Editorial
Sustainable economic development in Africa is the way forward
The ascent of China as a contending economic superpower with United States and Europe (the west), has opened up an alternative philosophical and economic path for the African continent. This is borne out by the increasing volumes of trade between Africa and China versus trade between Africa and the west. A sign of the changing times was exemplified by the president of the continent’s largest economy Nigeria’s Goodluck Jonathan state visit to China, coincided with US President Barack Obama’s visit to Africa in 2013.
However, is the Sino-African model sustainable?
It is apparent that China’s strategic engagement in Africa has been carefully crafted as an alternative to the established perception Africans have of Westerners as arrogant, parasitic, patronizing and prejudiced. On the other hand, with China, there is a feeling of respect and genuine partnership.
China’s current third world status and past serves as a bonding point and bears an understanding of “knowing where I am coming from and what I want.” China’s resource-backed development loans with virtually no strings attached offer an instant remedy to an immediate and urgent problem – a shot in the arm effect – to Africa’s hard infrastructure deficiency in roads, rail, ports, and industries. The soft conditions for acquiring the loans make them irresistible to prospective borrowers.
For the most part, China has delivered on her part of the deal as projects have been completed in record time and have positively impacted rank and file Africans. Before the emergence of China as an economic power, most African countries sought financing for their economic development from western backed Structural Adjustment Loans (SAL) through institutions such as the International Monetary Fund (IMF) and World Bank whose money came with strings attached such as structural adjustment and embrace of democracy and the rule of law.
These measures were meant to avoid default and ensure sustainability by enacting a political and legal framework through which acquired funds would be accountably administered. Structural adjustment was required to deregulate the local economy away from government control in favor of privatization. The measures were meant to improve economic efficiencies across the continent.
The general failure of Structural Adjustment Loans and programs in Africa can be put down to poor implementation due to weak soft infrastructure in recipient countries. In the unforgiving, high stakes world of politics, all sides working on a deal are expected to come to the bargaining table ready. Unfortunately this was not the case mainly because of weak soft infrastructure resulting in bad agreements – for Africans.
Consequently most of the decisions reached with the IMF and the World Bank were more personal than national resulting in most of the funds being misappropriated. At the end of it all most African countries found themselves in a debt hole with little or nothing to show for the billions borrowed. This has left a bitter taste in the rank and file African with regard to the Western economic development model.
Nevertheless, the viability of the western model is proved by its durability, resilience through times of war, overcoming recessions, economic downturns and adaptability. In this respect, it can be argued that effective democracy with its emphasis on the enforcement of the rule of law and good governance goes hand in hand with enduring economic success.
However, Africa’s weak political and legal institutions provide little or no checks and balances in the deal making process. This is where African policy formulators have to be careful not to throw away the baby with the bathwater in completely jettisoning the western model of economic development.
The Western model built on the foundation of soft infrastructure such as strong political and economic institutions supported by powerful regional organizations backed by robust legal frameworks is the way forward for enduring economic development. This system ensures that politicians are held accountable by the stakeholders in these countries for the agreements they approve. This in return guarantees to a large extent that countries enter into favorable agreements.
The Habari Network Editorial Board | May 6, 2014