|The Courier N° 130 Nov - Dec 1991 - Dossier: Oil - Reports: Kenya - The Comoros (EC Courier, 1991, 96 p.)|
Back in June 1986, British singer Bob Geldof, begetter of Band Aid, the big international charity shows, attended the UN General Assemblys special session on Africa and pronounced it futile and ridiculous. Was this a premonition? Five years on, we can see how far the UN programme for Africas economic recavery has achieved its aims of halting decline and generating growth at last and we may well ask what the point of the meeting actually was. The same causes of alarm are still there in every field. Agricultural output is still declining, raw material prices are still in free fall, debts are still mounting, getting heavier all the time, and economic imbalances and the interrninable process of structural adjustment are still with us.
There is virtually nothing to add to the pessimistic reports which were the basis of the UN talks in 1986 except perhaps the glimmer of hope afforded by the general emergence of a new democratic framework.
At the end of August, UN Secretary-General Xavier Perez de Cuellar admitted that Africas economic and social conditions have deteriorated in the five years of the Programme. In a document released on the eve of the meeting scheduled to take stock of what had been achieved, he called the results really disappointing, despite most African countries having in fact adopted the requisite hard-line measures. Their efforts have been undermined by a deleterious external environment which has eroded export prices and export earnings while imports have been on a constant increase. In 1986 alone, the commodity price slump cost Africa $19 billion and the figure was $50 billion for the Programme as a whole, with exports expanding at the rate of 2.5% p.a.
Agricultural output, Mr de Cuellar said, has failed to keep pace with the expanding population. Africa is producing less and less of the food it needs and becoming more and more dependent on the outside world for its staples, with severe famine in some places as a result.
Socially, the past five years have not been much good either, for living conditions have seriously declined, the economic crisis is still with us and the austerity measures dictated by structural adjustment programmes have in some cases forced cuts in education and health programmes and brought down employment and incomes. Education and health accounted for 6% and 15% respectively of government spending in 1986, but were down to 5% and 11% by 1990, with dwindling school enrolments (77% down to 70% in 1980-90) and a further unwelcome deterioration in what was already the worlds worst death rate among mothers and children as a natural result.
Unemployment increased by an average 10% p.a. during the Programme - thanks, at least in part, to structural adjustment - and the redundant came to swell the ranks of the informal, less secure and poorer paid informal sector. Employees who managed to hang on to their jobs saw their wages slump, by more than a third in real terms, in the 1980s.
Why such a catastrophic outcome? The Secretary-Generals report looks at some of the reasons for what can only be called the failure of the Programme, starting with the inadequacy of the continents resources over the past five years. Africa, as we have seen, lost $50 billion in export earnings on the commodity price slump alone in 1986-90, and this partly explains its failure to mobilise the extra $80 billion it was supposed to contribute to the Recovery Programme.
The international community failed to stick to its commitments too, declining to bring up its net contributions (around $25 billion in 1986) by $9 billion p.a.
The latest OECD statistics show that net flows of finance to Africa dropped in real terms (1986 prices) from $24.6 billion in 1986 to $23.3 billion four years later, largely because of fewer loans from trading banks and an export credit squeeze in the 1980s. Even official development assistance (80% of net contributions to Africa) began levelling off, with only a minor improvement, from $16.2 billion in 1986 to $16.9 billion in 1989, the last year for which statistics are available, despite the steps which the IMF and IBRD took to push up soft loans to Africa as part of the improved structural adjustment facility and the special programme of assistance to Africa. However, such were the African countries repayments that net payments from the World Bank were a mere $4.9 billion over the 1986-89 period instead of the scheduled $7.6 billion and they paid the IMF more than they received in all but one year of the Programme.
A new pact
The international community should forge a new world pact with Africa on cooperation and development in the 1990s, said Mr Perez de Cuellar after this uncompromising summary of the situation. One of the main aims would be to double per capita income to bring it to $700 by the year 2015, which means average growth of 6% annually, ambitious perhaps, but a figure achieved throughout sub-Saharan Africa (with the exception of Nigeria) in 1965-73 and one which would raise consumption by 3% p.a., doubling the present level by the year 2015... always provided demographic policies are more determined.
Other priorities of the pact would be human development based on productive jobs and rapid improvements in life expectancy, in the emancipation of women, in reducing mortality among mothers and children, in food, in basic schooling and housing and on changing and diversifying the African economies to make them a stronger part of the world economy and more self-sufficient.
Xavier Perez de Cuellar proposes achieving all this by asking the African countries to get on with their drive and in-depth reforms. But since even the most radical of reforms and the reorganisation of the African economies will not generate enough resources for lasting development, he said, aid to the continent should jump from the $21 billion of 1989 to $30 billion in 1992 and increase by 4% p.a. thereafter until the year 2000.
UN at Africas bedside
He also suggested radical steps to slash the crushing $270 billion debt which cost Africa $23 billion to service in 1990... although that was only 60% of the interest due last year. The rest has been rescheduled which is merely a way of putting off and often pushing up repayments - and there are mounting arrears, 20 or 30 times what they were 10 years ago, on top of that.
The official bilateral debt and the semipublic debt represented by export credits have to be wiped off too, the Secretary-General said, and the debt to the multilateral institutions substantially reduced with help from the funders. The private trade debt (which has already lost a lot of its value on the financial markets) also has to be cut and the idea of, say, converting it into shares in African companies encouraged.
Mr de Cuellars recommendations, expanded by an ad hoc committee which met in New York on 3-14 September, will be put before the next meeting of the UN General Assembly. They are bound to be adapted, of course, but there is no guarantee about actual implementation. Indeed, rather as happened when the Recovery Programme was launched five years ago, the fenders representatives on the ad hoc committee were unwilling to make constraining financial commitments. But Bob Geldof was not there this time. So he made no comment.