keep farmers from price fixing by the monopoly. A consumer food prices low. But prices were often better solution is to encourage broader participa- set so low that farmers had little incentive to sup- tion in trade. In contrast, African countries that ply the official marketing channels. Parallel mar- have allowed free domestic trade and export and 91 have left agricultural prices relatively uncon- ity control for export products, and establishing a trolled have had higher agricultural growth than legal framework that permits the development of those that have not-witness Kenya (for coffee, competitive marketing activities. food crops other than maize, wheat, and fruits and A controversy continues over whether incen- vegetables, as described in Box 4.1); west and tives should promote self-sufficiency in food by central Africa (for food crops other than rice and favoring food crops over export crops. The argu- wheat); and Ghana, Guinea, and Nigeria, follow- ment is misplaced. The distortion that needs cor- ing the recent liberalization of price controls and rection is the one that favors food over export marketing restrictions (for all crops). Where ex- crops or vice versa. Once the bias against agricul- change rates are overvalued and where monopoly ture is corrected, the remaining incentives should food buyers persist, however, protecting farmers be neutral between food and export crops, and through setting minimum purchase prices may be farmers will be guided by their comparative ad- justified as a "second-best" solution. Apart from vantage. Countries with a comparative advantage these cases, the clear lesson is that, except for food in export crop production should exploit it and security reasons in certain extreme circumstances import food if necessary. This will promote not (discussed in Chapter 3), price intervention is best only growth and higher incomes, but food secu- avoided. Governments do of course have an im- rity as well. In practice the policies advocated in portant role in pricing and marketing beyond that this report would significantly increase the pro- defined in food security strategies: for example, duction of food in most African countries and providing market and price information, promot- substantially reduce the food gap by 2020 (see ing private and cooperative marketing activity, Table 3.2). This conclusion is justified by the im- building market infrastructure, ensuring the proving comparative advantage of many African proper use of weights and measures and the qual- countries in food production that results from - ;~~--.- -1 z- -"-.- -i Box 4.1 Kenya succeeds in horticulture A'i Producti lcand inen Rn habeconie3arcerelati%etothe Au.jthcrihtHCE).-iCDA 4et.,pir, Ir7 Th,:HCtl A. Iapa r3 t.i- groti ing *uppl% oi labor In th.iv -.ituwrl.n hortic:ltL4r,il I.nl intituli.r-n that m6rk,tc 4ome -,t the pr.duce tronm culth-.iation b makinm intens4w. uSe ot both 13nd .ind -maliholJer4 it dL vel.-pid a mirko intornution *,temin labor. is highli 3pproprite It umplo - about 20i percent x ith the internaui..nal Trad,. Cntrei icer.,ed horticultur1l 1 ot the !abor orc; ' 9 mil nin pioplen I duinng the h r est evporters . tablished paJ.in *tat,on- participated in t cason and it pro% ide. ;rail-scale landholder5 i% ith arn a,ll.:rtm,. air car-. 4pac- imn worked to tancndarJze ; . addition31 source ol ,iiicomn and irnprc.cd -iod ,ecurit% conta,ner^. The Nhnlirrrr: ol Agrictiltur, helped hi, the International ani domtstic demand lor horticultural HCOA prr.oides e\rerisn and m.irl,etin- adJ, e Tt-,h products i high the gro% ing donie,tic niarket ak-nc at'- rnni4tr\ also c,-tr-li vte quahit% ,t produce to maintain - . s.rb. 01l percent ot tlle tnuit, .nd %epeta.bles produ,cd inmrrn.ati nil standard Trhe ken.a Ae,rncultur.o R-earch t thus replacing imported 3ples branasn.i nd !r.apes Int-t,ute under tilr. siri i\L Scence [ssearcl and r! i- a ens ta' orabt Jlimaln mnake' it pk-.ble t product. Tchnoloi'. c.irriv. out not.? crop irakaind vupervrs^thc * trlpical. -emirropical and ternperaie tru,rs and %eeet a- ale-lntnniarcr.iI TheprIvatesecrorandth HCDi ble-i. The range or produit; has increa-ed sieadi!; More comlpvt Irscel im hriesting. trani-prtation mrark,tin' S than 't;0 arietiejio tlower-arebeing r.o\n Klen%a. ' hich 3nd pricirip had A3mo4t no tl,'.'er e\ports 15 %ear' gc. i; no'.' the The prl%i'te s at-r;h.been the maini ource .t tinance world- tourrh large-t e\porter ot 'lower; ro-e- orchi-di \1arketirn h-. cots h 3; heen mo e becau,c .t tIc, clo.e and carnation- are the me't populir hnk' ni.an% e\p.rter; espccalh i:rr,.-r, mpanie4 ha%e [Erokiuctionotireshhorneultrl Ciraleports n:reased,dra- '. th e\tcrn.il market. Ebilateral as^s tance and prla'.ate m. mahcalk trom about I ii1 ton4 worth 9-3- Ii iui' - toreign i.tsrment trim St oral countrie rinnced hort,- lent, in l%.S to 3n.50Xi ron- it'.. rth i3-4 7 million' in Im-J7 cul-tiral re;earch and production igriculrural trairinrip T ihe\ are th. third lanrstt so:urce ot toretgn i.change crop re;earch %'ater do.elpment atid teohnical asis- a among agricultural e\port, Horticultural product, eo to tarc.; orsone 11' countries the largest inmgle marlet being the The- ,uc:,-.-t -e.nI a h.: .hriulrural prod.ctnon holds Lmnited l.indom. %' ith a har o0t more than -1i percetint niportant le,ont kor mther c.,ur.trie im. Atrica The go- Middle Eastern countries *re ako becoming a.n incroa-- crnnenit thr.-.uh the HCDA ackd as i tacilitator and ingl! important mark! t. co.rdinan,r but did noi crvak, 3 large b,,rc3ucr3acX it did Horth-ulture '.'a-5abietoe'.pano b-:aui4eloeatcntrepre. not intertere %' ith Ehe riarkEt neclhanrtmi but reli.d -i., .. neurs. -oreign !n n dtor4 and th. go% ernni.-ˇit collabo- Fri; ite incentei. u j rated. t3cl,tated i th.- Horticultural Crop. Pe% elopmeni 9,: these policies, the added focus on food security, ways to improve their operations are under study. and the relative stagnation in the real prices of Given the sophistication and complexity of world some commodity exports. commodity markets for agricultural products and Trade within Africa in agricultural products, the conflicting interests among producer and con- especially food, should grow as domestic distor- suming countries, this will be no easy task. tions in exchange rates, agricultural prices, and Schemes that resist long-term price trends created marketing systems are eliminated. Reducing the by changes in world supply and demand are al- barriers to regional trade will open up opportuni- most inevitably doomed to failure, possibly at ties for specialization, depending on the compar- considerable cost. Compensatory finance, such as ative advantage of each country, and will expand the EEC's STABEX scheme or that provided by the markets. IMF to countries demonstrating a need based on It is sometimes argued that because world significant short-term shifts in terms of trade, prices for most African agricultural products have makes more sense. They provide relief without fallen, government intervention is needed to pro- intervening in markets that are increasingly diffi- tect export producers. Agricultural prices have cult to manipulate. indeed declined. Sluggish growth in developed Subsidies in North America and Western Eu- countries reduced demand in the late 1970s and rope have created abundant supplies and have early 1980s. At the same time the supply of some lowered prices of cereals and livestock products export crops increased, especially from Asia and that are imported by African countries in compe- Latin America (notably coffee, palm oil, and tition with local production. In this situation tariff cocoa). New substitutes for some tropical prod- protection from subsidized and dumped exports ucts (synthetic rubber and sugar made from corn is justified; recent examples include dairy prod- syrup and sugar beets) appeared. Because of ucts, cereals, and edible oils from Europe and Africa's low market share, except for cocoa, world North America. For these commodities, produc- prices are not significantly affected by the level of tion costs are lower in many African countries production in Africa. than in exporting countries. If these subsidies Lower prices, however, do not explain why were to disappear, Africa would have much to Africa has seen its share of the world markets in gain. Tariff protection will permit production ca- cocoa, coffee, palm oil, rubber, copra, tea, and pacity and enterprises that market domestic pro- cotton shrink in the past 20 years. Asian coun- duce to develop. tries-with more liberal trade regimes, stronger private investment, and growing productivity- A role for medium- and large-scale farmers have taken up the slack. Africa's experience has shown that governments cannot afford to protect Better incentives should benefit not only small- farmers from sustained declines in world prices holder agriculture, but also medium- and large- for their export crops. Instead, farmers should be scale private farming. Enterprises that can allowed to adapt and respond through free and integrate agricultural production, marketing, and open price and marketing regimes. Africa's best processing are more likely to develop new prod- hope for the future is to become increasingly com- ucts and markets. They will often sign production petitive. Government's role is to help farmers to contracts with smallholders, who will thereby re- improve their productivity. Encouraging cost ceive the benefits of modern technologies, quality cutting and maintaining a policy environment control, marketing, and other services. C6te that permits diversification in response to market d'Ivoire, Kenya, and Malawi have attracted pri- signals is the best way to beat depressed world vate money to plantations producing export market prices. crops-bananas, pineapples, fruits, and rubber in Wide short-term fluctuations in world agricul- C6te d'Ivoire; coffee, tea, fruits, and vegetables in tural prices are disruptive. Efforts have been made Kenya (see Box 4.1, above); and tobacco in to mitigate such fluctuations through interna- Malawi. A more open policy for such investment tional commodity agreements, as has been at- attracts domestic and foreign capital, as well as tempted, for example, by the international coffee technical and marketing expertise. Educated Afri- and cocoa agreements. In practice, international cans who might spurn peasant agriculture could price stabilization schemes have proven to be ex- be attracted to work in such modern agricultural tremely difficult to manage effectively; however, enterprises. -,3 Fostering rural savings and credit government for funds and would increase the incentives for savings. The banks would gain the To provide funds for farm investment and to resources needed to strengthen the management improve farmers' cash flow, efficient financial in- of their rural operations. Commercial banks might termediaries are needed to serve rural areas. Many also be attracted into agricultural lending or en- parastatal credit institutions established to serve couraged to lend to farmers through intermediar- the agricultural sector have been unsuccessful, ies (such as traders who sell farm inputs and mostly owing to poor management. Politically equipment on credit or who market crops). This motivated loans have been common and their has begun to happen in Kenya, for example. How- default rates high. Governments have also tended ever, significant agricultural lending by private to maintain below-market interest rates. Conse- commercial banks will develop only in the long quently, the demand for credit invariably ex- run. Even then there will be little progress unless ceeded the supply. Credit was rationed and the banks are allowed to enforce the default distributed according to criteria that often failed clauses in their loan agreements. to take account of the quality of the investments For smaller farmers the most promising way to proposed. It is hardly surprising that these insti- provide credit is to encourage the development of tutions have suffered big losses. informal sector financial institutions (see Chapter A better approach would be to let interest rates 6). These combine savings by members with lend- balance supply and demand. Funds could then be ing to groups that assume collective liability for allocated by the market. Higher interest rates the debt. Peer pressure increases the likelihood of would also make the banks less dependent on repayment, since nonpayment by one results in '-i.; =,'TifW_-4 U E. I', - _ . - ^-4 i17 F --i. - ._Zr . t - ..Ii ad- :.N; . i ,j Box 4.2 Savings and credit cooperatives in Cameroon Cameroo,n sredtunion^ ClI a raninipr *neevnl nime lendng .no..pr o. trom rC3inurcs pro.i dOld o% ot Qtlhomnt ruralr n tminanii:l n-tirutt-on; The ha%e bIE3r, i3\twrrl,a urctz built on intornmal *i ing.z 3nd l.ndin;: .3;-i.ciatic i to- TetiLl nC-L c-nmetifr ih lng.L_rn in tk . ev ilop I tiu' i.r r,u'u . Iiich hlc i lon, h! i ir- datinig to pre- 4fl id in4titutionz Tr.:. pro.n, ., in tirutii..nal -tindardiz tls. rmnentizdt n ma. tn ri..n rn ir.. oC t anieroon Thv- C3merL-nm CoTper rIii% e Cred it L nion i 3ague s.:-.en3tion- to.ter ;3a inu-. through rfgtilar crintribution iLANI CCUL V- I3b Lztibl!.h.l in 1s-mni a. Jn apein 3.irani- r3 and obljnernr mmeml,r:rv t.: , ulJr debi rLpa m,:ntz zti.on iopir, ide -pport .-r i.ce.bo .1kl,:epin..mand manr - CLitornialized their .hort rlm teripemprar , arr.un,nkr, r%ii 3vnnt 3aianc a centrat tnpnce unit irainir- and into rern3nent intit-ultuon*; I hc tirzt CLi- Liere 1,.rn--d lin audit and rinurtcc 4er\ 1ic- tr i fi n-Kr; Ebsofre. re,r- in ir the nrrthi%Ezi an area in i hich tvnntine-t, ere i;tr3tiona net% CL operate4 pro%. i4i.'nlai v' 31 preccx.perai * prialent From thin, ,art Ci- ;pread proer.z-\.:l% ro i,' ,au nc..,lut' E\.i.rrni:.CL'. that 3ii to nieteviztabjlihed net hboring areai and naiivnv.i de e%pan.ton i planncd pr.t-ivional standarrd- ire do`. nzradiled cIpre.6- oPeratO I C L' mnet ihi ii-d; partlculark of ihc lot i -inc.nic z: sau-.-and are -ub.eo ic the ,an.:ction oi :-%n riua! loure urban and rural popula.-tion Rural tlarile. ne-cd a -alc I h CL * and C NNICCL L ar.: genuinrc Ls-P*cJrdcI'ee J place io dep-sii their za%i.rigz C-LI- o.ter it lt.it i[., s3me e tibh-hed and c:nrri1ed Lt nmlnbcr; and their r,pr,- deer-E of s;t,t0 iz.l miinc; a ar gr-ater i.riet% ifot , rinv t-renitafii Althou.h CLi are .13kt r'g,I.tercd t.irmal LO- ,n-truments an a hij-hcr d&Eree oft acct -ibilit% t,. dL-po.- opt: r at i% e or n inz ton - rh. t n% -rnnmint ha; nor in ir ;3 ci t af . nced tr. t, iil-hdra%i Nlthoau h the iormal interened in theliir i r.. tio.-m banking ector inCarmnrson-in und,r;o.ing . .fren dificulit ln,tˇad the artili.ated CL'- s:ontrol .nd zLIpsr% i-e pcrio.d ilie CLi mo-nemntr uc ihro,ing *ang ri.rou.lh CA\ICCLIL cpeCraun. nd financc; thurouzh their board -i r:n,:s 3a erai=ad L.tn 25 penrcntotr 1a ,n ard b, the t diret-irs:.r. rd.upt -. .itte cconrnucu % hich ar electcd r:ndR .f Is1- '31 CL. i ith ,.min, ,t111i11 ne,,ir'Ler. had b- anrd re-pon.ible to th, nmlnib,r; Dependin- . the,r ,-~ ~ai. !ngm!sepo.|if4 aindu iloanc of ~' milli,n aiud 24 illtcn 1iz,: C mn ar en.ina1ed iolu-int . or paid nina_ 2;; Box 4.3 Fighting insects with insects C t.as-aa i sthe-t3plecrop tor moret han .nJmmIIIiin people c.4p. n-o1red b the I iA ind the goi ernmenit t Zaire in in more than 3; Aricarn countrites and si p.rt,cuiarlI tin- lune 1J7 B13cai.e C,;-.iI .1. i 3 l -' Mu.? crop grot, n z pL-rt.nt during pa.rtixl or complete nrop raiture. .4 leii Frimarl% bt h widel% scattered po...or iraners lnd beciu-e % ear- ag.- it ; a, reporled thit ., small bug is eating the the meil% bu a are hard to control .l ith chemn,al peil- heart out .,t Arri:a -the Cac3a%a meal% bug rirvt identi- cides a dual trateg% %as rcccmmendect breeding; ca- ned in Zaire in 10u7 Togetlhr w,ith the cas3a%.1 gretn a% a tar.htie. rc-istarli to the pest- and implementing a ; pldLr mite I tr-t reported In Uganda in 1,4-l i the meal% biolical eontrol progrin. buz has spread rpidl; in a ^'tde belt trom Nll.zanmbiqut The IIT X located nearli 31:1 specks 0t predators and 2 through Zairc and the Central Airican Republic acro,- parasitcs the mo-i pronisinig beinm a tin% parasitic: "%asp coa,ial % e.t Attic3 ti Senegal and G une3 BSisau Stiere IE;l.t'ir` IAJl -1 i it ha, become ihe star ot the %i nrld a2 ttaucks.ietther petC-3n reduc, ieldtsb% uptoNiperceni. largest aird fri5ti 'ucces'tul biclogcol control pr-,gram Economic ln,se- are eshnlated at alnro,t 4 2 billion a cEar Linder a % 3ri,t% -t -ciogical cenditn-. it rapidki multi- -ome tarmeri ha,e itbndoned th1 crop phie and disper--. Eis l¾ atter tour ears oI rele-;es a \oit hoe,'.ver. thank Ito the Iniernation3l ln,titite ot the par.aire- presence .m- co.nrirmtd in !I countries ^ Tropical Agricilture .TA1.m in ibadan. Nigeria a -ucces,- Indication, arc that it .:3n E>t[lr;h it-ell throughout ie '' iti biological control program ha; becun to re%c r-, th, ca3a ax tcit Houtvc r the ,iu.inon i' nIo ure rt for ihis tide The st'rx .i t the Alt ca-n ide biol4oical cemntrol pro- Pa)Zst` approach gram tor thr mnlt .; bug bone oI rem3rkabL, peri sienTc-. There !- lirrge and Tro. in-, dLnmarnd tron more .x un- b regional and nter-national cooperation and technical 3nd trie tor trmining inpu1 anl tichncai. asi-ianc e to set up econimic s.c;;ss. The progr.ni s benewit n. .oo ratio rination.l pre-ramr Bec:au-e .:.t killed labor ind pricduc- c r. er% -itt -elN etimated at IS)1 l tir.n short3ge- at the ci.nirol Fro, rim he3dquarters at tIre , The programn merit- speial attention becau- if lIT A ni-.t all ol itth dnr-arid can be rmet although net - * L ^e s ni nehennical pt-t control ' Iitch i, en' ronnmen tacihtines h:-i e been construc:ted Im CL-1c0iou Benin The 1 tall sun.nd Jnd,do-, notd.,ra.ninore!gne-.:ha e re-urce- greaer ne.:d a.re -r kille,d te:hnici3n, in: run th Fpara- U* tler, 3 permanent and ,-el sustaining ,o1lution io a sitt breed.ng opcration- IrnL to dirct ani iniplenirein thle nalioragricultural prob1lm natiln.il pro_-grams , Benetits noitl% 'ub[-stenc, 13rmer- Mant donors ha.k supported the core program but * l' a national program with inputs ol technical a--is- there N ttIll a chr. in: shoriage ot rundn Clue in part tance and training trom outside the regi,iIni itnicalli to its ;Lics, *i hicl zit es the mi'takn impres- * Is al,o a. di e\ample It the benctits driii ed tr..orn 'or thai the ca',a a F-i protlem ir Airica has ber-. 4 rteQonal cooppratior itort example the tI rga.tzatlion tr -ik- -d in t .t more .; ork N n-eded to di,dribure the Atrican Uniti ii)0NI- helped to t.cihifile i:.. .--border par .te-- in th: ati-cied r. gon and1 to Lipp-rr a p3rallel . tligiit~ re,giona l- .-irsh-ops and :ntormanon e%chlria e proirarm that is scarelhng r.r bli cal conirol .,I the Tthe pr.ram grer-\ out ot an intern.ational iorks;hoF cas,aX a ;rCeri ;pdcr t-rite .- … - -- '~~~~~~~ - ~ :l i? - -7 Controlling pests and diseases and canals onto smaller areas growing crops or trees) (see Box 4.4). Pests and diseases such as rice blast, cassava bacterial blight, and green spider mite cause Agricultural equipment heavy preharvest losses in Africa-ranging from 10 percent up to 80 percent. There will be increas- In many parts of Africa it will be necessary to ing demand for chemical pest and disease control raise the productivity of labor by using improved material, much of which has undesirable environ- agricultural equipment. Past experience has mental effects. Planned programs of disease and shown that full-scale mechanization is not the pest control will be necessary, using limited quan- answer for the short or medium term. Tractor tities of pesticides and fungicides, but increasingly plowing and bulldozer land clearance have accel- relying on cultural and biological controls (see erated soil degradation in many areas. Mainte- Box 4.3). Pest- and disease-resistant crops will nance of machinery has been poor, partly because have to be developed. Improved cropping and of lack of foreign exchange for spare parts. Animal cultivation methods are needed that reduce the power is often a more profitable alternative. In spread of pests and diseases. addition many small "appropriate technology" projects run by private voluntary agencies have Irrigation and water availability and control introduced simple mechanical devices that re- quire little maintenance and are cheap and easy to In Sub-Saharan Africa 5 million hectares are use. The jab planter is an example of a hand tool irrigated-just over half by modern means, the that can halve the time needed to sow a hectare by rest by small-scale traditional methods. Some 70 hand. Animal-drawn equipment, such as plows percent is in three countries: Madagascar, Nigeria, and seeders, has an enormous potential. So too do and Sudan. The area potentially suitable for irri- improvements in on-farm storage facilities and gation is estimated at nearly 20 million hectares. machines for dehusking and the initial condition- Further irrigation could contribute significantly to ing and processing of crops. expanding agricultural production in Chad, Ethi- opia, Malawi, Mali, Mauritania, Senegal, and Livestock Uganda, in addition to the three countries cited above. These countries have dry areas that are Livestock offers good opportunities for rural cultivable with water, which could be obtained income growth in Africa. Small stock (sheep and from rivers or from groundwater resources. The goats) and poultry have a large potential, which most promising possibilities are schemes costing has not been exploited in much of the region. $1,500 a hectare or less, which could be built and Cattle production is currently the most important maintained by farmers with some government and provides a large proportion of agricultural assistance. These indude surface irrigation from value added-more than half in some countries. wells, controlled flooding, and development of Africa's 160 million head of cattle are distributed inland valleys and basins, swamps, and flood unequally across the continent. Mountainous east plains. Such developments have often spread Africa, relatively free of the tsetse fly, has one-fifth spontaneously. Private small-scale schemes by of all livestock on only 11 percent of Sub-Saharan Mauritanian farmers in the Senegal valley are one Africa's land. The Sudano-Sahelian zone, with an- example. In addition expenditure on the proper other third of the total, is crowded with cattle, operation and maintenance of existing schemes while humid central Africa, where the tsetse is and on rehabilitation will be money well spent in endemic, has only 3 percent of the stock on 18 many countries. percent of Sub-Saharan Africa's area. Water management and conservation for Livestock can also be part of an integrated farm- rainfed crops is important. In semiarid areas and ing system by providing both manure and draft where dry spells are a danger, it is essential to power. However, livestock also contributes to the maximize the proportion of rainfall that filters into progressive removal of Africa's vegetative cover. the soil for crops to use rather than washing off The task is to increase underused livestock for uselessly or destructively. This can be helped by production and draft power, while reducing the waterspreading(divertingitfromgulliesontocul- pressure on the environment. tivated fields) and water harvesting (directing Solutions will vary. In the mountainous areas runoff from a broad area by earth or stone bunds integration of livestock in farming systems is al- Box 4.4 Soil conservation and %water harestitng in Burkina Faso An iZricultural re;.-irch and - stcn§in projot -l Pr,. sid . i s-nnion t.tIi s:tntnie ts-,l1fln!Kl s. flE.. Agr:-Forsn:r,er I FI ,n ih, ateil'.i re,io:n et Burkl,na t. lho'unindLot larm..r- F.;,;, liJn,hed min l- ilrnec lt redu ini -oil er;.-r rird Th. rP \F luolrnJ that thc; .:'uIud tri.n ir, mo or siater rur,t It uZ:dJ 4nipk nc mnvp..r.._- I bvr-nten; 'i.e thirec da,- t---ik tv a tl, Id tat t it t.1.,%- r thiin; is per;on; C3rhtnri b.m,;in- to o i r.;,n. ankr t,r oret 9 ; -.: IundJ- the VAF - tr:,inlrg r,cor.t i. nlpre-.m.c Tlod.ii Cr-rn built r,. sllm . cl run.ii ..I r,lintall trrcnl t,rra..:es. ha, *cr, .!on - i a-ur - ur rr,r,; tirn rn lioii hle.,rire, ind pro%eid o-:tth%e i r.wdu.irrc ,ro-i-n rj rd.t irmi nlc mc!- extend to thenorthern region. tUt, m thInIn -Il Crop yields have improved because the bunds hold Th,c h at.enpa regn!n Ia 1Icatd In tti, 3heahtihn .-r,.3 [hlr rainwater .n thl.E field which increases theabsorption of bt.rd.:r th-, souiliern iLz -.I T th, a ihJr , dc rt 11 .* Lrs water into the land and thus by the crops. Fertilizer (usu- I, ith a nnu.,l raint IlI .5t I,; 1 to n9 1 milim c r neter. -nd prrorl, ally manure and organic material) applied to the fields is dnourhi Tr.tttsl .alrtculIttrl Jechniruut ;.xuvec- less likely to be washed away, which makes the soil di- idcrabtle ...il crsiL.n d,dJd.FpE iJd n 1, n - lalioi tim,- I. rectly behind the bunds more fertile. As much as 200 r-:torre the *- P, duculi iri, i ot ntrone porpuatsion pr.. . millimeters of soil had accumulated behind some of the -ure torce.d tarmert 1k *.hs.ricn and ,A entu3l11 hiilnars barriers after their first year of use. First-year yield in- the[ l.;ol%n p-ri,_.d- and the tir.ditional1 nrethsd1 .i tc*rnm creases c;.n h, d ra ma ii 15 to 30 percent, but the system m I n* -,I *r. o^','n pro% ed rut ic lnt n Pa; I I tort hti S°' - needs to be rn.,n.i - sell, with restitution of organic ernnient and intsirn.rtci:nal orc4an%,zonu s nirproi, ile matter and fertilization, for yields to be sustained. The .iruat ion h3d IarZ,.s talt I. project is successful because: To hili lurilhr .n% Jv.risni.I .dr.,d.1r!rs sI. F, \F * The techntcl-.vis simple.Yatengafarmerswerefamil- ILund. l and nna nag ed ts~ t-. 13am. F k r- I~. , el _h t s1.3 rl iar with the general principles of soil and water conserva- to ,. .lure.icr land for thc %.perm.:r.r ':l.ˇprt. tion, so they could understand the technology and do the calnl .iir.i thiK part,cipant. I'bsante mo:r. ntersscld is bhcn basic-sik -rind rnintcisansis.- thunsli hc largt: aniu nts.; l o r buill us ri th. nmiro,vatchnrlenr- * The extension program is simple. A few extension -eEserAi .Js*c,dd is pl.int upland rn,:e im th, bi-.n- .rnd workers can help many farmers so that an elaborate net- \-.rghum im.i intr-di.is,:d TIwserrTp.dld "\ell and --.-n workisnotneeded. imlrnerh -ti_J the, r attent ss.-n tr. nmn I.- 0_r.U F,r l .ts 1 t Iir * The benefits are obvious and the costs minimal. Farm- o I. n 13 d ers are not required to move, to grow crops they are iVhen P-tF -t311 Iltss.i thjt it., tarn,sr; ;.-rr inre unfamiliar with, to borrow money to purchase a new ntverLctOin pnlntmin cr..p4 th.in tr,... th-, ;h.t.,j tch. r itk:hno.lo,7 .sr b- dCo inything very different from what l.c sI. Tis P1'F al-. ;. m n,-d3 ,.rr>Dn; ..c s phe; e... e 1,n Li, Forasmallinvestmentoftimeand t-1r le4.; i on> t .:srtru.:rw.sn . the rt.:rin, hr effort, they canincrease outputand reduce risk. inicrT:s.:.-ichmonmt and b,can I. u7v a mntrh,:.d ,im;lr tI. -i ThePAFcanbecopiedcheaply.Thetechniquesidenti- traditional le,:hnlti:ue thai had '-: n it3ndJoridl F:r rn,.r. fied and developedare now widelydisseminatedbyother Cits,Cli.s ,5JtsˇinCssllsiciC5fl it.,h PAF d.,.! Fr ani in. en- NGOs and by the national extension services. This gives si%e and rather ngI-r:.u, de'it the s ,fler-tulbe eie%l hopethatamuchlargerareawillbereclaimedorprotected s huh i.i;;urr: el tidentaied thecontr ur line .r-nithe ...siIl dturitl4 i. n,<.t l ,sir- ready under way. In humid and subhumid zones Overgrazing is acute around public waterholes tsetse can be controlled, but not eliminated, and urban centers and is a major cause of environ- through low-cost traps and spraying. So a priority mental degradation. New water points should be should be the spread of dwarf cattle tolerant to widely dispersed in pastoral areas and allocated trypanosomiasis (the disease carried by tsetse), to user associations to help avoid the excessive along with the development of lightweight trans- concentration of livestock. port and draft equipment that such cattle can Veterinary services are essential for livestock power. In drier cultivated zones there will be in- development in all areas, and they can be pro- creasingly intense grazing pressure from farmers' vided mainly by the private sector. National ani- expandingherds,compoundedbythoseofpasto- mal health services should concentrate on ralists, who graze their animals on crop stubble regulating private veterinarians, organizing and and bushy fallows in the dry season. Greater con- subsidizing mass vaccinations, and undertaking trol of grazing is desirable, but no effective means other emergency measures that veterinarians in of achieving this has been found. The drier pasto- commercial practice are unlikely to undertake, ral areas have different problems. Although pas- except under contract with the government. Since toralists efficiently exploit the meager and shifting few private veterinarians will choose to practice resources of the rangelands, the potential for in- in the more remote pastoral areas, improved live- creasing their output and productivity is low. stock care will also depend on "para-vets" paid 98 from drug sales. In all areas extension workers ment of new agricultural technology in the past should teach improved animal husbandry and two decades reflects the decline in the quality of forage production to livestock owners. agricultural research in Africa. Often rudimentary and carried out by just a few scientists, agricul- Measures to promote fisheries tural research nonetheless contributed greatly to African farming in the first 60 years of the 20th The potential of African fisheries, both marine century. It enabled cocoa, rubber, mangoes, tea, and continental, is large, with a maximum sus- citrus, maize, and later hybrid maize to be intro- tainable yield estimated at 8 million tons a year. duced to African farmers-as were fertilizer and However, the catch is declining (it fell from 7.5 new agricultural implements and equipment. million tons in 1977 to 5.9 million tons in 1985) Weak government commitment and poor man- because of overfishing, climatic factors, and re- agement, rather than a lack of money, have caused ductions in river flows and lake levels. The value the current failure. In many African countries of African fish exports is about $650 million a year. more researchers than before are spending more African fleets account for about 30 percent of the money, with little to show for it. Donor-financed total, foreign fleets 45 percent, inland fisheries 24 projects have not helped. More has been spent on percent, and aquaculture I percent. agricultural research in Sub-Saharan Africa per Many African countries need fisheries resource farmer than elsewhere in the developing world- management plans that identify fishing potential about $360 million in 1980, the most recent year and the opportunities for exploiting this potential for which data are available, compared with in a manner consistent with long-term conserva- roughly $190 million in South Asia, which has tion and with environmental considerations. The many more farmers. It is an urgent priority for plans must also provide for the necessary policies Africa to rehabilitate its agricultural research in- and institutional development. stitutes, and tough action on the part of result-ori- Systems to monitor and control foreign fleets ented managers is required so that they can once are needed in many coastal countries. Such sys- again perform their critical role of creating, adapt- tems will increase the amount of taxes taken from ing, and disseminating improved agricultural foreign fishing, which is necessary since foreign technology, including new products. fleets are usually self-contained and provide little Most African countries are too small to afford benefit other than taxes and royalties to the coun- the agricultural research they need. Basic research tries whose waters are fished. Licensing agree- (as well as much applied research) will need to be ments with foreign fleets generally need to be done at the international agricultural research improved. Increasingly, coastal states should de- centers (IARCs) and at universities and research velop their own fisheries capabilities through pol- centers in the industrial countries. The interna- icies and financing that encourage private sector tional agricultural research effort devoted to Af- involvement. rica, particularly in technology improvement, Development of aquaculture can be greatly en- must be strengthened. Promising research on bio- couraged through both adaptive research and ex- technology in agriculture, which will have a pro- tension of acquaculture techniques to farmers and found effect on the world's agriculture by 2000, other interested individuals. Integrated agricul- will be done initially in industrial country re- ture and acquaculture farming packages have search centers and the IARCs because it requires considerable interest. The artificial stocking of high expenditure and high technical competence. natural and man-made bodies of water has some These institutions must play an increased role in potential. Finally, artisanal ("canoe") fisheries can the transferring and adapting of new technology be assisted through support to organizations of to Africa (see Box 7.4). fishermen; this support should also be given to International research will have an impact in women, who have an important role in small- Africa only if it can be adapted to local circum- scale fisheries and in fish marketing. stances, so it is crucial to rehabilitate national ag- ricultural research systems. The first step is to Better agricultural research draw up national action plans in which priorities are identified and provision is made for monitor- Better technology will be essential to achieve ing and evaluating results and for translating the targeted growth in output of 4 percent a year those results into recommendations for farmers. over the medium and long run. The slow develop- Faculties of agriculture should be drawn in. Donor efforts need to be firmly coordinated; the recently tried in Africa. Supervisors check that created Special Program for African Agricultural fieldworkers are visiting farmers as they should, Research (SPAAR) is an important step in this while regular training sessions and links with re- direction. The IARCs must also be drawn closer search allow extension workers to be continually into technical support for national systems. upgraded and to feed results and farmers' ques- Greater sharing of results among researchers in tions back to researchers. T&V is a good example various countries would be one way to achieve of capacity building. It focuses on improving Af- this. Regional networks would allow smaller Af- rican skills, on management, on building African rican countries to participate in specialized re- institutions, and on channeling information from search. farmers to government institutions. By consoli- dating various public agricultural extension ser- Improving agricultural extension and the supply vices into a single system, costs can be kept down. of inputs In Kenya some farmers have increased maize yields up to 50 percent as a result of a national Extension services, which transfer the results of extension system run along these lines. The T&V research to the field, have a further important role system has also been widely and successfully in- in transmitting information about farmers' needs troduced in Burkina Faso, Cote d'Ivoire, Nigeria, to researchers. Farmers experiment to adapt re- Senegal, and Togo, and is being started in other search results to their own circumstances; exten- African countries. sion services could do more to tap this source of Efficient mechanisms for supplying farm in- information. However, few African countries puts, equipment, and livestock are crucial, but have effective nationwide services. Most are frag- they have largely been lacking. As a rule these are mented, with separate systems for different crops best handled by the private sector. The role of or with special systems contained in various area government should be to provide adequate for- development projects. Multiple donor-financed eign exchange, to undertake research, and to pass extension services in the same country have often the results on to farmers. Government research caused confusion and have made the develop- and extension services, along with private volun- ment of efficient national extension programs tary organizations, should be developing inputs more difficult. Management and supervision are and investment goods (such as new hand tools, typically lax, links with research are weak, train- animal-drawn equipment, crossbred cows, grain ing of extension agents is poor, and feedback from storage facilities, and energy-efficient stoves) that farmers is almost nonexistent. A nationwide pub- can then be produced and distributed by the pri- lic extension system for every African country, to vate sector. which the donors could contribute collectively, would be more cost-effective. One extension Reorienting agricultural education worker would ideally be provided for about 200 to 1,000 farmers, depending on the population In most African countries agricultural institu- density. These workers would deal with all farm- tions presently provide inadequate training to stu- ing activities. Techniques that have been proven dents. After graduation students usually prefer to in similar environments could be suggested, with join the public service rather than become farmers. a preference for low-cost, low-risk techniques. Ex- Jobs in the private agricultural sector are scarce. tension workers should offer farmers, through The costs of training are high. Better training options rather than a single "package", the best should be focused on three distinct groups: on techniques to suit their circumstances. This would agricultural technicians, who will serve as staff or not preclude private companies or cooperatives owners of private agricultural and agroindustrial from offering extension services for crops that enterprises; on the staff of the research, veterinary, they market (as for tobacco in many countries). and extension services; and on high-level agricul- Also, where a single crop extension service is op- tural researchers and policymakers. This is an area erating successfully (such as in certain cotton pro- where donors can greatly help. grams), its activity could be expanded to cover other crops in collaboration with the national ex- Protecting the rural environment tension service. Programs based on the T&V system of exten- Reliable data on the state of environmental deg- sion, developed successfully in Asia, are being radation do not exist for most of Africa. However, deforestation is clearly a problem that calls for which provides denser soil cover, increases out- urgent attention. The most recent survey (in 1980) put, and provides more stable yields. Minimum showed that Africa's 703 million hectares of for- tillage (planting crops through a sod of dead ests were being cleared at the rate of 3.7 million weeds or stubble) can reduce erosion and increase hectares (or 0.6 percent) a year. Deforestation out- yields. A technique suitable for hilly areas is the stripped the rate of new tree planting by 29 to 1. planting of infiltration bands of fodder grass, such At the same time 55 million Africans faced acute as vetiver, along the contours. Vetiver, which pro- scarcity of fuelwood. Deforestation is causing the duces a dense hedge and is a complete filter, is destruction not only of much of Africa's unique cheap and self-sustaining. Simply farming along animal and plant life, but also of its preagricul- the contours in hilly areas will be beneficial. In tural cultures, such as the pygmies. Burkina Faso farmers are placing lines of stones What little evidence is available indicates that across the contours of land prone to soil erosion. 80 to 90 percent of Africa's rangelands and 80 The lines slow down runoff, increase water infil- percent of cropped land in the dryland areas may tration, and collect topsoil. They can restore be affected by soil degradation. Soil erosion, wide- desertified land (see Box 4.4, above). To stand any spread in all areas of Sub-Saharan Africa, is per- hope of adoption, the soil conservation must in- haps most serious in Ethiopia, where topsoil crease crop yields, cost little or nothing in cash, losses of up to 290 metric tons a hectare have been and involve no expensive machinery. If tree plant- reported for steep slopes. In west Africa, losses of ing is involved, it must produce timber and fuel- 10 to 20 metric tons of soil per hectare have been wood or fodder and not conflict with the labor reported even for very gentle slopes. Wind ero- needs of crop production. sion is significant in drier areas. There are numer- In Africa's often fragile soils trees protect the ous reports of a decline in the fertility of cultivated soil against wind and rain, provide organic matter land in many parts of the region. to improve soil structure, and draw on deep A common feature of degradation is the re- groundwater and nutrients that the roots of an- moval or weakening of vegetative cover by over- nual crops cannot reach. In many areas fallow grazing, overcultivation, or deforestation, which periods have been cut too short for naturally re- exposes the soil to rain and wind. With several generating trees to reach maturity and fulfill these notable exceptions government efforts to combat functions. Expanding herds of livestock exert a soil degradation have failed because soil conser- heavy grazing pressure, reducing the ability of vation usually requires the farmer to provide extra forests to regenerate naturally. The tree cover of labor-labor that is often unavail