It is disheartening to come to the realization that Europe and America are in the 4th Industrial revolution age while Africa is still in the pre-industrial age and still praying. The first industrial revolution was based on the use of steam power for mechanization of industrial production; the second revolution was based on the application of science, invention of electricity, the telephone, the automobile, the airplane and mass production of goods; the third based on nuclear energy, electronics, digitization, computers, robots, space travel etc, and now the fourth involving artificial intelligence (A1), robotics, genome editing, the internet etc. Each industrial revolution brings along changes in thinking, planning, manufacturing and distribution of goods and services. Each industrial revolution brings along structural change in Europe and in America bringing along changes in the deployment of capital, labor and products distribution systems. Each revolution brings changes that increase wealth in Europe and America and poverty in the major portion of Africa.
False start in Africa
In his book of 1962 by the above title, translated into English in 1966 and in subsequent years, René Dumont, a French agronomist, was dismayed at the large scale intensive projects that had been started in parts of Africa. Dumont was disgusted that Africa was “attempting to adopt the technologies and life styles of the industrialized world” right from the immediate years of Africa’s independence. From his work on agriculture development in Tanzania, his view was that the aid received from former colonial powers was being misdirected. His opinion was that Africa had started the development process wrongly. Rather, Africa should have started on small-scale basis in industrialization and in agriculture; secondly, after achieving political independence, Africa should have started to “decolonize its education system” by overhauling the education system and making it more technical/vocation oriented.
Large scale projects supported with aid and loans led a number of African countries into heavy indebtedness. In 1983 both Nigeria and Ghana had to go through the structural adjustment programme.
Structural adjustment programme (SAP)
There are two terms that must first be clarified. These are structural adjustment and structural change.
The structural adjustment programme (SAP) also called structural adjustment loan (SAL) consists of “a set of economic policy reforms that a country must adopt in order to receive a loan from the International Monetary Fund (IMF) and/or the World Bank.” IMF and World Bank policy reforms for loans to recipient countries include the following conditionalities:
Devaluation of the currencies of recipient countries in order to reduce balance of payment deficits
Reduction of budget deficit through higher taxes and lower government spending
Restructuring foreign debts
Implementation of monetary policy to finance government deficits (in the form of loans from central banks)
Elimination of food subsidies
Cutting public sector employment, subsidies, and other spending to reduce government expenditure
Cutting wages
Raising the price of public services
Closing tax loopholes and improving tax collection domestically
Long term SAP policies include the following:
Market liberalization; that is Free trade
Privatization or divestiture of all or part of state-owned enterprises and deregulating of State-controlled industries
Creating new financial institutions
Easing regulations in order to attract investment by foreign businesses
Focusing on economic output or direct export and resource extraction
Improving governance and fighting corruption
By the Washington Consensus of 1980, implemented in 1989, SAP now allows loan facilities to be expended on primary education and the provision of basic health care.
From various accounts, structural adjustment, which is basically intended to improve financial growth of loan recipient countries, rather brings untold hardships. Ghana and Nigeria went under SAP in 1983 as indicated earlier. Other African countries that have been recipients of SAP include Sudan and Zimbabwe. Other countries in Africa and around the world have gone through SAP. The statement the Nigerian legislator, Audu Ogbeh made in the video already cited in the August edition of Africa Supreme is worth repeating.
The tragedy of Nigeria, says Legislator Audu Ogbeh “started with the structural adjustment programme recommended to the Nigerian government by a team from the World Bank and Harvard University in 1983. The programme required weekly devaluation of the Nigerian naira for 32 years, leading to poverty, misery and increases in bank interest rate; making it impossible to build factories, farms and undertake any meaningful development projects to create employment.”
Barely twenty years of independence some African countries had incurred massive debts and are still in massive debts. In just twenty years of independence the chances of African countries for rapid development and financial growth had plummeted. Unemployment puts a major portion of citizens into debt. Living conditions get worse. The military sets in; one coup d’état after the other.
Writing on “Structural Adjustment and The African Crisis: A Theoretical Appraisal,” Howard Stein, University of Chicago, and Machiko Nissanke, University of London (1999) write as follows:
Structural adjustment over the years 1980-1994 recorded a sharp reduction in total output, exports and investment. Both industrial and agricultural production declined. With growing populations, per capita income fell on average by 0.6 percent per annum during 1980-1994.
After 15 years of reform efforts, the region’s growth performance remains far too low to lead the economies along a path of economic development, which would counter growing levels of poverty.
SAP had not been helpful. Devaluation, reduction in government spending, removal of government subsidies, increases in unemployment and other conditionalities had led to increased poverty. Decreased government spending leads to decreases in health facilities; in electricity provision; and in the availability of clean water all leading to severe hardships in recipient countries.
Much of Africa has remained poor since independence and much earlier. It doesn’t really matter who is in power; whether a civilian government or a military government. One must however, consider that SAP has not worked in the way expected due also to cultural constraints in the African recipient countries. The authoritarian political and administrative systems of the continent and the escalating corruption will obviously contribute to the erosion of any possible gains of SAP.
Structural change
Jedwab and Osei (2012) wrote as follows:
“In 2010 Sub-Saharan Africa was still poor, with the same GDP per capita as Western Europe and the US in 1860.
Sub-Saharan Africa has lagged behind Western Europe and the United States in economic growth and in GDP per capita for 250 years when structural change started in England. This, and political inertia have been the critical underlying factors for our poverty.
Structural change refers to the model of production involving three sectors: primary, secondary and tertiary production that emerged during the first industrial revolution, according to Jedwab and Osei in their article.
The writers use the push and pull theory to explain the rise of the structural change model. On the pull theory, the writers state the following:
“Labour pull approach determines how a rise in non-agricultural productivity –an industrial revolution – attracts underemployed labor from agriculture into the modern sector. No matter the origin of structural change, labor moves from lower-productivity to higher-productivity activities, increasing overall labor productivity in the economy.”
The writers state further that England adopted the structural change model in the 18th-19th century, that is, during the first industrial revolution era of 1750-1850. France, Germany, the United States, Japan and South Korea adopted the model in the 20th century; while China adopted the model in the late 20th century.
From the work of Jedwab and Osei, one can now deduce the reasons for the genesis of the abolition of the slave trade. While the abolitionists of the slave trade had difficulties in persuading slave owners on the grounds of morality, the reaction of slave owners was to consider alternative ways for utilizing cheap slave labor. The acceptable alternative to slave owners was to abolish the slave trade; get Africans to stay in their lands and produce natural resources for export to European countries and America for the manufacture of secondary products. This alternative would be moral to the abolitionists, but most importantly, an advantageous economic model to slave owners and to the capitalist system.
Consequently, Britain abolished the slave trade in 1833, releasing over 800,000 African slaves in its colonies. One by one, European powers and America abolished the slave trade. Portugal abolished the slave trade in Angola in 1836; abolished the slave trade in Brazil in 1850; and abolished the slave trade in all of its empire in 1875. Despite the abolition of slavery in Angola in 1836, slavery in Angola is recorded to have continued till 1911 and even up to the 1960s.
The triangular trade
With the prospect of launching into diversified manufactured products based on natural resources from Africa and other lands in a cordial trade atmosphere among European nations, the necessity for the Berlin Conference of 1884-1885 to carve out African colonies for European powers became urgent.
Across West Africa, gold, palm oil, rubber, fish and cocoa could be obtained. In Central Africa, gold, copper, cobalt, diamonds and palm oil could be obtained; gold and other minerals from southern Africa, and tea, coffee, flowers and other products from Eastern Africa. All these natural resources could be shipped to Europe and America for manufacture of finished products many of which would then be shipped to Africa and other European controlled territories of the world. This would be a new phase of the triangular trade. On the drawing board, ships would be transporting natural resources from Africa to Europe and America; returning with manufactured goods for sale in Africa and in other territories.
By agreements reached at the Berlin Conference, the whole of the African continent had been partitioned into colonies and put under primary production of natural resources by the end of 1900. This started the epoch of the colonization of Africa and the African colonial economy; an economy that exists on the production of cheap natural resources for manufacturing in the factories of Europe and America; A system of production that has kept most African countries in agriculture and in abject poverty.
The table below shows the percentages of people living on less than US$1.25 from the years 1990-2015 in the regions of the world. Percentage of People living on US$1.25 dollars a day in world regions: 1990-2015The colonial economies of Africa, principally based on keeping most Africans in agriculture, have kept Africans in abject penury for far too long. By 2015, China had moved from 61% of its population in agriculture in 1990 to 4%; and Southern Asia had moved from 52% in agriculture to 12%. The developing regions of the world consisting of Papua New Guinea, Paraguay, Peru, Philippines, Rumania, Russian Federation, Rwanda and Samoa had moved from 47% to 14%; and Sub-Saharan Africa had moved from 57% to 41% of Africans farming one or two hectares per family in 2015.
It is estimated that 40 percent of people in Sub-Saharan Africa currently live on US$1.90 a day; a slight improvement but nothing to consider in view of increasing prices and increasing cost of living.
Structural change in Africa
In most of Europe and America currently, only 1 percent of their population are in agriculture producing agricultural goods for domestic consumption and for export. In parts of Asia, only 5% of their population is in agriculture. Modern development planning entails reducing the agricultural population in favour of increased population in manufacturing and the services sectors.
Writing on the development of Asia, particularly on East Asia, Jedwab and Osei (op.cit) state the following:
Each country (in Asia) has its own story of how it developed, but at the regional level, some stark patterns stand out. For Asia, the development path was rather traditional, with the decline of agriculture and the rise of manufacturing and services. In fact, it is the path that eight high-performing Asian economies followed between 1960-1990 to reach rapid, sustained, and inclusive growth rates - higher than those of all other regions – earning the title the ‘East Asia miracle.’ But for Africa, the development path has been quite different. It too saw a decline in agriculture, but it still lacks a vibrant manufacturing sector.
From the table above, it can be seen that between 1990 and 2015, China reduced its agriculture population by 57%, while Sub-Saharan Africa reduced its agriculture population by 16%. The current level of forty percent of Sub-Saharan Africans in agriculture is far too large, unnecessary and wasteful of human resource. Since the 1970s in Ghana for example, whenever the government could not deal with the issue of joblessness the general call to the people has been “Go back to the land,” a call that increases the farm and rural population, a call that does not solve the unemployment problem; an injunction that does not help in increasing the national revenue; The call back to the land is used across the African continent. But this is a retrograde step in modern development planning considering the requirements of structural change.
Besides being the wrong step, the exhortation to go back to the land is counter-productive. Fertility in the rural-farming areas generally ranges from 4.5 to 9 per family, and in some cases over nine children, while it is generally about three children per family in the urban areas. Going back to the land is therefore an exhortation to increased fertility and consequent rapid population growth.
Besides the unnecessarily huge farm population, Africa’s farm labour is far lower in productivity than in other parts of the world; and still lower in the manufacturing and services sectors than in Asian countries (Jedwab and Osei, op. cit)
Agriculture in Africa has relatively low productivity because of lack or adequate fertilizer, insecticides, other farm inputs and the lack of integration of crop farming and animal husbandry, an integration that keeps farm lands more fertile.
With rigorous training, changes in work ethic, and effective supervision devoid of politics, the continent could raise good quality human resource for industrial growth. With this in mind, it is yet possible for Africa to systematically implement structural change processes by initiating a green revolution, decreasing farm population, increasing agricultural production in the process, moving into secondary industrial production by finding common ways for utilizing the varied crops and mineral resources of the continent for industrial production, export and rapid financial growth.
Certainly, every ambitious country will at some point need a bail-out from the international financial agencies, but financial planning through effective industrial growth and national revenue generation should precede considerations of bail-out through SAP.
Structural adjustment is an example of “external locus of control” mechanism, in the words of Brian Tracy. On the other hand, structural change is an “internal locus of control” mechanism. If African countries could develop cultures of effective internal planning and control of their development, building effective food security system; re-planning farm land holding system, reducing farm population to 5% in the next 20 yeas, raising the manufacturing sector to a much higher level, the services sector will grow exponentially by itself leading to more jobs, increased national revenue generation and increased financial growth.
For instance, the emergence of the internet and the mobile phone have spawned online marketing, a services sector business; food delivery services; increased number of financial services agents and other businesses. The internet and the mobile phone have also taken a large part of the postal and cable services formally provided by the Post Office, With the internet and mobile phone , one can now reach the far corners of the world in nano seconds, speeds that were not available in the hey days of the Post Office. The loss of market has led the Post Office system to create a new courier service to be able to stay in business.
It is the existence of a vibrant manufacturing, research and development sector that becomes the spring board for the growth of new services ideas and businesses, leading in the process, to increased job creation and increased national revenue growth.
In a conversation with a gentleman from a French-speaking African country that has been riddled with coups d’état, over a decade ago, he said “Plus ça change, plus c’est la meme chose.” It is always the same whether it is a military government or a civilian government. It is all a matter of effective leadership and truthful governance. It is a matter of effective political leadership which is still wanting on the continent, and yet the youth cannot wait. It is time for the continent to shift fully into structural change after sixty years of independence.
Rene Dumont, False Start in Africa. English translation published by Frederick A. Praeger, 1966, N.Y.; second edition published by earthscan/James and james, Dec.1988
https://www.amazon.com>Neo-ColonialismI-Stage-imperialism;also published by Zed Books, Dec 1, 1973
Stein, Howard, University of Chicago and Machiko Nissanke, University of London; Structural Adjustment and The African Crisis: A Theoretical Appraisal. In Eastern Economic Journal, Vol 25, No. 4, Fall 1999
Odutaya, Aramide, Conditional Development: Ghana Crippled by Structural Adjustment Programme; May 2015
Nkrumah, Kwame, I speak of Freedom; Frederick A. Praeger Inc, Jan 1, 1961
Nkrumah, Kwame, Neo-Colonialism: The Last Stage of Imperialism; International Publishers, June 1, 1966
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