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Africa and the World Bank: Why it’s Not Too Late

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African countries are in a developmental conundrum; they have seen economic reversals in the wake (and arguably because) of the World Bank and yet African countries, at least for the foreseeable future, need the World Bank – owing to a paucity of alternative lenders in the present. In its assessment of the outcomes of World Bank involvement in Africa’s development, this paper emerges with a mixed picture.

While the institution’s policy prescriptions saw large-scale failure in the form of cumulative debt, GDP declines and impoverishment in many African countries (for example Liberia, Nigeria, the DRC/Zaire and many others), it also succeeded in some (the two success stories often touted are Ghana and Uganda). But it would also be illegitimate to pin the failures purely on the World Bank. Ultimately, there are states – for example the DRC/Zaire, the Central African Republic/Empire of the 1980s, among others – wherein substituting the funder, and even removing the structural adjustments (which were not even wholly applied in some countries) would not have resulted in a less bleak picture. Indeed that they needed to go to the World Bank in the first place is proof enough that the countries in the region were mired in economic problems that preceded involvement with the institution.

Thus this article concludes that the World Bank has hitherto hampered development in Africa; but with the help, in many instances, of African leaders, who fostered unreceptive neopatrimonial environments and mismanaged the loans, at the expense of African citizens. Ultimately, however, it is not too late as there is nothing in this setting which does not lend itself to reversal.

‘Accelerated Growth’, Structural Adjustments, and Lost Decades: The World Bank and African Underdevelopment, 1979-Present

Despite remarkable performance in the 1960s, African economic development slowed down in the 1970s and stagnated in the 1980s, Africa’s so-called lost decade. In turn, the African states’ attempts to reinvigorate economic growth through state-led investments and import substitution industrialisation strategies were unsuccessful. And then, unable to raise funds locally, shunned by commercial banks abroad, African states opted for rescue by the International Monetary Fund and the World Bank. In effect, Western donor institutions took over as Africa’s bankers. Thus Senegal in 1979 became the first African state to obtain a loan from the World Bank predicated on structural adjustment programmes (SAPs). Soon, others followed suit. Despite their desires, and domestic pressures (interestingly, this was not always the case; as in Dar es Salaam there was virtually no opposition to austerity measures because some 90% of the population had been living off the private, informal market), to do otherwise, by 1980 some thirty-six African governments signed up; many were either on the verge of, or beyond, bankruptcy.

These structural adjustments, today so synonymous with the World Bank, included currency devaluation, elimination of subsidies, market liberalisation through removal of tariffs and quotas, decreased government spending, privatisation, low regulation of foreign enterprises and raising of agricultural prices that had been artificially kept down by governments. The idea had been to enact a series of radical economic reforms to shift African states from the state-centred approach (which had once been lauded even by the west) of the 1960s, and to give the markets a bigger role. Echoing the language of Ronald Reagan, then recently elected President of the United States, the appointer of the successive World Bank presidents, government was no longer to be looked to as the solution to economic problems, government was deemed to be the very cause of these problems.

Because of their emphasis on expenditure cuts, public support for infrastructure, education, social services, as well as for research and extension, while not attaining reciprocal agreements from the corresponding western states, these sectors suffered and rural areas, with their high proportion of poor people, were particularly hard hit. Stein argues that SAPs, as promoted by the bank as a result of their neoclassical roots, were basically a-institutional and therefore ill-equipped to promote market and institutional development in Africa. The outcomes of this were immediate and prolonged. For many scholars, the spread of the Ebola virus in West Africa in 2014 was as a result of the neoliberal orthodoxy imposed on Liberia in the 1980s which championed rolling back expenditure on, and privatisation of, health services under direction from the Berg Report, Accelerated Growth, prepared under the auspices of the World Bank. The outcome, in a situation where there was a lack of state capacity with regards to health services (precisely due to the World Bank’s directives) and no will on the part of the private interests to invest in a “clientele” which could not afford the treatment, was the transnational proliferation of what could have been a containable outbreak. Less severely, Tanzania’s medical and educational systems had ceased to function in all but name with school enrolment down from 98% (in 1981) to 76% in 1988.

Further, between 1991 and 1995, Africa’s annual real per capita GDP growth averaged at 0% for all Enhanced Structural Adjustment Facility (the below market price lending facility that funds poor states in exchange for the adoption of World Bank-directed structural adjustments) countries, whereas non-ESAF developing countries experienced, on average, 1.0% annual real per capita GDP growth. Far worse was the fact that between 1991 and 1995, sub-Saharan African countries which had adopted ESAF programs experienced an average annual 0.3% decline in terms of per capita incomes over the period of adjustment. The shrinkage is also attributable to the decline in purchasing due to World Bank-mandated structural adjustments which necessitated austerity and currency devaluation.

And in 1996, the World Bank, in response to demands for action to address the external debt crisis of poor countries, ushered in the Highly Indebted Poor Countries (HIPC) initiative. More than 80% of the countries identified by HIPC as needing debt relief were African. But the debt relief would come, in a familiar way, with conditions attached; in order to qualify for debt relief under HIPC, countries had to participate in structural adjustment programs. The HIPC program has been criticised for providing too little actual debt relief and providing it too slowly while at the same time opening up African markets to Western corporations with whom they could not yet compete due to the infancy of their own markets.

To the extent that SAPs failed to promote growth, no improvement in poverty can be expected from growth effects. The impact on poverty and food security arising from the shifting of relative agricultural prices has been mixed, but in general in Nigeria, South Africa, Kenya and Egypt, for example, the winners have been net surplus producers of agricultural products among rural households, particularly those with export crops, while the losers have been net consuming poor households and the urban poor.

What of Africa’s Leaders?

It is not only the conditionality which determine the success of World Bank involvement in Africa, but also the conditions under which these are introduced; national leadership being the key one since the loans are granted to states and not private entities.

One of the few leaders to actually implement structural adjustment was Jerry Rawlings of Ghana in the 1980s and 1990s. Coming into power through a coup in 1982, he embarked on a wholesale reform, accepting market disciplines and a reduced role of the state. He increased cocoa prices, he devalued the Ghanaian cedi, import-licensing systems were abolished, and about 60,000 public sector employees were retrenched, and Ghana’s prized Ashanti Goldfields was privatised. Despite doubling of debt between 1983 to 1988, in that period, cocoa exports increased in just three years from 155,00 to 220,000 by 1986. Equally significant, food per capita rose, and inflation fell from 123% to 40% between 1983 and 1990; increasing the Ghanaians’ buying power. Similarly, Uganda through PRSP policies reduced its GDP-debt ratio from 58.3% in 1999 to 2.1% in 2009.

Even these so-called miracles, in any case 2 out of 54 African states, have been lacklustre and are disappointing on the whole – Ghana’s GDP in 1998 was still 17% less than its 1970 levels, and Uganda’s low debt has been due to donations. And some question whether these results have clearly been linked to SAP-related macroeconomic policies. Yet, it is probable that Ghana’s GDP would be even worse without the role of the World Bank, and in a more corrupt country – such as in post-Nyerere Tanzania cited above where bribery and corruption were rife – the donations and loans received by Uganda to reduce its debt-to-GDP ratio could have been imprudently managed and not made a difference.

The issue of whether the overall disappointing performance of SAPs in Africa is due to incomplete and “half-hearted implementation”, inappropriate policy components of the SAPs, or adverse external factors lies at the heart of the debate. A review of the available studies suggests that in most cases a combination of these three factors was at work – Africa has over 50 states after all. It is certainly true that there was incomplete, half-hearted, and “stop-and-go” implementation, that there were deficiencies in the sequencing of measures, lack of coordination of policies and inappropriate policy design, and that the markets for primary products, Africa’s main export, deteriorated in the 1980s and 1990s but it is clear that the failures were in large part due to World Bank failure in vetting the countries to be granted loans, and inabilities to affect penalties for mismanagement of funds. Qualification for loans, in other words, should have been predicated on more than just a state being a Western ally during the Cold War, or the anti-terror ally today. And here lies the problem, neopatrimonialism, in such places as the former Zaire, CAR, Nigeria, Malawi and numerous others, ensured that the funds were misused, and yet the World Bank failed to recognise this, or when it did, it did not hinder it from continuing to give the loans – which in turn went into “white elephant” projects. Indeed, a shadow review by ActionAid concluded that the Bank does not have an effective plan for ensuring accountability even in the wake of the Operation Policy and Country Services unit.

Where to From Here?

In at least two African countries, the World Bank has been a facilitator of development; and in those countries where there has been debt and negative growth in spite of World Bank presence, it is still possible that matters would be even worse in its absence, as it has been one of few institutions willing and able to make concessional loans. Furthermore, World Bank granting of loans has been found to positively increase attractiveness of receptor states in the short run and causes other funders to be more willing to make investments. SAPs during periods of falling growth or no growth appear to reinforce underlying expectations for the future; they are associated with positive expectations.

And to conclude, it has to be noted that essentially, the failures of the World Bank in the continent have also come about as a result of the World Bank’s own internal structural inconsistencies as well as an unreceptive climate within countries. For example, some scholars have argued that the content of PRSP, its ideological underpinnings, and the global context in which it is situated seem to involve contradictory impulses for national ownership, governance and poverty reduction in Africa.  We may go so far as to say that the institution is essentially a paradox; it is a neoliberal institution, and yet is itself state-owned – and therefore prone to serving national interests – and, moreover, despite its profession of market-orientation, it is a lender to governments as opposed to private entities; and thereby buys out of key classical liberal truisms such as competition and room for incentives. Equally pertinent, African countries themselves need to own up the other end of the equation because they are the recipients of the funds. In the wake of the 1990s Asian crisis and recovery through World Bank assistance (especially in the case of South Korea which managed to pay back its loan ahead of schedule), it is clear that the bank can be a partner for recovery and growth provided there is prudent assimilation of these funds. But before these funds can be granted, there ought to be a revisiting of the process so as to ensure the loans do not end up in imprudent hands in the first place. Perhaps then, and only then, the World Bank can continue to facilitate development on the continent. Wedded into this is the responsibility of not only African but World Bank leaders to make the bank more responsive – something which previous presidents such as James Wolfensohn and incumbent Jim Yong Kim began to grasp in their various “listening tours” around prospective recipient states.

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Global community must go beyond military cooperation to assist Africa

Kester Kenn Klomegah

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Russian Special Presidential Representative for the Middle East and Africa and Deputy Foreign Minister, Mikhail Bogdanov, has urged global community to go beyond military cooperation to assist African countries that are still facing a number of serious development problems particularly infrastructure, social inequality, healthcare and education.

According to Bogdanov, transnational problems, the issues of arms smuggling, drug trafficking, illegal migration and even slavery continue escalating on the African continent.

“Joint efforts of the whole global community are required for meeting those challenges, I am confident that the aid to African states should go beyond military components,” the Russian diplomat stressed.

“It is necessary to fortify public institutions, engage economic and humanitarian fields, construct infrastructure facilities, create new jobs,” Bogdanov said, adding “those are the ways of solving such problem as migration, for example, to Europe.”

Bogdanov was contributing to the panel discussions on the topic: “Engaging Africa in Dialogue: Towards a Harmonious Development of the Continent” at the Dialogue of Civilisations Forum that was held from October 5-6 in Rhodes, Greece.

This plenary discussion aimed at identifying specifically African countries’ priorities and issues holding back these countries and if competition between the West and Asia could benefit Africa, or is a more collaborative effort needed.

Bogdanov’s advice to the global community to go “beyond military cooperation” came at the crucial time when as part of the foreign policy, Russia has increasingly stepped up exports of military equipment through its “military-technical cooperation” abroad instead of assisting with needed investment in economic sectors in African countries.

Within the context of strengthening ties, Director for International Cooperation and Regional Policy Department of Rostec, Victor Kladov, said at the Business Forum of 2018 Army Games recently organised by the Ministry of Defense of the Russian Federation that “African countries are now returning to military-technical cooperation market as their national economies steadily develop.”

Rosoboronexport’s cooperation with traditional importers of Russian weapons from Africa include Algeria, Angola, Burkina Faso, Botswana, Egypt, Ethiopia, Ghana, Libya, Morocco, Mozambique, Namibia, Rwanda, Sudan, South Africa, Uganda and Zimbabwe. It has recently concluded agreements with a few more African countries.

In March, President Putin chaired this year’s first meeting of the Commission for Military Technical Cooperation with Foreign States and Kremlin’s website transcript pointed to the geographic reach of military technical cooperation as constantly expanding, with the number of partners already in more than 100 countries worldwide.

It’s an established fact that the major driver for Moscow’s push into Africa is military-technical cooperation more broadly. These often include officer training and the sale of military equipment, though the full details are rarely publicly available.

The Stockholm International Peace Research Institute (SIPRI) reported in December 2017 that Russia accounted for nearly 20% of the volume of major arms supplied to sub-Saharan Africa.

The Soviets provided military assistance, a historically accepted view, but many experts have also acknowledged that now ideology is not a significant factor.

Dmitri Bondarenko, Deputy Director of the Institute for African Studies Institute (IAS) of the Russian Academy of Sciences, told me: “With African countries, the primary aim now for Russian business is to regain a competitive edge in the global arms trade, and what’s interesting is that the approach is not ideological but very pragmatic – you pay, we ship. It’s simply business and nothing more.”

“Russia has revived their contacts with their African comrades that used to be the traditional buyers of Soviet weaponry. It is a similar policy, in the sense, that they are using military diplomacy once again in order to gain stature and influence in certain countries,” Scott Firsing, a visiting Bradlow fellow at the South African Institute for International Affairs (SAIIA), wrote in an emailed discussion.

Arguably, Shaabani Nzori, a Moscow based Foreign Policy Expert, thinks that Russia’s military-technical cooperation with African countries is appropriate in Russia’s foreign policy but African leaders should also allocate enough money to spend on priority development projects in Africa.

“It shows clearly Russia’s weak business engagement with Africa. Until now, we can’t point to completed Russian infrastructure projects in Africa. There are many investment areas. What is important these days is Russia has to go beyond just selling arms to Africa! Still, Russia has the chance to transfer its technology to agriculture and industries in Africa,” Shaabani said in the interview discussion.

President Vladimir Putin said a major part of Russia’s weapons business includes new equipment supplies, upgrades and refurbishment of Soviet-era technology and hardware. “Russia places special emphasis on developing countries that gradually increase military procurement. We understand that competition in this sector of the international economy is very high and very serious,” he said.

According to Kremlin website, Russia targeted global export contracts worth $50 billion in 2018. Russia’s export priority is to expand its scope and strengthen its position on the market. Last year’s results indicated that Russia has been keeping its standards high, confirming its status as one of the leading suppliers on the global arms market. The portfolio for Russian arms and military equipment stands at $45 billion.

Russia plans “to enhance multifaceted interaction with African states on a bilateral and multilateral with a focus on promoting mutually beneficial trade and economic cooperation” – the full text of the new foreign policy concept was approved by President of the Russian Federation Vladimir Putin on February 12, 2013.

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France and China in Africa

Giancarlo Elia Valori

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A geoeconomic and strategic clash between China and France is currently emerging across Africa, with France supporting the United States in a new bilateral relationship, and China changing its economic penetration into the Dark Continent- in a new relationship with the Russian Federation.

Let us look at the main data and statistics: this year the African Development Bank has forecast a 1.9% growth in Southern Africa; a 2.2% growth in Central Africa and even 3.4% in Eastern and Northern Africa.

However, the trend is towards a slowdown in economic growth across the world – a slowdown that will be ushered in by the reaching and exceeding of the 100 US dollar threshold of the oil barrel price.

In fact, if we analyse the data and statistical series, the recent great economic and financial crises have been triggered by a significant increase in the oil price – that the West is facing with increasing difficulty.

Reverting to the focus of our analysis, in East Africa growth will be even 5.7%, the current highest rate in the world, apart from some Asian countries.

Africa’s development, however, has two sides – the side of the GDP growth and the equally important one of the increase in the external debt of many African countries.

An African indebtedness that mainly concerns China.

Here two very severe cases can be seen: in fact, in January 2017, Mozambique declared it could not to repay its foreign debt, due to a hidden debt incurred by its companies to the tune of 1.8 billion euros.

Furthermore, in August 2017, Congo had to revaluate its debt to 120% of its GDP (it was previously 77%) for similar reasons.

Hidden indebtedness is currently one of Africa’s plagues. It is currently worth 34% of the total African GDP. It is a debt mainly denominated in foreign currencies, often run up by unsavory and deceptive bankers, including members of Italy’s and other regions’ organized crime. This obviously favours China’s purchase of African companies that now cost a handful of rice.

In Nigeria, currently 60% of State revenue is used for servicing the public debt, with evident and foreseeable internal turmoil in the near future, considering that the Nigerian government has no reserves for productive public spending and for the necessary poverty mitigation policies.

In Ghana, the government led by Nana Akufo-Addo, who has been in power since January 2017, has taken on the debt piled up by its predecessors, which today accounts for 80% of GDP.

Also Angola, the second sub-Saharan oil power, is debt-ridden and is reducing extraction activities.

In Angola the debt is supposed to account for 90% of GDP and it is rising quickly.

As previously mentioned, China already holds much of the African debt.

It owns 70% of Cameroon’s public debt. This holds true also for Kenya.

Moreover, international banks inform us of the fact that between 2010 and 2014 the appetite for Chinese credit has increased by 54% throughout Africa.

A figure never reached by any developed country in banking and economic development relations with Africa.

Until 2017, however, the average of the African public debt was 45% of GDP.

Currently, however, according to the African Development Bank, at least 11 out of the 35 low-income African countries are considered to be at very high over-indebtedness risk.

For years the low cost of raw materials has been the trigger of the crisis, which will certainly become very severe in the phase of the “debt peak” which, in the case of Africa, is expected to materialize in 2021.

At the same time, however, some African States have begun to lend money to some emerging African countries, obviously at a rate higher than the rate granted to them. Countries that had no access to international credit.

And with raw materials that have been on the wane for long time, as well as a growing cost of manpower and the increase in internal political instability, caused by the crisis in public spending for a minimum level of Welfare State.

A debt spiral that has already enabled as many as 32 African countries to accept the unfair conditions of the private Funds for debt recycling, which acquire the securities at derisory prices and then resell them at a higher price to good European and American clients.

In 1996, however, the Ivory Coast, Ghana, Cameroon, Gabon, Rwanda and Kenya accepted the PPTE program of the World Bank and the International Monetary Fund – the program for heavily indebted countries which imposed strict spending control on them so as to later enable them to return into the international credit mechanism.

The recipes are well-known: privatization, in the belief that the private sector is metaphysically better than the State one; heavy cuts in current spending, as well as reduction of spending on security and investments, including the productive ones.

As can be easily imagined, this has created a very profound crisis in the income of the poorest walks of society and has really annihilated the prospects for the young generations who, in fact, flee unreasonably towards the EU – or swell the ranks of the very strong exchange of manpower between the various African countries.

Currently the most indebted countries in Africa are South Africa, Sudan, Egypt, Morocco, Tunisia, Angola, the Democratic Republic of Congo, the Ivory Coast, Nigeria and Kenya. Hence a continent already destroyed before being made sufficiently productive.

Ironically, many of these countries are also on the list of the richest nations in Africa: Egypt, South Africa and Nigeria–again in descending order.

France, however, has lost its traditional role as top investor in Africa.

Between 2015 and 2016, for example, China invested as many as 38.4 billion US dollars in the Dark Continent, while the second largest investor in Africa, namely the United Arab Emirates, reached 15 billion US dollars over the same period.

Italy, however, is the top investor among European countries, especially through ENI.

France ranks only sixth with 7.7 billion US dollars invested.

Meanwhile the Russian Federation is strengthening its traditional ties with Algeria and it is arranging a free trade area in the Maghreb region, with the Alawite Kingdom of Morocco at the core. It is also building nuclear power plants in Egypt and Southern Africa, with further exports of Russian grain to the poorest African countries.

Russia is also organizing peer cooperation projects in Equatorial Guinea, Burundi, Zambia, Uganda and Zimbabwe.

Areas that are less relevant to China or where there may be cooperation between China and Russia, with the latter interested in agriculture and oil and the former building infrastructure and operating on the market of the other raw materials.

China already owns 98% of the world’s coltan -i.e. the columbite-tantalite used for all commercial electronic devices – which can be found in the Central African Republic.

France’s exports to Africa, however, have almost halved in 2018 compared to 2000, falling from 11% to 5.5%.

In Senegal, French exports fell by 25% in 2017 – a loss that locally favoured Turkey, Spain and, above all, China.

Certainly the French-speaking Africa – linked to the CFA Franc – is a huge source of raw materials, with 14% of the world’s energy reserves and 22% of the world’s habitable areas.

Through the Africa using the CFA Franc, the French-speaking regions, which alone account for 4% of the world population, still account for 16% of world GDP and 20% of global trade in goods. France led by President Macron (but also France led by his more colourless predecessor Hollande) wants to create an autonomous common market – to be used also against an adverse EU – between the economy of the French Hexagon and the economies of the African French-speaking countries.

And this is precisely the point of geopolitical contrast with China.

China, however, still has many strings to its bow.

Last June, for example, Burkina Faso announced it had broken its relations with Taiwan to recognize only the People’s Republic of China.

The first step that China asks all its partners to take.

China also doubled US bilateral trade with Africa as early as 2013.

The beginning of the new relationship between China and Africa – after the “Three Worlds” Maoist theory in which, however, the People’s Republic of China became the leader of the Third World, after the two American and Soviet “imperialisms”-materialized after the Tiananmen Square protests and crisis in 1989, with a view to escaping the isolation imposed by the West (and by Russia which, at the time, had many problems to solve).

It should also be noted that many current African leaders have been educated in China.

Think of Joseph Kabila, the leader of the Democratic Republic of Congo, who studied at the National University of Defence in Beijing.

Or to Mulatu Teshoma, the President of Ethiopia, who studied philosophy and political economy with a PhD in international law at the Peking University, before continuing his studies at the Tufts University in the United States.

Or again to Emmerson Mnangagwa, the President of Zimbabwe, former student of the “School of Marxism” at the Peking University, who later spent a period of time in Nanjing studying combat training.

The current leader of Tanzania studied military engineering in China and then returned to the country in 1964.

Hence how is France responding to this? In July 2018 President Macron went to Nigeria -after having paid an official visit to Ghana – but he has the clear intention of gaining broad consensus not only in the old African French-speaking countries, but also in the English-speaking part of the Dark Continent.

The French President believes that also Africa is now “globalized” and hence he must go well beyond the old traditional perimeter of the so called Françafrique.

The concept underling the strategy of President Macron is no longer the traditional one of Françafrique, but rather that of AfricaFrance.

The offer made to the President of Rwanda, Paul Kagame, to become President of the International Organization of the Francophonie must be seen in this context.

From the African autonomous culture – which, according to President Macron, must be revitalized – to the recovery of the French economy and companies in Africa: the French market in Africa fell from 11% in 2003 to 5% in 2017.

Meanwhile China rose from 3% in 2001 to the pan-African 18% in 2017.

Even Germany has currently overtaken France in foreign trade with Africa.

Certainly the French President also wants his country to remain the “policeman” of Africa – as during the Cold War –  but he plans to confine his fight “to terrorism”, or more precisely to the sword jihad, in the Sahel region, which is and will be the future core of the French military presence in Africa.

Furthermore, President Macron intends to deal with business, thus limiting the security role played by France in Africa France as much as possible.

This is also the meaning of the increasingly important role that will be given to the G5 Sahel,i.e. the Joint Force of the Group of Five for the Sahel including Mauritania, Mali, Burkina Faso, Niger and Chad.

In short, according to its best strategic analysts, France wants to prevent future geoeconomic battles by preserving its global strategic role. Hence it wants to protect its old African colonies from the predatory and harmful effects of globalization.

This means that France tends to produce a new African “common market” between its economy and the developing economies if its old Françafrique.

Hence the recent France-G5Sahel military operations must be seen in this context: Operation Barkhane, which began in 2014 with 3,000 French soldiers, in addition to those of the G5-Sahel, based in ‘Ndjamena, the capital of Chad, as well as the Operation Serval aimed at ousting Islamic militants from the North of Mali, and Operation Epervier, a French counter-terrorist action between Cameroon and Chad.

The other two French military operations, namely Sangaris and Licorne – the former in the Central African Republic, which ended in 2016, and the latter a peacekeeping action in the Ivory Coast, replaced in 2015 by the “French Forces in the Ivory Coast” -were a relative success, but with a progressive support from the US African Command.

However, what about the CFA Franc, which is now a controversial topic inside and outside Africa France?

For some African Heads of State and Government, who obviously do not want to give in to China or to other new players in Africa, the CFA Franc “is a sound currency” and “does good to the African people”, just to quote the explicit words of Ivorian President Alassane Ouattara.

President Macron stated that the CFA Franc is “a currency that works and needs to be modernized together”.

It should be recalled, however, that France intervened militarily in Africa as many as 42 times from 1968 to 2013.

France will never give up Africa, but it has not the liquidity to really do so. China, too, will certainly not give up Africa and will never intervene militarily, if not directly hit, while investing massively in the Dark Continent.

Hence how will the CFA Franc be reformed?

It is easy to predict: with an increase of its value as against the Euro and new internal regulations governing the relations between France and the other African partners.

The French game in Africa will work until the Chinese economy slows down and hence there will be less Chinese capital to invest in Africa.

China, however, is already a net importer of semi-finished goods, as well as clothes and basic products from countries such as Ethiopia, while many African countries keep on importing high-value-added goods and capital for basic industrialization from China.

In Africa, China tends to replicate the same development as its development of the early days of the “Four Modernizations” phase.

Therefore, the most likely solution in the near future will be a concentration of French power on the G5 Sahel, with a parallel reduced role of France in the Eastern region of the Dark Continent.

While China will keep on expanding its influence in Africa, from the South to sub-Saharan Central Africa, up to Egypt and the Northern Atlantic Coast of Africa.

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Twenty Years of South Africa’s transition: An Economic and Foreign policy perspective

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Authors: Srimal Fernando and Siksha Singh*

South African has made a major transition from apartheid to democracy which is one of the most significant political occurrences of the past 20 years. The flag bearer of this movement was anti-apartheid crusader Nelson Mandela. Through his deep commitment to the cherished ideals of equality he introduced South Africa to the larger world. The nation’s vision on foreign affairs during this period was based on the tenet that human rights should be at the core of international relations. This period also witnessed the constitution of Truth and Reconciliation Commission to set in place the justice mechanism. South African constitution has also gone through many transformations post the political upheavals in the region since 1996.

Mandela‘s tenure from 1994 to 1999 was credited for its emphasis on economic growth through a framework of market economics and encouragement of foreign investment. The former President exercised active, determined leadership in the years following his consolidation of power. There had been sincere attempts to shift to democratic federalist system which had helped in improving the economic welfare of all communities. On the economic front the nation was transitioning from Reconstruction and Development Programme (RDP) Policy to Growth, Employment and Redistribution (GER) Policy. This policy accelerated the economic growth of the nation to 3.5%, led to creation of 400,000 Jobs and uplifted the Black Middle class.

Mandela was succeeded by Mebaki’s Presidency. His government was instrumental in establishing intra-continental trade with other African nations which resulted in national exports rising from ZAR 8.6 Billion in 1994 to ZAR 38.8 Billion in 2003 which was a 300% increase. Mebaki’s regime was known for quiet diplomacy; however South Africa’s leadership among African nations was making new strides. The leader’s key emphasis was on finding solutions to Africa’s problems such as reducing poverty levels and helping in establishing stability in African states. However his foreign policy was criticized for the refusal to express disapproval of Zimbabwe’s President Mugabe’s authoritative rule and gross neglect of human rights abuses. The pursuit of economic development at all cost had implications for the political complexation of the Mebaki presidency as well. Former leader therefore wished the country’s performance to be measured in terms of its acceleration of economic change.

Zacob Zuma succeeded Thabo Mebaki and his economic policy shifted from Mandela’s Growth, Employment and Redistribution to a new macro-economic policy which provided social assistance to 17 million South Africans and ZAR 120 Billion a year on infrastructure projects like Roads, Railways, Ports and electricity supply. During his presidency South Africa also got the distinction of the number one country in the world for extending maximum subsidy for housing. South Africa also became a part of BRICS (Brazil, Russia, India, China and South Africa)in 2011 and helped in laying the foundation for BRICS Development Bank in Johannesburg. The country got the chair of IORA (Indian Ocean Rim Association) and BRICS since 2017.

The appointment of former Vice-President Cyril Ramaphosa as South Africa’s President can be seen as a period achieving stability and taking significant steps towards consolidating its economic and social status in the next four years. His policy formulation is vastly different from his predecessors. South Africa’s perception of foreign relations has remained fairly consistent since the time of late President Nelson Mandela and current President has been the most successful in combining creativity and collaboration with numerous regional groupings taking a lead on matters of foreign policy. The countries GDP per capita over the last twenty years has grown from 3,447$ in 1994 to 7,524$ (World Bank, 2017).The growth however has been inequitable due to the high rates of unemployment which was estimated to be around 26%.(Statistics office, 2017).The government recently set the vision for 2030 which is Quality basic education, decent employment through inclusive economic growth and Vibrant, equitable and sustainable rural communities contributing to food security for all. Changes in South Africa’s social structure during the past decades are insufficient to explain the policy changes that took place during Mandela’s period. Transforming the democratic leadership in South Africa was a process of what’s called dismantling of the old system in a way that simultaneously creates a new foundation for a political system that will lead South Africa to new heights. Nevertheless there are things that draw these leaders together as the political economy of South Africa has found a stable equilibrium with less than maximal redistributive taxation. The desire to preserve South Africa’s status as a global and a continental power will require small steps beyond the presidency.

*Siksha Singh, a scholar of Masters in Diplomacy, Law, International Business at Jindal School of International Affairs, India

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