Structural Adjustment in Africa

The conditions under which African governments have had to respond to the global crisis of the early 1980s have had the effect of locking them into new forms of dependent relationships with western governments and international financial organisations. In particular, the acute balance of payments crises suffered by most African states in recent years, and the accompanying disruption of local production, have undermined the continent’s ability to service foreign debt incurred in better times. Indeed, many countries have been forced to go even deeper into debt in an effort to stave off economic collapse and/or to attempt to stimulate economic recovery. In particular, they have turned to the International Monetary Fund and the World Bank for balance of payments loans. Usually, they have done so reluctantly, and because they have exhausted other possibilities of obtaining finance. Sometimes, banks, bilateral donors and other sources of funding insist that African governments borrow from the international institutions as a condition for maintaining their own contribution to balance of payments assistance. Their enthusiasm for this flows from the fact that Fund/Bank assistance carries with it the requirement that borrowers pursue economic policies acceptable to the international institutions, a requirement which explains the reluctance of most governments to draw on this assistance except as a last resort.

The protracted dispute between Tanzania and the International Monetary Fund, which lasted over half a decade, was widely publicised internationally. It has been the subject of numerous articles in newspapers and scholarly journals so much so that it might be thought that the subject has been thoroughly exhausted. To one who was intimately involved in advising on policy formulation in that country between 1981 and 1984, however, it seems that there is still more to be said; not all the issues have been aired fully, nor have all the nuances been adequately or sometimes accurately explored.

Zimbabwe became a member of both the World Bank and IMF shortly after independence in 1980. It is therefore one of their newest members, although followed by Mozambique and Angola which were in effect forced into membership as a result of the failure (or destruction) of their early socialist experiments.

A recurring theme in critiques of the IMF and World Bank policies for stabilisation and adjustment is that such policies undermine national economic integration and self-reliance by promoting the greater internationalisation of trade and capital flows.¹ At issue here is the question of the appropriate strategy of economic development and the extent to which countries borrowing from the international institutions to manage immediate crises forfeit control over choice of long term economic strategy. Critics contend that integration into the international economy on the basis of static comparative advantage exposes Third World countries to instability and to constrained long term growth possibilities. IMF and IBRD policies of reducing state intervention in the economy and of allowing market forces and world prices to dictate resource allocation serve, it is claimed, to reassert the logic of the (in Africa’s case) colonial division of labour and promote the interests of international capitalism at the expense of the ordinary people of the Third World. The Fund and the Bank are seen, therefore, as agents of imperialism whose role is that of ensuring the most favourable conditions for the accumulation of capital at the international level. Government dealing with them are seen, in the extreme, as conspiring against the best interests of the people they claim to serve.²

The Rawlings coup that overthrew the Liman government in Ghana on 31 December 1981 was in several senses unique. It gave rise to a spectacular experiment in ‘people’s power’ and a level of spontaneous mass mobilisation not seen since the early day of the independence struggle. Throughout the country ‘defence committees’ and other organs of ‘popular power’ sprang up. Students closed down schools in order to bring in the cocoa crop, artisans and machinery, working people and unemployed, supported by patriotic soldiers and police, attacked ‘kalabule’ (profiteering) and formed price-control and anti-hoarding committees. Even more important the coup gave rise to a strong but unorganised syndicalist tendency among the Workers’ Defence Committees. A number of state-owned factories were taken over, management was expelled, and ‘interimanagement committees’ of workers installed. These ‘factory revolutions’ culminated in the celebrated takeover of the Ghana Textile Printing (GTP), a joint-venture between the State and the United Africa Company, during 1982. In May that year the Provisional National Defence Council (PNDC) which had taken power after the coup, declared a ‘National Democratic Revolution’, the objectives of which were anti-imperialist struggle and the struggle for democracy on the basis of a broad progressive front.

The serve economic crisis which the Ivory Coast has experienced since 1980, and of which the first symptom was the deterioration in the balance of payments position after 1978, is frequently presented as the consequence of the deterioration of the international economic environment (the second petroleum price hike and the decline in world market prices for primary resources), and specifically the downward turn of coffee and cocoa world market prices, after the peak reached in 1976 through 1978, may be regarded as catalysts in setting off the crisis, but do not constitute the deep and fundamental causes.² Rather, from a macroeconomic point of view, the origins of disequilibria are embedded in a certain number of long standing divergent tendencies, intensified throughout the 1970s, which constitute the counterpart of the model of growth and redistribution which had ensured the sustained growth of the Ivorian economy from 1960 to 1980. These phenomena can be identified at a number of levels and systematised in the following manner:

In contrast to the other former French colonies of Sub-Saharan Africa and the Indian Ocean, Madagascar is characterised by a very particular configuration of characteristics which are a reflection of its situation as an island, its pre-colonial history and the political and economic choices it has made especially since the beginning of the 1970s.

Between 1967 and 1983, during the high point of World Bank activity in rural development in the Cameroon, the Bank financed 18 agricultural development projects, nearly all of which were oriented towards export crops such as rubber, cocoa and palm oil. Most of the projects were carried out by semi-public corporations and were of an enclave type. The project under consideration here is interesting because it was conceived to serve the internal market. Moreover, it is a development project not a production project. This vast irrigated rice growing project, Semry (Société d’expansion et de modernisation tion de la riziculture de Yagoua), is in fact destined to produce rice for local consumption. For the lending agencies, as for the state of Cameroon, Semry represents one of the rare examples of successful rice farming in Africa.

Over the last ten years, the government of Morocco has faced a dilemma. On the one hand, the structural problems of the economy, growing pressure from the IMF and the World Bank and the influence of other powerful interests both foreign and domestic, have led the government to adopt a series of measures which add up to a familiar package involving devaluation, cuts in public expenditure, a reduction of state intervention in the economy and the encouragement of private enterprise and market forces. On the other hand, the government has found it difficult until recently to implement its ‘stabilisation’ and ‘structural adjustment’ policies with the rigour that the two international agencies, aid donors and would-be investors would have liked to see. Reasons for this difficulty include: a continuing commitment to the war in the Sahara, strong pressure from certain sections of the middle class and organised working class to maintain a certain level of state involvement in the economy, and the danger that popular protest over measures threatening the welfare of the mass of the Moroccan people will turn into serious political agitation. Since 1987, however, the government appears to have committed itself more wholeheartedly to a programme of structural reform and privatisation.