Sub-Saharan Afrita.K 8209 From Crisis to Sustainable GrouIil,W A Long-Term Perspective Study I ii 'po- \ NW=,,1- 5 ' 4*t ;-a 4__ ~' , .' IL ___ -I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~M 14~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 SC-~ ~ ~ ~ ~ w I I I I ERRATA SHEET Sub-Saharan Africa: From Crisis to Sustainable Growth p. 35 In Figure 1.13 data for non-fuel export volume are available only up to 1987; the ascending line from 1987 to 1988 is for the GDP index only. p. 65 In Figure 3.2 the colors of the second and third categories in the legend should be reversed: the darker orange for 1980 and the lighter orange for 1987 (English edition only). p. 73 In Table 3.2 the unit for Case II, no. 4, should be mtme. p. 177 In the second paragraph, the third sentence should begin "In addition the IBRD..." p. 216 The colors of the first and third categories in the legend should be reversed: the darkest orange for the category "< 300" and the lightest orange for the category '> 500" (English edition only). p. 269 In Table 28, second column from the right, the numbers are years and should not have commas (English edition only). p. 299 Add International Sugar Organization. Various years. Sugar Yearbook. London. Sub-Saharan Africa: Stock # 11349 From Crisis to Sustainable Growth ISBN 0-8213-1349-5 November 1989 Errata Sheet Sub-Saharan Africa: Stock # 11349 From Crisis to Sustainable Growth ISBN 0-8213-1349-5 November 1989 Errata Sheet I Sub-Saharan Africa From Crisis to Sutanable G-rom^,fii IBRD 21870 Eq;-I. d G. r- , . _ i. Tom, I ' *, - -- ... ;,-. , ; I I I , Sub-ahaan-Afic [memationi-I bodridane, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~ - *S * - r - j __, I_-.r_ , ~ ~ ~ - ,*, N,; " -_S i j, 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CO E 1989 * - AI -11 *J --s I Ihc NI,j 'jar _I I ,Jn r -.J I! aL- -;,ns1 *~ jh: r K I h r]. [eTc, 1 -I;. ire Ic w qt,I II ,r' L,N82,,-,f I, -.~ ~ ~ Cjr,;.1/ > * t C1, - Ii~~ ~ ~ Torrrittr.,l,rrr.rro I I * * (~~~~~ ~ ~~~~~~~~~~~ '-h. I kr,II U-. -e lh ~~~~~~~~~~ii _ _, _- r......~~~~~~~~~~~~~~~~~~~~~~~~~~~~ N,rr, OCTOBER 1989 Sub-Saharan Africa 0 0 From Crisis to Sustatnable Growth A Long-Term Perspective Study The World Bank Washington, D.C. ! ©1989 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing November 1989 The maps in this report are for the convenience of the reader. The denominations, the classifications, the boundaries, and the colors used in them do not imply on the part of the World Bank and its affiliates any judgment on the legal or other status of any territory, or any endorsement or acceptance of any boundary. The material in this publication is copyrighted. Requests for permission to repro- duce portions of it should be sent to Director, Publications Department, at the address shown in the copyright notice above. The World Bank encourages dissemi- nation of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without a fee. Permission to photocopy portions for classroom use is not required, although notification of such use having been made will be appreciated. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Publications Sales Unit, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. or from Publications, The World Bank, 66, avenue d'Iena, 75116 Paris, France. Coverphotograph credits (clockwise, from top right): (1) a chemist at a palm oil plant in Cote d'Ivoire (Ray Witlin), (2) a woman planting tree seedlings in Madagascar (Yosef Hadar), (3) a weaver in Mali (Yosef Hadar), (4) a self-employed father and son making charcoal burners in Zambia (Ed Huffman), (5) a boy drinking from a handpump in Lesotho (Curt Carnemark), (6) women voting in new officers for a village organization in Senegal (Nicla de Palma), and (7) a METEOSAT image supplied by the European Space Agency. Library of Congress Cataloging-in-Publication Data Sub-Saharan Africa: from crisis to sustainable growth. Includes bibliographical references. 1. Africa, Sub-Saharan-Economic policy. 2. Africa, Sub-Saharan-Social policy. 3. Nutrition policy-Africa, Sub-Saharan. 4. Agriculture and state-Africa, Sub- Saharan. 5. Economic assistance-Africa, Sub-Saharan. 6. Technical assistance-Af- rica, Sub-Saharan. I. International Bank for Reconstruction and Development. HC800.S825 1989 338.967 89-24925 ISBN 0-8213-1349-5 Contents Foreword by Barber B. Conable xi Definitions and data notes xiii Introduction and overview 1 What have we learned? 2 Outlook for the next generation 3 A strategy for sustainable and equitable growth 4 A strategic agenda for the 1990s 14 1 A thirty-year perspective: Past and future 16 Past patterns and trends 16 The deepening crisis 17 Factors behind the decline 23 The outlook for the next generation 30 The challenge 33 2 Sustainable growth with equity 37 A strategy for the next generation 37 Growth that is sustainable and equitable 38 Strengtlhening the enabling environment 47 Building capacity 54 The political and cultural dimensions 60 International dimensions 61 In conclusion 62 3 Investing in people 63 Toward human-centered development 63 Providing universal primary health care and reducing the population growth rate 65 Food securi.y and nutrition 72 Primary education: revitalization and universalization 77 Higher education, skill formation, and training 81 The design and efficient management of human resource programs 84 Sustained financial support for human resource development 87 V 4 Agriculture: The primary source of growth and food security 89 The challenge of transforming agriculture 89 Mobilizing the private sector 91 Harnessing technology 95 Protecting the rural environment 100 Providing rural infrastructure 103 Developing farmers' associations and recognizing the role of women 103 Redefining land rights 104 Can the challenge be met? 104 5 Industry, mining, and energy 108 Industry: Responding to markets 108 The challenge of industrialization 108 A future strategy 108 The current state of industrial development 110 Opening up market opportunities 112 Creating an enabling environment 115 Building industrial capabilities 118 Meeting the challenge 120 Mining prospects 122 Minerals: A mixed blessing 122 Potential and importance 122 Past experience 124 Higher investment in prospecting 124 An enabling environment for mining 125 Future prospects 126 Energy for growth 128 A 30-year perspective 129 A future energy strategy 133 6 Fostering African entrepreneurship 135 The entrepreneurial catalyst 135 The development of African enterprise 136 Entrepreneurs in the informal sector 138 Improving the business environment 142 Supporting entrepreneurial capabilities 144 Answering the need 147 7 Regional integration and cooperation: From words to deeds 148 Experience to date 148 A strategy for future regional cooperation and integration 150 In conclusion 162 8 Sustainable funding for development 163 Development expenditure 163 Mobilizing domestic resources 164 External resources 173 Development assistance in the 1990s 175 vi 9 A strategic agenda for the 1990s 185 The search for the high ground 185 A strategic agenda for the 1990s 189 Consensus building within Africa 192 Building consensus among the donors 193 Toward a global coalition for Africa 193 Bibliographical note 195 Statistical appendix 203 Boxes 1.1 Costs of conflict and destabilization in southern Africa 23 1.2 The cost of infrastructure deficiencies: The Nigerian experience 28 1.3 The promise of biotechnologies for Africa 31 1.4 Mauritius: From Malthusian gloom to sustained development 34 2.1 Madagascar's environmental action plan 46 2.2 Nigeria's lessons of adjustment 48 2.3 Telecommunication in the information age 50 2.4 Labor-intensive road maintenance 51 2.5 Private participation in infrastructure 52 2.6 Restructuring African railways 53 2.7 Reforming the civil service 57 2.8 Capacity building for economic policy analysis in Tanzania 58 2.9 Self-help community participation 59 3.1 AIDS: The demographic and economic consequences 66 3.2 Willingness to pay for improved water supply 68 3.3 Family planning: Zimbabwe and Botswana 70 3.4 Cost-effective nutrition interventions: producing a low-cost weaning food in Zaire 76 3.5 Integrating health and nutrition services for children under three 76 3.6 Cost-effective nutrition interventions: delivering vitamin A supplements in Burkina Faso 77 3.7 Botswana's food security program 78 3.8 Ethiopia: effective in-service teacher training 79 3.9 Training for employment 83 3.10 Malawi: successful community participation in water supply 85 4.1 Kenya succeeds in horticulture 92 4.2 Savings and credit cooperatives in Cameroon 94 4.3 Fighting insects with insects 96 4.4 Soil conservation and water harvesting in Burkina Faso 98 4.5 Bicycle transport: The "missing middle" 102 4.6 Rwanda: A case of successful adaptation 105 4.7 The growth of smallholder maize production in Zimbabwe 106 5.1 Mauritius' success in export-led industrialization 111 5.2 A Zambian-German joint venture 114 5.3 Madagascar exports high-quality children's clothing to Europe 115 5.4 How adjustment programs have affected the industrial sector 117 5.5 Ghana's Suame Magazine: Building indigenous engineering capabilities 121 5.6 A revival of gold mining in Ghana 127 5.7 Energy efficient stoves in Niger 130 vii 6.1 Emerging agricultural entrepreneurs in C6te d'Ivoire 137 6.2 Small-scale enterprises in Kenya 140 6.3 The diversity of informal financial institutions 141 7.1 The control of riverblindness 151 7.2 Rationalizing regional institutions 152 7.3 Ethiopian Airlines 154 7.4 Entomology research: A case study in regional cooperation 155 7.5 Regional networking to improve professional capabilities 156 7.6 Eastern and Southern African Management Institute (ESAMI) 157 7.7 Labor mobility in west Africa 160 8.1 Botswana: Managing commodity booms and busts 167 8.2 Burkina Faso: Cost-saving procurement of petroleum products 168 8.3 Togo: A promising partnership with NGOs 170 8.4 Rwanda: Banques populaires 172 9.1 The Nordic development paradigm 187 9.2 The Social Dimensions of Adjustment Project 188 9.3 The Sahel-A special challenge 190 Figures 1.1 Gross national income per capita in Sub-Saharan Africa and other developing countries, 1967-87 17 1.2 Diversity of economic performance in Sub-Saharan Africa 18 1.3 Structure of GDP in Sub-Saharan Africa 19 1.4 Merchandise exports from Sub-Saharan Africa, 1965-87 20 1.5 Volume and value of Sub-Saharan Africa's agricultural exports, 1967-87 20 1.6 Sub-Saharan Africa's share in the value of exports, 1960-85 20 1.7 External debt of Sub-Saharan Africa and highly indebted countries, 1970-87 21 1.8 Terms of trade and income effect in Sub-Saharan Africa, 1961-87 24 1.9 Sub-Saharan Africa and South Asia: Components of per capita income growth 26 1.10 Real effective exchange rate index, 1970-87 29 1.11 Export prices for five major Sub-Saharan African export commodities, 1961-87 32 1.12 Population and urbanization in Sub-Saharan Africa, 1960-2020 33 1.13 Recent economic trends in Sub-Saharan Africa, 1980-88 35 3.1 Central government expenditures on health and education, 1975-87 64 3.2 Mortality rates of children under five in selected Sub-Saharan African countries 65 3.3 Projected food gap: Alternative scenarios for Sub-Saharan Africa, 1990-2020 74 3.4 Primary school enrollment ratios by gender in six Sub-Saharan African countries, 1986 79 3.5 Universal primary education: Cost scenarios for countries with low enrollments 80 5.1 Value of mineral exports in Sub-Saharan Africa 123 5.2 Mineral production in Sub-Saharan Africa, Asia, and Latin America and the Caribbean 124 Tables 1.1 Typical costs in Sub-Saharan Africa and Asia 27 2.1 Indicative projections of employment in Sub-Saharan Africa, 1985-2020 41 2.2 Contributions to the growth of GDP in Sub-Saharan Africa, 1990-2020 42 3.1 Fertility rates in Sub-Saharan Africa and South Asia 69 3.2 Population and food security in Sub-Saharan Africa, 1990-2020 73 3.3 Financial requirements for broad-based human resource development for Sub-Saharan Africa 87 viii 5.1 Contribution of mining to selected Sub-Saharan countries in 1987 123 5.2 Total primary energy supply projections in Sub-Saharan Africa 128 8.1 Gross domestic savings in Sub-Saharan Africa 165 8.2 Military spending 168 8.3 Actual and projected macroeconomic framework for Sub-Saharan Africa 174 8.4 ODA requirements for Sub-Saharan Africa, 1981-2000 179 ix The co-authors of thi, report were Pierre Landell-Mfills, Ramgopal Agarwala. and Stanley Please. Mlembers of the core team included O-siman Ahmed. Zafar Ahmed, Robert Barad, Kevin Cleav'er, locel% n de long, Gladson KaNira, Barbara Pitkin, Ral Sharmna, William Steel, Kalanidhi Subbarao, and Gertrud Windsper- ger. The team wi'as assi-ted bv Moussa Kourouma. Waheed Oshikova. Sangeeta Parunioo, and Klaus Tilmes. The statistical appendi\ waas prepared bv Ramesh Chander and Sandra Gain, with the assistance of Smangele Nikhwanazi. ; 11Manv in and outside the Bank provided contributions, notably Claude Ake, jacques Giri. Paul Harrison. Goran Hvden, Sanjava Lall, Andrewv Lemer. Janet M\lacGallev, lean Rabes. Pushpa Schwartz, Kafle Wodacjo,and the membersof the World Bank'-sCouncilof African Advisers. In addition a large numberof African and non-Africani development professionals provided written inputs and con- tributed through about 20 workshops held in Africa and outside in the course of preparation of this report. Financial contnbuitions for African inputs and wvorkshops were made by the UNDP, the EEC. and the governments ot Canada, Finland, France, The Netherlands, Norway. Sweden, and the United Kingdom. The support staff was headed by Jean Ponchamni and included Barbara Dobrovodskv, Gloria Jackson, Patricia Nioran. and Tatvana Ringland. Clive Crook was the principal editor. Production for publication was directed by \Virginia deHaven Hitchcock, with the assistance of Eileen Hanlon, Catherine Anni Kocak. jeffrey N. Lecksell, V ictona Lee, Carolhne NicEuen. Jonathan Miller, Hugh Nees, Niartin O'Hara, ean Robinson. Mlichael WV. Rollins, and Brian J. Svikhart The French editon was translated under the direction of Jacqueline Ni. Gardes The Portuguese edition was translated by Transle\. Inc. Foreword Africa's continuing economic crisis presents an needed for Africa to achieve a sustained and sus- extraordinary challenge to the development com- tainable improvement in welfare. The report is munity-to both intellectuals and policymakers. offered as a contribution to a continuing process Responding to this challenge during the past de- of policy dialog and consensus building on pro- cade, the Bank has issued a series of reports on grams to meet Africa's development needs. Our Sub-Saharan Africa. These have increasingly con- hope is that it will be seen by policymakers in centrated on urgent measures needed to set Africa Africa and in the development community at on the path to recovery, as have the efforts of the large as a resource on which to draw as they development community at large. Yet the crisis grapple with the task of formulating specific long- has continued to deepen. As we approach a new term country strategies. decade, the moment has come to step back from Most African countries are now embarked on the immediate problems and take a longer view. comprehensive programs of economic adjust- How have the economies of Sub-Saharan Africa ment. The nature of these programs has evolved evolved during the first three decades of indepen- significantly as we have all learned from our ex- dence? What lessons have been learned? And periences and mistakes. We have come to appre- what are the prospects for the next generation of ciate that fundamental structural change is Africans? This report attempts to provide such a needed to transform African economies and make long-term perspective. them competitive in an increasingly competitive The report is the product of a prolonged inquiry world. The adjustment efforts must be continued that has extensively involved African researchers, and the reforms broadened and deepened. The private businessmen, and public officials, as well journey will be long and difficult, and special as a broad spectrum of representatives of the measures are needed to alleviate poverty and pro- donor community. In this sense the process has tect the vulnerable. been as important as the product. The report To achieve food security, provide jobs, and reg- builds on the many studies undertaken by the ister a modest improvement in living standards, United Nations and African agencies, as well as Sub-Saharan economies must grow by at least 4 to by other scholars. 5 percent annually. Compared with the region's Clearly no single report can hope to do full past performance, even that target seems highly justice to the diversity of African economies, the ambitious-but we believe it can be achieved. complexity of the problems they confront, and the And for growth to be sustainable, major efforts differing views on how best to tackle them. We do must be made to protect, not destroy, the environ- not pretend to have complete answers; our goal ment. During the next decade at least, agriculture has been to sift carefully through the evidence, to will be seen as the main foundation for growth. listen to the many viewpoints, and to set forth our Food production must expand twice as fast if best assessment of the policies and measures Africa is to cope with the new mouths to be fed and slowly overcome malnutrition. The key to tilateral institutions, the private sector and the food security will be to develop and apply new donors, official and nongovernmental-has never technologies, as well as to slow population been greater. We all share responsibility for the growth. future, and the problems are big enough for all to A central theme of the report is that although have a role in their solution. By working together, sound macroeconomic policies and an efficient African governments will hopefully achieve faster infrastructure are essential to provide an enabling progress toward regional cooperation and inte- environment for the productive use of resources, gration, which was a central theme of the Lagos they alone are not sufficient to transform the struc- Plan of Action and has been once again stressed in ture of African economies. At the same time major the 1989 "African Development Report" issued by efforts are needed to build African capacities-to the African Development Bank. produce a better trained, more healthy population Previous reports have all called for increased and to greatly strengthen the institutional frame- aid. This report is no exception, but clearly exter- work within which development can take place. nal finance must be- matched by improved poli- This is why the report strongly supports the call cies. In the long term, dependency on aid and for a human-centered development strategy made technical assistance must be reduced. But in the by the ECA and UNICEF. immediate future the needs will continue to grow, A root cause of weak economic performance in and ways must be found to mobilize these re- the past has been the failure of public institutions. sources, including measures to reduce Africa's Private sector initiative and market mechanisms debt burden. are important, but they must go hand-in-hand A wide measure of consensus already exists on with good governance-a public service that is objectives and, with goodwill and open debate, efficient, a judicial system that is reliable, and an the differences on policy can be progressively nar- administration that is accountable to its public. rowed. So let us strive together to reach common And a better balance is needed between the gov- ground-the high ground-that will permit con- emnment and the governed. Thus the report sets certed action on a strategic agenda for the 1990s out a range of proposals aimed at empowering and beyond-thereby ensuring Africa a more ordinary people, and especially women, to take prosperous future. greater responsibility for improving their lives- This is a study by the staff of the World Bank, measures that foster grassroots organization, that and the judgments in it do not necessarily reflect nurture rather than obstruct informal sector enter- the views of the Board of Directors or the govern- prises, and that promote nongovernmental and ments they represent. intermediary organizations. The growing convic- tion is that development must be more bottom-up less top-down and that a learning approach to program design is to be preferred to the imposi- tion of blueprints. The difficulties facing Africa are formidable. Barber B. Conable The margin for maneuver is slim indeed. The risks President of failure are devastating in human terms. So the The World Bank need for concerted action among all the partners October 16,1989 in development-African governments and mul- xii Definitions and data notes Acronyms and initials ISIC UN International Standard Industrial Classification of All Economic Activities CEAO West African Economic Community LSMS Living Standards Measurement Study (Communaute Economique de l'Afrique de MUV Manufacturers' unit value l'Ouest) NGO Nongovernmental organization CGIAR Consultative Group on International NIC Newly industrializing country Agricultural Research NRR Net reproduction rate CPR Contraceptive prevalence rate OAU Organization of African Unity DAC Development Assistance Committee of ODA Official development assistance the OECD OECD Organisation for Economic ECA UN Economic Commission for Africa Co-operation and Development ECOWAS Economic Community of West OPEC Organization of Petroleum Exporting African States Countries EEC European Economic Community PTA Preferential Trade Area for Eastern and ESAMI Eastern and Southern African Southern African States Management Institute SADCC Southern Africa Development FAO UN Food and Agriculture Organization Coordinating Conference GATT General Agreement on Tariffs and Trade SDA Social Dimensions of Adjustment Project GDP Gross domestic product SDR Special drawing right GNP Gross national product SFA Special Facility for Africa HIC Highly indebted country SITC Standard International Trade IARC International agricultural research center Classification IBRD International Bank for Reconstruction SME Small- and medium-scale enterprise and Development (World Bank) SNA UN System of National Accounts ICIPE International Centre of Insect SPA Special Program of Assistance Physiology and Ecology SPAAR Special Program for African ICP International Comparison Project Agricultural Research IDA International Development Association S&T Science and technology IEC Information, education, and TFR Total fertility rate communication TNC Transnational corporation IITA International Institute of Tropical T&V Training and visit system Agriculture UDEAC Central African Customs and ILO International Labour Organisation Economic Union (Union Douaniere et IMF International Monetary Fund Economique de l'Afrique Centrale) xiii UMOA West African Monetary Union (Union Data notes Monetaire Ouest Africaine) UN United Nations * Billion is 1,000 million. UNCTAD United Nations Conference on * Trillion is 1,000 billion. Trade and Development * Dollars are current US dollars unless other- UNDP United Nations Development wise specified. Programme * Growth rates are based on constant price UNEP United Nations Environment data and, unless otherwise noted, have been com- Programme puted with the use of least-squares method. See Unesco United Nations Economic, Scientific, the technical notes for the statistical appendix for and Cultural Organization details of this method. UNFPA United Nations Fund for Population * "World Bank data" refers to data obtained Activities from various World Bank files, including the Bank UNICEF United Nations International Economic and Social Database (BESD), some of Children's Emergency Fund which are published from time to time (see the UNIDO United Nations Industrial bibliographical note.) Historical data shown in Development Organization this report may differ from those in previous pub- UNPAAERD United Nations Programme of lications because of continuous updating as better Action for African Economic Recovery and data become available and because of new group Development aggregation techniques that use broader country UNSO United Nations Statistical Office coverage than in previous publications. UPE Universal primary education * Country groups and economic and demo- USAID United States Agency for International graphic terms are defined in statistical appendix. Development * The symbol .. in tables means not available. WHO World Health Organization * The symbol - in tables means not applicable. * The number 0 or 0.0 in tables means zero or less than half the unit shown and not known more precisely. xh, Introduction and overview Africal entered independence with high expecta- stood? Has the institutional dimension been ne- tions. Most people believed that rapid progress glected? Have the recent reform programs been would be made in raising incomes and improving too narrow or too shallow? Could the process of welfare. And indeed in the early years many Afri- formulating and implementing reforms be im- can countries successfully expanded their basic proved? Has the effect of external factors been infrastructure and social services. Much effort was correctly assessed? Are external assistance and spent too on consolidating the fragile new nation debt relief appropriate and adequate? More fun- states. damentally, is there a long-term vision that is both After an initial period of growth, however, most credible and energizing? African economies faltered, then went into de- These concerns-especially the last-lie behind cline. There were some exceptions, but Sub- this report. Drawing on past experience, it ex- Saharan Africa as a whole has now witnessed plores how programs and policies need to be almost a decade of falling per capita incomes, changed to attain sustainable growth with equity increasing hunger, and accelerating ecological in the next century. It is not sufficient for African degradation. The earlier progress made in social governments merely to consolidate the progress development is now being eroded. Overall Afri- made in their adjustment programs. They need to cans are almost as poor today as they were 30 go beyond the issues of public finance, monetary years ago. This situation has spurred many gov- policy, prices, and markets to address fundamen- ernments to undertake far-reaching reforms. tal questions relating to human capacities, institu- More than half have embarked on structural ad- tions, governance, the environment, population justment programs. The countries that have per- growth and distribution, and technology. sisted with reforms since the mid-1980s are Changes in perceptions and priorities, as well as showing the first signs of improvement. These in incentives, will be required to bring about im- give grounds for believing that recovery has provements. Above all, to channel the energies of started. the population at large, ordinary people should The experience of the first generation of Afri- participate more in designing and implementing cans after independence raises some searching development programs. Much of this will take questions. Does Africa face special structural time. But while the focus of the report is on the problems that have not been properly under- long term, the call is for action now to bring about long-run changes that will promote growth and reduce poverty. 1 Throughout this report, "Africa" when used is an This report emphasizes and embodies the pro- abbreviation for Sub-Saharan Africa. The data given on cess as well as the product. It is the result of an Sub-Saharan Africa systematically excludes South Af- intensive collaboration with both Africans and rica and Namibia. donors and, as such, tries to reflect the evolution I in African views from the Lagos Plan of Action in What have we learned? 1980 to the program of action presented at the United Nations in 1986, the Abuja Declaration of Overall economic growth in Sub-Saharan Af- 1987, the Khartoum Declaration of 1988, and the rica has averaged 3.4 percent a year since 1961, UN Economic Commission for Africa's (ECA's) only a fraction above population growth. By 1987 1989 report, African Alternative Framework to Struc- this region of 450 million people-more than dou- tural Adjustment Programmes. The attention to ble the number at independence-had a total human resources, technology, regional coopera- gross domestic product (GDP) of around $135 tion, self-reliance, and respect for African values billion, about the same as that of Belgium, which that informs these African policy statements pro- has only 10 million inhabitants. Growth was un- vides the main focus of the strategy proposed in evenly spread over time and across countries. the following chapters. There were three broadly distinct periods: 1961- At various stages workshops were held in Afri- 72, when incomes per capita grew; 1973-80, a can countries as well as with donor agencies. period of stagnation; and 1981-87, years of de- Many eminent Africans contributed to the cline. For some countries (such as Liberia, Niger, report's thrust and content. The report is intended and Nigeria) the decline in per capita incomes to help in the design of a future development since 1980 has been calamitous-well over 25 per- strategy for each African country. Policies and cent. As always there were exceptions-notably programs would then be formulated in detail on Botswana, which has recorded an annual growth a country-by-country basis. in per capita income of more than 8 percent a year Some answers are readily suggested by past for the past 26 years; Congo with 4 percent; and experience. But other issues, such as the apparent Lesotho, above 3 percent. delay in the demographic transition in Africa or Africa's deepening crisis is characterized by complex environmental questions, will require weak agricultural growth, a decline in industrial further research. Any report on Sub-Saharan Af- output, poor export performance, climbing debt, rica has to confront the continent's enormous di- and deteriorating social indicators, institutions, versity and the grave weaknesses of available and environment. Agricultural output has grown statistics. We are all only too conscious of our annually by less than 1.5 percent on average since inadequate understanding of many of the issues 1970, with food production rising more slowly covered. But the report cannot be simply an than population. Although industry grew agenda for research. It attempts to derive the ele- roughly three times as fast as agriculture in the ments of a future development strategy on the first decade of independence, the past few years basis of present information, however incomplete. have seen an alarming reversal in many African A long-term effort to improve African data is countries where deindustrialization seems to called for. Meanwhile the available figures, poor have set in. With export volumes barely growing as they are, do provide enough evidence to estab- at all since 1970, Africa's share in world markets lish the enormity of the problems, and they are has fallen by almost half. used where possible to formulate policy recom- In the 1970s, to maintain income and invest- mendations. ment, governments borrowed heavily from Although much attention is inevitably given to abroad. Africa's long-term debt has risen 19-fold Africa's failures, a lot can be learned from its since 1970 and is now equal to its gross national successes. These show what can be done much product (GNP), making the region the most heav- more powerfully than any theories. ily indebted of all (Latin America's debt amounts Responsibility for Africa's economic crisis is to only around 60 percent of GNP). Debt service shared. Donor agencies and foreign advisers have obligations were 47 percent of export revenues in been heavily involved in past development efforts 1988, but only about half were actually paid. More along with the African governments themselves. than 100 debt reschedulings have been negotiated, Governments and donors alike must be prepared and still arrears accumulate. to change their thinking fundamentally in order The crisis is taking a heavy toll in human terms. to revive Africa's fortunes. However, Africa's fu- In several countries expenditure on social services ture can only be decided by Africans. External is sharply down, school enrollments are falling, agencies can play at most a supportive role. nutrition is worsening, and infant mortality con- 2 tinues to be high. Open unemployment in the largely by the declining level and efficiency of towns, especially of educated youth, is also on the investment, compounded by accelerating popula- rise. And, threatening Africa's long-term produc- tion growth-and not primarily by external fac- tive capacity, population pressure on the land is tors. Many countries, especially the poorer ones, accelerating desertification and deforestation; did suffer severe external shocks. But the low fuelwood is increasingly scarce, and soil fertility return on investment is the main reason for is being leached away, although none of these Africa's recent decline. Africa's investment and trends has been accurately measured. Last, insti- operating costs are typically 50 to 100 percent tutional decay is symbolized by the poor condi- above those in South Asia-the most comparable tions of once world-class universities, the region. Weak public sector management has re- disintegration of paved highways, and the col- sulted in loss-making public enterprises, poor in- lapse of the judicial and banking systems. Over- vestment choices, costly and unreliable staffed and poorly managed public bureaucracies infrastructure, price distortions (especially over- are deadweights on the productive sectors. Many valued exchange rates, administered prices, and governments are wracked by corruption and are subsidized credit), and hence inefficient resource increasingly unable to command the confidence allocation. Wage costs are high relative to produc- of the population at large. In many places political tivity (particularly in the CFA franc zone), even instability, coup d'etats, and ethnic strife are ex- though real wages have fallen by about a quarter acting a terrible toll on helpless people. And the on average across Africa since 1980. Intermediate costs of destabilization in southern Africa have technologies (such as pedal carts and animal draft been enormous. power) are too little used. Even more fundamental The factors behind Africa's economic decline in many countries is the deteriorating quality of are much debated. Some see mainly external government, epitomized by bureaucratic obstruc- causes, others internal. Changes in per capita in- tion, pervasive rent seeking, weak judicial sys- come have three main sources: variations in the tems, and arbitrary decisionmaking. All of this terms of trade, growth in population, and growth adds heavily to the cost of doing business and in production (GDP). discourages investors. For the most part Africa is * For Africa as a whole the analysis in Chapter simply not competitive in an increasingly compet- 1 shows that the income loss from changes in itive world. terms of trade since 1960 has been smaller than the The postindependence development efforts gain. Other regions have suffered similar losses failed because the strategy was misconceived. and performed better. Declining export volumes, Governments made a dash for "modernization," more than declining export prices, account for copying, but not adapting, Western models. The Africa's poor export revenues. Low-income Afri- result was poorly designed public investments in can countries have been the worst hit, with sub- industry; too little attention to peasant agricul- stantial income losses in the 1970s and 1980s. ture; too much intervention in areas in which the * Population growth has steadily risen during state lacked managerial, technical, and entrepre- the past three decades. Now well over 3 percent, neurial skills; and too little effort to foster grass- it is outpacing GDP. In contrast, in most other roots development. This top-down approach developing countries population growth has de- demotivated ordinary people, whose energies clined. most needed to be mobilized in the development * The region's disappointing GDP growth is effort. partly a function of the level and efficiency of investment. Gross investment during the period Outlook for the next generation first rose (from 15 to 20 percent in the 1970s), then fell back to 16 percent. The incremental output Certain fundamental forces will shape the con- generated by this investment has dropped dra- text for Africa's development in the years ahead. matically from 31 percent of investment in the The world is on the threshold of a new technolog- 1960s to 2.5 percent in the 1980s. ical age-driven by rapid advances in information Although many African countries have seen systems, in the biological sciences, and in materi- their development efforts disrupted by sharp falls als research. High-speed, low-cost information in the world price of key commodities, viewed processing and communications are transforming over the long term, falling per capita incomes for the way the world does business. Good market Africa as a whole since the late 1970s are explained intelligence, flexible production structures, and a 3 fast response to new opportunities will give firms traditions of solidarity and cooperation; and in the and farms the competitive edge. Biotechnology international support it can count on. The time has and materials sciences will produce a dazzling come to take up this challenge and to put in place array of new products that may quickly make a new development strategy for, the next conventional processes and products in Africa generation. obsolete. Against this background, an improve- ment in raw materials prices is unlikely. A strategy for sustainable and equitable Genetic engineering, tissue cultures, and the growth like offer new opportunities as well as pose a significant threat. If Africa is not to be further If Africa is to avert hunger and provide its grow- marginalized, but rather benefit from these devel- ing population with productive jobs and rising opments, two initiatives are crucial. Africa must: incomes, its economies need to grow by at least 4 * Improve its science and technology training to 5 percent a year. This must be the minimum and aim at the highest standards for at least a target. The primary source of this growth can only minimum core of specialists be agricultural production, which is itself targeted * Forge new partnerships with qualified firms to expand annually by 4 percent. African countries and research institutes in the developed countries. could then not only meet their own food require- Africa must grapple with two major trends: ments, but also generate the foreign exchange explosive population growth and accelerating en- needed for development. The target growth for vironmental degradation. In 1983 the ECA industry-initially 5 percent rising to 7 or 8 per- sketched out a "nightmare scenario" that de- cent a year-is higher than for agriculture, as is scribed the consequences of continuing high pop- consistent with experience elsewhere. With all ulation growth and stagnant or declining other sectors growing at around 4 to 5 percent, it incomes. On present trends the sheer growth in should be possible to provide jobs for a labor force numbers is staggering: a continent that had fewer that will expand by about 380 million people be- than 100 million inhabitants at the beginning of tween 1990 and 2020. this century will have I billion by 2010. Without a To meet these targets, Africa must not only decline in fertility the population will double in 21 dramatically raise the levels of domestic saving years. This will place an unmanageable burden on and investment, but also greatly improve produc- social services and, in several parts of Africa (such tivity-by as much as I to 2 percent annually for as Burundi, Kenya, southern Malawi, Rwanda, labor and about 3 percent for land. This requires and the Sahel), will put pressure on the land that an enabling environment of infrastructure services can be relieved only by large-scale migration. This and incentives to foster efficient production and would cause mounting social and political ten- private initiative. It also requires enhanced capaci- sions. It also implies continued rapid urbaniza- ties of people and institutions alike, from the vil- tion; by 2020 there will be some 30 cities with more lage to the upper echelons of government and than 1 million inhabitants. Depending on eco- industry. These themes recur throughout the fol- nomic performance, these cities could be a force lowing chapters. for growth and modernization or a wretched de- For these targets to be achieved over the long stabilizing element, with their inhabitants rebel- term, the growth strategy must be both sustain- ling against squalid conditions in sprawling able and equitable-sustainable because sound slums. environmental policies can protect the productive The degradation of Africa's environment has capacity of Africa's natural resources and equita- domestic and international dimensions. Unless ble because long-term political stability is impos- halted, it threatens Africa's productive base. But sible without this. Equitable means, in particular, deforestation in Africa is also of concern to the rest that measures are taken to reduce poverty, espe- of the world because it threatens the loss of cially by improving the access of the poor to pro- Africa's rich biological diversity-an irreplace- ductive assets. able gene bank of immense potential benefit. It The long-term strategy proposed here envis- also contributes to global warming. ages a move away from earlier practices. It aims The challenge now is for Africa to reverse its to release the energies of ordinary people by en- present decline. The potential is there-in its vast, abling them to take charge of their lives. Profits poorly exploited resources of land, water, miner- would be seen as the mark of an efficient business. als, oil, and gas; in its underutilized people; in its Agricultural extension services would be seen as 4 responding to farmers, not commanding them. and regular maintenance, will require an annual Foreign investors would be welcomed as partners, expenditure of 5 to 7 percent of GDP, accompa- not discouraged. The state would no longer be an nied by measures to increase user fees, foster the entrepreneur, but a promoter of private produc- domestic construction industries, and reform ers. And the informal sector would be valued as a public procurement, the administration of con- seedbed for entrepreneurs, not a hotbed of racke- tracts, and transport planning. The consequences teers. of poor planning and the cost of neglect, ineffi- ciencies, and obsolescence are borne by a broad, Enablingenvironment but diffused, constituency. Systematic consulta- tion with organized interest groups, such as cham- Farmers and firms will be efficient only if the bers of commerce and industry, can strengthen incentives they face encourage them to be. The accountability and responsiveness. There is ample enabling environment that promotes production evidence that businesses willingly pay the full cost and efficiency has two parts: incentives and the of reliable services; without them, they fail. physical infrastructure. Both are crucial. Africa needs efficient cities to accommodate Experience worldwide convincingly demon- competitive businesses. Services can be largely strates that the countries with the highest growth self-financing. So can the upgrading of shelter, rates have kept their exchange rates competitive, which at the same time would generate a great avoided excessively protecting their manufactur- deal of employment. Pollution from waste dis- ing industry and underpricing their agricultural posal can be avoided by low-cost, on-site solu- products, kept real interest rates positive and real tions. wages in line with productivity, priced utilities to recover costs, and avoided high and accelerating Building capacity inflation by following disciplined fiscal and mon- etary policies. Structural adjustment programs Africa needs not just less government but better have reflected these themes, but as yet the policies government-government that concentrates its have been only partially implemented. They are efforts less on direct interventions and more on critical for Africa's recovery. enabling others to be productive. Every level of Exchange rate policy is perhaps the most con- government should take measures to improve the troversial issue. Overvalued exchange rates en- performance of public administrations and courage imports and discriminate against local parastatal enterprises. Institution building is a producers. A competitive exchange rate is essen- long-term endeavor that requires a clear vision tial to boost domestic production and employ- and a specific agenda. Several countries have al- ment. The key is to keep farm prices remunerative ready embarked on major reforms of central gov- and industrial wage costs internationally compet- ernment, for example, Central African Republic, itive. But for exchange rate adjustments to be suc- Ghana, and Guinea. They aim to create a leaner, cessfully managed, there must be tight financial better disciplined, better trained, and more moti- discipline and no artificially supported wage vated public service, with competitive salaries for rates. highly qualified officials. Special attention needs Neglected infrastructure-poorly maintained to be given to strengthening the policy analysis roads, inefficient ports, unreliable utilities, and the and economic management capabilities of gov- like-greatly increase the cost of doing business. ernments. Public enterprises need to be given Most African countries face this problem, but for clear mandates, managerial autonomy, and some the situation is chronic. To tackle this issue, monitorable performance indicators. Local gov- governments should give priority to rehabilitat- ernments also could play a greater role if allowed ing infrastructure over investing in new facilities. more autonomy and regular, independent sources Costs could be reduced by using small local con- of revenue, especially in managing the expanding tractors and revenues increased by raising urban networks that link the towns to their hinter- charges, especially for utilities. Determined re- lands. In rural areas local services, such as water forms in parastatal management could yield sig- supply, could be better run at the communal level. nificant improvements quickly. This too requires genuine delegation of responsi- Tackling the backlog of deferred maintenance bilities. and rehabilitation will extend well into the next Building private sector capacity should extend decade. This, together with the need for expansion beyond helping community associations. Local nongovernmental associations can be drawn into Africa's situation is unique. Never in human the development effort as intermediaries to pro- history has population grown so fast. If current mote grassroots activities. Credit unions and in- trends continue, Sub-Saharan Africa will have formal savings and loan associations (such as nearly 500 million inhabitants by 1990 and more tontines) could retail credit to farmers and than 1 billion by 2010. Africa will find it increas- microenterprises. Local consultants and profes- ingly difficult to feed itself, educate its children, or sional associations could also be mobilized. All find jobs for new entrants to its labor force. The this requires a deliberate, carefully orchestrated absolute numbers are not so worrying in them- effort by a country's leadership to build local ca- selves-there are still vast underpopulated re- pacities. gions. But the high rate of growth means that Ultimately, better governance requires political Africa's economies and social services must sprint renewal. This means a concerted attack on corrup- ahead for living standards even to stand still. tion from the highest to the lowest levels. This can Family planning is the cornerstone for im- be done by setting a good example, by strength- proved health care. Africa has some of the highest ening accountability, by encouraging public de- rates of maternal and infant mortality in the bate, and by nurturing a free press. It also means world. In the poorest countries-Burkina Faso, empowering women and the poor by fostering Ethiopia, and Mali-about one-quarter of all chil- grassroots and nongovernmental organizations dren die before the age of five. There is strong (NGOs), such as farmers' associations, coopera- evidence from Botswana and Zimbabwe that, tives, and women's groups. when family planning services are made widely available and especially when they are backed by Investing in people mass media campaigns and community-based ed- ucation programs, contraceptive use is high. The However well developed, institutions are only preference for large families has remained higher as effective as the people who work in them. Ed- in Africa than elsewhere, even when mortality is ucation and health were priorities in the strategies falling. Families remain to be persuaded that bet- developed after independence and must remain ter spacing and timing of births and fewer births so in the future. But better programs are essential. can reduce infant, child, and maternal mortality Previous attempts to achieve universal coverage and sickness. Most African governments now of- in basic health, education, and food security ficially support family planning, but there is an failed, partly because the efforts were swamped urgent need to match expressions of commitment by soaring population growth and partly because with adequate technical, financial, and manage- public expenditure was devoted to other priori- rial support. To reduce the population growth rate ties. But it is unthinkable that another generation from the present high 3.3 percent a year to an should go by without a determined effort to attain average of 2.75 percent a year for 1990-2020, the this goal. By adjusting priorities and by cutting total fertility rate will need to fall from 6.7 children and recovering costs, it can be done. Moreover it per woman to 3.4 by 2020. An annual budgetary can be done without setting aside the goal of better allocation for family planning programs of only quality. Improved science and technology train- 0.8 percent of GNP would establish effective fam- ing is a high priority. Costs can also be reduced ily planning programs in most countries. and efficiency increased by encouraging benefici- aries to participate in the design, delivery, and PRIMARY HEALTH CARE COMES FIRST. Major management of services. strides toward better health care are possible, even within the budgetary constraints facing African SLOWING POPULATION GROWTH. Raising the countries, if expenditures are redirected from GDP growth rate from the 2 percent of the recent high-cost curative medicine in modern hospitals past to 4 to 5 percent in the years to come would to preventive and community-based systems. -be a significant achievement. But incomes will Mass immunization campaigns are cheap and ef- improve little if population growth continues to fective against several major childhood killers. soar. Increasingly, African governments are com- And even very poor people willingly pay for ing to accept that population policy should be an health care if they demonstrably get value for their integral part of a sound strategy for human re- money. This above all means ensuring a reliable source development. supply of inexpensive drugs through better pro- 6 curement procedures and regular delivery to clin- produce low-cost teaching materials adapted to ics and health posts. local needs. The long-run goal remains to expand Two out of every three rural Africans are still enrollments-especially of girls, because female without safe water. Universal access to clean education has a particularly strong effect on fam- water, which is a prerequisite for better health, ily welfare. should be an integral part of the long-term strat- All this will require more money to be spent on egy. People themselves hold the key to achieving basic education. The first step, however, is to use this target. Where communities are involved in existing resources more efficiently. This could be designing, constructing, and installing water sup- done, for example, by moving to double shifts, plies and are made responsible for their mainte- increasing teaching loads, and strengthening nance, water projects tend to be more efficient, management of the school system. There is scope cost-effective, and hence sustainable. Once again to enlarge the education budget by charging fees, much of the cost could be recovered through user especially at the university level, and by redirect- charges. ing some of the savings to basic education. Total expenditure on education can also be increased by ATTACKING HUNGER. More and more Africans encouraging private education and community are going hungry. Severe food shortages were contributions for school buildings, equipment, exceptional in 1960; now they are widespread. It and housing for teachers. is estimated that about one-quarter of Sub- Radical changes are called for in postsecondary Saharan Africa's population-more than 100 mil- education if Africa is to equip its labor force with lion people-faces chronic food insecurity. In the the skills needed to survive in the new technolog- first instance, this is a supply problem. Expanding ical age. Resources should be shifted especially to food production is essential-the target is 4 per- science, engineering, accountancy, and other tech- cent growth a year-although that will be ade- nical fields. Education subsidies should be re- quate only if food trade within Africa is also duced, and a better balance achieved between liberalized. This rate of growth would be enough salary and nonsalary costs. Vocational training to feed the growing population (2.75 percent a should be better attuned to employers' needs, em- year), improve nutrition (1 percent a year), and ployer participation in course design should be progressively eliminate food imports (0.25 per- increased, and stronger links should be forged cent a year) between 1990 and 2020. An improved between the work place and training institutes. supply is not enough; the purchasing power of nonfarm families will also have to be sufficient. BETTER MANAGED SOCIAL PROGRAMS. Placing With the rising level of employment proposed in management responsibility for basic social ser- the target scenario, the number of low-income vices in local hands makes the programs more households unable to afford an adequate diet responsive to users, who in turn become more would gradually decrease. But recurrent droughts willing to contribute to their cost. The watch- will continue to cause famine for a residual core words for the future are delegation, community of the poorest. For this vulnerable group, sharply participation, and cost recovery. In this approach targeted food subsidies or food-for-work pro- the central agency provides technical support grams will be needed, supplemented by direct through a training and visit system. NGOs can act feeding programs for malnourished women and as valuable and cost-effective intermediaries be- children. tween the central agencies and community groups. A BETTER EDUCATED POPULATION. School enroll- Women and women's groups can make a major ments have been vastly expanded during the past contribution to improving delivery of social ser- three decades, but too often at the expense of vices. In Africa women are generally lead manag- quality. Improving quality is now the top priority. ers within the household; they are responsible for More must be spent on books and other materials. feeding the family; for providing water, educa- Raising annual expenditure on books at the pri- tion, and health; and for family planning. They are mary level from $0.60 per pupil to about $5 would also active in production of food crops and in cost less than 5 percent of the amount donors trade. Their role should be more explicitly recog- spend each year in Sub-Saharan Africa on techni- nized in design and implementation of human cal assistance. Countries also need the capacity to resource development programs. 7 SUSTAINABLE FINANCING. Even with the most and seek out specialty markets-in off-season strenuous efforts to put them to the best possible fruits, flowers, and vegetables, for instance. use, existing resources will not be enough. The Greater regional integration would particularly proposed strategy calls for doubling public expen- help expand trade within Africa in agricultural diture on human resource development-from products, especially food. around 4 to 5 percent of GDP to 8 to 10 percent- Despite the enormous range of ecological zones between now and 2000. This expansion can hap- across the continent, there is surprising common- pen only if donors are willing to share the cost and, ality in the kinds of policies needed to stimulate at the same time, if a greater effort is made to growth in Africa's agricultural sector. To achieve recover costs by charging fees, especially for the growth target, all African countries will need postprimary education. to create an enabling environment, harness new technologies, build capacities, and safeguard nat- Raising agricultural production ural resources. * An enabling environment for agriculture In contrast to the past, the future strategy sees means allowing prices to move flexibly in re- agriculture as the primary foundation for growth. sponse to changing market conditions; turning This is where Africa has an immediate compara- over input supply, marketing, processing, and ex- tive advantage. Agriculture accounts for 33 per- porting largely to the private sector and reducing cent of Africa's GDP, 66 percent of its labor force, administrative controls; promoting credit at com- and 40 percent of its exports. Moreover the links mercially attractive interest rates through private between agricultural and industrial growth are homegrown financial institutions such as cooper- strong. Farmers need the urban market, and urban atives and credit unions (as already exist in Cam- producers thrive in large part by selling to the eroon and Rwanda); gradually reforming systems rural population. Even taking full account of the of land tenure to enable titles to be registered (and environmental constraints, the scope for expand- in the interim codifying customary land rights), ing agricultural production is great, although it thereby increasing security and encouraging in- varies from country to country. The target is to vestment in land improvements; and upgrading raise output growth from the 2 percent achieved rural roads using small local contractors and local since 1960 to 4 percent-the level that will be community contributions. needed to achieve food security and to raise per * Harnessing technologies requires a new em- capita incomes, initially by a modest 1 percent a phasis on agricultural research. This in turn calls year, and eventually by 2 percent. This in turn will for rehabilitating national research institutions, require an annual increase in labor productivity of expanding the role for the international research about 1.5 percent. Since the area under cultivation centers, and establishing multicountry research could not be expanded by more than 1 percent a networks to pool research efforts on specific top- year without adverse environmental conse- ics. The core of the strategy must be a determina- quences (the average rate of the past two decades tion to improve research management and to link was 0.7 percent a year), the productivity of culti- research to the farmer by putting in place better vated land must rise by around 3 percent a year. management systems for agricultural extension, A 4 percent growth rate is ambitious, but not which will be more responsive than in the past to impossible. Cameroon, C6te d'Ivoire, Kenya, farmers' needs and more efficient than the present Malawi, and Rwanda have all achieved that or situation in most African countries where donor- more for extended periods. Other countries have financed projects have created many extension greater land potential, such as Ethiopia, Sudan, services in the same country. Zaire, and Zambia, to name the largest. At the * Building capacities is a need that runs same time a few-especially those in the Sahel- through all levels to produce better trained re- are unlikely ever to reach this target. searchers, extension agents, and farmers and to The overseas markets on which African agricul- strengthen rural institutions (such as farmers' as- ture depends will remain highly competitive. sociations, cooperatives, and women's groups) es- Long-term price trends cannot be expected to im- pecially by training managers. prove much. Only in rare cases-notably cocoa- * Measures to protect the environment are will rising African production be likely to lower needed to reduce soil erosion, deforestation, and world prices significantly. Nevertheless African desertification. Trees are being cut down 30 times countries will need to diversify their production as fast as they are being replaced. Possibly as 8 many as 80 million Africans have difficulty find- tuting market prices for direct controls. Success so ing fuelwood. In Ethiopia topsoil losses of 290 tons far has been limited. Indeed output has continued per hectare have been reported. Simple measures to decline. This is partly a necessary adjustment- can have a large impact. In Burkina Faso lines of a weeding out of misconceived production oper- stones successfully reduce run-off and collect top- ations that have no chance of becoming viable. But soil, communal tree planting in Ethiopia has for industrial production to respond positively to slowed deforestation, and Kenyan farmers have the reforms, there must again be an enabling en- terraced hundreds of thousands of smallholdings. vironment, together with measures to generate These efforts need to be multiplied across the market demand and build industrial capabilities. continent. The most pressing need is to plant more trees. AN ENABLING INDUSTRIAL ENVIRONMENT. Be- Although these ideas are not new, they are not cause of their high operating costs, African coun- yet widely applied. Controlled prices and restric- tries will have to be all the more determined in tive marketing, disorganized research, and weak using exchange rate policy, undertaking in- extension services, poor rural roads and few effec- frastructural investments, forging international tive farmers' associations, insecure land tenure partnerships, and providing incentives to raise and poor environmental practices are still the rule productivity if they wish to be competitive. Be- rather than the exception. Only by concerted ac- sides lowering the direct costs of business by in- tion will it be possible to achieve and sustain the vesting in infrastructure, governments need to agricultural growth targets on which Africa's fu- lower the administrative costs and financial risks ture development hinges. of private investment. This means moving from a controlling approach to a facilitating one, from A new start to industrialization protecting existing business to promoting compe- tition. The aim must be to reward efficiency and Since independence Africa's labor force has ac- innovation. Regulations and controls should be quired technical skills and industrial experience- removed unless there are compelling reasons to as workers, managers, and entrepreneurs. retain them. Indigenous businesses range from self-employed Although the public enterprise sector has ex- metalworkers making cookstoves from scrap panded industrial capacity in many countries, it is metal in Kenya to a firm making paper from sug- hobbled by poor management, political interfer- arcane waste in Ghana. African countries today ence, and weak financing. The private sector holds export not only processed raw materials but also the key to future industrial growth, but private manufactures, such as garments from Madagas- entrepreneurs have often found more enticing op- car, electronics from Mauritius, and car radiators portunities outside industry (especially in taking from Tanzania. The challenge is to build on this advantage of the scarcity rents created by con- base and achieve the industrial transformation trols). To attract investors, a stable economic and envisioned by African leaders in the 1980 Lagos political environment is essential. Governments Plan of Action. need to support private investors both in words Preparation for a Second Industrial Develop- and in deeds-and in particular by establishing a ment Decade for Africa, first formulated by the well-functioning judicial system that can be relied ECA and the UN Industrial Development Organi- on to protect property and to enforce contracts. zation (UNIDO) in 1981, has stimulated system- atic reevaluation of industrial policies and ExPANDING MARKETS. Industry should be devel- strategies. While deteriorating economic condi- oped in response to market opportunities. Thus tions impeded implementation of ambitious in- sustained industrial growth will depend in part dustrial investment proposals, it has become on a broadly based expansion of domestic de- increasingly evident that the earlier industrializa- mand for local manufactures. The key will be to tion efforts focused on state-led creation of capac- take advantage of demand and supply linkages ity without adequate regard to cost or markets. between agriculture and industry and to aim for The result was highly inefficient industrialization, complementary growth in both. Higher agricul- heavily subsidized by consumers and taxpayers. tural incomes raise the demand for consumer In recent years the emphasis has been on restruc- goods and farm inputs in the rural areas and turing that capacity (including divestiture of generate increased surpluses for processing, large, unviable public enterprises) and on substi- while the availability of appropriate, low-cost 9 manufactures stimulates farmers to invest in share of jobs and output. Estimates indicate that order to raise income and also provides them with these enterprises currently provide more than half the means to raise productivity. of Africa's urban employment and as much as The small market in most African countries has one-fifth of GDP in many countries. two strategic implications. Small-scale producers Unregulated and unrecorded, the informal sec- can play a special role in meeting localized de- tor is home to small firms in agriculture, industry, mand and providing competition; but rapid in- trade, transport, finance, and social services. It is dustrial growth will depend on penetrating not static and not necessarily traditional in its external markets. African leaders have correctly techniques, but it undertakes innovations and ad- placed priority on enlarging markets through re- aptations indicated by market forces. In the infor- gional integration. In practice, however, progress mal sector enterprises find a business has been far too slow. Greater access to neighbor- environment that is competitive, free from unjus- ing markets would be a stepping stone to markets tified regulatory constraints, and well-adapted to beyond Africa. Competition in regional markets local resource endowments and demand. These would stimulate efficiency and help prepare Afri- enterprises are also supported by a system of can producers to compete globally. grassroots institutions: on-the-job apprentice- ships that provide training and small associations BUILDING INDUSTRIAL CAPABILITIES. Industrial- that can represent group interests and improve ization in Africa has so far engendered too little access to credit and other resources. indigenous technological development to be self- But the capacity of Africa's small and starting and too few labor and management skills microenterprises as a seedbed for entrepreneur- to generate steadily rising productivity. The core ship and jobs remains limited by restrictive busi- of a future strategy to transform African industry ness environments and inadequate links with from infancy to maturity is a deliberate plan to formal markets. Governments can help these en- acquire the necessary entrepreneurial, manage- terprises to grow in several ways. rial, and technical skills. Incentives should focus * Improving the business environment. Regu- on in-firm training and adapting technology to lar consultations with private sector associations local conditions. Industry associations should be can increase confidence in the stability of reforms. encouraged to set up advanced training courses. Specific actions include regularizing the legal sta- Postprimary education should aim to furnish the tus of enterprises in the informal sector, eliminat- work force with technical and commercial skills. ing unnecessary taxes that stifle initiative, The business of manufacturing is learned removing excessive regulatory constraints, pro- mostly on the job. In Africa's case this should tecting property and contract rights, and ensuring mean in partnership with foreign investors, who fair settlement of disputes. have the skills as well as the capital. The transfer * Expanding access to credit. Banks should be of capabilities, however, is not automatic. It can be allowed to charge market-based interest rates that helped along by building links between indus- reflect the costs of small-scale lending. For the tries-through subcontracting, for example-and smallest enterprises, informal groups can provide by promoting local consultants. mutual guarantees that mobilize resources and use social pressures to ensure repayment. Fostering African entrepreneurship * Encouraging self-sustaining services. Trade and professional associations, NGOs, and grass- In the coming decades Africa's entrepreneurs roots organizations are often better at delivering face a monumental challenge-to find productive extension services and technical assistance than employment for a labor force that will surpass 600 government agencies. Policies that support sub- million workers by 2020-about three times the contracting links between firms and encourage present number. These jobs are more likely to be local consulting firms can improve access to tech- created in a myriad of small and microenterprises nology and inputs. than in a few large firms. Fortunately there is no * Stimulating local markets. Government pur- shortage of entrepreneurship in Africa. During chase of goods and public services, such as refuse the recent years of economic crisis, small firms in collection, transport, vehicle repair, and road the informal sector have provided a growing maintenance, can all be contracted out to small 10 firms. Improved infrastructure linkages and tar- mining companies using hired expertise, with the geted assistance programs can also help accelerate country itself bearing all the risk-has performed entrepreneurial responses to market incentives. poorly in the past and is better avoided in the future. All this applies equally well to oil and gas Unlocking Africa's mineral wealth production. Africa is well endowed with minerals (includ- Energyforgrowth ing oil), and so far only a fraction of this wealth has been extracted. But these riches are a mixed The demand for energy grows roughly in step blessing. Large revenues received by govern- with GDP-possibly a little faster in the lower-in- ments in the past have too often disrupted rather come countries. Without assured energy supplies, than promoted real development. The income has African economies will not grow. To achieve the been spent unwisely, compounded by heavy bor- needed 5 percent expansion in energy production, rowing secured on future revenues, which led to Africa will have to invest some $28 billion during an excessive debt burden. Massive distortions the next 10 years, equivalent to about 2 percent of have entered the pricing system and have ob- GDP annually. structed agricultural and industrial growth. The Africa has abundant energy resources, al- development of mines and oil wells will make its though these are unevenly distributed. Proven oil proper contribution to Africa's long-term growth reserves alone are equivalent to 120 years of cur- only if governments exercise tight financial disci- rent consumption. Less than 4 percent of Africa's pline, rigorously appraise new investment, and hydroenergy potential has been developed. prevent exchange rates from becoming overval- Known reserves of gas are equivalent to 20 times ued. current installed hydropower capacity; exploit- Very little mineral exploration has been under- able coal reserves amount to 135 billion tons. taken in Africa in recent years because transna- To meet Africa's energy needs, formidable tech- tional mining companies (the most important nical, financial, and environmental problems potential source of investment in mining develop- must be overcome. Careful planning will be ment) have found Sub-Saharan Africa the least needed to establish the least-cost mix of energy attractive place to operate. Unfortunately, for their sources. Opportunities exist to reduce overall part the foreign companies that do invest have costs through intercountry cooperation, using often contributed to the malaise by withholding Africa's oil reserves to earn more foreign exchange information and by failing to train local staff or to and making full use of natural gas, which causes build links with the local economy. Managing this less pollution and is difficult to transport to over- relation successfully-to the benefit of both par- seas markets. Large savings are possible simply ties-is another challenge for the future. from better management of power utilities and During the past two decades, African produc- more efficient energy use. tion of 10 major minerals has declined by an aver- Household energy poses a special problem. age of 2 percent annually, whereas that in Latin Four-fifths of Africans depend on woodfuels- America and Asia has grown. But with more fa- but well over 50 million people face acute short- vorable policies this trend could easily be re- ages, and the number is growing rapidly. versed. A feasible target would be to expand Measures to promote tree planting and to encour- output by 5 percent a year over the long term, age the use of more efficient stoves or alternatives, although it will take time to build up to that level. such as bottled gas and kerosene, are urgently It will require an annual investment (largely pri- needed. Charging fees for fuelwood and charcoal vate) of around $1 billion in exploration and de- would help, but means would have to be found to velopment, about five times present spending. As assist the poorest families. Measures to overcome before this will be possible only within an en- the household energy crisis should be an integral abling environment of competitive exchange part of each country's environmental action plan. rates; guaranteed repatriation of profits; stable, transparent, and equitable fiscal management; Closer ties among African states and an attractive mining code that clarifies recip- rocal obligations. In short governments need to African leaders have long recognized the need build a new, more balanced partnership with for- for closer regional ties. Most African economies eign investors. The alternative approach-state are too small to achieve economies of scale or specialization without trade, and their firms too greater regional cooperation across a broad range new and inexperienced to compete with estab- of issues, such as education, research, and water- lished overseas exporters without some protec- shed management. Consistent with the priority tion. But progress toward economic integration proposed for capacity building and technology has been disappointing. Official intraregional training, particular attention should be given to trade has hardly grown in 20 years. Nonetheless creating regional centers of excellence. the case for larger integrated markets is confirmed by thriving unofficial trade. Sustainable funding for development Only one trade group-the francophone West African Economic Community (CEAO)-has REORIENTING DEVELOPING EXPENDITURE. For scored some success. Thanks to lower nontariff output to grow at the target of 5 percent a year, barriers, a common convertible currency, a satis- Sub-Saharan Africa will need to raise investment factory compensation mechanism, and labor mo- from the present 15 percent of GDP to 25 percent. bility, trade among the members has grown to Total expenditure on human resource develop- around 10 percent of their total trade. That con- ment should be steadily expanded until it reaches trasts strikingly with the 3 percent for the larger 8 to 10 percent of GDP annually, about double Economic Community of West African States present spending (with donors meeting about half (ECOWAS). the total). Infrastructure spending should rise to If the goal of greater regional integration is to be around 6 percent of GDP. This would cover capi- realized, bolder efforts will be needed to create an tal and recurrent expenditure and ensure ade- enabling environment. First, there must be much quate resources for maintenance and running greater harmonization of macroeconomic poli- costs. In contrast to the past, the bulk of invest- cies, particularly exchange rate policy, which can ment in the productive sectors (estimated at 4 be part of a phased program of trade liberalization percent of GDP for agriculture and 3 percent for favoring African products over those from industry) would come from private investors. Rig- abroad. A top-down dirigiste approach-govern- orous appraisal of all public investment is essen- ments deciding which enterprises will go where- tial to raise the efficiency of investment. will work at the regional level no better than at the national level. Rather, integration must follow HIGHER PUBLIC SAVINGS. A significant effort is market signals. Second, experience suggests that needed to generate public savings by both raising the approach most likely to succeed will be prag- revenues and controlling expenditures and to do matic and incremental, allowing two or more so in a way that is consistent with the priorities of countries to move forward wherever opportuni- the future development strategy. Thus, progres- ties arise. For instance two countries with noncon- sively and as far as feasible, taxes on trade-that vertible currencies could agree to allow market is, on producers (and especially exporters)- clearing of their payments imbalances through the should be replaced by taxes on consumers. For open market operations of commercial financial example, higher tariffs could be charged for utility institutions. This would be consistent with the services and fees collected for certain social ser- Lagos Plan concept of phased integration. Third, vices. Revenue measures should be matched by needless obstacles to movements of capital, labor, much stricter financial discipline to limit waste, to and goods should be removed. Simpler adminis- ensure that spending reflects development prior- trative procedures, uniform national standards, ities, and to achieve a better balance between ex- and better commcnications would make a big penditure on wages and materials. The goal difference. (At present up to 70 separate steps may would be to lower the public wage bill, which be necessary to take goods across a border legally.) currently absorbs as much as 60 percent of reve- Infrastructure investments should still be made nues in some countries, and to raise expenditures only in response to established demand. Fourth, on materials needed for the staff to work effi- through chambers of commerce the private sector ciently and for maintenance. Savings could also can do more to disseminate market information. come from lower subsidies to the parastatals and The proliferation of regional institutions, cre- from reduced military expenditures. ated ad hoc over the years, has made coordination and financing difficult. Rationalizing these insti- MOBILIZING PRIVATE SAVINGS. Africa's tradi- tutions should be high on the agenda. This would tions of sharing and community-based develop- promote not only economic integration, but also ment provide an avenue for mobilizing private 12 savings. Contributions might be in cash or labor foreign savings would decline, and drop to 5 per- and be applied to a wide range of local community cent of GDP by 2020. projects, such as primary schools, health clinics, While average per capita income will grow by and the supply of drinking water. Strongly sup- less than 1 percent during the 1990s and overall ported by government, these grassroots initiatives per capita consumption will stagnate, the impact could make an important contribution. across income groups will vary. The top 5 percent There is also considerable potential for mobiliz- of income earners, who belong to the modern ing additional household savings through the for- sector, will contribute most to increased public mal and informal financial systems. In many savings, and consequently their consumption will African countries the formal financial system has be compressed, while the rest of the population- deteriorated in recent years. Reforms are urgently those working in the rural areas and in small and needed. These should aim to bring about market- microenterprises- will enjoy a rising level of con- determined interest rates and credit allocation, sumption of about 2 percent a year. stronger bank supervision, and adequate pruden- The proposed scenario for sustained growth is tial ratios and debt collection. The broad objective fragile. It is built on the assumption that targets for is to deepen and diversify financial intermedia- the key parameters (levels of investment, savings, tion. There is further scope, too, for encouraging incremental capital-output ratios, and the like) informal savings and credit institutions, which will be achieved. These targets are all ambitious. can extend financial services to farmers and to Some countries will not meet them. Some should informal sector enterprises, especially in remote do better. To the extent they fail, the outlook will areas. More attractive investment opportunities be that much bleaker. for the informal sector will, by themselves, pro- mote savings by those seeking to expand their Development assistance in the 1990s household enterprises-for example, by buying plows, oxen, or fishing nets. The momentum of the growth of aid during the past few years will have to be maintained during THE EXTERNAL RESOURCE BALANCE. If Africa's the 1990s if the reforming African countries are to economies are to grow, they must earn foreign persist with their difficult adjustment programs exchange to pay for essential imports. Thus it is and if the countries that have not yet embarked on vital that they increase their share of world mar- reform are ever to do so. Adding to the demands, kets. The prospects for significant increases in there may be some new entrants (currently classi- world prices for most primary commodities are fied as middle-income) to the list of IDA-eligible poor, so higher export earnings must come from countries. Moreover special efforts will be needed increased output, diversification into new com- in the I990s to reverse Africa's backsliding in areas modities, and an aggressive export drive into the such as food security, human resource develop- rapidly growing Asian markets. In the proposed ment, and infrastructure and to fund new initia- growth scenario the ratio of exports to GDP is tives in family planning and environmental targeted to rise from 19 percent in 1986--87, to protection. about 24 percent by 2000, and to 28 percent by The external resource requirements of Sub- 2020. To make up for the compression that has Saharan Africa could be met if the donor commu- occurred during the past decade, imports in the nity: early 1990s would need to grow significantly * Increased gross official development assis- faster than overall GDP-to about 33 percent of tance (ODA) during the 1990s at about 4 percent a GDP in 2000-and thereafter they would grow in year in real terms (which is below the rate step with GDP. achieved during the 1980s) Several assumptions underlie the overall re- * Put in place concessional debt relief mecha- source balance: an initial target GDP growth of 4 nisms (preferably debt reduction) so that debt percent a year, rising later to 5 percent; total in- service payments are at most no greater than in vestment of 25 percent of GDP throughout the recent years (that is, no more than $9 billion for all period; and domestic savings of 18 percent of GDP Sub-Saharan Africa). To this end, the middle-in- by 2000, increasing to 22 percent by 2020. The net come countries should be considered eligible for transfers (including all forms of financing) re- concessional debt relief measures. quired to close the gap are estimated to be 9 per- The above assumptions lead to a gross ODA cent of GDP by 2000. Thereafter the need for requirement of $22 billion a year (at 1990 prices) 13 by 2000. These estimates imply that if the critical If a new and more equal partnership is to make minimum needs for reversing Africa's decline are aid more effective, then the design and monitor- to be met, ODA needs to grow at 4 percent a year ing of macropolicy and the related aid program in real terms. The combination of low and declin- should be placed on parallel tracks. The dialogue ing per capita incomes create special difficulties would be as intense and disciplined as under for Africa that require special assistance efforts. structural adjustment lending. But it should be Furthermore,duringthisperiodtheremaybespe- clear that the reform program is the cial new ODA needs if more African countries are government's-expressed in its own policy pa- added to the list of IDA-eligible countries. If these pers and internalized through local seminars and efforts are not forthcoming, Africa's decline is workshops. Then donor support linked to specific likely to continue in the 1990s. If, however, the programs or project expenditures would reflect special programs of assistance started in the 1980s overall performance. Assistance should become can be continued for another decade, Africa far more selective among countries and be biased should be able to reverse its decline and level off, strongly in favor of sound and sustained reform and eventually reduce, aid. programs. Reflecting the priority accorded to capacity AID COMPOSITION. In line with the strategy pro- building, technical assistance will remain a crucial posed in this report, ODA should be increasingly component of donor support. But with about $7 focused on four priorities: per capita being spent annually, donors and recip- * Supporting public expenditures on physical ients are clearly not getting value for their money. infrastructure and human resource development. Most technical assistance is uncoordinated, im- As far as possible external financing should fund provised, poorly managed, and rarely fitted into "time slices" of sector and subsector expenditure a comprehensive strategy for capacity building or programs, including recurrent outlays for opera- institutional development. A radical reappraisal tion and maintenance. must be undertaken on a country-by-country * Using structural adjustment financing more basis. Greater use should be made of consultants selectively, although it will remain an important from Africa and other developing countries and component of aid in the 1990s and beyond. Policy much more attention given to transferring skills. lending should be given increasingly in support The long-term target must be to reduce technical of measures already adopted, rather than with assistance sharply. The first step is to replace long- conditionality based on promises of future action. term experts with short-term consultants. * Assisting private sector initiative at all levels and using NGOs to channel more ODA, particu- A strategic agenda for the 1990s larly for grassroots development. * Fosteringregionalintegrationbysupporting This report sketches a menu of options and the rationalization of regional institutions and ideas to guide the formulation of long-term devel- helping to cover the transitional costs of trade opment strategies. Its conclusions are inevitably liberalization within Africa. couched in general terms; they do no more than With these priorities, the suggested composi- indicate the directions forward. Each country tion of ODA would be 25 percent each for social must develop the approach that suits its particular and physical infrastructure and 50 percent for the circumstances. Debate, even over these general productive sectors, technical assistance, and pro- propositions, will continue among Africans and gram assistance. between African countries and their external part- ners. But the aim must be to seek the highest MAKING AID EFFECTIVE. The financing gap is common ground for joint action. large and growing. The aid required can be justi- Already a consensus seems to be emerging on fied only if it is used effectively and only if it is some important points. As a result, a strategic clear that the need for aid will eventually decline. agenda for the 1990s can be suggested. Neither donors nor recipients can accept a strat- * Adjustment programs should continue to egy that envisages permanent dependency. There evolve. Programs must take fuller account of the must be a credible commitment to ensure that aid social impact of reforms (and increase budget ex- funds do not go, even indirectly, to finance mili- penditures on human resource development), and tary spending, luxury consumption, or capital investment needs to accelerate growth and mea- flight. sures that are required to assure sustainability. The goal is not simply to achieve macroeconomic nance in Africa improves. Leaders must become balance but over time to fundamentally transform more accountable to their peoples. Transactions Africa's production structures. must become more transparent, and funds must * The strategy should be people-centered. be seen to be properly administered, with audit Human resource development and meeting basic reports made public and procurement procedures needs are top priorities. overhauled. * Capacity building needs to be deliberately The challenge facing Africa is exceptional. The pursued through institutional reforms at every cost of failure would be appalling. Much depends level of government and by measures to foster on the relation between African governments and private sector and nongovernmental organiza- their foreign partners. New and closer forms of tions and to enable women to play their full role collaboration should be devised to ensure that in economic and social development. policy is continuously reviewed. To facilitate this * An enabling policy environment that fosters dialogue, a global coalition for Africa should be private investment should be put in place. Greater created. This would provide a forum in which efforts to provide efficient infrastructure services African leaders in the public sector, private busi- are crucial, as is support to the informal sector for ness, the professions, and the universities and generating income and employment. their key partners could agree on general strate- * To overcome the nexus of weak agricultural gies that would provide broad guidance for the production, rapid population growth, and envi- design of individual country programs and on ronmental degradation, agricultural research and specific action programs for greater African coop- extension services would have to be strengthened, eration. family planning services expanded, and environ- The coalition could give particular attention to mental action plans adopted. reaching the high ground of agreement on actions * Regional integration and coordination to tackle the priorities identified in the following should be pursued through a series of pragmatic, chapters: environmental protection, capacity incremental steps to facilitate trade across bor- building, population policy, food security, and ders, labor mobility, education, research, and nat- regional integration and cooperation. And it could ural resource management. A first step would be provide impetus for channeling aid to these prior- to rationalize regional institutions. ity programs. Such a coalition would be a concrete * Special programs of assistance to Africa demonstration of a shared new resolve to work should be continued throughout the decade. together pragmatically to build a better future for None of these measures will go far, nor will Africa. much external aid be forthcoming, unless gover- 15 A thirty-year perspective: Past and future Past patterns and trends control prices, restrict trade, and allocate credit and foreign exchange. At independence Africans had high hopes of Much was achieved. Starting from a low base, rapid development. New energies were released African countries have significantly raised life ex- by the ending of colonialism, and African leaders pectancy and expanded literacy and health care. were determined that their countries should catch There has been enormous growth in the number up with the developed world. "We must run while of trained people, and major investments have they walk" well summarizes the spirit in those been made in Africa's infrastructure: roads, ports, early days. No time was to be lost in overcoming telecommunications, and power. The region has "ignorance, poverty, and disease." Africans were seen important successes, as well as failures, and encouraged to be bold by the many who argued has accumulated valuable experience in manag- that Africa could find shortcuts to development. ing development. Countries born with arbitrary The donor community shared this optimism and colonial borders have struggled to establish na- contributed substantial resources. tion states and to put new governmental struc- The first generation of African leaders adopted tures in place. In some-notably Angola, economic strategies that echoed the ideas of prom- Mozambique, Somalia, and Sudan-the struggle inent economists of the day. Industrialization was continues and takes precedence over economic believed to be the engine of economic growth and and social development. South Africa has been a the key to transforming traditional economies- further source of conflict and destabilization partly because the prospects for commodity ex- throughout southern Africa. ports were thought to be poor and partly because Overall economic growth in Sub-Saharan Af- of a strong desire to reduce dependence on man- rica has averaged 3.4 percent a year since 1961, a ufactured imports. Agriculture was relegated to a fraction faster than the increase in population. By secondary role of supplying raw materials and 1987 this region of some 450 million people- providing tax revenues to finance other develop- more than double the number at independence- ment. To implement these strategies, African lead- had a total gross domestic product (GDP) (at ers believed that government had to play the market prices) of nearly $135 billion, about that of dominant role. That view reflected their mistrust Belgium, which has only 10 million inhabitants. of foreign business, the perceived shortages of Economic growth initially was moderate-al- domestic private capital and entrepreneurship, though slower than the average for other develop- and an underlying distrust of market mecha- ing countries. The pace quickened after 1967. nisms. As a result, and generally with full donor Record commodity prices and high investments support, governments drew up comprehensive financed from export earnings, commercial bor- five-year plans; invested in large, state-run core rowing, and aid helped raise the growth rate. But industries; and enacted pervasive regulations to then, as the 1970s advanced, countries began to 16 Figure 1.1 Gross national income per capita tightly controlled, while others operate largely on in Sub-Saharan Africa and other developing market principles. The climatic zones span the countries, 1967-87 whole spectrum from temperate, well-watered 1980 dollars highlands to arid deserts and from dry savannah 800 - to tropical rainforests. Countries vary from tiny to vast. Five alone account for more than half the 700 Developin ~ counties inhabitants of the region. The population of Nige- 600 - Sub-Saharan ria is more than 100 million, while nine countries -' > ~ -Nfri.c have less than 1 million. Population densities are 500 - S4b-Saharan very uneven, with more than 246 persons per 400 - Af ,frAca excluding Nigeria square kilometer around Lake Victoria to less than 400 - l in Mauritania. Fifteen countries are landlocked, 300 - Low-income - , and six are islands. Incomes per capita vary by a developing countries - => factor of 20. Some countries have considerable onn - - ~ ~- S outh Asia 200 - . mineral or oil wealth, while others have almost 1001 1987 none. 1967 1970 1975 1980 1985 1987 Despite this diversity there are surprising com- Source: World Bank data. monalities in the problems facing Sub-Saharan countries: high rates of population growth, low levels of investment and saving (except in a few of stumble. By the middle of the decade Africa's the mineral-rich economies), inefficient resource performance had fallen below that of other devel- use, weak institutional capacity and human re- oping countries. By the 1980s output was actually sources, and a general decline in income and liv- declining (see Figure 1.1). ing standards. It is therefore possible to draw out Throughout Africa much of the modern sector common themes that provide a framework for has been in malaise for nearly a decade. In con- discussing the problems of Sub-Saharan Africa as trast, the nonformal sector (broadly defined to a whole-themes that will then merit further ex- include indigenous, mainly unregistered, enter- ploration country by country to take account of prises in both urban and rural areas as well as local specific country circumstances, a task that can be intermediary, nongovernmental, and grassroots effectively tackled only by country specialists. organizations) has shown remarkable dynamism. This applies to a broad range of activities in agri- The deepening crisis culture, industry, trade, transportation, finance, social services, and even regional trade and inte- Sub-Saharan Africa has now witnessed almost gration. a decade of falling per capita incomes and accel- Behind the broad trends experience has varied erating ecological degradation. Per capita food greatly from country to country (see Figure 1.2). production first fell, then rose, but remains lower Average annual GDP growth during 1961-87 than in 1980. Africa has lost a substantial part of ranged from 8.3 percent (Botswana) to minus 2.2 its share in the world market for its exports. Some percent (Uganda). Oil accounts for much of the African countries have surrendered some of the variation, with oil exporters. doing well or badly gains they made earlier in human resource devel- according to fluctuations in the oil price. Exclud- opment-notably in school enrollments. Open ing the oil economies, aggregate annual growth urban unemployment is a growing problem in initially rose but generally declined in the late many countries. 1970s and 1980s. In the past decade six countries-Equatorial These variations in country experience reflect Guinea, Ghana, Liberia, Nigeria, Sao Tome and the rich diversity in Sub-Saharan Africa. Even Principe, and Zambia-have slipped from the within countries there are often large differences. middle-income to the low-income group (as clas- The region contains a multiplicity of ethnic sified in the World Development Report). If overval- groups, languages, and religions. Almost no coun- ued exchange rates were taken into account, more try is culturally or socially homogeneous. Govern- would have slipped. In the early 1960s Sub- ments vary from working democracies that Saharan African countries had per capita incomes encourage debate and dialogue to authoritarian similar to those in other developing countries. But regimes that trample dissent. Some economies are African incomes began to fall behind in the 1970s, 17 Figure 1.2 Diversity of economic performance and, if present trends continue, they will be on a in Sub-Saharan Africa par with those of the poorest countries of Asia by Per capita GDP growth rate, 1961-87 the turn of the century (see Figure 1.1 above). Thirteen African countries-accounting for a Benin - third of the region's population-are actually Botswana F poorer in per capita terms today than they were at Burkina Faso d independence. Burundi o Several countries stand out in contrast against Cameroon . this picture of general decline. Botswana, Camer- Central African Rep. - oon, Congo, Lesotho, Mauritius, Seychelles, and, Chad o to a lesser extent, Gabon and Kenya achieved CotendIvore significant per capita income growth between Ethiopia 1961 and 1987. But in recent years the oil produc- Gabon ers experienced dramatic declines when oil prices Gambia, The - collapsed. Ghana - Africa's generally poor performance during the Guinea - past 10 years has been reflected in weak growth in Kenya - the productive sectors, poor export performance, Lesotho - mounting debt, deteriorating social conditions, Liberia E environmental degradation, and the increasing Madagascar F decay of institutional capacity. Each of these Malawi trends, and the reasons for them, is discussed Mali below. Mauritania - Mauritius - Weak growth in the productive sectors Niger - Nigeria - During the past two decades the contribution of Rwanda - agriculture to production has declined to less than Senegal one-third of GDP; industry (including mining and Seychelles l oil production) grew much faster, at 6 percent a Sierra Leone - year, and rose to 28 percent of GDP (see Figure Somalia 1.3). But these broad trends do not reflect any Sudan - fundamental transformation in Africa's produc- Swaziland - tive structure, diversification of exports, or change Tanzania in trade patterns. For the region as a whole, new Togo oil extraction simply made up for lagging agricul- Uganda tural production. Manufacturing remained at Zaire about 10 percent of GDP and contributed less than Zambia one-tenth to exports. Zimbabwe 2 During the 1960s agricultural production grew Sub-Saharan Africa - at 2.7 percent a year, about the same as population. Middle income - Thereafter agricultural growth slowed consider- Low income - ably, averaging only 1.4 percent from 1970 to Large countries 1985-half the rate of population growth. This Small countries - decline was due to many factors, including severe Oil exporters - Non-oil min. exporters - Drought prone - -3 -2 -I 0 1 2 3 4 5 6 7 8 9 Note: Large countries are Ethiopia, Kenya, Nigeria, Sudan, Tanzania, percent and Uganda. Small countries are Gabon, The Gambia, Mauritius, Sey- chelles, and Swaziland. Non-oil mineral exporters are Liberia, Maurita- nia, Togo, Zaire, Zambia, and Zimbabwe. Drought-prone countries are Burkina Faso, Chad, Ethiopia, Mali, Mauritania, Niger, Senegal, Soma- lia, and Sudan. Source: World Bank data. Figure 1.3 Structure of GDP in Sub-Saharan Africa (percentage of GDP) Agriculture Agriculture Manufacturing T 43% - Manufacturing \ 9% Other industry \- Other industry X 10% ..7%. Services 39% Services 40% 1965 1987 $73.5 billion (in 1987 dollars) $134.5 billion (at current prices) Note: Other industry includes mininig and petroleum. Source: World Bank data. droughts in 1972-73 and 1983-84. But it also re- Poor export performance flects the low priority accorded to farming by Africa's postindependence development strate- During the 1960s the volume of exports from gies. Policies kept farm prices low; encouraged African countries grew on average by 6 percent a labor and capital to flow into cities; promoted year. Almost all countries shared in this growth. cheap imports of foods such as wheat and rice, Since 1973, however, export volumes have re- which are preferred by urban consumers; and mained stagnant or declined significantly in most neglected agricultural research. of the countries. For Sub-Saharan Africa as a With population growing faster than food pro- whole, including oil exporters, the total volume of duction, higher commercial food imports and exports has declined, on average, by about 0.7 food aid have been necessary, although not suffi- percent a year (see Figure 1.4). cient. But lack of purchasing power and other During the 1960s agricultural exports (which distributional factors have meant that hunger has now account for one-fifth of agricultural produc- nonetheless become more widespread (see Chap- tion) grew at nearly 2 percent a year. But since then ter 3). they have declined sharply-by more than 3 per- Some of the other productive sectors did better, cent a year (see Figure 1.5). As a result Africa's but not by much. Although in the 1960s manufac- share of world exports for most of its major crop turing grew by more than 8 percent a year, this exports fell during the 1970s and early 1980s. For initial spurt did not last; the average growth rate example, between 1970 and 1984 Africa's world for 1965-87 was about the same as total GDP. The market share for three main agricultural exports- volume of mineral production, as measured by coffee, cocoa, and cotton-shrank by 13, 33, and exports, grew only 1.7 percent a year, no faster 29 percent, respectively. Of the six major agricul- than agricultural output, because of inadequate tural exports, market share rose only for tea. exploration and excessive taxation, which pre- The share of African exports in all world trade vented maintenance and modernization. Only pe- fell from 2.4 percent in 1970 to 1.7 percent in 1985 troleum output expanded substantially during (see Figure 1.6). Its share of non-oil primary com- the period, although output (again measured by modities declined even more dramatically, from 7 exports) has fallen by more than a third since its percent to well below 4 percent. The implications peak around 1980. Rising petroleum production are substantial: if Sub-Saharan countries had accounts for the 5 percent annual growth of indus- maintained their 1970 market share of non-oil pri- trial GDP during 1965-87. mary exports from developing countries and prices had remained the same, their export earn- Figure 1.6 Sub-Saharan Africa's share in the value ings would have been $9 billion to $10 billion a of exports, 1960-85 year higher in 1986-87. The difference is approxi- mately equal to the region's total debt service Percent payments in this period. In practice part of this 14 gain might have been lost because of lower prices 12 - " . '. resulting from increased supplies; however, r, Africa's competitors might not have expanded 10 - their exports so much had African countries been 8 stronger exporters (see Chapter 8). The structure of Sub-Saharan exports has re- 6 mained largely unchanged since the early 1960s. The heavy reliance on primary commodities (in- 4 cluding oil) persists; they accounted for 93 percent 2 -_ 0 -- Figure 1.4 Merchandise exports from Sub-Saharan 1960 1965 1970 1975 1980 1985 Africa, 1965-87 Source: UNCTAD data. Billions of 1980 dollars 40 - 35- of total export earnings in 1970, declining to 88 30 - Fuel percent by the mid-1980s. A few countries, such 30- // \ / < as Kenya and Mauritius, have partly diversified 25 - out of primary products, but they remain the ex- 20 Merchandise ceptions. The markets for Sub-Saharan African 20 - e exports have also changed little. Roughly half the 15 - region's exports still go to the European Commu- 10 - nity. African exporters have yet to take advantage of the booming markets of Asia. 5- Manufactures 0 - Mounting debt 1965 1970 1975 1980 1985 1987 In the face of declining commodity prices, many African countries resorted to heavy external bor- rowing to sustain levels of expenditures made Figure 1.5 Volume and value of Sub-Saharan Africa's possible by earlier booms. Sub-Saharan Africa's agricultural exports, 1961-87 total debt increased from about $6 billion in 1970 Index(1961=100) to $134 billion in 1988. By the end of that period 230 - the region's debt was about equal to its gross 220- national product (GNP) and three-and-a-half times its export earnings. Roughly 70 percent of 200- Hypothetical value with total debt, including short-term commercial trade 180 - constant 1970 volume credits and drawings from the International Mon- etary Fund (IMF), is at market rates. 160 - | \/Sub-Saharan Africa's debt has grown faster 140 - Actual value than that of other developing regions, especially 120 1 since 1980. Long-term debt has increased 19-fold since 1970 and is now the heaviest of all; Latin 100 - American debt, for example, is only about 59 per- 80 - Votume cent of GNP. But Sub-Saharan Africa owes less to 80 1961 1965 1970 1975 1980 19856 1987 private creditors (39 percent compared with 73 percent), and about a third of their private debt is Note: The dashed line shows that export value would have been pret,adaotatido hi rvt eti higher if export volume had kept up to its 1970 level, guaranteed by creditor governments. Sub- Source: FAO data. Saharan Africa's difficulties in servicing its com- 20 mercial debt have received relatively little atten- with stagnating GDP growth and drastically de- tion because its share in total developing-country clining per capita consumption. Their imports debt is small (about 10 percent) and poses no have been compressed even more than those of threat to the international banking system. The the countries eligible for the Special Program of exposure of private financial institutions in Africa Assistance (SPA), which have benefited, at least is concentrated in a few middle-income countries. recently, from rising official development assis- Debt service obligations, the real measure of tance (ODA) disbursements. Projected debt ser- debt burden, rose in the 1980s to a point where vice ratios are considerably higher than those of they could not be met. They stood at 47 percent of the HICs. A higher share of their debt is owed to export revenues in 1988. No more than a dozen official creditors, while their commercial debt is Sub-Saharan African countries have serviced their generally worth less on secondary markets. debts regularly since 1980. For the others debt service payments have had to be reduced, either through rescheduling or the accumulation of ar- rears. Altogether during 1980-88,25 Sub-Saharan countries rescheduled their debts 105 times. Debt service actually paid averaged 27 percent Figure 1.7 External debt of Sub-Saharan Africa of Sub-Saharan Africa's exports in 1985-88 (see and highly indebted countries, 1970-87 Figure 1.7). This represented only about three- fifths of the region's obligations. Low-income Percent Total external debt/GNP countries had an even higher debt service ratio- 110 - 30 percent, a crippling burden for countries where 100 - poverty remains so widespread. 90 D The debt crisis in Sub-Saharan Africa is not 80- uniform in its origins or its effects. By virtually Low-income g ~~~~~~~~~~~~~70 -Sub-S aharan Africa every measure the low-income countries face the 60 - harshest difficulties. Their debt ratios are nearly 60 c double those in the highly indebted middle-in- 50 come countries and more than triple those of low- 40 - income Asian countries. Because much of this 30- Midle-income debt is concessional (almost half of total debt in 20 Sub-Saharan low-income Africa compared with 5 percent in the 10 Africa highly indebted countries (HICs)), the usual debt 1970 1975 1980 1985 1987 ratios may overstate the real debt burden borne by low-income Africa. The estimated grant equiva- Percent Debtservice/exports lent in low-income Africa's existing debt is about 40 $17 billion. But even adjusting for this greater 35-/ concessionality, the bite that debt service pay- 30s ments take out of countries' capacity to import each year is clearly unsustainable in an environ- 25 - ment of low investment and stagnant GDP. 20 The debt burden of the middle-income coun- 15 tries in Sub-Saharan Africa is also more severe than that of other HICs. Although their ratio of 10 - M/Middle-income Sub-Saharan debt to exports is only slightly lower, these econ- Africa omies have a lower capacity to adjust to their debt overhang. Their per capita GNP is only about a o0 third that of the other HICs. Their economies are, on average, smaller. Their export structures are generally more rigid, with a higher share concen- Note HICs refers to the group of 17 highly indebted developing coun- tries, listed in World Bank 1988h, of which two are in Sub-Saharan trated in a few primary commodities; export Africa. Totalexternaldebtis outstanding and disbursed long-termdebt, growth has been erratic and lower on average. short-te fr debt (1977-87), and IMF credit. Debt service is interest and amortization for long-term debt. Exports are goods and services. Per- Their economic performance has in general been centages are based on debt in current dollars. much more negative than that of the other HICs, Source: World Bank data. 21 Deteriorating social conditions industrial countries are trying to dump their toxic waste in Africa. There is growing evidence of deterioration in Against this background of growing, continent- the social sectors. Primary school enrollment rates wide damage to the environment, certain ecolog- have declined since 1980, and life expectancy is ical zones have special problems. The Sahel and lagging well below South Asia's. The problem of areas bordering the Kalahari face encroaching de- food insecurity is becoming ever more daunting; serts and soil degradation accelerated by drought. in the 1970s the proportion of Africans with defi- Countries with tropical rainforests have to con- cient diets increased slightly (while the popula- tend with accelerated deforestation. Soil erosion is tion increased substantially). The adverse particularly acute in areas of dense settlement and economic environment of the 1980s has acceler- cultivation-for example, in parts of Burundi, ated the deterioration. In the 1980s barely a quar- Ethiopia, Kenya, and Uganda. ter of Sub-Saharan Africans lived in countries in which food consumption per capita was increas- Institutional decay and political instability ing; in the 1970s the corresponding proportion had been about two-thirds. In many African countries the administrations, Despite slowing economic growth, government judiciaries, and educational institutions are now spending per person in the social sectors contin- mere shadows of their former selves. This wide- ued to rise in real terms until the early 1980s. After spread institutional decay is symbolized by the 1981-83, however, these expenditures began to poor physical condition of once world-class insti- fall, reflecting the acute financial difficulties faced tutions such as the University of Legon in Ghana by an increasing number of governments. The and Makerere University in Uganda, by the break- cuts tended to fall mainly on nonwage recurrent down of judicial systems in a number of countries, costs. Spending here was already too low-in 1983 by the poor state of once high-quality roads, and a mere $0.60 on each primary school pupil by the dilapidation of once well-functioning rail- annually. ways. Growing open unemployment is becoming a Equally worrying is the widespread impression significant concern in virtually every African of political decline. Corruption, oppression, and country. This is partly a consequence of urbaniza- nepotism are increasingly evident. These are tion, which transforms rural underemployment hardly unique to Africa, but they may have been into urban open unemployment. A particularly exacerbated by development strategies that con- worrisome aspect is the mounting number of ed- centrated power and resources in government bu- ucated unemployed, in part a result of an educa- reaucracies, without countervailing measures to tional system that is insufficiently responsive to ensure public accountability or political consen- local needs. sus. On the one hand, in several countries the neglect of due process has robbed institutions of Environmental degradation their legitimacy and credibility. On the other hand, the proliferation of administrative regula- Within Sub-Saharan Africa's 21 million square tions such as licensing, controls, and quotas has kilometers natural water and land resources hold encouraged corruption and set the individual vast potential for growth. But the ecology of Africa against the system. is fragile, and there are clear signs of ecological Sometimes the military have deposed unpopu- degradation. The pressure of population is caus- lar regimes. But often this has led to more, not less, ing desertification to accelerate, because it forces state violence and lawlessness. Occasionally it has people and their livestock farther onto marginal led even to civil war. These disruptions have grassland. The productive capacity of land is fall- driven many to become refugees, both directly by ing because of shorter rotations, soil erosion, and threatening lives and indirectly by making overgrazing. Growing population also raises the drought and other natural calamities harder to demand for fuelwood and cropland, and the re- cope with. Sub-Saharan Africa, with one-tenth of sulting deforestation increases runoff and erosion, the world's population, now accounts for about a lowers groundwater levels, and may further re- third (or almost 4 million) of the world's officially duce rainfall in arid areas. Pollution is a growing recognized refugees. In addition the region has problem, especially in poorly serviced urban another 12 million or so displaced persons. In areas. And, to compound these problems, some southern Africa destabilizing policies have dis- 22 - - t _-,',,-Ti - ' :_5T_ Box 1.1 Costs of conflict and destabilization in southern Africa I The humnar .in-i ,c. inornic co4t ol contlict ind dt4traiIi- Ani.o3a s Incipient rvt-rrm- h.i%e been hampered by con- ,ZSitiOl in oeutIcrn -trl ha. o been -ta-gerinrig Stud e tinuinzng intabdlit', The int,rrulptic:n oI tran,port roilew in i unduriaken bM -[DtCC the ECA and LiJCIFF p-.int tk. NlaIa; ne.Ncet.tingth urilerr.o-tl% mea4ure.. ,el back the quarnilidbko arproachin- 2' lo 41' rercent or C P good progre-z mad. in -Iructirra .djUtstment in the earls jl annuL;A1 and v%,n grcater in 1`zanmbique ind Angola. 1"-ii- The c!ts oii adiur-rnent hie bven igniticantlk thenmiotde .l nt,d niti-,nr, increa3ed. especialli in Z,mbab:-e and Zambia IWVhile The - ct tr.:,- r ill cc.:tor, or ih -e.n-orimn M,lrhtar relornm rnea4ures conmbinwd with international support e spund in' hi- di' ertid e n. .rncuL- res.c:urce; rrnm sout Ihrn and inipriwed rcgioinal CurrI' IholIld help growth rate, -\1rica z ceI-.pnivnt and ha, cc.-n.ulm*d nearli, ril per to recokur thE accurnul.atkd lo>Ceno the pa3^ dec3de will , n cin .OI go-..rrinen \ppendiiure; in the countTic, c pert- depre-s3ggreS.teirncomn le%ektwt,r eartoncome. ncinm ihc %%.rt drt.abilizatwin ELportr ha%e -uttered The Io>-ot !ieŽ'ndhuman pctnritalded-squantifica- tihrrughout Ih, regi,in and Import co-t, have ri-en a- tion Apart tronm the hurman sultennp and miieor. the -- tr in-prtn.iuw ha' beendI-r1U`tLd torcing laindlocked death-hundred,otlth.u,3ndvolpe,:ple. thurirsen in ant :cunir.c. t-. uLI- cir:uituuu- r:.u- thirou h South AInc. indJchildmn-ortalat th srunted potent,ialfrnlm 3niinend Thir h.3 re,ulted in 1.t rtk nu,- and liulher co;tS lor malnutriiron.and thelack.'r progres; in and insomeca.ee i hc- *:.-untrr a,l muc h a. 4'-' prccnt highe r Inr Nialaii the virtual di4inte-gration oii educa3tn and health serx-ice u In dditi 'n iher1 ha. bL.-:ntthe ic-a-. 'sburden ctnereen; deli%er% 4 sttemrn haje imnmeasurabl% ;etbackthede-el- Ii. thc- r,nilhlon t! - million di4pl3c-1 per--n4. p ornpnt in -outhirn Airica Building natit'nal capacltle; hi a: h- ihr,d to tle-.l tlhe.r land and hon- in mittr ;o-nomic and .:-icial adminilrtation and creating: an tinmncil t-rnmi f.'r, th,- h-; s:eedvd I billkon dollars en-.ironnienr c.induci' e to entr,preneunal acti' its ha3e Llurin, the tv.i. .%.. er .md aLovt the contrbimt,.r.i cnt ben lar,el; precluded Lwause ecarco nianagerial talent nternali,.r.il ri-l1 hll.rlt -\gain \hz.a3nmbque and An- ha3 been viphon-i c lt Ink militit', and reliel operition; , ila ha%,. had t. be.ir ih, bulk ot thlk' cc-.tu. but the The pr.. peci tor est.blishing political stabilit- ha.e c.ipacit% ot neihbor'irin: countrew ha4 a31-i been srraintd grjdual3 fmnprci-.id hoi,-ver. r-cent dctl,dopnient; are l t ilai;i Ilre,-id- onit -,I nmo^i dennc-It pupulIted coun- ecpcalI encour.aiging The econoniies haee bee.Lin to tir, .n Attica I ho-tti o -omen-1 iii1 it.i 7i)l0ii irertLi4ees r-cer ritlectinx a rirng mornentumrol polic\ relorm Th,Ti loSt r--LUtCL- ie't-et t'eri .id foreC,one in- alnd nhanceJottr .rancc Ne ertlielthe' renain C-mL a .; c..niqti,nc.. ol dt,,.tbilizaticin hayt: turther highl\ %ulnerablq. tode;tab,lizauticn Further progre-. to- handc.app.d Ie-K 'e.t mc:.ni;-i I rIn Nl-.zanbiquc ih, capa. - %,ard peaice i eential to rrin,late the rtcover% o1 rccenl i, ot rhc LConi.rn% to respond -.-. time tar-rcaching ertt or Lar- into us-u-tained gro rth -..1.inli.. r,rirni- hiz bNer, ,-': ercli co,n.irainmd rupted the development of South Africa's neigh- confidence, and performance sinks even further. bors (see Box 1.1). The process undermines the very basis on which to build growth and to develop African responsi- Crisis of confidence bility for Africa's destiny. Many people in and out of Sub-Saharan Africa Factors behind the decline feel a growing sense of hopelessness. This crisis of confidence has been reinforced by the adverse Some lay the blame for the region's economic external image of Africa in the global media, decline on factors beyond Africa's control-bad which focuses mainly on Africa's economic, so- weather, weak world commodity prices, fluctuat- cial, and political woes-famines, desertification, ing international interest rates, and too little aid. refugees, human rights violations, coup d'etats, Others blame policies, especially poor manage- internecine violence, and health problems. Some- ment of public resources and inappropriate incen- times this image is projected from within Africa tives. Most recognize the importance of structural itself, in an effort to call forth additional excep- factors, especially high population growth. tional external support. Yet many in and out of Changes in per capita income have three main Africa feel that Africa may become too dependent components: domestic economic growth, popula- on external financial assistance and on foreign tion growth, and changes in the terms of trade. advice and expatriate personnel. The danger is Because Africa's problems are so frequently attrib- that pessimism can become self-fulfilling: weak uted to adverse external factors, the impact of performrance breeds disappointment, responsibil- changes in terms of trade is discussed before the ity is shifted to others, inaction undermines self- internal causes. 23 Figure 1.8 Terms of trade and income effect in Sub-Saharan Africa, 1961-87 Index (1961=100) All Sub-Saharan Africa Index (1961=100) Low-income countries 140 - 140 - Terms of trade Terms of trade 130 - 130 - 120- 120- 110 - 110 100 100- 90 90- 80 80 - 70- .,,7 . ., ....... , ., . .. ,, . .0 . ., ,, . ., . . ,, . 87 61 65 70 75 80 8587 61 65 70 75 80 8587 Income effect/GDP (percent) Income effect/GDP (percent) 12.0 12.0 8.0 ~~~~~~Income effect I. ncome effect 8.0 _ 8.0 4.0 - 4.0 0 0 -4.0 -4.0 61 65 70 75 80 85 87 61 65 70 75 80 85 87 Note: Estimating terms of trade is complex, and alternate methods may be applied. Here it is defined as the ratio of export and import unit Middle-income oil importers values derived from series in current and 1980 dollars for goods and Index (1961=100) nonfactor services. The "income effect" of changes in the terms of trade 140 in a given yearis calculated by multiplying the value of exports of goods Terms of trade and nonfactor services in 1980 dollars for that year by the percentage 130 change in the terms of trade index. The result is shown as a percentage 130 - of GDP in 1980 dollars for that year. Source: World Bark data. 120 - 110 - Terms of trade loo J14 . \V \11-Z The evolution of the barter terms of trade varies 90 - for different groups of countries and has changed 80 significantly over the longer term. For the region as a whole terms of trade fell sharply in the 1980s, 70 although the decline was from the historically 61 65 70 75 80 85 87 high level attained in 1981. Despite the fall the Income effect/GDP (percent) terms of trade were still higher during the first half 12.0 of the 1980s than in the 1960s-although by 1986- 8.0 Icome effect 87 they were lower. The loss in income caused by 4.0 deteriorating terms of trade since 1985 is far less 4.0 11 11 1|1than the earlier gains. Although declining terms 0 u* of trade result in depressed levels of income, the 4.0 U region has gained more income (at constant prices) since 1961 from terms of trade changes 61 65 70 75 80 85 87 than it has lost (see Figure 1.8). Except in 1986-87 24 the effect on per capita income growth has been recently, a fall in the proportion of its people who small-less than one-tenth of a percentage point a are literate, numerate, adequately fed, and year, on average, during the entire period, 1961- healthy, and this has had an obvious negative 87. However, unstable prices have made eco- effect on long-term productivity. While high pop- nomic management far more difficult. ulation growth contributes to the decline in per Several African countries have been hard hit by capita income, it is not a sufficient explanation. A persistently declining commodity prices; many crucial factor is also the low GDP growth rate, had little scope to shift resources to more promis- which, in turn, is a consequence of declining in- ing exports. The low-income countries suffered vestment rates and the low efficiency of sharply declining terms of trade in the 1970s- investment. partly because of rising oil prices. The 1980s brought them greater stability, but their terms of Declining investment trade remain lower than in the past. The steady increase in aid has only partially offset this. The Average investment rates were roughly the pattern for the middle-income oil importers is same in both South Asia and Sub-Saharan Africa more complex, with terms of trade rising rapidly until 1980-roughly 16 percent of GDP in the in the late 1970s followed by a general decline into 1960s, rising to 20 percent in the 1970s-although the early 1980s. This decline was at first cushioned in real terms Africa's investment rate was less by rising commercial borrowing, but these in- because of higher costs. Since then investment flows declined precipitously after 1983. rates have declined by a quarter in Africa, while Even so, many countries in other regions have continuing to rise in South Asia. Moreover the suffered similar terms of trade losses and have growth of investment in Africa stopped just after coped better. Africa's declining income must be the mid-1970s and has since generally declined, attributed in large part to a combination of high reflecting the drop in both the domestic and for- population growth and low GDP growth. It is eign savings rates. The domestic savings rate fell instructive to compare African per capita GDP as declining terms of trade and production re- growth since 1961 with that of South Asia, the only duced real incomes and as large public sector comparable large group of low-income countries deficits emerged. The foreign savings rate fell be- (see Figure 1.9). Until the first oil shock, per capita cause nonconcessional capital flows declined dra- GDP grew almost twice as fast in Sub-Saharan matically in 1984-85 and because worsening Africa. Since then, despite the fact that more than domestic economic performance reduced Africa's half of the region's GDP comes from oil-exporting creditworthiness. But foreign savings remained countries that benefited from the oil shock, per positive and, even at their lowest point in 1985, capita GDP growth has been negative, and in- real net capital inflows were only 8 percent lower creasingly so. During this timE, however, it has than in 1975-77. been increasingly positive in South Asia. On aver- The recent low investment rates point to diffi- age since 1973 annual per capita GDP growth has culties in restoring growth in the future (see Chap- been four percentage points lower in Africa than ter 8). Because its investment rates were in South Asia. comparable with those of South Asia until the 1980s, however, it is hard to conclude that too little Population growth investment has caused Africa's poorer economic performance since the mid-1970s. Low returns to Sub-Saharan Africa now has twice the popula- investment are what made the difference. tion it had in 1965 and more than five times the population it had at the beginning of the century. Low returns to investment The upward trend in population growth has greatly handicapped Africa's efforts to raise per Measured simply as the ratio of the growth of capita incomes. Had the region's population output to the rate of investment in a given year, growth followed South Asia's or Latin America's Africa's returns on investment have fallen stead- declining trend since the early 1970s, per capita ily. By the 1980s they were only about one-tenth incomes might now have been as much as 10 of the levels in South Asia; they had been more percent higher than they actually are, assuming than one-third higher in the 1960s and early 1970s. the same growth in GDP. Instead Africa has wit- If the returns were calculated by setting invest- nessed an increasing dependency ratio and, more ment in the late 1970s against growth in the 1980s 25 Figure 1.9 Sub-Saharan Africa and South Asia: Components of per capita income growth Average annual Population growth Average annual Per capita GDP growth growth rdte (percent) growth rate (percent) 3- 313 1961 - 73 3.1 3I 1973 80 3 - 2 °r v- 2. 2 1TLL N 1961 - 73 -L : | t 11 L 1973 -80 7 ' 21980 -87 -IL~~~~~~~- _____ i ~~~~~~~~~~~~~~~~-2.6 Sub-Saharan Africa South Asia Sub-Saharan Africa South Asia Percentage Investment rate Average annual Rate of return on investment of GDP return (percent) l35 - 24- M 1961 73 22.8 30,7 OM 1961-73 2016 t' N 2 II,,' ~~~~~~25 - 12 4 0 1 -_ - I Sub-Saharan Africa South Asia Sub-Saharan Africa South Asia Note: Ideally this measure (as well as the more conventional incremental This modification changes the levels of the rates of return, but the basic capital-output ratio) should use net, rather than gross, investment. Use conclusion regarding a sharp decline in returns on investment in Africa of gross investment means that the returns thus calculated can go down remains unchanged. In this calculation, however, these returns are also when the gross investment rate goes down, even though net returns declining in South Asia, although not as rapidly as in Africa. have not. In practice the depreciation figures necessary to calculate net Source World Bank data. investment are seldom available. Assuming a depreciation rate of 10 percent of GDP (which is on the high side), the calculated net returns on investment are as follows: Net rate of return (percent) Region 1961-73 1973-80 1980-87 Sub-Saharan Africa 83.8 23.5 6.2 South Asia 47.8 38.5 36.5 (allowing for some lag in the supply response), the not the reason; African exports have actually lost decline would look even larger. market share. The greatest fall in the region's What caused the returns on investment to de- terms of trade happened after 1985, and by then cline? Drought is not the answer; its effects on the stagnation and decline in GDP growth were production in the 1980s were hardly any worse already well established. Everything points to de- than in the early 1970s. Falling world demand is clining productivity. Africa's crop yields are 26 Table 1.1 Typical costs in Sub-Saharan Africa Costs are high partly because of Africa's partic- and Asia _ ular circumstances. Difficult topography makes Africa road construction and irrigation expensive. Low relative population densities and widely dispersed settle- Sub- Low- to low- Saharan income income ments (20 persons per square kilometer in Sub- Africa Asia Asia Saharan Africa compared with 146 in low-income Investments and construction Asia) also increase costs. Landlocked countries Irrigation 6.0-10.0 2.546.0 1.4-2.4 face even greater difficulties. Undiversified econ- (in thousands of 1984 omies short of skilled local labor depend on ex- Uollarb wer supplye) 55-106 35-60 1.8 pensive imports of skills and goods. But a large Urban water supply 55S106 35 60 1.8 (1985 dollars per unit) part of the explanation for Africa's present eco- Vocational school 5.0 3.0 1.7 nomic crisis also lies in poor public resource man- boarding (thousands of agement and bad policies. Together these have dollars per place) undermined the efficiency of the private sector Roads 250 190 1.3 and have added greatly to the high cost of doing (thousands of dollars business in Africa. per kilometer) Recurrent costs POOR PUBLIC SECTOR MANAGEMENT. Because the Primary education 92 17 5.4 state is dominant-public expenditures in 1986 Transpdollarta per pupil)were more than 27 percent of GNP (compared Transportation Road maintenance 4.8 2.2 2.2 with only 19 percent in low-income countries out- (thousands of dol]ars side Africa)-its interventions strongly affect the per kilometer) overall efficiency of resource use. There are count- Rolling stock cost 0.09 0.04 2.3 (dollars per ton/per less examples of badly chosen and poorly de- kilometer) signed public investments, including some in Wages which the World Bank has participated. A 1987 Central government 5.5 2.0 2.8 evaluation revealed that half of the completed (multiple of per capita rural development projects financed by the World income, median annual, 1977-82) Bank in Africa had failed. A cement plant serving Unskilled construction 1.91 1.35 1.4 C6te d'Ivoire, Ghana, and Togo was closed in 1984 (median, dollars per after only four years in operation. A state-run shoe day, 1989) d 1 = -- ~ - -- ~- - factory in Tanzania has been operating at no more Note: Country coverage varies by indicator, depending on than 25 percent capacity and has remained open available data. Source: World Bank project files and various reports. For only thanks to a large government subsidy. details see the background paper by Singh. Data on central African governments and foreign financiers government wages are from Heller and Tait 1984. (commercial banks and export credit agencies as well as donor agencies) must share responsibility. Foreign financiers and suppliers promoted capital smaller, its cropping cycles on irrigated land are exports with attractive credits, and poor coordina- fewer, its transport costs are higher, and its utili- tion among donors caused duplication and waste. zation rates for factory capacity are lower. Governments also agreed to-and often pressed Higher investment costs have contributed to for-grandiose or inappropriate investments. lower productivity. Investment costs are usually Moreover the rapid increase in foreign exchange more than 50 percent higher in Africa than in resources-about fivefold in nominal terms be- South Asia (see Table 1.1). Part of this difference tween 1970 and 1982-tended to relax investment may reflect overvalued currencies in Africa, al- criteria and undermine financial discipline. The though the effect of exchange rates is reduced to region's public enterprises expanded tremen- the extent that investments are more import-in- dously during this period. Governments (and do- tensive. These costs have risen in the 1970s and nors) have preferred to invest in new buildings 1980s as infrastructure and institutional con- andequipmentratherthanmaintaintheirexisting straints have become more binding. Costs of op- facilities and to hire new staff instead of giving erating and maintaining investments are higher, their existing staff the resources they need to work too, in Africa-often more than double South effectively. As a result the capital stock has deteri- Asia's. orated, and many investments yield little or noth- 27 ing. Poorly maintained and managed infrastruc- rates (see Figure 1.10). The inability to meet debt ture has added enormously to the cost of doing service obligations in the 1980s disrupted interna- business (see Box 1.2). tional financial relations. Increasingly stringent price controls and the growing currency overvalu- PRICE DISTORTIONS. Large state monopolies, ation affected traded goods most. Real agricul- controlled prices, and centrally allocated credit tural prices declined during the second half of the and foreign exchange have been common. The 1970s as real effective exchange rates rose. Public departure from market prices and the resulting enterprises began to run bigger operating deficits, inefficiency in resource allocation have grown and before long the banks that were called on to worse as governments have tried to use adminis- finance them were showing losses. trative measures to cope with tightening foreign These events hit producers hard. Overvalued exchange and shortfalls in public revenue. The exchange rates, together with export taxes, under- failure to adjust policies promptly to the decline mined export performance from the early 1970s. in primary export prices following the boom years The region's market share in the major non-oil of the mid-1970s, to the shrinking nonconcessio- commodities declined sharply. nal flows in the early 1 980s, and to the rising debt These price distortions caused longer-run dam- service payments on earlier borrowing deepened age, too. Farmers chose not to invest in soil fertil- the crisis. ity, mining companies undertook little Widening budget deficits prompted more bor- exploration and depleted their reserves, and man- rowing and higher taxes in the first instance, not ufacturers underutilized their capital assets. At less public spending. The deficits fueled inflation the same time governments let the physical infra- despite price controls. Because parities were not structure deteriorate. Because countries lacked adjusted, real effective exchange rates appreciated flexible, diversified, and dynamic economic struc- steadily after the first oil shock, and parallel ex- tures, their budget and balance of payments gaps change rates increasingly diverged from nominal became unmanageable. Governments, forced to C;-d >G,IP:_ . r-- - . : zE2 i.l;.; S2.J Bo.x 1.2 The cost of infrastructure deficiencies: The Nigerian experience ' Rec-nt reisarch n Nizena ha- dernclnsrrited that p-or acro -iftatts bv firm size and by r% peotf ervice E\pen- t intr tstructur, ;erx Ic.. ha% e imp,4.ed hewv .milion man dLture k% 3i highe5t on electriClh generatlon-almo..t tour ! ufacturing enterpris.e- To ci ercome these deficiencies. times rhat for borvholeJ and nrealmVrt icliclnes firms h3v e had to in;ur conviderable e\penses AIthouRh. all 1Th . r the urnr .rudie1 v ere ;cnnecied to the pci..er grid alltlc.sexnrh nurefhan9Ciempl\eeshadtheirc.Er Boxfigure 1.2 Nigerian enterprises m ith their own E standb% generaror- and had inesed. on .vierape infrastruclure $1300i1) ielt an e%ch.anige rate cit 5 na!ra Fer dollar,n i their o%n poi er tacilties Ut nirms %%ith tft er than 20 ernplc.%1es onlk oneithird gen,erated their n pl-er,-r j tVater suppI c. a srrrilarcase 1\ hilernoneorthe hsmall enterprises w3a- ale to nstallitsoi n supply too fercome , f i 1 i3 1 - poor pubhlic %%ater *ervict, 14 percent ol tirmrs *ith be . _ tu.e:en 2uand 0Oemplo%eesdid Morethin nr-ohirdcl ot d larger enterpnres ithose . ith ni.re than ltil emplo% ee*l " had in e;ted n pri%atet Lv)reholes 4 - % Poor publhc telephone .nd posial .ern ce are stt an- other;.nstrintor0n business Frins ha3%etrie dtool er ome the diticutities b% using messenger m.rtorc%les ;or radio '* tr3n-mitter- As the- size or tirms increased. lc did their '-' i relianceon their own-nsuppll Lit uch t?ienices Th,eimpor- , l 1 tance attiched tcommunlcaioli;s 5cr ice,s was3agreatas ,_ lor% .iter uppl Or largerfirmi.stc,OI percenthadrheir t . -'.'' - -'' 1 I on, n radio tran,rnitters. - 4.l SI . S The squd% ho%% ed th)t although the capital alueor For cr !nir r-b.onij.c.., p pr. 3te t3aclities ' a- about 1t percent ct the tot.l value .- B . ri W sicr machirier and eqiuipmen tlor large nrm;. it %. .a on a% trr lage 25 percent lor small irims This share varied %%ideJ l . -_ Lec jnJ i rd - . 28 income, were several times those in Asia. For in- 1970-87 stance official Tanzanian wages, which were rela- Index (1980=100) tively low for Africa, were more than double those __________________________________ in Sri L anka. Adjustment is well under way. The Interna- 130Su-SahranAfi tional Labour Organisation (ILO) reports that real wage rates in Sub-Saharan Africa have fallen by a quarter since 1980. This is a brutal but necessary 110- adjustment to reflect labor underemployment 100- caused by a growing labor force that has out- 90 ,,...fi, `, stripped job creation and by the need to become excluding Nigena internationally competitive. Devaluation has 70 helped to bring the dollar cost of African wages close to its competitors'-in Ghana, Guinea, and Tanzania, for example-although official wage 9 70 1975 1980 19887 rates in tCFA franc zone remain high. Market forces have kept real wages in the infor- Note: Group averages weighted by 1985 GDP in dollars. mal sector more closely linked to productivity. Sub-Saharan Africa here includes only 30 countries. Until recently, these forces did not touch govern- Source: IMF data. ments, where much of the educated labor was employed, nor the parapublic and large-scale pri- vate sectors, where rents created by trade protec- retrench, often cut back first on social expendi- tion and subsidies helped to finance wages that tures, thereby further eroding the human resource were higher than labor productivity would other- base. wise justify. Now in several countries public sec- tor wages are barely enough for subsistence, and HIGH WAGE COSTS. Because the direct and indi- the wage structure has become highly com- rect labor content in final production can exceed pressed. In those cases the correction has gone too 50 percent, Africa's high cost of labor relative to far, and productivity has plummeted as a result. its productivity matters all the more. High salaries are a legacy of colonialism. Real wages in the first THE MISSING MIDDLE. A unique feature of Afri- half of this century reflected abundant natural can economies is the dualistic character of con- resources, plentiful private venture capital, easy sumption and production. Intermediate access to protected markets, trained and experi- technologies are scarce. Transportation is mostly enced expatriate managers, and stable colonial by motor vehicle or on foot (see Box 4.5). In some administrations. Expatriates, employed to com- countries there are surprisingly few bicycles, pensate for the shortage of skilled African person- mopeds, carts, and the like. (Burkina Faso, where nel, were paid above European scales. As Africans the moped is ubiquitous, is an exception.) Africa acquired comparable skills, their salaries were has nearly 7 cars for every thousand inhabitants linked to (but remained lower than) those of the (Zimbabwe has 30, Cote d'Ivoire 17, and Senegal expatriates. After independence the pay of skilled 13); the Republic of Korea has only 6, India 2, and nationals was brought closer to that of expatriates, Bangladesh 0.3. When farmers modernize, they and unskilled wages, at least in the formal sector, switch from the hoe to a tractor; few use oxen, were increased through minimum wage even where the tsetse fly is absent. On the produc- legislation. tion side there are countless microenterprises and But what seemed justifiable and sustainable at a few medium to large modern firms, but not independence became less justifiable with the in- much in between. Almost everywhere one looks creased availability of educated Africans and less there seems to be a "missing middle." Investments sustainable with less experienced management and operating costs are higher than they would be and less efficient infrastructure services in an in- if appropriate technologies were used more. Con- creasingly competitive world. In most African sumers with little alternative tend to spend heav- countries at the beginning of the 1980s public ily on imports. All this adds to the high cost sector wages, measured as a multiple of per capita structure of African economies. 29 DETERIORATING GOVERNANCE. At indepen- breakthroughs have already created new oppor- dence Africa inherited simple but functioning ad- tunities to trade long-distance services, such as ministrations. They were managed largely by accounting, tourism, or education. The ability to expatriates and were not geared to the develop- transfer funds instantly anywhere in the world ment role assigned to them by African leaders. has already led to a 24-hour-a-day global financial The responsibilities of the state were enormously market. Industrial applications of information expanded. But at the same time the rapid promo- technology are starting to change the face of man- tion of inexperienced staff and the gradual politi- ufacturing and the division of labor within the cization of the whole administrative apparatus led global economy. to declining efficiency. A combination of admin- Certain labor-intensive service industries could istrative bottlenecks, unauthorized "fees" and thrive in developing countries with flexible links "commissions," and inefficient services imposed to knowledge-based markets abroad. But a conti- costs on businesses that have progressively un- nent with a weak telecommunication system and dermined their international competitiveness. tightly regulated service industries will be iso- The gradual breakdown of the judicial systems in lated from the mainstream of progress. Africa's many countries left foreign investors doubtful prospects for competing effectively will depend that contracts could be enforced. The ones that did on greater efforts to create an efficient basic tele- invest insisted on large profit margins to compen- communication structure and to obtain access to sate for the perceived high risks. Authoritarian global information networks by building links governments hostile to grassroots and nongov- with international partners. ernmental organizations have alienated much of Advances in biotechnology also hold enormous the public. As a result economic activity has potential for Africa and could raise its agricultural shifted increasingly to the informal sector. Too production and protect its population, crops, and frequently ordinary people see government as the livestock from disease (see Box 1.3). In contrast to source of, not the solution to, their problems. the Green Revolution, which required irrigation and focused on just a few crops, the biorevolution The outlook for the next generation can reach the entire rural population. At the same time tropical countries, which control around 70 What kind of environment will Africa face dur- percent of the earth's biogenetic resources, may ing the next 30 years? The future is likely to bring seek to barter the increasing value of their bioge- accelerating technological change; new patterns netic pool for economic development. Partner- of industrial organization, competitiveness, and ships with private companies in the United States, trade; mounting pressures on the world's ecolog- Japan, and Europe that attempt to forge globe- ical resources; and a demographic outlook that spanning alliances uniting capital, research capac- threatens to blight the region's prospects for a ities, marketing channels, and access to biological better future. Their impact cannot be ignored. resources suggest new patterns of technology Most important, Africa should not turn in on itself transfer. However, the commercialization of bio- and risk being completely peripheral to the global technology also poses risks. Laboratory produc- economy. tion and product substitution can threaten the markets for Africa's traditional export crops. The The technological revolution extent to which companies can claim property rights to biotechnology applications will influence The world is on the threshold of a new techno- the spread of new crop varieties in Africa. logical age, driven by advances in information Advances in materials sciences will be no less technology, microelectronics, biotechnology, and far-reaching. Optical fibers made from silicon materials sciences. This will have implications for have virtually replaced copper in telephone ca- virtually all sectors, not just those considered to be bles. Current research promises fuel-saving en- high tech. gines based on high-temperature ceramics. The Fast and cheap communication and informa- accelerating substitution of advanced materials- tion processing will transform business and ad- superconducting substances, optical transmission ministration. Global information networks will fibers, advanced plastics, metal alloys, and so integrate markets and facilitate the global man- on-for traditional raw materials will put pres- agement of dispersed industries. Access to ideas sure on minerals producers. The implications for will be the key to competitiveness. Technological Africa will vary according to the ability of its 30 Box 1.3 The promise of biotechnologies for Africa ' The L irecl IA- c-i biot,cchnolo'% i,r planntipr,.pigatw.n and pr-Iduiictio 3nd trade Tliii nrr3N puL.t a3 threat lo Alrtc. - bretdin, coitid drarnatrcall r.l c-rop pFrn.JuLt:ti% tn .ipnrr.l, po Lro 'rat.r -proiluctcd i,nill.) r.i4cni, It r t 0' Er.all t,hul prducri.n n dv-' elIping countriesI IC-Lit the lteihhood 'It i* ti anilla bean tarmer, in lttadaga;s 0 L cultur lechniqueC are :r.atin, mir. drouthi. an..1 iac it' diubr Andit - ' urt r,ilal tha cun-iJnerI 'ciLA1i` ea.> *r.ils.anL '-.-rtltene 1' . a'.v3 i. 11 p:iIni. .'nd ;r.und * .;'n tixt' .; cho.,:. bet:e'. piKer''a A- -A3nd bi, xttk.. bean' N 3 nut. Plant gen.,ti tDgme rmnt mray rliI r .r u lclr e nraI i ih. in ib, ittd Sr.ite Another c-n ern in'.ohe thee tn. %,ilh I s. calteir.e in! resp .nz'llt n. ne., cn,nLumenr pri'. .nz.lti.n nt rt C.ir;h r ult; The c.:rrent pract'c. oF orter,rie .2; or iaC tsr Ir. .'.in tr, ~Psies , hich make paltrtine lhrzt-zererati.:n biotc. Inolvg pr'du;.i to i;r N rclireltairon Bettvr tcrmenenta.i-n t, hniquc in cs".. m:r an, further u4t: il bioncered n matcral .itl I- 'lid nkdl:d -uch i9 pr. n-.cnrtllud ur ir . . r tin .r ' l .. mlrel mit iut-ur - cnMpettil.n. Fi t d lop. pmn* counrire~ ,l p ro'. the nuirri,indala ' ct crop- EnLr', ci tranc:. r maN rhi- mth ilso .nIt311 h,zh th l,nmrn .oee- tor %% ' ht.. 'i Ira.L the reproducti. capacit\ I. like-tc.' G: kantel. .%ill ninke it harder t:. dt Ctnmniti rie. crop %arctte'. t 1 I s eng,ntrt,d .accinc; nmi oi%r,'on.ir itr% pano-n3 a tliu; n..lliildt_rs The ;- ide .prcad ci trtbution I no. %, pertng up i;ein-ti rzt ri-. nc. areai eickdal rL. botenctnnercd plnt rm utrial n',m decrva e rhc gcneti j l 4 e.rch .r nion, . clJoral annbod i, prc entI' thc taste I dit:crst%h :nd wima moke crop- incr. ta mghl % ulnerable to n tro"% inci: brunch of biikchno..,r,, i.. .'p t od .re.-Alt m ne'.. -diea,-aes ii niorc uccurjlr nim di.ul te-t. and diano,n'L: Nvei,t -c- A ile'.lte Atric.n ri,p;n.e t;. these :'mptritiLv- ci't. if. cin- a sain4t killer dizc.-:; are t. im- d'veloped Nnd nan;ic mu-r be bated -n aclo'-e mr:.n!trrnc ci bimtcchno s I n tor ted bL 'twrc' . IIm .nI na. s! nulanc.: u-I u ncn r- lcizcal trend1 niore 'nrnt irhearch and d- elrnpment .tc tood aninml [ted and tiel thIIroutl1 tit,irot'ial :0nVCr- part ncr-hip- ". it l\er;t, rn onmpa nies ind I lie dlc-% elcip- i ,- thi, inij mer r *M ul-Ctuie producl At Ili*- amne tim.: Attira %, ill Tht,commer-ial u-,uit nu,, btc'indu,Ir!3l products rma' n-l.d dranm,1ic npr..etnt,.n in it, ,eenie-Jucation and a re-ult in ci r.umanu.still, dnt-hrent p..tt rn~ a.rIr:utur.l agricultural trutnin, exporters to adjust to shifts in world demand. these management practices contrast sharply with Policies that favor efficient production methods, previous industrial country concepts that focused the development of new raw materials, and in- on mass production and economies of scale and creased exports of food and manufactures will considered labor as a cost factor rather than as a help to reduce the region's dependence on pri- resource. mary products in declining demand. Africa can draw important lessons from these new perspectives on technological progress and Changing industrial organization and managerial competitive advantage. The introduction of "best- practices practice" production systems may offer the most cost-effective and rapid way for Africa to improve A new perception of technological progress as its competitiveness quickly. With a critical mini- a function of organizational flexibility and access mum of complementary technical and managerial to information is emerging and is forcing a reas- skills, the pursuit of better product quality and the sessment of organizational structures. New busi- new forms of industrial organization may be par- ness methods, derived partly from Japan's ticularly well-suited to a variety of labor-intensive experience, may be more relevant to Africa than sectors such as textiles, clothing, and light assem- developments in high-technology machinery. bly. The transfer costs are low, consisting mainly These innovations include "best-practice" pro- of improving the skills of the labor force. More- duction methods, such as flexible specialization, over the benefits of longer-term technological in- total quality control, and "just-in-time" inventory novation may not materialize unless flexible management. Collectively, they improve a firm's production management methods have been in- ability to respond to shifts in consumer prefer- troduced in the meantime. Africa will have to ences, often at lower cost and with higher quality. overcome enormous hurdles to exploit this poten- They may also transform relations between firms tial, including making up the skill deficits in the by extending longer contracts to fewer, more reli- work force, providing appropriate incentives for able suppliers or by promoting cooperation be- organizational change, and raising awareness of tween potentially competing suppliers. Overall the links between information, technology, and Figure 1.11 Export prices for five major Sub-Saharan African export commodities, 1961-87 Index (1961=100) Cocoa, Coffee, Cotton, Copper Petroleum 340- - 700 Cocoa --e Coffee Copper - 600 280 Cotton - Petroleum _ l \ / \ ! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 500 220- - 400 160 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-300 100 -~~~~~~~~~~~~~~~~~~~~~-. - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 40 = f ~100 1961 1965 1970 1975 190 15 1987 Note: Prices deflated by the manufacturers unit value (MUV) index. Source: World Bank data competitive structures. Much will depend on the attracted credit from commercial sources quite region's ability to make partnerships with firms easily. However, the debt crisis and Africa's poor and institutions in the more advanced countries. economic performance have frightened most lenders away. This situation is not expected to Evolving patterns of production, trade, and finance change in the near or medium term. Fundamental changes must occur, including the establishment Far-reaching changes are also occurring in the of political confidence, before these channels open global pattern of trade and production. The Pacific up again. Equally, capital flight will be reversed Basin is elherging as the fastest growing area for only when confidence has been restored. Africa's world trade and capital flows. By 2020 it will best option for obtaining nonofficial finance is to probably have become the center of economic create conditions that are attractive for direct pri- power. Sub-Saharan Africa, historically focused vate investment, since by definition such finance on the North and the West, will need to also look would be linked to expanding production. Steps to the East from now on. must also be taken to reduce Africa's debt (see Africa will be affected more than any other Chapter 8). region by the likely slow growth in demand for primary commodities. Any hope of a revival of African megatrends economic growth predicated on the recovery of primary commodity prices would seem to be mis- The UN Economic Commission for Africa placed. The price forecasts for Africa's five major (ECA) was among the first to dramatize the long- primary commodity exports up to 2000 do not term consequences of recent trends. In 1983 it show any significant increases. Except for oil, presented a "nightmare scenario," which under- prices are currently close to their long-term trend, lined the urgent need for fundamental reform. and, while sharp fluctuations are to be expected, Since then the outlook has deteriorated further. it,is most unlikely that there will be significant or lasting gains from the terms of trade (see Figure DEMOGRAPHIC TRENDS. The two key assump- 1.11). However, Africa can and must seek to ex- tions underlying the ECA's scenario were popula- pand its market share wherever it has a compara- tion growth and GDP growth. The alarming tive advantage. vision portrayed by the "nightmare scenario" Commercial capital flows are unlikely to be comes from the extremely rapid and immense much help either. Many African governments en- increase in the number of people who will popu- joyed a favorable credit rating in the past and late the continent if current rates continue. Africa's 32 population would double every 20 years, reaching national attention is especially focused on the ef- I billion in 2010. Even if fertility follows the declin- fect these processes are having both on the rate of ing pattern in South Asia, Africa's population will habitat loss and species extinction and on changes reach 1.7 billion by 2050. A turnaround in fertility in the global climate. The global impact of envi- behavior will not occur easily and certainly not ronmental trends in Sub-Saharan Africa can be over a short period. This makes the "nightmare expected to command increasing attention in the scenario" more than a bad dream-it is a very real future, as environmental issues become increas- possibility. ingly prominent in world affairs. The consequences of the soaring populations Sub-Saharan Africa is endowed with an abun- are striking (see Figure 1.12). During the next 30 dance of wild plants and animals. It is home to an years the rates of entry into the labor force will estimated 300,000 species out of a global total of 5 more than double and will exacerbate an already million. The Tai Forest of C6te d'lvoire, the Mon- acute employment problem. Rapidly growing tane forests of East Africa, and a small slice of populations will also soon lead to a switch from Madagascar are among the most biologically di- land abundance to increasing land shortage in verse areas of the world. Many plant and animal several countries. Land-to-people ratios, already a species in Sub-Saharan Africa are unique to re- constraint on agricultural development in several stricted locales. For example, more than 6,000 places, will worsen. Ecological degradation will flowering plants, 106 different birds, and half the accelerate. world's chameleon species are found only on the This exceptional demographic surge will be ac- island of Madagascar. companied by massive pressures for migration- The disappearance of Africa's plants and ani- both national and regional-creating social and mals has implications beyond the extinction of political tension. Most of the migrants will settle species. It means the loss of genetic material for in the expanding urban centers, creating megacit- the future development of crops, medicines, and ies. By 2020 there are likely to be about 30 cities industrial products. The reduction of Africa's for- with more than 1 million inhabitants. Several can ests and other vegetation cover can also contribute be expected to exceed 10 million. to large global climate change. The widespread burning of forests and scrub to clear land adds THE GLOBAL VILLAGE. Desertification and defor- large amounts of carbon dioxide to the atmo- estation in Africa are increasingly of worldwide sphere, thus contributing to global warming. If concern, just as the heavy pollution coming from deforestation were slowed, these emissions industrial countries is of concern to Africa. Inter- would be reduced. If reforestation efforts were accelerated, the role of these forests as a vast car- bon sink, which removes large amounts of carbon dioxide from the atmosphere through photosyn- Figure 1.12 Population and urbanization thesis, would be enhanced. in Sub-Saharan Africa, 1960-2020 Even though Africa's contribution to global pol- MUinDS Of Sub-Saharan Afic, 96-20lution is minor compared with that of the indus- Mill20ns of rersons trial countries, the twin threats of loss of biological diversity and global climate change are of increas- 1,o, 0 73 i ing international concern. They present an oppor- o v.i j tunity to mobilize international resources to 80' l -reduce the poverty that drives deforestation. 60- The challenge 40.l Africa's crisis is deep seated. But while great problems lie ahead, Africa also has important as- 20' sets on which to draw. First, despite the popula- tion pressure in certain areas, its land and water 1960 1990 2020 resources are vast. Agricultural production, with Note: Figuresfor 1990 and 2020 are projections based on the right technology, could be greatly expanded. decliningfertilitsrate. The considerable mineral potential has yet to be Source: World Bank data. tapped. Africa has massive energy resources in 33 gas reserves and hydropower potential. These re- ing conditions and opportunities that goes be- sources-are unevenly distributed across Africa; for yond an existence predicated simply on policy the most part they are not where the population distortions and the general poor performance of is. That is the region's first challenge: to realize the the largely statist, formal, modern sector. vision of pan-African cooperation by allowing This locally based dynamism has channeled the freer movement of supplies and people. continent's traditions of community welfare into Second, women in Africa, although more fully self-help-as in Kenya's harambee. These move- involved in production activities than in many ments, often supported by foreign nongovern- other developing countries, face innumerable ob- mental organizations, are now active in many stacles to the true fulfillment of their potential. fields: education and training, health care and Given the right opportunities, they can have much - family planning, village water supply, agricul- greater impact on the development of the conti- tural production, storage, marketing, nent than in the past. agroforestry, housing, slum improvement, and Third, the informal sector has great vitality. small enterprise development (see Box 2.9). They African traditions of solidarity can be of tremen- have been effective intermediaries between grass- dous value in mobilizing populations at the com- roots organizations and those providing public, munity level. The widespread practice of sharing commercial, and private forms of support. among people can be used to mobilize private Fourth, Sub-Saharan Africa's vast endowments savings for local social investments. Informal en- of diverse flora and fauna and its spectacular sce- terprises have demonstrated remarkable dyna- nery and fine beaches make tourism a very prom- mism and can be counted on to continue to be a ising sector, as a few countries such as Kenya have significant source of income and employment. In already shown. Africa's biological diversity is of country after country the informal sector has ex- enormous international interest. Considerable re- hibited a resiliency and a responsiveness to chang- sources can be attracted to ensure its protection Box 1.4 N'lauritius: From Nlalthusian gloom to sustained development Tle scciLoeconcrnlc 4trucrure or Mlaur[iiLIt in the varl comipetitve k.aSc rates E .ports reprm.int o3 per:ent t l%'lrrilshad the^an'e rrgr.cdAientvrpoor pr pectsa. m.r3nn GDP but he econorni ha moved a3%a% tromr it earlier orhEr countrie- .nAtric3 ha%ti toda% Population i'a. dependence oin *uiar N1.anulactures-nora.tl% te\tiles- growing at almnot 2 . percent a %ear and per cap,t.i in noi% account tcr 39- percent ot e ports Spurred b% contin- comr- i-3S bareI, rinins ir !ln'4 the crudle birth rate iva; uing grow%th in per capita incomr 13 percent a %ear on 3r- thE tc.tal tertilit- rate %, aIS 4 i 3nd the intant .rt.iht a3 erage berx ,en li3nd losrin% entmrntnJJdomertic rare . .4 O populatnon e\plo,c'n or that inainitude S3'. ings ha:. e bren gro- ingi nd are nof% abo: e 2c1 PeTcent i vuld lriAt .ilr,es-c:ale economric Ind :ocial rqpercu;. .t CDr Domestic polwii:vi also prwomoied eitible sions For e\.rmple. the t%orkinr-agt popuiatio.:n agd 15 de%etopment-spaltilI% bi dinrninihingtherareot urb3n ears and oiern iaj protectedl to increase b% S.ome Su popuiation gro', th sectorallv. through ta orableagrneul- percent during ,5 -72 Thi; combintdJ% ith io! saing; tural pricingpolic and.intergEnerational% throughcon and in-verment ratr- ibelove !2 and 1I percent respec- ser%ati%e debt 3nd borro%wing policie4 tie :nd cnJ porrs ,-clu.. oc tba-ed on .ugar rnade the Lindimin,shed vmphsi c.n programs to.nr human re- pro.pectar4rogrirowingour ot the.iciouzoircle ot po%erm sourcedeeiopment includingperhapsthemmostsuccess- qiIte Poo r tLil population program in the region his pl3ced The Suistaned pursuir ot sound maceroccv.rimnc 3nd Nlauritiol amnong the top pertkrmer4 kn Sut-S3haran Ar- populatiOn pc.lrci. jrmong other, ha!. completel' trans- ric; its Population groLs th rate 1 percent :, tear durinn tormed ihe outlitok The impnort repl3cenivrit striregv toi- II.t--, s the lowe.t in the region vw irh life E\pectan;% lobed in the t%cils , ,a nct \. table lonig-term option. at -,v era IQ95Th Other he31th and iertlit\ Indicatcrs alo a Itough Ii did enable industrialists toacquire e'.penence 4hoI' si4niricnt impro%ement a crude birth rare or IQ and allo ed a nEr iJdu;tTil! culture to tr:e rort To build I ,1A7 a t:tal iErItlrN rate Lot 2 2 I n an inmant mortatIt\ on thise,perience ncenrire, ha e been pror ided to0%er- rate ot 24 l197 1 and a chi!d death rate of 1 l -4 do%, n sea m3nuracturing tirm, t. locatt labr Lnten,i%e 3ctir i trom 4 in lQn'5 Enriolnient ratios oi 10ll percent tor pn- tie, In Nlaunhu, and to convert Imported r3i\ m3teria3l miar schc.ols and abo. e 90 percent tor second.irr educa into ini-lied gcs--d- tor e .pc.rt The siructurE ot the econ- tron are h!gh tor 3 de. eloping countrT %% ith kllauritius . oimm has a- a result 3aso been transtorni&d The countrs level or per c3pita Income Nlauririu, ha- shown thai the h.as tAken ad\antage ot opportunities in torld markvets right polrcies can orercorne poor initial conditions and aid hace\plitedt ir reourc:ter.do.u rnents--anadequate ,_ork an economic transtormatton ntrta4ructure anda lhteraieand adaptable labor torce paid :ro34wj ; E-._-"- ' .... ---- - - - - - - 34 and more generally to protect the environment Figure 1.13 Recent economic trends (see Box 2.1). in Sub-Saharan Africa, 1980-88 The history of economic development has wit- nessed some remarkable transformations. Coun- Idex (1980=100) tries once considered economically weak have 120- later prospered. Within Africa several countries have done consistently well since independence 6 (see Box 1.4). There is no insurmountable reason 112 - why the others cannot succeed as well. 108 Agproduction Since the mid-1980s Africa has seen important / changes in policies and in economic performance. Although per capita incomes declined more stee- 100 ply in the two years 1986-87 than in 1980-85, this 96 must be put in the context of other important signs l .:[ 0.011e of improvements since the mid-1980s. The large 92 fall in regional per capita incomes in 1986-88 was 88 - 1980 198 1 1982 1983 1984 1985 1986 1987 1988 caused by a combination of especially sharp dete- riorating terms of trade and continued high pop- Source: FAO and World Bank data. ulation growth. These negative factors swamped the growth in domestic output. Comparing the nomic basis for renewed growth. Nonetheless past four years to the early 1980s for Africa as a stronger efforts to improve domestic economic whole, however, there is some indication of better management may help to sustain these recent performance. The region's aggregate GDP grew at improvements. 2.1 percent a year on average during 1985-88, About half the countries in Africa have adopted reversing the 1.2 percent annual decline of the major policy reform programs during the 1980s. previous four years. For 17 countries, accounting Initially these programs mainly addressed the for a third of the region's population, output grew short- to medium-term macroeconomic imbal- faster than population during this period. For ances. Over time they have evolved significantly, some the annual rates of growth were impressive: with measures being introduced to tackle the un- 9.1 percent in Mauritius, for example, and around derlying structural constraints. Exchange rate ad- 5 percent in Ghana and Kenya. Terms of trade justment has been crucial to this objective. In declined largely because of falling oil prices, response, their real effective exchange rates began which have since stabilized. Preliminary data for to decline in the early 1980s, following a decade of 1988 show that the terms of trade improved for the growing divergence from those of other develop- non-oil-exporting countries. ing regions. A combination of nominal devalua- On average, agricultural production and ex- tions and market liberalization led to rising real ports have grown faster since 1984 than during the agricultural prices in many countries, especially previous two decades. Even when the recovery for export commodities. The immediate response from drought in 1985 is excluded, recent annual to these price increases has been dramatic in some growth rates appear well above the longer-term cases, as for cocoa in Ghana, for instance. In other average of the 1970s and early 1980s, thus reflect- cases the response to reforms has been slow. Many ing a positive response to incentives, although countries have also seen a realignment of real good weather also helped. Africa's most recent factor costs; real interest rates are becoming less export performance is encouraging, with non-oil negative, and real wages for both skilled and un- export volumes rising in aggregate by almost 10 skilled labor are continuing to decline. In some percent during 1985-87, in sharp contrast to the countries, such as Tanzania, real wages are now declining trend of the past 15 years. Moreover, less than half of their 1980 levels, although in Africa's declining share of world markets for non- others, particularly in the CFA franc zone, adjust- oil exports began to reverse in 1984 (see Figure ment is still delayed. 1.13). Economic performance has also been spurred The improvements are often small and could be by large increases in aid. In 1987 net international reversed. Africa's undiversified economies re- capital flows were 10 percent above the 1975-79 main especially vulnerable to external shocks. average in real terms, and estimates for 1988 point Past low investment rates have weakened the eco- to continued increases. 35 The social impact of these improvements is dif- many countries policies need to be reoriented rad- ficult to assess. Up-to-date data are patchy. Better ically. Each country is unique, and there are no delivery of public services will in any case im- magic answers. Many factors-the pace of techno- prove conditions only after a lag. Nonetheless, the logical advance, the weakening market for pri- evidence from several African countries suggests mary products, and the changing structure of that real per capita spending on public health and world production-are beyond the control of Af- education services is no longer falling. In coun- rican policymakers. A long-term perspective is tries in which adjustment programs were adopted essential. The necessary decisions are hard-for early with strong donor support, per capita expen- donors as well as Africa's governments-because ditures may now be rising. big changes will be needed in the way aid is dis- Africa's economic problems cannot be solved pensed. Above all each country will need to estab- quickly or through a single focus on capital accu- lish a development strategy appropriate to its own mulation or economic adjustment. Africa's pro- particular circumstances. duction structures need to be transformed; in 36 Sustainable growth with equity A strategy for the next generation end countries concentrated on import-substitut- ing manufactures, and industrial investment was Governments have been struggling to reverse largely state-led. The strategy failed in part be- the relentless decline in African living standards. cause it was based on poorly adapted foreign They can succeed. Indeed, if Africa is to avoid a models. The vision was couched in the idiom of major human catastrophe, they must. In their dec- modernization-meaning the transfer of North- larations at the UN Special Session on Africa in ern values, institutions, and technology to the 1986, the region's leaders clearly recognized the South. In recent years, however, many elements of need for radical reform. This chapter draws on the this vision have been challenged. Alternative debate taking place within Africa and on the ex- paths have been proposed. They give primacy to perience of the past three decades. Building on agricultural development and emphasize not only measures already initiated, it describes the main prices, markets, and private sector activities, but elements of a long-term strategy to set Africa on also capacity building, grassroots participation, the path to recovery and growth. decentralization, and sound environmental prac- tices. So far such ideas have been accepted and The need for new measures tried only halfheartedly, if at all. The time has come to put them fully into practice. The nightmare scenario projected in Chapter 1 Both in the broad conception and detailed elab- is not far-fetched. Indeed, without resolute new oration of the development strategies adopted measures, it will almost certainly come to pass. Yet after independence, non-Africans played an Africa has unexploited land and minerals and a overly dominant role. There are now a significant population that can be mobilized to develop them. number of experienced African policymakers During the past five years broad-ranging reforms who will decide future strategy. Nonetheless an have been widely initiated, but these are no more important supportive role will remain for Africa's than a beginning. The reforms, although coura- external partners. Self-reliance and the assertion geous, are incomplete because they fail to address of African leadership should not mean cutting fully the long-term constraints. The challenge for links with the global economy and turning away African governments is to forge comprehensive outside assistance. Yet, partly as a consequence of and coherent programs of action that will attract its policies, Africa is in danger of being increas- broadly based support. ingly marginalized in its participation in both the To be credible, any new long-term strategy world economy-Africa's share in world trade should be based on a hardheaded examination of has fallen from 3 percent to less than 1.5 percent the lessons of the past. The first generation after since 1960-and in global strategic decisionmak- independence assumed that development meant ing as superpower competition in Africa ebbs. For achieving Northern standards of living. To that Africa to become isolated from the mainstream of 37 global development would be disastrous. The increasing production. It was soon appreciated rapid development of the world economy, the that, to bring about real and enduring develop- huge expansion of population, and the dangerous ment, a transformation of the production struc- pressures on the global environment are leading tures was required and, furthermore, that the irresistibly to growing global interdependence. capacity of people and institutions to deal with Africa and its external partners have a compelling change must be enhanced. This means strength- mutual interest in building a stronger and more ening institutions and investing in people. A start equal basis for collaboration. has been made, but much more remains to be done. Development in this widest sense is the Keyfeatures of afuture strategy theme of this report. It is consistent with the human-centered strategy recently recommended To ensure Africa's future welfare, the next gen- by the ECA. Both reports see people as both the eration must first build solid foundations for sus- ends and the means of development. tainable and equitable growth: sustainable, Building capacity is also a prerequisite for because care must be taken to protect the produc- greater self-reliance, the dominant objective of the tive capacity of the environment, and equitable, Lagos Plan of Action. Self-reliance, so essential for because this is a precondition both for political Africa's long-term development, has an evident stability and ultimately for sustained growth. The regional dimension. In the past the rhetoric in focus here is on access to assets and poverty alle- favor of greater regional cooperation and integra- viation, not on the distribution of wealth. Creating tion has been insistent, but the actions disappoint- wealth, in contrast to rent seeking, is seen as es- ing. The time has come for determined and sential for growth. By giving the poor access to pragmatic action; Chapter 7 sets out specific pro- assets and promoting their productivity, a higher posals to this end. level of growth can be ensured. These aims will take time to achieve. Institutions will need to be Growth that is sustainable and equitable strengthened and capabilities enhanced. The task will require sustained effort and far-sighted polit- Even at current levels of per capita income there ical leadership. are many opportunities to meet basic needs more To prosper in an increasingly competitive effectively. Over the longer term, however, wel- world, Africa must radically improve the produc- fare cannot be steadily improved unless economic tivity of its labor, capital, and natural resources. growth significantly exceeds population growth. This requires two things: This is the clear lesson from countries such as * An enabling environment of sound policies Ethiopia, Ghana, and Tanzania. What are to be the and efficient infrastructure and services to foster sources of economic growth? To what extent will productive activities and private initiative. Africa's soaring population and accelerating envi- * A much enhanced capacity, from the village ronmental degradation compromise its develop- to the highest echelons of government, to cope ment? And how can growth be made equitable? with change. Weak capacity in both the public and private Sources of growth sectors is at the very core of Africa's development crisis. In the most fundamental sense develop- There is a growing consensus that ment depends on the capacity to initiate, sustain, postindependence strategies pinned too much and accommodate change. Africa's governments hope on rapid state-led industrialization. Domes- were grafted onto traditional societies and were tic markets were too small for the capacity created, often alien to the indigenous cultures. Its econo- while the state proved to be an uninspired entre- mies were dualistic, with modern sectors that re- preneur and a bad manager. In contrast almost mained highly fragile. Many governments proved everywhere the informal sector has been a thriv- unable to cope with the political stresses of rapid ing success-in part because it escapes govern- modernization and the unstable external environ- ment regulation. This is a measure of the vitality ment of the 1970s and 1980s. and potential of the neglected African entrepre- The structural adjustment programs of the early neur. The earlier strategy also neglected agricul- 1980s aimed to improve resource allocation pri- ture, a sector in which Africa has a clear marily by correcting distortions in prices and mar- comparative advantage. Exploiting Africa's land kets. But these programs only set the stage for resources offers the best immediate opportunity 38 for raising incomes. Over the longer term and with industrial policies will need to be overhauled in policies that foster private investment and entre- the early 1990s. The key is the transfer to Africans preneurship, the industrial sector could undoubt- of industrial skills: management, marketing, tech- edly contribute increasingly to Africa's economic nology, and finance. This can occur most easily growth. But it is to agriculture that Africa should through a collaborative partnership with local in- look for the primary foundation for growth dur- vestors who have the necessary expertise and ac- ing the coming years. cess to markets. This in turn implies a radical Agriculture currently provides 33 percent of reappraisal of the current industrial strategies. Africa's GDP and 40 percent of its exports. Yields The precedents in Asia and elsewhere are well are far below potential. Even when full account is established, and there are already good examples taken of the environmental limits to land exploi- in Africa of what can be done. tation, the scope for expanding production is African entrepreneurs able to participate in great. Of course this potential varies among coun- such partnerships are emerging in increasing tries. Over the long term it must be assumed that numbers from the indigenous informal sector. The people will migrate away from the arid lands and explosive growth of the informal sector has gone that the resulting inflow of labor will spur growth largely unrecorded in the national accounts data. in the better-endowed areas, as it has in C6te For example, Zaire's value added in the manufac- d'Ivoire during the past 30 years. turing sector is estimated to be possibly 25 times Chapter 4 argues that agricultural growth can the official figure. Policy has often discriminated be doubled to 4 percent a year-as it must be if against the informal sector, yet it has been the African living standards are to improve. This tar- most dynamic part of most African economies and get is ambitious. Industrial growth, starting from is by far the largest source of new employment. a much smaller base, could be significantly higher. Although agriculture and industry constitute But neither sector will prosper unless the linkages the first and second sources of growth, other sec- between the two are strengthened. In most Afri- tors could also make vital contributions. Africa can countries these linkages are weak because of will need to exploit every opportunity. Mining, oil poor infrastructure and the failure to gear produc- production, and tourism all have good potential. tion to rural needs and to overcome the fragmen- Mining in the 1980s contributed 13 percent to tation of rural and urban markets. Sub-Saharan Africa's GDP and earned some $8 Savings in the agricultural sector provide the billion in foreign exchange in 1988. But growth has basis for capital formation in the cities, and sur- been limping along at no more than 0.2 percent plus earnings in the urban sector are in part chan- annually in the 1 980s, a tenth of the world average. neled back to rural areas. In Kenya, for example, Here, as in manufacturing, attracting private in- urban workers remit an average 21 percent of their vestors will be a decisive factor. Despite known earnings. Migration from the countryside pro- reserves richer than those elsewhere, the major vides labor for urban industries, while some mining companies have preferred to invest out- workers in industry and in the nonfarm sector side Africa, where they found conditions more return to work in agriculture, thus bringing a new attractive. There has been comparatively little se- dynamism to farming. Agricultural growth stim- rious exploration in Africa during the past decade. ulates the demand for consumer goods and for The same is true of oil. Chapter 5 suggests policy agricultural inputs produced by industry, and in reforms that could help the sector eventually to turn industrial growth stimulates the demand for achieve growth of 3 to 5 percent. Equally, how- food and for inputs into agroprocessing ever, the exploitation of mineral and oil resources industries. should not be viewed as an easy option. It is no This stress on agriculture does not imply a substitute for fiscal discipline and sound policies. minor role for industry. African industry has per- As Nigeria and Zambia have shown, poor man- formed disappointingly during the past 25 years; agement of oil or mining revenues can easily un- growth in output has slowed particularly in recent dermine the foundations of long-term years. But with sound policies there is no good development. reason why the rate of growth of industry should Despite huge worldwide expansion tourism not recover in the 1990s and rise gradually toward has made very slow headway in Africa. Global 8 percent a year during the next two decades. In spending on tourism is about $160 billion and individual countries, of course, higher rates of growing at 15 percent a year. Africa's share is just growth are possible. For these to be achieved, 2 percent, and falling. Nonetheless a few African countries have booming tourist sectors. For exam- increasing numbers live in urban areas where ple, Kenya's gross foreign exchange receipts from there is much less demand for child labor. With tourism are more than from any single commodity development, intergenerational income flows export. Tourism is also an important revenue from children to parents are gradually reversed. earner in The Gambia, Mauritius, Senegal, and the For a major region Africa's situation is unique. Seychelles. Africa's tourist assets are remark- Its population growth rate is the highest seen able-and, in countries such as Ethiopia, Mada- anywhere, at any time, in human history. Whereas gascar, and Tanzania, largely unexploited. in Asia and Latin America better health care and Europe's resorts are rapidly reaching saturation, extension of education have been accompanied by and the market can be expected to continue ex- falling population growth, in Africa the reverse panding vigorously. Europeans are increasingly has been true. In 1960 African and South Asian looking for recreation farther afield. Unless Africa population growth rates were around 2.5 percent becomes more welcoming, tourists will travel in- a year; Latin America's was reaching 2.9 percent. stead to Asia and Latin America. Today, South Asia's and Latin America's have As in tourism, so in industry and agriculture: fallen to 2.1 and 2.5 percent, respectively-but the challenge is the same. Markets exist, but the Africa's has risen to 3.2 percent. Even if fertility competition to satisfy them is fierce. In the years fell tomorrow to two children for each African to come this competition will get even tougher. family, the continent's population would con- The pattern of demand is changing as is the tech- tinue to expand for the next 60 to 70 years. On nology to supply it. Only those flexible enough to current trends it will double in 22 years. No region adapt will succeed. Comparative advantage is of the world has ever managed to develop with so swinging in favor of those with good market in- high a rate of population growth. telligence, a grasp of the relevant technologies, Each year Africa's school-age population in- and a capacity for rapid response. Abundant labor creases by 4 million (3.22 percent). There is a cor- is no longer enough. responding increase in the number of mouths to Taking all this into account, the recent decline be fed, bodies to be clothed, health services to be in per capita incomes can be arrested in the 1990s provided-all just to maintain the existing level of and the foundations laid for modest growth there- health, education, and nutrition. The public and after. It will require fundamental reforms and a the private purse are thus depleted. Too little is new vision of the contribution to be made by the saved or invested to improve living standards. rural sector, of the route to industrialization, and For Africa as a whole land is still abundant, but of the strategy for human resource development. in some countries the transition from abundance But it will also require measures to slow the rise to scarcity is already affecting agriculture and the in the region's population. environment. This transition took centuries in Eu- rope and Asia. It is taking place over decades in Slowing population growth Sub-Saharan Africa. The image of Africa as a con- tinent of vast empty spaces is less and less true. In Raising Africa's overall GDP growth from the 2 some places the pressure of population on arable percent a year achieved during the past decade to agricultural land and other natural resources is 4 to 5 percent in the years to come-the target already intense (for example, in much of the Sahel, proposed in this report-would be a major Burundi, western Cameroon, Kenya, eastern Ni- achievement. But if most of that is eaten away by geria, and Rwanda). It is true that many areas are surging population growth, per capita incomes substantially underpopulated. Some could easily will hardly rise. Significant improvement in living support much larger numbers, but here too very standards cannot be achieved over the long term high population growth makes it difficult for peo- unless population growth is slowed. On current ple to escape grinding poverty. The urgency of trends Africa will increasingly be unable to feed curbing Africa's population explosion is not due its children or find jobs for its school leavers. The to the present size of the population, but rather to burden of dependents on active workers is over- the unmanageable rate of increase. whelming if half the population is under 18. Tra- The link between accelerating population ditionally children contributed significantly to growth and environmental degradation is espe- farm work; if children are to attend school, as they cially worrying. In several countries overpopula- should if they are to become more productive tion is putting unsustainable pressure on adults, that can no longer be true. In any event agricultural land. In many places traditional farm- 40 ing land is already overcultivated, and more frag- Employment and wages ile land is being exploited to meet the needs of the growing population. Without agricultural mod- Rapid population growth is causing an acute ernization the result is rapid desertification, defor- employment problem. The creation of jobs for the estation, and loss of vegetation cover. With sound rapidly expanding labor force must be a central practices and technological innovations Africa objective. Nearly half those who will enter the might eventually accommodate several times its labor force in the next three decades are already present population. But this will take time, and, born. Therefore, even if the population growth meanwhile, high population growth spells rate during 1990-2020 slows down to 2.75 percent, disaster. the labor force will continue to grow more than 3 Few Africans are yet persuaded of the advan- percent a year. If the unemployment rate by 2020 tages of smaller families; they see land as abun- is to be no more than 10 percent, employment will dant and labor as scarce. But these conditions are have to grow around 3.4 percent a year. In other changing. Family size is a highly personal and words about 380 million new jobs (more than sensitive subject. In most cases it will be necessary twice the current level of employment) must be to bring down infant mortality rates if parents are created by 2020 (see Table 2.1). to be persuaded to accept a smaller family size. Agriculture occupies about two-thirds of the Each country must, of course, attune its policies to labor force in Africa, and it will continue to be an its own culture and economic circumstances. important source of new employment during the Often donors approach the issue in inappropriate next generation. For instance horticulture, dairy- or ineffective ways. But the demographic realities ing, and forestry could expand rapidly, and all facing Sub-Saharan Africa remain: exceptionally these activities are labor intensive. However, there high population growth is compromising eco- are limits to agriculture's capacity for labor ab- nomic growth and family welfare, adding to envi- sorption. To achieve food security throughout the ronmental degradation, and thus seriously continent, average per capita food consumption jeopardizing Africa's long-term development. has to increase by about 1 percent a year during This nexus of rapid population growth, the 1990-2020 (see Chapter 3). For this to occur, and slow modernization of agriculture, and conse- to provide for the needed growth in agricultural quential environmental damage is a stark reality exports, value added per worker in agriculture that must be faced boldly and urgently. It implies has to grow by about 1.5 percent a year. Thus an a change in fundamental societal values as pro- agricultural growth of 4 percent would imply em- found as has already occurred on other continents. ployment growth of no more than 2.5 percent a The future strategy would be gravely deficient year in agriculture; this would enable the sector to were it not to include measures to slow population provide jobs for almost half the increase in the growth (see Chapter 3). A reasonable target would labor force. be for Africa to follow the rate of fertility decline Only a fraction of the new workers who come already achieved by other developing countries. on the job market each year will be able to find This would result in an average population employment in the modern sector, even under the growth of 2.75 percent a year for 1990-2020. most optimistic of scenarios. The public sector is Table 2.1 Indicative projections of employment in Sub-Saharan Africa, 1985-2020 (millions of persons unless otherwise specified) Annual growth rate, 1990-2020 1985 1990 2000 2020 (percent) Population 423 497 677 1,107 2.8 Labor force 198 230 318 610 3.3 Employment 168 199 279 549 3.4 (employment rate, percent) (85) (87) (88) (90) - Agriculturalsector 131 148 190 311 2.5 Modern wage sector 10 12 17 32 3.4 Small and microenterprise 27 39 73 206 6.0 Sources: ILO 1988, World Bank 19891, and World Bank data. 41 chronically overstaffed and needs to be trimmed essary to create effective demand for agricultural back rather than expanded. In some countries products. budget constraints are already forcing cuts in pub- Wage legislation has a direct effect on job cre- lic employment. Large-scale modern industries ation in the modem sector. Governments have will be important sources of employment only in typically attempted to set minimum wages higher a few countries. However, much simple manufac- than market-determined wages. Such regulations turing-for example, furniture, clothing, and are widely ignored in the informal sector, but, household goods-can be undertaken by small- where wage legislation has been effectively en- and medium-scale firms. Employment in these forced, it has led to higher costs and lower com- firms and in construction could be important. In petitiveness. Experience shows that this the longer term it is to these expanding modern legislation reduces overall employment. enterprises and their supporting services that The impact of wage controls is well illustrated countries must look for new jobs. But in most by the experience of Kenya, where real wages countries they will fail to absorb more than a quadrupled between 1949 and 1968 (to several fraction of the new workers who come onto the job multiples of average rural farm incomes) as a market each year. At best, wage employment in result of wage fixing. Later the government ceased the modern sector as a whole can be expected to administratively raising private sector wage rates grow at around 3 to 4 percent annually. and allowed the labor markets to function. Within This leaves small and microenterprises, now a decade the wage rate for unskilled labor was mainly in the informal sector, to absorb about half little higher than the mean income of farmers, the new entrants to the labor force. Construction which broadly eliminated the urban income bias. to meet the fast-expanding demand for housing is The effect on employment was striking. In the likely to be an important source of jobs, especially decade before 1968 urban formal employment ex- through owner-managed businesses that employ panded at a sluggish 1.6 percent a year; in the just a few laborers. The same is true of much decade after 1968 it grew at more than 6 percent a construction of infrastructure, such as school year, only part of which can be explained by buildings and clinics, as well as small sewerage, greater public sector employment. In the 1980s rural road, and other rural and secondary-city government policy has been to allow official wage infrastructure. A myriad of other activities and contracts to rise by no more than 75 percent of services can be imagined. inflation. As a consequence real wage rates in the Overall, employment in small and private sector have continued to fall. microenterprises will need to grow on average by The policy conclusions are clear. Experience 6 percent a year. It would be reasonable to assume suggests that, except on grounds of health and that value added per worker in these areas will worker safety, governments should resist interfer- grow at least as fast as in agriculture (1.5 percent ing in labor markets. If left alone, they work well. a year) and that the small and microenterprise The political imperative is to interfere, but the sector would grow by 7.5 percent annually, thus economic logic is not to. Minimum wage legisla- contributing about 1.5 percent to overall GDP tion, regulations restricting the ability of employ- growth-about the same as each of the other sec- ers to hire and fire, and related interventions tend tors (see Table 2.2). Such growth will also be nec- to raise costs, reduce competitiveness, and con- Table 2.2 Contributions to the growth of GDP in Sub-Saharan Africa, 1990-2020 (percent) Sector Small and Agriculture Modern wave microenterprise Total GDP distribution (1987) 33 47 20 100 Growth of employment 2.5 3.4 6.0 3.4 Growth of value added per worker 1.5 0.2 1.5 - Sectoral growth rate 4.0 3.6 7.5 - Contribution to GDP growth 1.3 1.7 1.5 4.5 Source: World Bank data. 42 strain the growth of employment. Equally, for their agriculture have also had the best relative countries in which public sector salaries act as success in equipping their cities and developing pacesetters-which is common-wage rates fixed their urban networks. Conversely, the countries at higher than the market rate will tend to raise that have stifled or neglected their agriculture also wage costs in the economy as a whole. This is no have the most dilapidated urban infrastructure longer true in countries such as Ghana, Liberia, even when they have benefited from large sur- Sudan, and Uganda, where real wages have col- pluses from extractive industries. Agriculture and lapsed, but it still applies in other countries, espe- urban development go hand-in-hand. cially those in the CFA franc zone. During the next Yet many African governments have pursued generation the rapidly expanding labor force will macroeconomic policies with a distinct urban tend to drive wages down. In these cases any bias. Their past trade and credit policies have attempt to obstruct this process administratively encouraged the establishment of large-scale, cap- will fail in the long run, at the cost of lower growth ital-intensive industries that locate in large cities, in production and employment in the short run. while agricultural procurement, food subsidy, If farmers and firms are to raise their production and exchange rate policies have tended to keep and employment as intended, they will have to be food prices low for urban consumers at the ex- competitive both at home and abroad. This means pense of the farmers. Partly as a response to this letting wages and salaries reflect labor productiv- urban bias, Africa's urban growth has been mark- ity in agriculture and industry. Thus, as part of the edly faster than average for developing countries. future development strategy, pay should largely Efficiency and equity call for a neutral policy be determined by the market. framework. Indeed adjustment processes pres- ently under way in much of Africa are dramati- Urbanization and migration cally reducing urban policy biases, with a marked impact on urban incomes. In Tanzania farm in- The corollary of rapid population growth is comes rose by 5 percent in real terms between 1980 rapid urbanization. This, of itself, is not alarming, and 1984, while urban wage earners faced a de- since urbanization and economic development cline of 50 percent; in Ghana, during the same are mutually reinforcing. People migrate in re- period, farm incomes stagnated while urban in- sponse to economic opportunity and should not comes fell by 40 percent; in C6te d'Ivoire the ratio be discouraged from doing so. As cities grow, they of urban to rural incomes fell from 3.5 in 1980 to generate economies of scale and, through com- about 2 in 1985. In Nigeria higher farm incomes plementarities, achieve a higher level of produc- have caused workers to return, at least temporar- tivity than the rural areas. Cities foster ily, to farming. modernization and change and consequently are Whereas in the past urban dwellers in many the nerve centers of the development process. African countries have benefited from subsidized Nonetheless they must be in economic balance investments in infrastructure, urban enterprises- with their rural hinterland. and especially the small- and medium-scale ones Agricultural growth creates a demand for trans- that provide the bulk of new employment-are port, processing, and various other support ser- nonetheless suffering from inadequate and unre- vices. Through increased cash incomes it also liable infrastructure services. To ensure the effi- creates a demand for urban goods and services. cient functioning of Africa's cities-and thus The associated multiplier effects are typically very future economic growth-the key urban services strong as further increases in income and employ- need to be made self-financing, and local govern- ment are generated in the towns. This leads in turn ments have to be allowed to mobilize more of their not only to increased demand for agricultural own resources, rather than relying on transfers products but also to greater efficiency in the pro- from the central government. Past investments in duction of agricultural inputs. Improvements in certain primary cities-Brazzaville and Lusaka to transporting, storing, and marketing agricultural name but two-also seem disproportionate when products allow farmgate prices to rise while con- compared with the poor infrastructure in second- sumer prices fall. ary and minor towns. The-benefits of urbanization Comparisons during the past 30 years suggest depend partly on the efficiency of the overall that countries that have pursued policies leading urban network linking farmers to the domestic to sustainable development and diversification of and international markets. Thus it is imperative 43 that the infrastructure needs of the secondary deserts, species of flora and fauna lost, and water towns are given due weight in public investments, and air polluted. These are losses not just to the as has been done in Kenya. present generation, but to all future generations. Since population will more than double be- Environmental sustainability is a critical issue that tween 1990 and 2020, certain areas will be subject cuts across all sectors. to intense population pressure. To accommodate Environmental management and economic de- this growth, migration between countries must velopment are intimately connected. The environ- occur. Based on past trends and differences in ment consists of intricate ecological systems. Trees resource endowment, rates of such migration may and grass, for example, not only provide fuel and range up to 1 percent a year. fodder, but also build soil fertility, prevent ero- This would be nothing new. Africa's popula- sion, provide water catchment, ameliorate climate tions have always been highly mobile. Even with changes, and provide wildlife habitats. These sys- the imposition of colonial boundaries, consider- tems are the underpinnings for human welfare able migration occurred between territories and and survival. over long distances. Since independence C6te Sub-Saharan Africa's environment is easily d'Ivoire has accommodated more than 2 million damaged. Eighty percent of the soils are fragile, 47 people from the Sahel. The willingness to accept percent of the land is too dry to support rainfed migrant workers has been of great economic ben- agriculture, and average rainfall varies from year efit both to C6te d'Ivoire and to the countries of to year by an enormous 30 to 40 percent. In many origin (see Box 7.7). Migration gives low-wage areas population pressure is pushing farmers onto farm labor to the former and substantial remit- marginal lands and causing deforestation, severe tances to the latter. On present demographic soil erosion, and declining productivity. Poor trends it is vital for countries to facilitate rather families cut whatever wood they can for essential than frustrate migration. fuel. The result is ever-widening circles of bare and infertile soil around settlements, ever more Sustainability time and effort required simply to obtain fuel and raise enough crops to survive, and less time and Sustainable growth calls for a development energy to improve welfare. Where environmental strategy that does not compromise the welfare of abuse leads to loss of arable land, wildlife, and future generations. Until recently, public policy water supplies and even to local climate change, and donor programs have largely neglected the the effects are felt in declining incomes and a issue of sustainability. Instead spurts of growth diminishing quality of life. Inevitably the poor have been based on external borrowing, inflation- suffer most. ary financing, rapid depletion of natural re- After a while environmental damage may reach sources, and the degradation of ecological a critical point. In the Sahel expanding popula- systems. Such growth cannot last. tions and accelerated deforestation have triggered When growth depletes capital, it must eventu- a cascading decline in biological and economic ally slow down. Capital, in this context, includes productivity and have created what is now the not only plant, machinery, and infrastructure, but world's largest area threatened by desertification. also natural resources such as land, water, and Hardship is widespread as people seek refuge in minerals and human capital in the form of knowl- the cities. The Sahel's urban populations have edge, health, and social organizations. Thus, to quadrupled in the past 20 years. Air and water ensure sustainable growth, the future strategy will pollution in these areas and their growing de- need to emphasize both sound environmental mand for raw materials (such as fuelwood) in turn management and human resource development. accelerate deforestation and environmental Unlike physical capital, human capital grows degradation. through use. Moreover the health and education This downward cycle can be reversed through of parents improves the health and education of sound environmental management. Strategic tree their children. planting, for example, can significantly reduce Properly managed, renewable natural re- pressures on the land. In Rwanda communal for- sources can last forever. However, there is a per- ests, village nurseries, tree planting, and vasive tendency to consume or destroy them agroforestry have helped to provide fuelwood, through overuse. Throughout Sub-Saharan Africa fodder, and erosion control for the rural popula- forests are being cut down, crop lands turned into tion. Throughout Africa the rural populations 44 should be mobilized to plant trees around their efits in resource conservation, this seems amply homes. justified. A compact might be envisaged in which For some countries the costs of environmental donor assistance would be provided if credible degradation could be clear and immediate; in programs of environmental protection are imple- Kenya, for example, one-quarter of the nation's mented. Without such programs assistance can- total foreign exchange earnings come from tour- not in any case expect to achieve lasting benefits. ists mainly attracted by its wildlife. In other cases the impact of natural resource depletion and pol- Equity and poverty reduction lution on economic growth is less clear. Many costs take years or decades to appear. Traditional Growth does not necessarily reduce poverty or measures of economic well-being, such as per ca- provide food security. Thus the future develop- pita GNP, fail to capture them. At the same time ment strategies of African countries need specific- spending on pollution abatement, for example, is ally to address poverty alleviation and better counted as consumption rather than investment. income distribution as issues in their own right. Rapid population growth and a declining re- These strategies need to address two critical source base lead inevitably to conflicts over re- needs: first, how to make the poor more produc- source management. Environmental issues tive and, second, how to provide productive as- involve externalities. Powerful groups will try to sets to the poor. Earlier policies tended to favor the impose environmental costs on weaker ones. De- urban elite at the expense of the rural poor and veloped countries may try to transfer the costs of men at the expense of women. Establishing a neu- their environmental problems to developing tral structure of incentives is an important first countries. The export of toxic wastes, for example, step toward a fairer society. In addition ensuring must be vigorously discouraged. better access to food, clean water, health and nu- Earlier approaches to environmental manage- trition, education, and sanitation for everyone is a ment were based on environmental impact assess- central objective. Improving human capital is an ments of individual projects and on investment in effective way to promote social mobility and more programs such as pollution abatement, afforesta- equal economic opportunities. tion, or water management. These are useful, but In the 1970s increasing attention was paid to the inadequate. The project-by-project approach importance of meeting basic needs, not just for tends to address the symptoms, rather than the welfare reasons but because a work force that was root causes, of environmental problems. Future deprived would not be able to generate growth. strategies should look beyond projects to the The economic crisis of the early 1980s diverted broader issues and explicitly recognize intersecto- attention from basic needs programs. This was a ral links and intergenerational concerns. To this mistake; every effort should be made to protect end a few African countries are preparing national basic needs expenditures in times of recession. environmental action plans, which describe how The challenge now is to make up for lost time. Also population growth, land tenure, livestock man- important to long-term equity are measures to agement, and other agricultural methods need to improve the access of the poor to assets, especially change to attain sustainable growth. A wide range for women. Throughout Africa land reform and of people and organizations have been involved credit for microenterprises are good examples of in these discussions. This should help to secure a this. consensus on the actions that are needed and Structural adjustment programs already incor- broad support for their implementation (see Box porate components intended to assist the poor 2.1). (see Box 9.2). For example, higher agricultural Government's awareness of environmental fac- prices benefit the rural areas in which most of the tors and the willingness to take politically difficult poor live. Several countries are planning to help measures will largely determine whether the deg- redundant workers through food-for-work pro- radation of natural resources will continue to grams. But more needs to be done. Above all it is threaten economic growth in Africa. Integrating essential for governments to maintain, and as natural resource management into country eco- soon as possible expand, expenditures on basic nomic planning will require political courage. To health and education. overcome the financial and institutional con- The issues of growth and equity underlie the straints, substantial concessional assistance from dualism that is found in most African countries. abroad will be needed. Since there are global ben- Public sector employment has expanded enor- 45 Box 2.1 Madagascar's environmental action plan The Nla lag3,a go%ernment has initiated decisik eaction to in a range otl disciplines trom a great 1arier Lit public. torestall the serious environmental degradation that nou- emnLipublic and pr!titmeoreanization, Furthermc.rea tast threaten, the countr,'s long-term de%eiopmerit. With multimedia campa!gn has been launched to mncrea.e donor asistance it ha, prepared an erw,ironmnnial act.ion -:it,rene-k ot the enk ironmtnt at all le%elk of Nlalagas, plan with five L?e, ,ets ot mea'urtc aimed at saciets En% ironmental iasies are being prin2re%ilel' n- * Limiting detorc-iation and soil en-ion rroduced into primnark ,econdarv and urn'er-it; educa- * rrotecting \ladaga>car unique biltogical patrrnionrk tion * Monitonng en ironniental trend; * Quick prongress. n tr.mo ,tudile. to action Studies h3ae * Educating tht populatior orn en-. ironm,ntal i-.uev alrcad% led to actions in tht hleld pilot operltions. the * Controlling urban pollution. prep.ration 0at maltr ine'tmcrt program and propi- Nladaag3car ,a, mnitallN endo%%id ed ith abouIt 1:1 Per- ak tc-r roes and institutionil retormi cent ot toresied 13nd a nd an ewceptionall dt%er'e flora The pla,nred ine-tnieit program includ&, %aterhevd and taun3 Noti einli lo percent ot for-t land i, lett It man.gement prolectl to prot.ct large irrigation ,cheme, current trends are not re%ersv d Nladagasc:ars narural h%dropot'er damn ard rt-er. Nrs the de%clopment otl tre-r,te will dis1rpear altocether %irtimn about ll, %ear' enmir.:nmental i niorriv n ;* tem, imapping remrte Thit- voulci cauiecalatnitous soil erosionarid an irrexe rs- senmine and C3dasrTal ree_.rdsl to impro re,our,e- man- Ibie decline in it, e\ceptonal biolog ic. l di% ersitt v. hich 3gencnt: and educatii:n program4 Among ihe le:al and %iould repre.enr a permanent t- to tuture generation; pilIc; changes being elaborated arc land legi;lation and As; acreqluencordetoretattion. land iertilitv is steadil t a\ation to ncrea,e land ,i:curitx and thu. to provide decreading % hule in; esrment and maintenance costs t1r incentives lr rtorqtat.ion 3nd conswer%ation pr3chces. major irrigition -cheme- and dam- hav increasetd dra- procedure- or si. trem3ticall, screening l3rge invest- maticall The annual cotot oenrvirimental damagt3 e is ments and the monitocringot eLiidangcred .pecies emtiniated io bebert.et n 5 and ! per,eni ot GNP Ni3d3gascar; drirke to Protect it; umi.qe biological di- The environme ntal action plan ha' been conct ,ed a; v er;it i; uIt iong-term global concern and ha- stimulated an on-going proces; i ith three teatures. ;trong donr s .. i.t ill al,oc bring economic benefits * Stror.g poilih:o l C:omnlltmernt Inihated b5 the prim.: in the tcirm ot .:clAogical tourism A large iour,sm prolect minisrer the plian ha, etllechic political tupport and i, %ihich %%ould open parks under strict control has been connsiderd an integral partolitladagancar cdevelopn-cnt imtiatted with Prn .atetundinm TOurTim inlilcreatemuch- program A National Charter lor Entironment is being needed eniplo% mentopportunities in addition togenerat- prepared lor appro; at b% the NtioUnal As;en'bl \ Al- ing re'. rnu- tr.m tlaariOil arid f-ee thoughdonorshate,trongl% supported ihego%ernnient Y,o tar Ghana Lesotho Nlauritius. and Ri.anda have initiatne.the haebeen nomore th3ntl ,csi tot a . also begun tc develop en' inroment3l 3action plan! and nahonal proccess. other countriw' have e; prested their interv-t in doing so * Intense participation and communcation To prepare Thei ;%ill bonetit iro m Mladagascar;^ pioneering: eftorts. the plan about I ;i1 leal spccialvi;t ha% e been mobilized mously since independence. Educated Africans Corruption is not, of course, unique to Africa. But have assumed that they would be found jobs in perhaps Africa can least afford it. the civil service, in the military, or in parastatals- The rapid growth of population during the jobs that paid better than others elsewhere in the 1990s implies that even the ambitious targets pro- economy. Public sector pay often set the standard posed for agricultural and industrial growth for firms in the formal private sector. Public would leave room for only limited improvements spending would be better devoted to meeting in per capita incomes. Moreover the increased basic needs than to creating unproductive jobs level of domestic savings required would mean and providing social welfare to a privileged mi- that per capita consumption would remain stag- nority. nant. However, the strategy would still imply a Allied to these concerns is a growing recogni- significant increase in income and consumption of tion that many officials with power over scarce the vast majority of the population working in inputs (such as import licenses or foreign ex- agriculture and in the informal sector providing change) have prospered unfairly in recent years. goods and services. The squeeze would come They have sold these inputs at parallel market mainly on the consumption of the top 5 percent prices, sometimes in collusion with firms from belonging to the formal modern sector and to the developed countries. "Rent-seeking" and the cap- recipients of "rents." Beyond the 1990s even this ital flight that goes with it have undermined de- top 5 percent of income earners can expect rising velopment and corroded the fabric of society. levels of consumption, although it is important 46 that these increases are related to real increases in producers and the prices consumers pay for im- productivity. ports-exchange rate policy can tackle some of Africa's major barriers to growth. Strengthening the enabling environment An active exchange rate policy ought to be part of any long-term program to boost production The first element of the proposed two-part strat- and employment. For farm and factory employ- egy is to strengthen the enabling environment. ment to increase rapidly, external and internal Chapter 1 makes clear that low productivity lies demand for local products must rise. A devalua- at the heart of Africa's economic problem. A fun- tion raises the price of imports, which switches damental reorientation of the pattern of incentives demand from imports to local goods. Exchange seems essential. On the one hand, consumers need rate adjustments are a simpler and more effective to be more attracted to domestically produced way to promote domestic production than tariffs goods; on the other, new entrants to the labor or other trade restrictions. market should no longer aspire to employment in After independence most African countries the public sector and nowhere else, but instead adopted levels and patterns of personal consump- seek to use their skills in industry or agriculture. tion in the modern sector that could not be sus- Policies on pricing, the exchange rate, and taxa- tained at prevailing levels of productivity; this tion can be attuned to this goal. was especially true of public employees. Tanzania was a notable exception in holding public sector Reoriented incentives pay in check. In some countries, such as Ghana and Uganda, general economic collapse has Economic distortions in African economies forced a brutal fall in consumption. A better way have had a pervasive and damaging effect on to bring consumption into line with productive patterns of household consumption, income dis- capacity is an across-the-board "tax" on all forms tribution, and growth. The countries with rela- of consumption that, directly or indirectly, require tively high growth rates have avoided the worst foreign exchange. This, in effect, is what an active of these pitfalls. Specifically, they have kept their exchange rate policy implies. The most obvious exchange rates competitive, avoided strong or dis- result would be a greater demand by the prosper- criminatory protection of their manufacturing in- ous for domestic goods and services-household dustry, avoided underpricing their agricultural workers, drivers, and other personal services- products, kept real interest rates positive, kept real and a corresponding drop in their demand for wages at levels justified by productivity, applied imported clothes, electronic appliances, and the cost recovery in pricing infrastructure services, like. Such a switch would be wholly beneficial and avoided high and accelerating inflation by since it would generate employment and save following disciplined fiscal and monetary foreign exchange. Admittedly consumption hab- policies. its are difficult to change in the short run. Im- Structural adjustment programs are helping to ported products easily come to be regarded as reduce distortions in many countries, but much conventional necessities, and the vested interests more remains to be done (see Box 2.2). Chapters 4 of suppliers and consumers accumulate around and 5 return to the question of incentives in agri- them. In the longer run, however, consumption is culture and industry. Exchange rate policy is so flexible. central, however, that it merits further examina- Exchange rate policy can also stimulate regional tion here. economic integration in Africa-an important po- litical objective and a necessary condition for sus- EXCHANGE RATE POLICY. Discussions of ex- tained growth. Greater trade among African change rate policy usually focus on the short-run countries will not happen as long as foreign goods macroequilibrium. Devaluation has therefore are made cheap by an overvalued exchange rate. come to be associated with austerity. This ignores In theory fiscal measures such as tariffs and export its structural implications. Import-intensive pat- subsidies could substitute for devaluation. But terns of consumption are largely attributable to their administrative and economic shortcomings exchange rates that discourage domestic produc- are evident. The extensive and porous borders of ers. By influencing a country's internal terms of African countries offer many opportunities for trade-that is, by raising the return to domestic smuggling. The best way to make imports from 47 Box 2.2 Nigeria's lessons of adjustment Nigeria s ecn.ronil\ iit4hrate; th. dwitortions; cariced bi a .on.oil e\p,irt- pariicularle ca;and other a,riculrul Cornrnodir\ bomn thi. p-csiitic imnpact )tdeci4t..ego%ern- productr h3; er-cen-harpr.-b\ -i0percianta\earin in 1 ment action to reorient !n,enttie-. and th, need to rn.der- and ivSS atc- the advevre ociat impact otf :diusrurmert mea,uret Incontra-rii-tothe prtgr.in.' ettucti enets in impro%ing Shai-pl\ ri,ing oil pnces boosted e\port4 trom SI4 billion in eti,cinc\ i hsfnot\trledJ a .1'-eoi ptriatem ;est l'Y Ito'2n billic.n in 10Sil %thileGNP pcr ipta rose trorn ment-the k,e% to tulure crc... th T. re% ieE pratMe in. est $3-i' to more than SI t01lil Rmsing public e\lyenditr-uri ru- meni tht aUthcritie; h. o%e recontl ltib,ralized the eled h. oil re\ . nues vhiftrd producti.n tronm gncuiture re,ula1or; n' ironment br pr% itt nim -itrnt'including to seL ices IN hen the price of oil collapved so did relr-.ino rs,triction- on direct tore.rn intvetrn-nr I nd Niger3 S tpi)ri receipit R\ lthSn th,e; ;,i-re doi nr tio !ha ubeAunl ttocon.n.cr, a1iat7 nalor public enterpri,e-and 4 billion i hile e\terrial debt ri--e tormii5 billion in lu,i I to pr- atiz minor on-e $25 billion in l%nS Real mpnorts contractedt at an jiera3. Partl% becau e of the: ,Iuggi.hne . or pnvrite inen t annual rate ot 'no percert Grot. th rat.e tuirned 4harplI ment GCDP groith ha' bar.-.. kpct up w,th population rleganit 2nd GNP per capita tell to'3?i) 1zro.etmh and per capili income' hatic stignated LInem- Atrerinlknsi; public debak thegoxe%rnm:entadopted pho inentrernarnshizh beau,ethe tot torce igroi-.ng a program i lsberalze the econ'm ardnoie o mtnrkvet la;ter than enipto, ment although the e,iuaton ha' been prvce- b% pirtialls alleviated b, i srrng mngrition back t- the l3nd * Introducing 3a n.irketidEterrmined e\ch.inge rate -te - hi-a take di antaceot the !ntreased tcontOMIC .ppi.rtuntties tem in the rural ,cetiir Real i% a ii hich tell 1\ mort than ;¶ * Eliminatingi niporilicen-ing 3nd litbrtnn;ne,portr;ee. percent in l2-So. declinud b.. an idditijnal Ii) percent ul.ltilon in ILJS7 iard 3 puor har. e-t in I-S- raichet,d up prices. a Removingv pri-e cointrot- and AbNlkhing agricuttiral Relaxed financ,il p-liee. in earl. l e\aeerbated the;s markeing bo-ird- pr.ce pr,s;ure, Althl-uh c,il ^er\iIe aie vrt m-1 * Adopnng LiFpportmig rn.net; and rtical pol ic% crea sed n earl ,s ! 4iarp h3lrp ri,Ing tc.,1d prices more than The pricZram initiated m I"n h.is transformed the croidd thit gmn In lmd-IS tiscal -tabilization and a incenth e -tructure ot the econirmi A teurtold deprei!a- gi od harx,st s*1-.ed the incrca-e in tNod prici- until the Mt tion it the currenc, *harplv incra.s-d the rclarnvet prices tir't part i:.i l;S Bur Frices ther. began t.- risc 7uickl\ in ot internahonallk traded _e. ds This h.Is rei.italized the part retlecting e\.change rate depreilation and reduced treecropsector but a- tarniers shjited producti,unt,!i, ard go. erminent runding of the lfrecin e\change mirket The U e\ponr- 3nJ dub,tntutcd lor import; lord pnrcev ro;e. 'o,iil inpictot the,e trends ha-e bcen har,h %%hich mrde tood production more proit3ble Tht;e im- e. u-r.il It-son! emer_e tfrm Nigeria- s eperience - A proved incenti., for a2riculture ha,erew. red tle strong Mlost prciminent - the need or prudencc in spending the urban bias that h id dei Eloped during th, oil bi,rn pr:iceeds ot a coimmodrt boom. Cuttine public pending E\cliange rateadtustmcni t:nd trade reoirm Ihala rod'- ii hen .1 bOLiM ends s dlilttlult a3 is Ad3atin gIrI- ltrucrure ' re-cted tcreizn echange to here it i nioirc producti% ,t in ecounon;\ to tioer -pendingq Liuc; Thesk1 dificulties IS13nutacturing timms ha' : ^, itched lrcini a'entLI' iper- dlt Ia\ d Nigeria . resp0nr.se to the collapse ot oil ri' enu,e atirn aind other mpirt-dependent tnes- of production to and Itd to a buildup ot toreign debt that it could not ach\ities ba;ed tn local material- Alter et \,t,rs if ser-ice I te r,d Ic -r, i-thatde.alu ,trincan ucct-- contra,ti,n 3t an aer.irge rate l. 4 percent a %ear. namv tull.r prniiote irq,culrural production aiid enhancL the t3aturing output btegan gznro ing again in lOS The ne.. etticuenc% cit re-cur.e u- Third ei:iugh tinie must be ,'.change rate and pnce rtgimt hav,e improvedt resciurce al3-ed ior macroo.2c:.nrnni: nle.a-urte to haie an eftect u-e in the econoin% and encouriged eNport Althi;uch Sp-cc- police- undermine i e,tor cointidcnce and de- inmetirrcnt and import level, have contilnued to decline pr%c the econrnn ot in etimrEnt. essential i,r its re-:lI% - since the pronr3rn was :idopt-d. Output la-s 'tartted io ern Finall adtustmenrt niust be rieJd as an ongoing reco%er In the tiE %ear, fromnt101u' t. 1W. real non-cll proce>- and unles fiscal disciphnli is niaintained. ntl- output \ccluding, 3grniciture. dropped ; p,,rcent Klor tlien can ea-il underrmine the relornns and caust undue than halil ot this los;s v%as recouped in C1i-5 anti Ic055 cical di,tre-, dJ^pite a 30 percent deline in rt,. ral Alue ot rmp.:-ri outside Africa less attractive than those from tries such as Guinea-especially for breaking within Africa is to keep exchange rates away from highly overvalued currencies. Other competitive. countries, such as Botswana and Malawi, have For all the above reasons active management of successfully adopted more managed systems. the exchange rate is central to achieving sustained A managed system is particularly relevant growth and greater regional integration. The pre- where a country has abundant inflows of foreign cise form of exchange rate policy can vary. Oper- exchange from oil or mineral sales or from a wind- ating a free market in foreign exchange, possibly fall caused by a temporary peak in the price of using an auction system, has been useful in coun- some other export commodity, or even from a 48 high level of capital inflows (see Box 8.1). In these poor. In many countries much of the population situations a free market in foreign exchange will lives more than a day's travel from an all-weather result in a currency that is overvalued, as judged road. Average road densities are one-half to one- by the need for long-term incentives in favor of third of those in other developing regions. Fewer domestic production. The aim should be to make than 20 percent of attempted telephone calls are farm prices remunerative and industrial wages actually completed; in many countries the figure internationally competitive. for international calls is less than 10 percent. Short- Effectiveness of exchange rate adjustments will ages of drinking water and problems in waste be thwarted if the patterns of consumption and disposal are all too common. In Zaire, for example, production are not flexible enough to redirect ex- urban infrastructure services reach less than half penditures from imports to domestic sources. The the urban dwellers. Further, lack of maintenance problem of the "missing middle" in the consump- is eroding the infrastructure base. Urban buses are tion and production systems in Africa thus con- out of service as much as 90 percent of the time. tributes to the slow response to exchange rate Private motor vehicles are reported to last only adjustments. Government action to promote "in- three years on Zairian roads. Road maintenance termediate technology" would be an important equipment in West Africa typically operates at element in the overall strategy for structural between only 30 and 60 percent of capacity. Gov- adjustment. ernment-owned civil aviation services are frag- Financial discipline is essential if nominal de- mented and suffer from lack of coordination. The valuations are to result in real devaluations-that examples are endless. All this greatly raises the is, if they are not merely to cause higher inflation, cost of doing business in Africa. as happened in some African countries. Timing is There are many reasons for the poor state of vital. Governments should, for instance, take ad- Africa's infrastructure. First, except for railways, vantage of improvements in their terms of trade independent Africa inherited a very meager base. or of bumper harvests. This implies the opposite Second, public infrastructure agencies have per- of the conventional (and politically convenient) formed badly and have generally failed to develop view. It requires governments to recognize the a professional cadre of managers and technicians. central importance of exchange rate policy for Third, policies have failed to emphasize financial long-term development and to see a short-run viability and service quality; underpricing has led balance of payments improvement as an opportu- to decay and scarcity. Prices for petroleum prod- nity to devalue rather than an excuse to do noth- ucts, kept low by administrative controls, for ex- ing-or, even worse, to revalue. Indonesia ample, have resulted in waste and shortages, skillfully followed such a strategy in 1978. especially in the rural areas. For exchange rate policy, as for the manage- Sound infrastructure is particularly important ment of other key prices, the objective should be for cities and towns to develop and function effi- to avoid major distortions, even when fully mar- ciently. In Africa, as in other parts of the develop- ket-determined prices are not feasible for eco- ing world, rapidly expanding urban centers are nomic, social, and political reasons. Experience crucibles of acculturation to modernity and to the also suggests that when the country starts from a market economy. The earlier development strat- situation of high distortions, the process of adjust- egy gave prominence to the primary urban cen- ment has to be managed carefully with regard to ters. In many instances it adopted distorted timing, pace, and scope to avoid disruption. The pricing and investment policies, which stifled the benefits of liberalization operate primarily links between urban centers and their hinterland. through changes in relative prices, with resultant As a result the urban networks that are vital for changes in the flows of new investment, and they the development of domestic markets were not are easier to bring about in an environment of established. Postindependence strategies have economic growth. Thus, adjustments and growth also done little to develop the institutions that are have to go hand in hand. necessary to manage urban growth, particularly local government. Given projected population Improved infrastructure pressures, the long-term trend toward rapid ur- banization will not abate despite the drive to mod- A key component of the enabling environment ernize agriculture. And since efficient urban is good infrastructure. Despite the heavy invest- networks foster both urban and rural develop- ment in the past, services remain extraordinarily ment, provision has to be made for a faster expan- 49 sion of infrastructure. In this, policy should recog- ing. During the past 15 years donors and govern- nize the role of secondary towns in supporting ments have begun to address the problem of road agriculture. maintenance, but lasting results have been In the coming information age rapid access to achieved in only a handful of countries. Some data and new ideas worldwide will be the key to have developed innovative labor-intensive meth- national success. This is as true for Africa as any- ods for road maintenance in rural areas (see Box where else. Improving and expanding the tele- 2.4). phone service is therefore an essential component Faced with tight budgets, the huge backlog of of the new development strategy. Recent studies maintenance needs, and rapid urban growth, how on the relationship between the supply of tele- can governments hope to provide essential infra- communications services and economic develop- structure services? Several broad recommenda- ment have shown benefit-cost ratios of five to one tions merit consideration: and in some sectors even higher. In Africa less * Give priority to rehabilitation instead of in- than one person in 300 has access to a telephone. vestment in new facilities This coverage is half that of Asia and one-six- * Make greater use of the private sector teenth that of Latin America. The figures under- * Improve cost recovery from public services state the difficulty because the service is generally * Ensure consistent long-term financial sup- poor. At any time between 20 and 40 percent of port. the connected lines are out of service for lack of maintenance, and the service is unevenly distrib- RESPONDING TO DEMAND. Political and commer- uted, with remote areas often lacking any service cial interests both in Africa and in the donor coun- at all. So large is the unmet demand that a well- tries find it advantageous to expand facilities and managed telecommunications sector could easily especially to undertake the large projects that pay for itself and generate substantial surplus rev- were typical of past infrastructure programs. But enue for other uses (see Box 2.3). too often overly optimistic forecasts of demand Neglect of road maintenance multiplies the and revenue have been used to justify investments eventual cost of repair by 200 to 300 percent and that later proved unviable. Pressure to construct increases costs to vehicle owners and shippers by new roads that will benefit only a limited constit- up to 50 percent for paved roads and much more uency should be resisted while portions of the for gravel and earth roads. It is estimated that $5 existing network are deteriorating. Responding to billion is required to clear Africa's maintenance proven demand itself poses problems of phasing and rehabilitation backlog and that a further $700 and sequencing. Infrastructure improvements million is needed each year to avoid further dete- with high rates of return deserve priority. These rioration. This will require big changes in spend- include telecommunications and rural roads serv- Box 2.3 Telecommunication in the information age in an increaszm41 - nt,rrination-dri en -.orid Atrica a be a rea-0na3t:1 target r;r hub 5aharan Africa and %would comperitnvecss % ill depend on it abilht to 3cctS-S and require an meetmienlot t3round3 $SOih million each %ear, e\change Intormat.rn globallk hilormirac. are dr3mant- or about 1) 5 percent ol GDP This tare.t is modesl crnm- call improvin, d.ecisinnmaksn- proc ;ssc rawi ng pris par,-d ;vith the hc3adlng e .pannion takhn; place in the du:ti% ities. and rran-tormning the map or comparati% do elopedc ountrie- Europe currontk allocates 1.1 - per- ad vantage. N.u t%-chnc,loes-t.rm perc. ial: nputers cent ot GDP i hiie itrica tigure is onl ' 3 perceni. and teleiacsirimles to di,ital n.utorkl-are re%olutionmz- To meet ihiv challenme. the tradiiw nal approach to ing the w%ax the .%orld d;ee bu,iness None -r thl equip- XlLcommunicarbon-,n .lArica %,,ill need to be rethought ment can be us,d II the basic telecommunl icinon nEt-w or- E . sting public monc.pokhsare alread% Xo. erwhellmed and is not in place AtprEscnt Atrica 5unm,tdemnand tlorline4 lack thb managerial. technical and tinancial resourcei to iS estimated at more th.in ni! percent ol current inmialled cope. The commercialization and in ~ome aspects the c3pacit\ prl atization ot tklee-mmunicantnr ser;r%ices %ould be a Experiencevewlheri -uggeursth3t a haGDPeroieth more ettectie ,a-% to mobilize the resourct4 and ;knIl rate o0 4 percent, the number oi in:lephc:.r lints *hould 11iat are nceded The ben ltit.co,t ranic4 ot eood communi- e\pand b% Ill peroent in recent X :ars th-e e%pansion rat. cation are sic high and the economic ios-e cau,ed b% the has bpen perie ninnialk To n;e upmh;O b -Li lh 3 1 current poor ter i.e; 4o gre-,t that 3 read, iniere'.t on the percent annual gren' th r3te in thv number -it hne, v- ould part o, the pnm atc seci,.r is a-sured 50 Box 2.4 Labor-intensive road maintenance Ro,3drehabilitatic.nandm.tntEna,nce kheoherottrurnk or rehabilitation in th r D,rrict Roadts Inpro%ement Pro- teederroads generall. retirs heaailm 'n tls equipment gram ~Viteihl3 Lactelackt !toreiene.,harn ta3i~ Igmanx sun- ~h3n.i ha- decided ic. u-c labor-ba;ed method4 trir trie- such equipment lea; bven .car:e In it- place labor- aboul 29 pcsrcent oft it, 3nnual io:der rjad rehabilitation ba.ed technrique can ;ai.. tiorei'nv'ch,n. eand zencratw and n-,aintenancl. Federr rl ..ib iould be rehabilitated I; lob percent m.re :hv3pIl thin tho le dont: N conventional In The Gambia a pilct proltcct on lator-ba-ed moiinto- m nlhcdi v ith tup to .i 41I percnti a% ing- in toreign nance ha hoi n that vmph.Ning small-;caie % llave- chang 5mAlI contraci...r; after tour ronth ot practicial ba4ed contracto.r- lboth men and i,%nmeni i tca;ible arnd trainin ltoll.--t.:d b t% 1-. month, ot trial coritractu. can economic. Thr ;niAlI contrackt,r~ quickk le:rn. d the nrc n;- r each prodlu - :n a%era4e t"o kilornetrcr oI high- t-sarsi kill- and ettvcti%eh or,!nied X lrker~ I r thr cialltti fr.i .l road a nionth Th,- emploN ab.ut 200 pb-. Thvu- t a> povsile becaue vimpltited pro..cdurv> for per,on; Ac-ut 3i to 41' perct:nt n oment da compared the at, arclinc . ontrol and pai-mont -)f crrlrractf and ior n tit iboujr 1ii r^crv under thocapiral-initrlil e method nionitorng perfornianci and producth ith *:.erer detel- :aget contribult to ca h varning. ihcli ~hmulate the oped rural eccnomr Ntnolten uch nirmr ha%, bevn trained in Othere,arnple o t ;;e rtullabor-inie.ruralr.oad the %Ncrld Bank LiNiP-trnanced prole, t e\ecuted bi the rehabilitation procranis e\iit in Ghana lken'.i and ILCiSpondins noquipmnt .whnmied btractor.tral. g Nialalwi Labor-ba-ei rechrnque~ %%ere ~uC-t tull, ud l r-. and manual cornpaction eLiUipmcni co;rng nabout in the Kenma Rural Accc,i Road. Prr:Lct and the- Mincir lIt 11 p1e0' r contrictor cmnpared with the$l 1 milionto Roads Protect Malaa'E i ba al-: dcm rnn4traied th iobilir r .ii million nr,eded b\ Xas:h contra -tlr under the capital- and ettecti%enei- cil Iibor-intenikv techruqu*- tor road nt,n.Lv mrthc.d ing areas with good agricultural potential or services has forced individuals and companies to towns with strong economic links to the agricul- invest in electric generators, boreholes, radio- tural hinterland. equipped couriers, and the like. This demon- strates both the scope for private services and the USING THE PRIVATE SECTOR. Infrastructure is willingness of users to pay for them (see Box 3.2). long-lived and, as a rule, inherently monopolistic. Programs for the sector should consider ways to Governments must therefore take overall respon- promote such interaction. sibility for it. But an important distinction can be Many governments are already relying more on made between the facilities and the services they the private sector. Their policies range from out- provide. The private sector can play a useful role right privatization to divestiture of ancillary activ- in managing the services, even when government ities (for example, stevedoring and freight builds and controls the facilities. Box 2.5 describes forwarding) and management contracts. In some cases of private sector participation in water sup- cases public agencies have narrowed their role to ply, solid waste disposal, and public transport. In intermediation and planning-as in Malawi, Nigeria a privately owned power company serv- where the housing project agency is being recast ing the Jos Plateau sells electricity to the National as a lender rather than a developer. Contractors Power Authority. However, subcontracting to are now used for road maintenance in several private firms is a viable option only if the govern- countries, such as Ghana, Madagascar, and ment respects its contracts and pays its bills. Senegal. While recognizing that local governments are the appropriate managers for infrastructure ser- REDUCING COSTS. Although experience varies vices (see "Strengthening local government," from country to country, the unit costs of infra- below), most countries would also benefit from structure investments in Africa are as much as greater reliance on the private sector. Nowhere is - twice that in Asia and even higher for mainte- this more evident than in transport. In Khartoum nance services. This is partly because domestic the informal bakassi continue to operate profitably markets are small and fragmented. But it is also while the public bus fleet accumulates deficits. So because of poor methods of public procurement it is in many cities. Wherever private operators and contract administration, low labor productiv- have been permitted to enter the market-and ity, and the dearth of indigenous machine shops where monopolies and restrictive practices were and other support. Some African economies are held in check-transport services have generally too small to support a construction sector that can improved. In many countries the failure of public undertake major rehabilitation and development, 51 so it makes sense to foster the emergence of firms use of urban streets. In Abidjan, for example, new that will serve subregional markets. Measures to parking restrictions recently increased rush hour do this would include harmonizing the regula- capacity in the central downtown area by about 30 tions that apply to public procurement. percent. Reducing the cost of infrastructure is vital if Africa has so far failed to take full advantage of African producers are to compete successfully in- the available small-scale, labor-intensive proce- ternationally. Most infrastructure agencies have dures for developing, maintaining, and supplying opportunities to cut costs without affecting the infrastructure services. Attempts to use appropri- quality or the volume of their services. Cost reduc- ate technologies have been too quickly aban- tion programs require careful monitoring and, doned. The comprehensive programs launched above all, strong commitment from senior manag- under the UN Water Decade to develop hand- ers. Sector agencies under financial pressures pumps for rural use and to design low-cost sani- have seen that such programs are needed; for tation have shown that the keys to success in this instance, the managers of Africa's railways are area are extensive field testing and a multidiscipli- struggling to rehabilitate their bankrupt systems nary scientific approach. Regulatory obstacles (see Box 2.6). Greater use of infrastructure is pos- and institutional weakness often frustrate the use sible with better management and modest invest- of new technologies; this is true of containers used ment. This applies to the turnaround time for for transport, for example. wagons, to the berthing time for ships, and to the .;i Box 2.5 Private participation in infrastructure r Pri%ateenlerpris can provrde intra tructure cr,tcicteIti- -oIlectinn andJ di poing Lome municipal ohd wa te in 2 ctentl% a; the lollo%wing ca e denmonsrate. 1 74 \n annual ta\ ;p cihcall.i designaled lor Lw-iste HI Pr.'.;.e Ikl *1110 1 . SUC;esLtul pri - ie prc.v ion ot colicction and applied to tht properties ;erxed Is the i jntra4tructure !S denlOnStr3ted in Co( cl l.o.re % here principal .urce rnmen r :-enue to paF Ilte con.- drinm,ing i,aler is supplied b% tht Societe de Dislriburti.n pan%. and th; municipalirs s ex\ellcnt performance in i d Eau de la Cole dR loire iOC)DECI, t1. 13111 cites and reveiu-e c h!tction t- one ot the re1s.ii lor the 4uccess of lok.ns-Iron! Abidjan ; ,\tEnste piped nehtork to \eli- the operation Li bseted s -t.n in malilcr tlo: n; CODECI I.ointh oi-ned ;OTENIA 4arted i iih i one. .earrene%.able contract to Ih- prit3te It Lriar intere-l. the iovtrrnment 3nd a Frtnch col;: t ;ran;port and disp.oe eo the lull range or a rte; nirm SODECI ha. operated under a s; ;trm b;-a d on Ihe and i b noo collect: 3nnuall% an a' erage ot 5-I 1 tlns French ap. rnai,ic model in k hich tht public iuthorLri ot t a,te The compan% ha, maintained responsible di,- - handtle- the consruction o the s; tem but contracts ut p° pal tand.irdt and ha- eslabhi;htd a good record ot iN It4 operahon. r-aintenance and collechton o ch.arge, to a n. ironnmentil imptr,- cen,et largemn rit practices 2 pnrale operator. the rertinri This arTangement ha, re- hbae been s ound and the cempan has N rot' n steadik centl\ been e\tended to a coiicvssson contract that aiko andproliuabl.k ubilanil r ercache.edbE man- I make S;ODECI reponsible bor in%esmenl in e\panding ulacturinZ collection quipment locall under hcen,e. the .;ater s-;tem lnve,tmtnt plans need to b appro%ed No% atter ne3rlh, 1t- ear t ,u;cce,taLl oppraion. bk the to0Lrnnment -(ITErgA ha;obtained tinanrcalsupporr trom local bank- E 4(eCIEC[ re%enu,: deri%e lrom a tee that i' abour ngm intiruton,.and, tud',ng ropo toe\pandoper g one-third o0 the . -,ter tarnt Althoug.h the tari.l tructire attions to other cities n Tog,land abroad i pro%ides bor a l, ier tarilt lor small con umer; Lhich Pri/ I rt 'L Ic I - a . u, r~ /irt [rit tae bus op r3tors are s help- the poor to allord t\ater o%erfll It 1i set to rellt-t mniaing a br akthrou h in Accra. Ghana in pro dinrg total cost1 linancinig or debt ierx ic: and cash generator nnmuch-needed putlic iransport A zmall pr'.atE tirm. tor ruture inm e,tment; The %%ater larilt 3nd the ree mre slarted bN ) mrchanic in m S1 purchased monme old buses relatedcothe -olunimco i% att r-old io a-livuumer4railthr th3t wer auctlioned irib% a stte-o ned bu, companr than la\pa.;er p3a tror [lhe erucc receited and -incc Thebusrx v ererehbtililatedintheintormal ector.,ndptrt con4umpton iS metered. %.1ler lo;;es are l .. SOCDECI into; sr%ice Ntm the lirm h.3aabi.'ut4 4buze, that pr iklde ha,c1ons,ttentlk sho%%na proIiland hast\panded rapidl regular pa3ienger ,cnrict- un man% routes in Accra The because il UFpIIEie water at stand3rds among thc highe,t tirm ha3 a .tatt-to-bu. ratio ,it tn c-3boul one-iourth ot mn We,t AfTica Ihe ,t1tt-o-bu; r3tio ot tte-ou ned bus companies The RfVtI1 CllcIIt,L;ll Another v\ampl Ik th h colltctinr o 'ucce- ot lhi prin 3te tirnm in pro% iditg ellic:ent ser'ice, municipal aste b% a pri% 3te compan% in Togo I he pri. at 3 prolit t ihin f-, ernment tarilt Ict ek is a good 1i\am- %ate Togolewe Reru;e C.ollection Compan\ i§-0-ENIAi ple-e poi.c% nraker. trN ing to reorganize atlaie-ot ned bus -; 3 lrirmed a; a Togoles pril atcorporation u ith French compinies mire ethi:,enlI\ technical participation 3nd tinancial ;upport and beg3n 52-W _ -m;LC! Box 2.6 Restructuring African railways R3ilwav,s.,hich wereoncethebackboneol,Arrica'strans- Railt%a',4could hatean important role to plas in meet- port sNstem. are not' in a cnhticl 'ituation ing the mncrea,r in irclht and p.s-rncxr tranepo rt d& * In 1*6-19%. on]; two Sub-Saharan Alrican r3il%a .s m3nd resulting trom conomic rcco er; The'$ should out ot 22 appear to have denr ed a modest inancial *ur- operate i ith Ile relianct on mandator; alloc3tion t plus. Large dencirt are the rule In 1NY. out ot nine rail- troight talic It iell-nianaged . ih% oc-tild bK able t.- %%avs tor w%hich reliable dat3 are a%3al3ble .one had comptte u lih pmnate lruc,er, and buse- and '1ler alter- operating costs ofQlilpercent,aneither,;i. percent ne,ces nati%enran,it rout,e; or lanlcledl countrics ol revenue. The raile a', .cak marketing and poor coninierci3l * Sub-Saharan Africa ;s railwaY tTatric has enerall been services are otten a result of being imc-nopotl esacer- dechning both in absolute terms and in traltic; shares bated b'. bureau-crahc manageement and tack orlaLAtonomr Ghanian r3ilwvas- carried around 2 h million tons o. To- turn thil ituation around the railica$- , iill need to freight in the earlK 1970s and onis 1) 4 million tons b% the de%elop capibilities tor rrategIC planning an:al' is L.t mid-198i.ss. Nigerian railwavs lost 33 percent ol trattic demand marketing .md iraltic co-ring. Special markets trom jO7Q tc 1j.&6 In Sudan 41t1 percent ort sports were can bK round *uch as Erxing as lorg-haul carrier, in earned bv rail in 14.s0. but bl' IN$o the rafl% al s 'hare had transilt ransportation lot whch bt-tnernrmodal oordi- rallen to 5 percent nation with ports and maritine Iran port s ssential * Ratlwasvs have generaliv had ditticult conrcilling Railwa% deticits arei result ot inacdqiaate Itructure of theirpax roliand havenotad;usted their workiorcesin lne tarit- and can lead hi continuoc1 reliance on ;ub-idie; with declining outputs Stafl costs ot raile a', s absorb up Progress to%ward tinancitl ia iltaih n%ill require that rail- to 75 percent of re%enue in the worst caaes.and 47 prercnt w%a% manamrent bK granited a nuch higlherr eree at inthebest wthile 50 percent isco;nsideredastheacceptable autonom\ in tarilt-5ethng and pricing in controlling all maximum, given other costs Also staft productivih 1s co-F coniponenti and in personritl m.n3gag3ment Also the low A lQSo stud' showed that in 10 trancophone Alrican role and conmposLhon of raailwa board anrd the . 3zt nuni- countries, the average productiv it% ot their raile 3a - "as berot contT01 Iand regulatl ns need t''bere intd to inipart about 1IS percent below that in Asia and Latin America J3lnvN cohesion. and accountabiliht. In se%eral -ongoing * The consequence ot inadequate maintenance is low rethructurinn etitortl in Ciabon htnsa and Sene3al 'uch availabiliht cif loxomotive and rolling stock. often below in,titutional retcrrni- reard; have been enshrined in per- 01) percent %%ith some i%stems well KIlow 40 percent tormance contr3cts negotited bei"een the ratlwaN man- Alihough badly in need of revenues rail%sa;s are unable aenement and the go%ernrrent These- ill succeed onl; it to take up tonnage offered b! shippers because oa lack ot. both parties strictl% adhert- to thEir cornmitnt nts under and pcor maintenance ot equipment th, pertormrndne contract; RECOVERINGCOSTS. Except perhaps where facil- nance, only 60 percent of the tolls are collected, ities are underused, there are no good reasons for according to recent estimates. Such figures are charging the users of infrastructure less than it common. By contrast, recent rural water-supply costs to provide the service. In fact these services projects-which users themselves have helped to may sometimes be priced above long-run costs to operate and maintain-have collected charges recover some of the consumer surplus; most of successfully. these services are consumed by the higher-income Operational discipline is also needed to mini- groups, so this approach would also be equitable. mize capacity losses and service leakages. Accu- Often cost-based pricing alone can increase rev- rately metering water and electric power, enues by 20 to 30 percent. Adjusting the charges enforcing motor vehicle regulations, and monitor- for water, electricity, roads, and telecommunica- ing shipping and air traffic may be particularly tions so that they better reflect marginal costs can cost-effective. These measures can add the equiv- increase public revenues by between 5 and 10 alent of 40 to 50 percent to the capacity of many percent. For water supplies special arrangements systems at relatively little cost. may be justified to protect the very poor. Setting prices properly is only part of the an- MAINTAINING THE CRITICAL FINANCIAL COMMIT- swer: fees and charges also have to be collected. MENT. Financial uncertainty has added to the Revenue-gathering in Sub-Saharan Africa has problems of planning and maintaining infrastruc- been notoriously poor. Frequently this is because ture. World Bank studies find that erratic pay- people cannot see what they are getting for their ments by governments to contractors are one of money or because they subvert the cost-recovery the main risks facing indigenous construction process for personal gain. In Tanzania, where the companies. In several African countries utility roads have deteriorated because of poor mainte- companies have trouble collecting fees from min- 53 istries and parastatals, and contractors are not and life expectancy. Since then, however, it has paid on time for road maintenance. In some cases seen reverses in these as in other areas. Vocational cash shortages are to blame since they lead finance training is poor, and labor productivity remains officials to divert funds to seemingly more press- very low. A high priority for the new develop- ing areas. This is a costly mistake. It increases ment strategy must therefore be to restore mo- future demands on government funds and slows mentum in human development. In particular the economic growth. Timely and reliable funding is quality of African education and public health essential. Earmarking revenues-although unde- must be improved. Where access to education, sirable in principle-may in practice be needed to training, and health services has been widened, it protect infrastructure assets and to build fiscal has generally been at the expense of quality. discipline. Education must be relevant to the real needs of The gulf between current spending for infra- African economies. The allocation of spending structure in Africa and the amount needed to among primary, secondary, and tertiary educa- develop and maintain a system to support eco- tion, between academic and vocational training, nomic growth is huge. Africa cannot achieve sus- and among the different disciplines must likewise tainable development unless this gulf is bridged be related to development needs. Above all, edu- through a long-term commitment of public funds. cation should aim to engender an analytical frame Annual infrastructure investment equivalent to at of mind and receptivity toward technology. least 4 to 6 percent of GDP on average is warranted Another aspect of capacity-building is training in most countries, and $10 per capita annually for excellence. To make progress every country (1980 dollars) may be a suitable absolute mini- needs a technocratic elite of entrepreneurs, civil mum target in all but the poorest nations. Spend- servants, administrators, academics, and other ing for normal maintenance must keep pace with professionals. Although few in number, they will new investment. An additional 1 percent of GDP be important catalysts for development. With is needed annually over 10 years to catch up on technology advancing rapidly, Africa will need the substantial backlog of deferred maintenance. scientists and technicians if it is not to be left behind. This question is addressed in Chapter 3. Building capacity Public versus private institutions An enabling environment creates the condi- tions for higher productivity, but growth rates The postindependence development strategy will be raised and sustained only if African capac- accorded the state a lead role in producing many ities are much enhanced. Capacity-building has goods and services. This approach foundered on three distinct elements: the weak capacity of public institutions. At the * Human development, especially the provi- same time, far from promoting the private sector, sion of basic health, education, nutrition, and tech- the state often actively curbed private initiative, nical skills including cooperatives and grassroots organiza- * The restructuring of many public and pri- tions. These policies have been partly reversed, vate institutions to create a context in which but where to draw the boundary between the skilled workers can function effectively private and the public sectors remains controver- * Political leadership that understands that in- sial and must be settled on a country-by-country stitutions are fragile entities, painstakingly built basis. up, easily destroyed, and therefore requiring sus- The debate is not simply about the division of tained nurturing. responsibilities between the state and the private Often African countries have been lacking in all sector, but also about the division among the cen- three elements. Too frequently national institu- tral authorities, local government, and local com- tions have become politicized and hence used for munities. The goal is to reduce the number of tasks narrow, sectional ends rather than to achieve na- performed by central government and to decen- tional objectives. tralize the provision of public services. Many basic services, including water supply, health care, and Human development and labor productivity primary education, are best managed at the local level-even at the village level-with the central In the first 15 years after independence Africa agencies providing only technical advice and spe- made impressive gains in literacy, public health, cialized inputs. The aims should be to empower 54 ordinary people to take charge of their lives, to likely to succeed when they are given clear and make communities more responsible for their de- attainable objectives, day-to-day managerial au- velopment, and to make governments listen to tonomy, and unambiguous performance indica- their people. Fostering a more pluralistic institu- tors, which permit the supervisory body to tional structure-including nongovernmental or- monitor progress without undue interference. So ganizations and stronger local government-is a far in Africa this has rarely been the case. means to these ends. Development takes place through institutions, The state has an indispensable role in creating a including markets, whether private or public. In- favorable economic environment. This should, in stitution-building in the widest sense is essential fact, be its primary concern. It is of the utmost andmustforthemostpartbenurturedbygovern- importance for the state to establish a predictable ments. But few African governments have paid and honest administration of the regulatory much attention to the task. Agencies are created framework, to assure law and order, and to foster or disbanded without much attention to the inter- a stable, objective, and transparent judicial sys- relationships and respective roles of the different tem. In addition it should provide reliable and institutions involved. Once created, they are often efficient infrastructure and social and information allowed to decay as their initiators move on. The services-all preconditions for the efficiency of turnover of senior staff is frequently kaleido- productive enterprises, whether private or state- scopic; yet prolonged inaction in the face of urgent owned. problems is also common-and equally damag- The division of responsibilities between the ing. Thus, to overcome these weaknesses during state and the private sector should be a matter of the next generation, governments need an explicit pragmatism-not dogma. Often public services strategy for institution-building for both the pub- can be provided by private contractors at very lic and private sectors. competitive rates-road maintenance, transport, water supplies, refuse collection, and public vehi- Bettergovernment cle repair to name but a few. At the same time consumers have sometimes been exploited by pri- In the words of President Abdou Diouf of Sen- vate business monopolies. What matters is reli- egal, Africa requires not just less government but ability and cost-effectiveness. There need be no better government. Despite reforms in the 1980s preconceptions about the "right" type of organi- Africa's public administrations remain woefully zation; appropriate incentives count for much weak. The principal causes are: more. * The uncontrolled expansion of staff in the Most state enterprises have a poor performance civil services and public enterprises, which have record, although there are some notable excep- often functioned as welfare agencies for unem- tions (see Box 7.3). Managers have suffered from ployed school leavers political interference. But it has also proved diffi- * The rapid promotion and turnover of poorly cult to devise incentive systems to motivate em- qualified staff who have little in-depth under- ployees and managers when entrepreneurship, standing of either the institutions they manage or commercial judgement, and risk-taking are of the broader context in which they are expected needed. Increasing recognition of these problems to function has spurred a worldwide trend toward privatiza- * Difficulties faced by managers in motivating tion. If Africa wishes to remain competitive, it and disciplining their staff owing to the social and should not resist this trend. State-owned enter- political context in which they operate prises will still be appropriate in many cases, es- * Insufficient appreciation in government that pecially in providing utilities and some public public agencies work best if staffed and run by goods. In some cases the private sector lacks the professionals according to objective rules and capacity to take over, but in time and with imagi- criteria nation privatization can work. * In an increasing number of countries the Much can be done to strengthen the perfor- compression of civil service pay scales at the ex- mance of those state enterprises that are retained. pense of higher level staff. Efficiency has less to do with ownership than with Recognizing the urgency of this problem sev- the conditions under which enterprises operate. eral governments-notably Central African Re- Experience shows that state enterprises are more public, The Gambia, Ghana, Guinea, Mauritania, 55 and Senegal-have launched, although not yet takable. Despite the many competing claims on completed, comprehensive programs of adminis- the public purse, in countries in which civil service trative reform. The key measures include: wages have collapsed, systematic progress must * New and clearer mandates for the agencies, be made over time to reduce the numbers of public with staff planning based strictly on need employees and to reallocate the savings to im- * Staff testing to help select the best qualified prove wage scales if performance incentives are to candidates and the release of redundant staff with be restored. compensation and assistance to enter the private Staffing is but one aspect of the problem, albeit sector a crucial one. Complicated staff and financial reg- * Better personnel management, with compet- ulations that are barely known and erratically ap- itive entrance examinations, regular staff apprais- plied contribute to a gross lack of accountability. als as the basis for promotion based on merit Overspending and misappropriation of funds (rather than patronage and longevity), and accu- occur routinely and pass unnoticed because of rate personnel records that correspond exactly to poor accounting and the lack of audits. Even when the payroll audits are conducted, they are rarely acted on. * Selective improvements in the pay structure Such laxity can and must be stopped. Administra- to attract and retain highly qualified staff. tive reform takes time and persistence, but it can Public employment accounts for more than 50 be done. Guinea's administration, which was percent of nonagricultural registered employ- enormously weakened during the 1970s, has suc- ment in Africa, compared with 36 percent in Asia cessfully instituted far-reaching reforms and has and only 27 percent in Latin America. Chronic laid off 16,000 civil servants in the past two years. overstaffing has damaged performance severely, The Gambia's government has gone even further partly because staff are badly deployed and de- and has still maintained its political support; de- nied adequate material support and partly be- spite heavy redundancies, it was returned to office cause idle staff undermine the morale of those in a free and open election held soon after the who want to work. Many ministries in Africa reforms (see Box 2.7). would probably function better with a fraction of Despite overstaffing and growing numbers of their present staff. Often the application of exist- educated unemployed, there is a great shortage of ing regulations-dismissing persistent absentees, competent officials, especially at the higher tech- requiring retirement at the mandatory age, laying nical levels. This is partly because of poor training off temporary staff when they have completed the and partly because many well-trained nationals task for which they were hired-would reduce join private firms or emigrate. For example, 10,000 staff substantially. Pressure on the wage bill can highly trained Nigerians are reported to be work- be eased by eliminating ghost workers, double ing in the United States. With the right incentives payments, and automatic promotion. Merit-based it should be possible to persuade many to return pay systems, which relate bonus payments to per- home. So producing skilled people is only half the formance and not status and which pay a greater battle; the other half is to recruit and retain them, part of salary in that form, help to motivate staff. not so much by high pay (which can be ill-af- In many African countries compensation for forded) but by ensuring that they have productive civil servants has been severely eroded during the jobs, satisfying work, and secure conditions. past decade, if only by inflation. This erosion has often affected positions requiring higher skill lev- Effective economic management els disproportionately, precisely those where the greatest shortages exist and migration occurs. By African governments have depended heavily many measures of internal and international com- on external agencies and foreign consultants for parisons, compensation levels were too high at the analytical work on which key policy decisions independence, and in a few cases they may have have been based. If governments are to become to fall further. In a growing number of countries, more self-reliant, their capacity to undertake this however, compensation has fallen below levels work for themselves must be improved. In the necessary for the government to compete for in- 1980s governments had to design adjustment pro- dispensable skills and for government workers to grams to attract external support-notably from support their families on their official income the IMF and the World Bank. This stimulated a alone. The adverse effects-low morale, moon- demand for policy analysis, but progress was lighting, and petty corruption-have been unmis- slow. Governments should plan ways to build up 56 Box 2.7 Reforming the civil service Li., Civll *cr' ice reform is high on rhe agenda tor mans Atri prersonnel action is.uch a- hinng pro.mntiori tran.ier r 1 can governments such a- the Central Atrican Republic retirement, i promptil r iorded n th, per.onnel irtr- The Gambia. Ghana and Guinea In these tour countries nl.3tion s. lem and the fM roll sn1iultaneoull. adiusted. ivil rsenice, ha%ee'panded %erN tlat and hae;erncd in 5, crtating a personnel data ss-tem linked Lu thc pa; roll part au weltare progrcam in a pn-od ot ecenonmc declin, g;. urnment~ have been able to pre;tnt rsalarN a ments . Consoquentl% the ,alan bill ab-crbcd a 'er; large part -t ltonont\i stento runauthorizedper-onriel Mloreo,ercomn- F 4overnment re%emnuc 1 BI QIn C Guinea . ! Itit" ci; II puterizatIon permits rcgular Lpdat in and quick lerifica- fi ernantswn agesaccnunted tor3 ipercentolcurrentespen nn. in The Gambia the ;tatt audi it %%as tlollcied b, the Jiture,. In TheCGambia the civil .erx ico dcubled beDceen rigorou; nionilonng ot 4al:l;, pa; ments and :ontrol ot I974andlQ4S4 InGhanathecii,il sErx icc increaseda3tarate ncu% hinng and ;imilar niea~ures are being instituted in lisehmes thegroi' thol the labor marlet-14 percent each Ghana 3nd Guine.a ;earbetween IY. and l n .2.lntheCentral.Arrican Reput- Fourth basic and mtn*ri ice ltrainin- Is bting de,i:nei B lic civil ern Ice salarie- ab,orbed re3 percent ils current in the cc.nte\t of a -omprelinen iE ci;il snirxicc human revenues. Recent hiring thce2ee haleMhped tocontain ih, re 'ourc: plan and clcarl\ link-d to planned -:areer de%El- z'agebill, butthth remainunsustainable Th,cappinqgot opment Mfore peciiical; to 'oercom, t;eaknes inper 4 3 ge andprmotionsha;edemotivated tati h mu sonnel management npecralized in-,erxice training I' rale a, alreadJvtenr potor GcneTall prolducti;it; u a- being provided to personnel stall In The Gambia andi estremel, low di.eplnei a- largele lacking and o% erall Ghani the tat3t audlits .cre undcrtal,ern H selec-ted oUti- there u as little accountiabiith cial%. wvho ou cr tirrtensive-training i taifm- To tackle ihi, situarion the lirtt tep has been to con- ~ pect.in and 1oh anals si, techniqoe+ U duct a stall census to-. eliminate troni the pa; r;.li departed Filth, the r,hatblir3hon o! a ci% It eri ice also- required ii -taff ighostsi overage nmplo\ st'-. and unwarranted pro- the reform c't the -tatutvr\ and leeal trrme%s"rk The i mohon~ and allo%% ances and to determine preciselY the oblectc ts ii to re; ise and simplit the ci% II ertIce code numbers and deploi mentotcitIl seri ants In The Gambia pro-.nncl tartutic and emploirment conditions to rellect more than 21 perct oIt Ithe I -iI enr- e -as identitIied a the need t.r a streamlined mnrvale'a . and cost-conscious -upertl`Ious rcll:.t- ng such a censu- and was subs- ci; II ,cr ice Linkud v' thin in Tlh- Gambia was a re\ sinon quentl\ retr,nched. The Central African Republic t,rrmi- t thle civil ersi pa; 3nd benefiti trucrure and related nated automahc recruitment olgraduates and introduced re% ard s; :icms special honus,s and allowanct's1 aimed comppvtiti\ entrance e\am, a cenaus allo wed sa; in,s ot at harmonizing special arlr3ngement- and linking salar 7 to 5 percent Lt the itage bill prcmiumst ili% idual pertfrmance in Ghana based on A; a second step staf a3udit, have been und rtilaenr t cemparalor ;ur\-v% pa' i:; naiproved in two ws 3% r t - match stati requirermenl toaactual sLttming thereb; estab- higher-,kill lev%ls to rev-ersc a ser ere brain drain out otl : hishing 3ppropnalt--tatring ,trucwurt and identir. inc Zovernment and to Il! crrical lon -tanding acancies . -urplus statf Toensure that thet most cc.mpetent -ntia ere In 31a tour ca'cs rcolrm in'.-olvt-d la; ing-oll stalf The t retained. Guinea required all ci; 1 oer' ants to be tested. A' ucce;; .;t the retorm hinged .n the pclitical skill i ith a result 14 001) stall have bcen placed -n idministrahse ;%hlch this ta,k !,as approaclhe. In The Gambia a stall lease pending retr.rnchmeni and 0(ltsilt hawe opted totr re,eitlement ;cheme to a'sinr redund.ant emplo;ees as .; early retiremenit (Ghaa carried out .; stemar: lob in- put in place and n Gha;na a r,ieplo;ment committee s a- ;pection programthat ins oed uptoLi ljob inspsctor anl e-,libh4hed to help fornier ci; ilt erl,ants ind arntul pri- remm- ed sonle 4 1-1 Wii civil serx-ants Inr'm the past-'ll I.- er vale' stctc'r emFIc; nment In C(-u .[ the go'vernment has sv-o sears Introduced a redeplo;, ment program as-istedi b% a credit L Ti) avoid c'stl. r peai- ot -efnl5 and compntenc; tc ,ts schrme adrnin,tered b'. local bank, the third step has tren to le tlsp and nanta!n an etle- The- inmplem.rntaltiin o: c isil serx nic retorm is a oI ng nMe personnel infrmation * 'rem to provide up-io-d.ils and pc.ltcall- ditticitti r;c-.- se urm participated in workine partie; and ad%ii;Ed e,amples in Africa in h hich lacult- and re-earch econo! on th, hormahon ot the Economic Reco%er% Programme mists are conmbutin sigmticantl to national economic; nd e\ternal n. Ctiati.r,. Donors -urnded polic-, and prol- policN analhsi;. lt E;oncmi Research Bureau slarted in ecthtidieslon intlahontarift retormns.arldcropmarketing 14i,5 with Rockeleller Foundation support a %.t AallEd a; %%ell as hecollechonand anal% si;ct data on parastaral intialhb eXp3triate; v hiletTrnzanan- i er tsentabroad performance and ¢(x rnm.nt recurrent colsts LIDSAI tor posigraduate training. econormists have also promntkd informal discuslion ol This etorl io creatt a cenier or e\cdllence as set b3ac Filici op ior.r b% or)aniinnge orksthop~-. ith setnior gov b% the phasing out oi Foundahon support in 1471. Core ernment o.ttic3ks in iQN ihes launched a quarterlN pub- staft were attached to pbs in the public ser% ice and e\pa- lication re% et in ;;conomnc rTends and coritemporar~ tM3ites lett. Thisdecline wa4 reverstd it 1'7- % hen '% -e- Foht 1\ 5s;ues. den agreed tc sponsor technical support and trainine tor All this proved pos;ibl tor three reasOns First. the the bureau and tor the economics taculLt at ihe Uni er;tir stron* toundltions laid 21.1 %e ar ago % ith e\ternal sis ot Lund kinc:e ut3mained the ta.iculr\ thr: .igh the lOQ7is 3nd helped The current program 31so provide- for 4hort-term producealar4eenoughs .condgtnierahb,nt l ell-trained stud\ visIts s.abbatical leavetor senior statt assignments economisrt to prov ide 3 cniical mininmUM ams- Second. bs 0islring protessors 3nd eqLipment As a re-ult the the authorities .ought an .pen debalm on dilicult pohic. UDSM now% provides more thanr a dozen TanzanIan pro- isues ;nd --ere . ilring to drxi. on nianonals out4ide fessional economist4 i ith .trong capabilities tn indepen- g!oernment to reintorce policA raming c3pacir. fhird. dentresearchandpolc\ anal\sli there a3 increa,ing av arente4s b% donors that local es- These ULDSKI eccnomnits have beer incr asinzk prt%sarea kn A ledgeablri:3d;csrt-tecti%ere,urce tr drawnintopolics workb% rhegvternmertinrecent% sers their ow n program worK The% were ;econded to go'.ernment and para,iata[l. These technocrats provide the continuity when should be redirected to give priority to the needs governments change. To improve the quality of of decisionmakers. This issue is discussed more the work and to ensure that the structure will fully in the Statistical appendix to this report. survive periods of neglect, the pyramid must ex- tend beyond government. This can be done by Strengthening local government developing analytical capacity in universities and other independent research institutions, as well as In most countries urban growth has far out- in economic consulting firms. The donor commu- stripped planning and administrative capacity at nity has made a useful contribution to institu- both the central and local levels. The task of meet- tional development by building up this ing mounting infrastructure needs has increas- nongovernmental component-mainly through ingly fallen on local governments. This is as it private foundations for research into long-term should be. Alhough weak and underfunded, local development. Several countries have institutes of governments are best suited to meet the needs of this kind, which are scarcely used by govern- local communities. This is as true for the rural ments. Tanzania is an exception; its university areas as it is for the towns. The initiative shown by economists played a valuable role in preparing its Rwanda's communes in mobilizing citizens for economic reform program (see Box 2.8). road improvements, tree planting, and soil con- The aim must be professional excellence, and servation illustrate the potential. Developing one way to promote this is by building profes- competent and responsive local governments is sional links between economists within Africa. central to capacity-building. It implies stronger The creation of a professional network of econo- powers to raise revenue locally and a clearer del- mists in East Africa is an important step in that egation of authority and responsibility. Many of direction, which could well be replicated else- the problems of the towns and rural communities where and in other disciplines (see Box 7.5). can only be solved locally; solutions imposed by Policy analysis is very difficult in the absence of central authorities are likely to fail. The objective reliable and timely data. Africa's statistical ser- should be to capitalize on the energies and re- vices are woefully inadequate. Most need compre- sources of the local people. hensive upgrading and increased funding as a Decentralization in Africa has so far mainly matter of urgency. Their data collection activities concentrated on strengthening the field agencies 58 of central government. This has been justified by vious regime. The new approach should try to the fear of corruption and inefficiency in poorly reconcile efficient government with the common supervised local governments. But a change of desire of individual Africans to be independent heart is now apparent. Francophone West African economic operators and of social, religious, and states have embarked on fresh efforts at decentral- community groups to play their part (see Box 2.9). ization; Nigeria is reappraising its local govern- This latent local capacity can readily be tapped by ment systems; and Tanzania is in the midst of removing administrative restrictions and provid- reviving local government. These are all moves in ing positive support. the right direction. They need to be extended and The objective should be to release private ener- reinforced. gies and encourage initiative at every level. At the grassroots level this means village and ward asso- Fostering private sector capacities ciations; at the intermediate level, various local nongovernmental and cooperative unions and Recognizing the drawbacks of relying too heav- other organizations; and at the national level, ily on public bureaucracies, future development chambers of commerce and industry, trade asso- strategy could make greater use of the private ciations, umbrella NGO organizations (such as sector. Often, despite considerable hostility from CONGAD in Senegal and VADA in Kenya), and central government, local entrepreneurs have professional associations of bankers, doctors, law- shown remarkable vitality (see Chapter 6). In yers, accountants, and the like. Such groups and Guinea, for example, private traders continued to communal actions can build on the African tradi- supply the population with essential goods even tion of self-help (see Box 8.3). when severely harassed by officials under the pre- Box 2.9 Self-help community participation LnducLi :.hich mein; brotherhordol Sir, ad hili i4 the h;ll anid a nur.cr% - hool e r eLuLlil Thenexlprorect a.a, ; nam0! a prntjtak oc er th.I i-hlping p-ir arhan . ouih tile rotrildinot o5ri iou-- ds&tro%!ed b a hea% - lloodl In k.L t1o find Z.inlultT1, ment throush tralningr.and aupmenied he th prLr i,ior o p it l.trint- tl.ipath, and ;omrnunitl> io alter ,ite Po% ertr and pror ide 1; .-ct a . road A third prol% r pro-r dLd h.uming tor about n 4111 hou.ming tarted bh a Catholic a rton group it begin it, lqu:tior re,id.-nt; 1 Srm I II-"i h-.ues e.cre built at an .rk1 . in b t ttering .heller arnd lod .t cling Fark- * crage 61,r ot .tk; th[r,n $'1 I per h.ou-. including .elt- mg bo. ;. ho lil ed olt tipF on the ,treeE; 't Nar.:.bi To help lahor-tar le- e:pen. i c than the geo crnment-a- 1pro ide -ocation;l training tor the bo- s. it doeeloped a3 ,i.kitd lot -c-.t hie *-and- er'ls houling Alth,.ugh ;villagI, potechnic *%-'*m hich later e oled into. ; a orn.. am e haltli-rr in standard thcV are much better than %Er% ,uce,tuc ;Fpr nice-hlp pror3na Linder thbi pr0- the tl1mni; cardt.ard and Paper dJ elling. that tht: re- grin, L ndugu pas s rougehlN halt ot tile wi to rile place'd tradertmn rr iil,ng in- train rhemand h3iase. loped ..irnple The range ca Lindurzu a-ti.t itite grel TrI ing to S t t buinoev irain.n s;pectcall; lorn hc Etrainer, Apprin- the root, 1 irporr it be:anlr in. oh ed in primnarschool tice. are required to atl nd clase- to ac;quire a minimun c-ducation 3dIIlit , rac3 cli,C tonr %. ormen and rhe Pr- ot theorelical kno le.1ge .nd at the end .,I theappr ntice- si4on ot ba ic heltih eor' ice, inc nme-gencrating acti i- Ihip perio.d thes take rrade ieSti g4,en b thht go'. errnmnt li-s 1r o-.nien ;nd nuths inclUded the tormarion ol a The% gencrallk paF. *h>,e ie.t; alter rinfe mninth; im;tead rLoop,ratir e ic. all tenit .ilv..ied trom Nairobi main oI the 1tr' cear- that i.- normal lor tho,t %ho art, nd the jump 13% earl% I i Llndueu participated in mor. than 2i go% ernments ; %llaiu poli technicm;s prorans andi neLded to rethiiLk it, role and the locu' ot 1 Relaredtltrainint Lncdu,u robtecti'. itocreagimn- it.. future Inorir.id to concentrate on emplor mEnt iul emplok Tnr.n tor thc %outh~. to tind -ource; 1 rncom ... g x eni:ration throuh continuation ol training and rmal- it -.:relted it- o'.% n training ind produ:hon uniitm in carpen. entcrpri;e deJ elopmni. 1.1. -co;t h,,u;ng and oniniu- 4I tr', metal'.rcirkinv n-oior mechanic-, .nd tailoring X %c- nat d--ealopment through the hormation .1 irnkrest tl hicle rnjintenari;c: coniract trom ik Nort%.-ean a,d cro-LlP- ' .enc; INiNRAD, ia4 ,o -ucce-trul thai an indep,nl I oda Ihe Lindaga S'ciet' ha;s salaricd ,tati ol more nmaintenance t.kiti irn liS.h thar, lisi.i h n..IanI a nd ti..o or thkre %.llunteers Its Ilus;7 L*r,dug u . n%ol%.rment in hou4ing proileci .tarted in budget a;ra more than sI million almrn t haltot w-hich i. 1%3 tollo%inpg a large tire in ne c-I N airobi - ,ljm r derirled Iron: itl incoime-produ.:ing actiitiest. among i' tlages with nommun!t[ participation in plinninc and then a .:rilt .hcip in one ol \Virobi 1e-ti-do arva; and j elt-help contribulton, n r construction iork .Ibout 0 .5 . grok inm number orncri.ultancie. to oui,idegroupS t, ho one-rnom mud-and-.. attlI h,ius¢- a z.cond cr.Mnmurita dra.v. on Lindugau er%perience and kno.-ho%, 59 The political and cultural dimensions traditional sector, despite its strengths, should not be romanticized. On the contrary, the aim must History suggests that political legitimacy and indeed be change, but change that is securely consensus are a precondition for sustainable de- rooted in a country's social context. velopment. A sound strategy for development Customary institutions are not stagnant, but must take into account Africa's historical tradi- rather constantly evolving in response to the tions and current realities. This implies above all changing environment. Tobe successful, develop- a highly participatory approach-less top-down, ment programs need to take fuller account of a more bottom-up than in the past-which effec- country's social context and cultural dynamics. tively involves ordinary people, especially at the Each country has to devise institutions that are village level, in the decisions that directly affect consonant with its social values without losing their lives. sight of the basic objectives. In some spheres, how- ever, there can be little compromise. The family Modernization and ethnic ties that strengthen communal action have no place in central government agencies, African intellectuals have emphasized in their where staff must be selected on merit and where writings the widespread failure of the public and private monies must not be confused. postindependence development strategies to build on the strengths of traditional societies. Empowerment of women Modernization theories in the early years of inde- pendence tended to make rigid distinctions be- That women play a central role in development tween modern-that is, "Western"-societies and is becoming increasingly recognized. They are the premodern or traditional societies. Modern soci- principal producers of food, the managers of ety represented "progress." The approach led to household resources, and the custodians of family many mistakes, especially in land reform, live- welfare (see Chapter 3). This is a case in which stock projects, consolidation of rural populations, tradition and development really do seem to and integrated rural development. clash. African women face a variety of legal, eco- Future development strategies need to recog- nomic, and social constraints. Indeed some laws nize that, far from impeding development, many still treat them as minors. In Zaire, for instance, a indigenous African values and institutions can woman must have her husband's consent to open support it. For instance the persistence of primary a bank account; the new civil code presumes that group loyalties, although often deplored by out- a wife's property will be managed by her husband siders, has been a significant force for develop- unless he is proved incompetent, and, although ment. Communal culture, the participation of she may manage goods acquired in the pursuit of women in the economy, respect for nature-all her profession, her husband is allowed to usurp these can be used in constructive ways. The infor- them if he deems it in the interest of the household. mal credit systems successfully draw on custom- Such legal constraints have confined many ary values and patterns of social organization (see women, in their role as economic agents, to the Boxes 4.2 and 6.3). Many indigenous cultivation informal sector. practices, such as mixed cropping, were once Future development strategies should favor much criticized but are now seen to have technical women. Government and donors should help merit. More generally, while the modern sector women's groups to contribute more fully to eco- has been in malaise, the informal sector, strongly nomic and social development through training rooted in the community, has been vibrant. In and access to credit and by giving them equal particular it has shown a capacity to respond flex- status in their dealings with formal institutions. ibly to changing circumstances. This is not to lessen the importance of the mod- Governancefor developnment ern sector. Certainly if agricultural growth is to be raised, higher productivity through the adoption Underlying the litany of Africa's development of modern agronomic packages, tools, and ma- problems is a crisis of governance. By governance chinery is essential. Other sectors need modern- is meant the exercise of political power to manage ization too. But increasingly it should be a modern a nation's affairs. Because countervailing power sector that supports the traditional sector, rather has been lacking, state officials in many countries than one that aims to replace it. Nonetheless, the have served their own interests without fear of 60 being called to account. In self-defense individu- accounts outside Africa. The cost is not just the als have built up personal networks of influence waste of funds, but also more seriously the pro- rather than hold the all-powerful state account- found demoralization of society at large. able for its systemic failures. In this way politics Corruption can be countered in several ways. becomes personalized, and patronage becomes The elimination of unnecessary controls greatly essential to maintain power. The leadership as- reduces the scope for "rent seeking." Transparent sumes broad discretionary authority and loses its procurement procedures, scrupulous and prompt legitimacy. Information is controlled, and volun- accounting, the publication of audits, and the vig- tary associations are co-opted or disbanded. This orous prosecution of those misusing public funds environment cannot readily support a dynamic all contribute to financial propriety. External economy. At worst the state becomes coercive and agencies providing aid have a right to insist on arbitrary. These trends, however, can be resisted. such measures. Donor governments also have a As Botswana has shown, dedicated leadership can responsibility to prosecute their own firms when produce a quite different outcome. It requires a they pay bribes to obtain business; regrettably so systematic effort to build a pluralistic institutional far the United States is the only developed country structure, a determination to respect the rule of that has outlawed such practices. A free and vigi- law, and vigorous protection of the freedom of the lant press-all too rare in Africa-is as important press and human rights. for good governance in Africa as elsewhere. The Intermediaries have an important role to play; two countries with the best economic perfor- they can create links both upward and downward mance in Africa-Botswana and Mauritius-both in society and voice local concerns more effec- have effective parliamentary democracies and a tively than grassroots institutions. In doing this, vigorous free press. they can bring a broader spectrum of ideas and values to bear on policymaking. They can also International dimensions exert pressure on public officials for better perfor- mance and greater accountability. The National If Africa's efforts are to succeed, the interna- Christian Council of Kenya has played this role for tional environment must be supportive. Four as- some time. Others are now emerging in several pects are particularly important: countries. The intermediary's role can be politi- * A renewed effort to promote regional inte- cally controversial, yet it is essential for greater gration and cooperation citizen involvement. In relating to the local orga- * A growth-oriented, liberal trade environ- nizations, it is the intermediary that must exercise ment restraint. A common mistake is to ignore local * Sustained and assured long-term financial leadership, often on the grounds that it is exploit- assistance ative, but there is little empirical evidence to sup- * Reduced donor dirigism. port that view. On the contrary, studies show that Africans have long seen greater regional inte- working with existing leaders produces more ef- gration and cooperation as prerequisites for sus- fective development programs. Better informa- tained development-and rightly so. But real tion is crucial for generating greater public progress will be made only if there are new initia- awareness. Too often political consciousness and tives (see Chapter 7). This report does not address participation are stymied-sometimes deliber- the issue of South Africa. Nonetheless it is reason- ately so-by lack of information about govern- able to assume that solutions will be found to the ment policy. problems that have divided the peoples of that region and that South African economic coopera- Curbing corruption tion will eventually transform the prospects for the whole of southern Africa. The extent of corruption is largely determined Growing international trade is essential for Af- by the example set by a country's leadership. And rica to expand and diversify its exports. Africa is once bad habits have become entrenched, they are a beneficiary of the generalized system of prefer- hard to undo. Unfortunately foreign aid has ences under the General Agreement on Tariffs and greatly expanded the opportunities for malfea- Trade (GATT), while the Lome Convention grants sance exacerbated by the venality of many foreign African countries virtually free access to the Euro- contractors and suppliers. Hundreds of millions pean Community market. Thus market access for of dollars have been siphoned off to private bank manufacturers is not a problem. However, Afri- 61 can countries do frequently encounter obstacles to these programs is the lack of local capacity, both trade in the very agricultural commodities in private and public, in their design and execution. which they could be competitive, such as beef. The Too often conceived by outsiders, the reforms are dumping of dairy products in Kenya severely not adequately internalized and do not inspire damaged its dairy export prospects; US restric- commitment. A deep political malaise stymies ac- tions on cut flowers did the same. Protectionism tion in most countries, and the citizenry sees the that keeps out African products serves the inter- elite as self-serving. Governments have failed to ests of neither the importing nor the exporting rally the people for development. countries and should be vigorously opposed. Africa has abundant resources. It could achieve Equally, the newly industrializing countries an economic growth rate of 4 to 5 percent a year- should be encouraged to open their markets to the target proposed-if bold actions were taken. African produce. Future country strategies should: To reduce and eventually eliminate Africa's de- * Continue to pursue adjustment programs, pendency on foreign resources must be the goal. which should evolve to take fuller account of the Aid has negative, as well as positive, effects, not social impact of the reforms, of investment needs the least of which is enabling hard decisions to be to accelerate growth, and of measures to ensure postponed. The development community must be sustainability vigilant that the negative effects do not become * Stress capacity-building through a new predominant. In the medium term Africa's mini- drive for human resource development, espe- mum requirement of foreign assistance will re- cially a radical reorientation of education and main high (see Chapter 8). It is important for training to improve quality, relevance, and cost- donors to ensure the continuity and growth of effectiveness and through the adoption of a sys- their support for countries willing to undertake tematic approach to strengthening institutions, sustained reforms. Prompt and far-reaching mea- both public and private, by paring down over- sures to reduce Africa's debt, as outlined in Chap- blown public agencies, directing their activities ter 8, are also essential. from controlling to promoting development, and In assisting Africans to develop their own capa- fostering nongovernmental intermediate and bilities, donors should be willing to be flexible. It grassroots organizations is increasingly clear that the approaches applied * Foster an enabling environment for produc- in the North are inadequate even for tackling tive activities by removing unnecessary regula- northern problems: the war on poverty has not tions that add to the costs borne by enterprises, been significantly more successful in some north- keeping exchange rates competitive, and ern countries than in the South. Development strengthening infrastructure services practitioners from the North have often prepared * Overcome the nexus of weak agricultural programs for the South without the participation production, rapid population growth, and envi- of local officials-or still less, that of the general ronmental degradation through enhancing agri- public. These programs often inspire little com- cultural research and extension services, mitment from the countries involved and as a promoting family planning, and elaborating and result have often been ineffective. New and more implementing country environmental action effective aid modalities are discussed in Chap- plans ter 8. * Pursue regional integration and cooperation to overcome the fragmentation of African In conclusion economies . Forge a genuine partnership between gov- The central objective of the future country de- ernments and donors that builds on all these ele- velopment strategies is to transform production ments. structures, to reverse the decline in institutions, The following five chapters address in greater and to build the foundations for sustainable and detail the main issues that will arise in putting this equitable growth. The recent structural adjust- strategy into effect. The report then discusses fi- ment programs are important first steps in the nancing needs, the role of the donors, and the right direction-but much more is needed, and steps that are needed to build a global coalition in greater care should be taken to mitigate their ad- support of a jointly agreed future development verse social impact. The fundamental weakness in strategy for Africa. 62 -~~ Investing in people Toward human-centered development rent trends persist, the basis for long-term devel- opment will be undermined. People are both the ends and the means of de- The future development strategy calls for a new velopment. Although improved health, nutrition, commitment to developing Africa's human re- and education are ends in themselves, healthy and sources. There are two immediate priorities: to educated human beings are also the principal improve the quality and relevance of education at means for achieving development. every level and to redirect public resources to- Measuring development in terms of access to ward basic education and health care, including basic health services, education, and food is more family planning. For the longer term, and by 2020 satisfactory than using most other yardsticks. So- at the latest, African countries could realistically cial indicators, such as life expectancy, reflect aim for universal food security, primary educa- more accurately the condition of most of the pop- tion, and primary health care. ulation than per capita incomes because of their much broader distribution across households. Synergism in human resource development programs Kenya, for example, with a GNP of only $330 per capita, has lower infant mortality and higher pri- The components of human resource develop- mary school enrollment rates than, say, Cote ment programs are linked in a mutually reinforc- d'Ivoire, with a GNP of $740 per capita. ing way. Family planning, for example, is more Narrowing the gap in access to basic services accepted when overall mortality is relatively low between Africa and the more developed countries and levels of education relatively high. Family is a more feasible goal than narrowing the gap in planning improves maternal and child health by income. The gaps in access to basic needs have allowing the spacing of births. Similarly, clean considerably narrowed during the past 30 years water and sanitation produce more benefits when and can be narrowed even faster in the next 30. provided along with health education, which im- Countries such as China and Thailand made proves hygiene, and nutrition education, which much progress toward meeting their social goals promotes better dietary habits. Providing clean by devoting about 5 percent of GDP to health and water reduces infection in children and boosts education when their per capita incomes were no nutritional status. higher than those of present-day Sub-Saharan Af- Healthier children are more likely to attend rica. school and to learn than the sick or malnourished. Africa has made impressive progress in human Education, in turn, enables people to understand development since independence, but there has health problems and to act in their prevention and been a disquieting setback due mainly to fiscal cure. In general the incidence of mortality is found difficulties and expanding populations. If the cur- to be lower among children of educated mothers. 63 A mother's knowledge, in particular, about inex- Figure 3.1 Central government expenditures pensive health and nutrition measures such as on health and education, 1975-87 immunization, oral rehydration, breastfeeding, Percentage of GDP and hygiene can have a significant effect on a 10 child's survival. Educated and healthy parents are 9 Zambi the most likely to have educated and healthy chil- 8 / dren. Similarly, raising educational levels en- 7 Kenya hances agricultural productivity and contributes 6 to the effectiveness of agricultural extension and, 6-Tanza therefore, to food security. A healthier population . can produce more food and generate higher in- 4 . .- comes, which can lead to further improvements in 3 ...... nutrition, health, and education. Improved access 2 - to health and education are thus crucial for Sub- I Saharan Africa's long-term development. 0 1975 1980 1985 1987 Poor quality of, and declining access to, social Source: World Ban k data. services The quality of social services varies throughout Sub-Saharan Africa, but it is generally poor and How can universal food security, primary edu- has declined in the 1980s. Urgent corrective mea- cation, and primary health care be accomplished sures are required. Improvement in the quality by 2020 in Sub-Saharan Africa? First, it will be and content of education is especially important imperative to reverse the decline in per capita to support sustainable growth. incomes and to achieve a modest but sustained In most African countries human resource pro- improvement in living standards. The targeted 4 grams have been geared to meet the needs of the percent a year GDP growth rate would generate elite. Health, education, water supply, sanitation, comparable increases in public revenues for in- and other services for most of the poor are either vestment in human resource development-itself nonexistent or represent the efforts of local com- essential to sustain the projected growth. Second, munities and NGOs, poorly supported financially fertility rates must be lowered, without which and technically by the state. Few government ef- improved access to, and the quality of, education, forts have been made to elicit community partici- health, and other services necessary to accumulate pation-and this in societies that have a long human capital and social development will be history of group decisionmaking. Africa's social constrained. Third, although all levels of educa- indicators will improve only if public policy and tion and health care require more resources, rela- money are focussed more on delivery systems that tively more public resources need to be allocated respond to the basic needs of a wide spectrum of to primary education and primary health care beneficiaries, especially the poor. services. With a targeted GDP growth of 4 percent With the recent decline in public resources a year, additional public financial resources will caused by Africa's poor economic performance, continue to be available for hospitals, curative social services in many countries have deterio- medicine, and higher education, but their relative rated as budgets have been cut (see Figure 3.1). share in total public budgetary resources should There is evidence also of stagnating or falling decline. Moreover, given the prevailing overall primary school enrollment rates; infant mortality budget constraints in many countries, there is an rates in some poor countries continue to be very urgent need to tap additional private sources of high. Where there are serious inequalities in ac- funding for higher education and curative health cess to public health and education, even a small care. Parallel measures need to be taken to reorient reduction in aggregate social expenditures may higher education toward effective and relevant have a disproportionate effect on the health of skills training. Fourth, serious efforts have to be poorer households. Therefore it is important dur- made to reduce costs, promote cost sharing, en- ing fiscal crises to protect public expenditures on courage people's participation in service manage- basic social services. ment, expand outreach, and raise the efficiency of 64 social services. Fifth, mainstream programs must sects) that transmit diseases. Only large-scale- be designed to reach both genders effectively. Fi- and expensive-efforts can control diseases such nally, additional resources should be committed as river blindness and schistosomiasis. Cam- to the social sectors. paigns have reduced their prevalence, but many of the control efforts have lapsed since 1970. Be- Providing universal primary health care sides reinstating disease control efforts, programs and reducing the population growth rate are also needed to efficiently administer the drugs that have recently become available to reduce the Critical health threats intensity of infection and to control morbidity. The declining availability of food has worsened In 12 out of 29 countries for which data are malnutrition. Moreover high fertility leads to low available, the maternal mortality rate is higher birth-weight babies, who have the poorest chance than 500 for every 100,000 live births, compared of withstanding malnutrition and infection. For with 44 in China and 90 in Sri Lanka. Each year those who survive childhood disease, morbidity about 150,000 mothers in Africa die and roughly remains high; an estimated 200 million Africans the same number suffer permanent disabilities have chronic malaria and live disabled lives. Be- because of complications from pregnancy and tween 1979 and 1983 life expectancy declined in childbirth. The infant mortality rate for most of nine Sub-Saharan African countries. Sub-Saharan Africa ranges between 100 and 170 On top of all this has come the AIDS epidemic, for every 1,000 live births, compared with 33 and which is likely to strain the capacity of already 32 in Sri Lanka and China, respectively. In many weak health sectors in the countries to which it countries deaths of children under five represent spreads during the next decades (see Box 3.1). The close to half of total deaths. In the poorest coun- potential cost of caring for AIDS patients is high, tries, such as Burkina Faso, Ethiopia, Mali, and in addition to the indirect cost to society of the loss Niger, only 70 to 77 percent of children live to the of labor and family caretakers. It is also likely to age of five. In most countries progress toward divert resources from the treatment and control of improving child survival is slow. The progress other diseases. achieved in seven countries is shown in Figure 3.2. Africa also faces some of the gravest-and most Improved health care intractable-general health problems, especially tropical endemic diseases. The environment fa- The economic crisis facing many African coun- vors the survival of vectors (such as airborne in- tries has not only depressed already low incomes and poor living conditions, but has also dealt a blow to the ability of the health care sector to cope by constraining public expenditures on drugs and Figure 3.2 Mortality rates of children under five medical supplies. Safeguarding budget alloca- in selected Sub-Saharan African countries tions for health care, especially for the provision Rate (per 1000) of primary health care, is essential if health ser- 400- vices are to achieve their potential contributions _ I ,- . , , to improved health, productivity, and develop- -; i - I_I ! '-'> t ment. These might be best accomplished in many 300 - - | ! " African countries, if people-individuals, fami- lies, and communities-take responsibility for 200 : || 11 L I -L m their own health care. Government, NGOs, and the private sector need to provide support for these efforts. Communities must be consulted and 00 1- encouraged to participate in setting their own f. :priorities and in the design and delivery of health care programs. a - a i In many cases the new investment in health care Malawi Nigeria Zaire Kenya has not been distributed equitably nationwide. Note: The mortality rate is the number of deaths of children Poor communication and transportation keep under age five per 1,000 live births. meager services outside the reach of most of the Source: UNICEF data. population. Clearly, priorities must be reassessed 65 Box 3.1 AIDS: The demographic and economic consequences The t%Vrld Hedlth Organizatiorn iV HOr esti,mnatc that To combat AIDS re'uriens aire likel to be d.,erted more than 3 milihon people in Atrica are miected b% the Ironl the tre.itment and control III other Important di- HR v-irus 3nd that 30 percent ol thIhe - Il et ole into ea;es At the Nlaina-iemiT- hospital in Zaire. %Ithici has AIDS cases im a tew% years The couritrie, med attected in 2 1i11ijl bed- 50 pterient o the mncdJal or 'urgical pahents the central belt Cot AtTica art? Burundi ker'a R1- \.nd test pl-liti e. andi 2-5 percent 4T deaths are AID[S-relatud i Tinzania Uganda 3nd Zaire Surie,; is n the,e countries AIDS C reatm,nt ilso itill increase demand tor lorergn sho,e seropo-;iti%e pre% alence rate- from S to 21' perceni excharce br pharmleeurrcals The IVHO E-,ential Drugs r among urban adult; and high,r rates among high-risk Program rt-;s racing t%en mire acute -hortages as in- groups. crea3mg numbers of AIDS patient, set- teatnment tor AIDS can tpread quickl in Africa The pree alencte ol recurrcntinrecntonr., Iiicharenioreresista..nt.totTeatment . sewuallv lransnmitted d-e3a e, i5TD1 I retlects d-!de^pr,ad and require higher le eks ol drug u,e E high-risk se\ual behavior which also lacilitatte thetiran,- Tliere are olher cost- AIDS predomminantl allects mission Li Ihe HAB virus In Bancuit Central Atricatn Re- ettingand niddic-aged pople i their pnre producri e public seroprepralenceamongaduIl4rose trom 2 I percent sears Anione Acricrn adult, the hlche,-t proportions Vl in ILIS,to7. percent iniu> 1........S.. Amrong prc.stitults in Kens. miectcd people are b,tte nn In and I ,ears old A Cost ir rose trom 4 to 5Q perceni in ti . ears -rud! prepared lcor Zaire esinrace, the nunmber or heaIth% The mortalct, rate trom malaria is higher thar. that ae3r- saed tIc.r cach c3se !t HRX prFvented a- nr'2 on related to Al.IX.bnt rhedeathrate and infantmortalit in aitr rate The%alueo tl these lealtlt\ ears ould be S'.5I2 particular could rn-e during the ne:t dec3des 3s a rc-ult n urb3n areas and $S' in ru r3l area; tWeighting cost b; ot the AIDS pandemric Ditirent rn-:-dels shoe- thi rude tl Ipeticlitd4eeltil moput in rural or urban Irta i I e de3th rate rising tronm 21 o t-tI percnt or-ver h-hat , %% ould an a %e ra.g e mdnirrct :o -t .)I *4.,Cii .:or 21) time; the dJrect othere. iSte be in ornl he oor thrredtcade, Inlant morcalih iost or each AIDS ca,t rates could ri-e ti' percent or more The impact ot AiDc-;nnot be, protcated it ith prucision Thv treatment ot AIDS patients *t il increa-e demand but the urgent need t.-.r A[DScontrol i- clear Str3ategie- to onr %%eak health care s% stems in the c ountrito it %% hich it conmbat AIDS depend on the vpecitic c-pidemrologv oi spreads In a co;!t ana i-isv in Zaire tie co'ts ol traIting AiD.S -.ithin th. courtrxcor-c Trned The iollinA are AiDS ranged itr-mna lt ot $1 32 torach p3titnt tin Public necessan cOmponent, Health Center tacilittes to a3 high ot $1 5s3 tr prirn3te- * Pro-T.rams integr3lad ithl ei.,-ting prim.ar health care tre3tment'. A *e iglited at erage i r) percent o- patient; talmix planning programs. maternal 3nd ctlild heailth ,er- attend public ta-iliriees 25 percent are intured and - per- I ces and STD conirol progr3an; cent use pritate cacilitiesI ields an average co-It oc $22a * Ertectite 3nd continued coun-eltng of peopte * ho ic-tst for each AIDS pat-ent Nlultipin mz the number ot people pc-smhtw lor the AIDS iru, to reintorce behax ioral pat- hlkel tros-e-k AlIStreatmEntb\this ateragecist gitesan .ern, that could rtduce the sprad- t intetetion eshmateoi total direct innual coc-t oi $4:- million , 2111 * Quick diagnosm. arid ettech e Ireatrment ot 1STD %ic- To tInance this. rhe national health budget I *ould ha% e to tin, it hoarc es pec, ilt li,lerable to HR 1A Targeted con- ncrease bs 5S percent in 10cef and up to 244 percent in don distribulion ha' been etrective in Kent3 and lTee I0110 Cost sharing mar reliev-e some- ot the burden but it condoms to pro-tiutle- have enant lot' er intec:tiln rattc will b te-o great alter 20`1-tobt borne tT Ithout ub,lide- * Inrortrt,3iLn and educa,tion cam,paign; tarŽeted to Thus AIDS ha, budgetar% implih,:3hons apart trom the c:ootl-a.c riopulatiions e\uallv ictt e people and ph%,ical ,tran, -n thehealth careei';erl ;\ -reim. pro]tirutev and the coverage of services broadened. Besides, drug procurement and distribution program; its consideration should be given to increased pri- Essential Drug Program ensures a regular supply vate and NGO involvement in nonprimary levels of essential drugs for most of its rural population of care, especially curative care. The large of 20 million for about $0.30 per person a year. amounts (relative to income) being spent by peo- Better storage and security would also reduce ple on private health services, often of dubious costs. A study in Cameroon found that 35 percent quality, make cost sharing seem feasible for public of medicines were lost from central medical stores and NGO health care systems too. because of bad storage and expiration due to poor Rationalizing drug procurement and dispens- inventory management and control. Big savings ing could reduce costs. Improved procurement can be achieved too by better prescription prac- methods can save 40 to 60 percent on budgets. A tices and by improved compliance with directions study in Mali showed that l15 to 20 percent of the for drug use. In each area the most effective roles drug budget could be saved if the procurement for the public and private sectors and the NGOs strategy for one widely used antibacterial drug- should be considered. injectable ampicillin-were improved. Tanzania Rationalizing the use of labor in the health sec- provides a good example of an effective low-cost tor could raise efficiency. Delegating simpler pro- 66 cedures to less-trained staff, particularly in hospi- than 30 percent of the population lives-took al- tals, would allow doctors and nurses to devote most 60 percent of the annual drug budget in more time to complex and unusual problems. In 1979-80, 70 percent of the Senegalese physicians, rural Africa community health workers are the 60 percent of the midwives, and more than 40 front line of the health care system; their often percent of the nurses. Donors contribute to this weak performance could be improved if links to curative bias in health care by supporting capital- higher levels of the health sector were strength- intensive large hospitals in urban areas. Yet the ened to provide efficient training and supervision. irony is that the urban poor may have no better Also many superfluous unskilled workers (such access to effective health care than the rural as groundkeepers and janitors) could be reduced population. without affecting the quality of health care. Expenditure on hospital services has been dis- Primary health care services can expand more proportionate to that on primary health care, and rapidly with cost-effective delivery. For example, the consequent burden of large hospitals on recur- preventative activities can have large-scale results rent budgets is often overwhelming. For example, at low cost. Many maternal deaths can be averted the cost of operating the main hospital in Brazza- by community-based family planning, prenatal ville equals the total Congolese expenditure on care, and delivery of infants. Traditional birth at- primary health care. There are exceptions to this, tendants can be trained to identify high-risk moth- however. For example, since 1972 Tanzania has ers and refer them to adequately staffed and limited hospital construction in order to channel equipped health facilities, which could reduce resources to basic rural and community health birth-related injuries or illnesses and improve services. As a general rule for future development these mothers' chances of survival. By encourag- strategy, investment in new hospitals or in ex- ing birth spacing, breastfeeding (which provides panding existing hospitals for curative services passive immunity to the newborn, as well as nu- should be made only if it can be demonstrated that tritional benefits), and appropriate weaning and public health would not be better served by in- feeding practices, infant deaths can be reduced. creased expenditures on primary health care, in- With a small cost (and supervision) immuniza- cluding the facilities necessary for their support. tion is effective against the main childhood killers. Much-needed improvements in hospitals (and For example, one measles shot costing $0.06 is 95 elsewhere in the health care system) will require percent effective in preventing the disease. The improved management and training. Basic health total cost of immunizing one child against the six centers are needed to encourage people to seek target diseases-measles, polio, whooping cough, care at an early stage of sickness, which would diphtheria, tetanus, and tuberculosis-is esti- thereby reduce the crisis morbidity situation that mated to be $5.00. Rapid strides have been made prevails in most hospitals. through the Expanded Programme on Immuniza- Pressures on women's time have an adverse tion campaign in developing countries, yet only effect on the efficacy of health care. Women are about one-third of children in Africa are immu- limited in their ability to travel to service points nized against these diseases. There are variations (for immunizations, for example); thus outreach among countries; Botswana, The Gambia, and clinics may be more cost-effective than they ap- Tanzania have almost reached their target of 80 pear to be when the cost of women's time is taken percent coverage, while Kenya may reach it in into account. Apparently low-cost health inter- 1991. In many countries, however, serious efforts ventions, such as oral rehydration therapy, may are required to speed up the coverage, and signif- have hidden costs in that they divert women's icant management reforms are necessary to make time from productive activities. Therefore policies these programs sustainable. that free women's time will have to go hand-in- Most countries in Sub-Saharan Africa endorsed hand with community-based health care the Alma-Ata declaration on Primary Health interventions. Care, supporting the goal of "health for all." Yet Improvement in health care delivery in Sub- the influence of urban and upper-income elites on Saharan African countries is contingent on safe- public policy and the lack of health policies to guarding and improving budgetary allocations to redress distribution problems have skewed the the sector and increasing the efficient use of these distribution of resources away from the rural poor resources. In health care a little money can go a and more preventative services. For example, in long way. According to the World Health Organi- Senegal, the Dakar-Cap Vert region-where less zation (WHO), depending on the level of infra- Box 3.2 tVillingness lo pa) for improv ed water supply In urban arta3 middle- and upper-mncome hi'u,ehold' hold,ile; thanillinaira or13per1capita per monthipa t% picallv rec-k- %utiidizcd piped '%aier Hic.u,lold- as much a' 1 s percent ot inc;me dur,ng the dr~ sea..n -' without municipal t%ater zer\ ice particularlk the poor vr,us ' to lpercentr the upperin:oniehouseholds In otten purchasek%aterIron pri%'tc higlatgh pricc- Addis Abab.ithe urbanpoor sp.,nda highroportiont thu- incurring an ependtture 3moiunting to:. somettm.. their inconmm on % t.:r more than 3 percent ot incone Private %%aier eriding i; `\ hat people are ..i.;wlell pa mig t- not the sanm as th. inetiteient and e\pen;t\e in ntnisha. Nlgeria an !mpur- amount th,\ are ;i'.'-z to pa. in studt o-'t hou,vehotds tant market to" n in m\ -t Arrica ikith a populato 0t %,illingnerstop3p ,nthe N al1a,i tr,ct ot ;outh.rnT3n about 71)1)i1H-i only -1-,ii hou'-ehoid, tor about ; ioi. iii zanit Aavestimatedathatm v. mor cillIgto pax o peoplel had tunctioning ctinn;tetons ti the public " ater th3n s per., iii ot their in-rre yr t.-.:tter irom pubic tap; -uppl.. in 1-7. \.i,t ot the population obtained ater in thtir diltace trom an elaboraL arnd -eIl-l urganizLd prti ate sector *- Man tictors beIJde inco. me detormine hoi% much 3 teni Appro\imitelt 2-5 tan-ker truck; purch.;-e i%ater hli,Ar 'old i. illIng to pax tcr inipro, .Žd.J.... -aen upplp Ii trokn about 20 pri..3te borehole, and -ell it t. households .-t inmportarnt dtli-irninrt 1t the tine Twent collecting 3nd bumin-,e4 e-lquLipped i, ith i it,r i,nrace ta,f.it.Es a,ter irom Le Ot n v- ;ragc iur.cr n the mans cii i%hich then resell th. % ater b, ihe tucket to Net\ :la di4trict were %t illing to,pa\ 'l) percent niore than n. mdi iduals men ton tmpro. ..d I; aNtr rC r, ice -1 men ireejuentl, v. Alk This; pro\ide a reliabcl rrlati cl, high-qualith *atn:r .ehihciur adacl tLlectitat.Irot ntraitional surces ,. .uppl .buithepricei-high Tranportinn; 1iterbn tatiker tnd .i bucket it ,I aten iron ,rdors otien c;. t; 50 to, 1 Cii. truck and on toot Is in..ttcient and tank,er .itner, ha'e plerceni oa t a 1a - "a in alrltuottre Cton,ind rino thc been able to cc.nrrot price; HoueItholds itvrc pF. ing or. oppcrirtun,ri .-st ot lab.nr pent incollecting kiater it - not t av ?eragr 1210 h0ut nakra a da-; lii'i> iil in tI",- % ib!tut 24 u rprisng thit p., 'or p, o.. opIe r, - ll,nc to, pa a ubItant,al i ; times mort than the re% Enue ot the eater utilirt wxhich pnrtion .it their incorme th.r A ater c.pite limited c3sh supplied onrly 1 mill..n gallon, a itin-halt ot r. on ,our.:e;. - a amountsupplded b theL endcing stem E%,nduring the 1 tlihneness- to pa, also dl,pcnd~- on the perception rains ,ea-,._n hou,ehold %,ere pa\ ing about 51 Oilii naira a-utl entitlmerit me. .y, it at.r tr.om z' %rrm,nt Thu.e -. a da i-lt 2.0i'li to the. .nding ei -tcn mt h,ich N more th3n v- hi no. lngnrn bei cd that it th.l -t3te s re-pon4ibiiri IOtinit; the rn\ enue -ii th-e3 iater utiliti In total. hou,c- ti pretiie % iter t,ere\ .llingtopa- 14 percrt mrorc than hold. in Onitsha wecre pa, Ing it ater %etnd0rs abo-.ut twE ice thl*;.: i. hi) rilt tt it ,t as the Aovernnment * resp-;i4iibdit% the annual operartin and maintenance co;ts oI a net IThert. ! thus 3 nred to.r g.e ernnient; ntri unls to institure L' pipFed distribut!oio s, stem and Ti percent .i the totil an- -Ound co,t -hring practice- but also to make a spc;ial nual co,tv o. a nc 5% . ,tem ,er% ing the cit\ .t (Clnit,ha eMicrt tv chinge poplec; perception th3i ire. itater t, a --A P.eoor household; pa. more tor it ter than the niddlc- h3,i rhi and upper-inconiegroup; InClnitsha li. -incomne hous-- structure development, it should be possible to This puts great physical strain on the water carri- provide essential primary health care with a recur- ers-women and children-who tend to be the ring cost of $10 per capita per year. For even the most nutritionally vulnerable. It also means time poorest countries with GNP per capita of around lost that could be spent on childcare, crop cultiva- $200, the public expenditure for gradually achiev- tion, food preparation, education, or other activi- ing universal primary health care would be no ties that could improve health. Unlike the health more than 2 percent of GNP, increasing to 3 per- benefits, the economic benefits arising from time cent by 2000, provided measures for improving savings that improved water supplies contribute efficiency are adopted. are measurable; recent research has established that these benefits can be substantial. Water for better health Although coverage has increased in the 1980s, an estimated two-thirds of rural Africans are with- Access to safe water, accompanied by improve- out access to improved water supplies. Until re- ments in sanitation and personal hygiene, contrib- cently, the high per capita cost of water supply utes to better health. Not only the quality, but also systems has been a primary obstacle to increasing the quantity of water can affect health. In many Africa's water supply coverage. Improved tech- parts of Africa families devote inordinate nologies have reduced the per capita cost of safe amounts of time to collecting water. In the Lesotho water; the capital cost of handpumps and simple lowlands, 30 percent of families spend more than gravity-fed systems is estimated to be about $5 a two-and-a-half hours a day collecting water. In person, although there are regional variations. eastern Nigeria it can take up to five hours a day. Low cost does not necessarily ensure success. Peo- 68 ple hold the key to success. Women, in particular, ens national efforts to improve the quality of life have the incentive to make water programs work and productivity of the population; and exacer- since they are generally the most affected by poor bates the problem of declining per capita health access to water. Wherever communities are in- care expenditures. Policies to improve health care volved in the design, construction, installation, have to go hand-in-hand with those to reduce and maintenance of water supplies, water projects fertility levels and vice versa. are more efficient, cost-effective, and hence sus- tainable. In Malawi nearly 1 million people have Reducing population growth access to clean water through systems that are owned, built, and largely maintained by the com- The total fertility rate (TFR)-the number of munities they serve. And consumers seem willing children born to a woman during her childbearing to pay for safe water (see Box 3.2). With commu- years-in all African countries (except Mauritius) nity participation and cost sharing, an expendi- is significantly higher than in developing coun- ture of about 0.5 percent of GNP (net of cost tries with comparable levels of per capita income, sharing) would ensure widespread access to safe life expectancy, female education, and contracep- water. tive prevalence rate (CPR) (see Table 3.1). This reflects not only the high econornic value of chil- Health and fertility dren in rural Africa, but also the many sociocultu- ral factors that determine the fertility aspirations Better spacing and timing of births as well as of households. Knowledge of the latter is scanty. fewer births can reduce infant, child, and maternal The high economic value of rural children in the mortality and sickness. A baby born within two African context, however, is understandable. years of its mother's previous delivery has a 90 Rural Africans spend long hours farming and per- percent greater chance of dying during its first forming other household activities. Children con- year of life than one born two years or more later. tribute labor in cropping, livestock herding, As child survival rates increase, fertility rates de- fetching water and fuelwood, and child rearing. cline; parents no longer have too many children to As the frontier for fuelwood recedes and water insure against future deaths. Declining fertility and soil resources are depleted, the need for chil- through family planning leads to healthier dren to share the increased work burden intensi- families. fies. The problem is further aggravated by the Unregulated population growth strains the ca- prevailing high levels of infant mortality. The pacity of social services throughout Sub-Saharan nexus of population, poverty, mortality, and the Africa. It imposes a burden that takes its toll on environment is complex; hence population con- individual, household, and state savings; weak- trol policies must be integrated with policies that Table 3.1 Fertility rates in Sub-Saharan Africa and South Asia (percent unless otherwise specified) Per Infant Total capita Life mortality rate Female education Contraceptive fertility income expectancy (per 1,000 (enrollment rates) prevalence rate rate (dollars) (years) live births) Primary Secondary (most recent Region and country 1987 1987 1987 1987 1986 1986 estimate) Sub-Saharan Africa Botswana 5.0 1,050 59 67 109 33 29 Kenya 7.7 330 58 72 91 15 17 Mauritius 2.1 1,490 67 23 106 49 78 Nigeria 6.5 370 51 105 . .. 5 Zimbabwe 5.9 580 58 72 126 37 40 South Asia Bangladesh 5.5 160 51 119 50 11 25 India 4.3 300 58 99 76 24 35 Nepal 5.9 160 51 128 47 11 15 Sri Lanka 2.7 400 70 33 102 70 62 Source: World Bank data. 69 Box 3.3 Family planning: Zimbabwe and Botswana | Zimbab%we and Boisi-. ana are the leader- in timili plan- thaniSlii3 month' The ZNFT`C ha- al-bee-n rteponsible ning in Sub-Saharan \r,ca Their programs 3rt 3a' ailablk lr an impre'-ii e JEC i intorm3ti.-n educarion and corn- ic mi4t :litzen' Kn-. 1kde. ot modr rn contract-prion i- muncationi -traikg- and ni.nit.rir', ', aluatin 3nd * eidv-pread 3nd rni el4 o i mdern conriarcepti.e u.em--in re'e.,rch unit l-o% "i, percent in Zimbabwe and 32 pe:rcent i Botbh - RecLnti' the gcernnm-:r't i,th help romm th. World ana-arethebet in Atrica Borh 4,tm no" to beachie% in.c P 'nk-as-it,td health pril,ct dt:iAded tooricr imii' plan- a siwniticantd,ci,ne in rertilitx Iel; rngn -cf ices through i, net%, ork or health ta-cililte' N ti the ttec. countries h3ae tolc-t- ed d itercnr ap- L.. hich are. exected t. be--nm, the main pro idvrs Coot-r proaclies. llu'trat'nrg that lhere is noblueprint tr succe" dinatinn 3nd c,..'perai3on bete:Dn ZNF-PC nlmd health in thi- tield and that 3ill trategie- mu,t ltart tronm the per;innelaregd \e erth-ls theoutreach ;', ,ten'. ha j unque;ituationoreahocuntr-v Bothcourilnes ho-eler remained the backbone ct the Zimbkb%%e lmil', plinning *hare a lat-,irabl mL, ct bakl,-roundti eatirs including pro-ram in rural are:.i 5 goyd-ic-t- ellent eoconom,c: grnoth and F-er capita in- Bot.- ana l !o;\-ke% program ditt-er, in almo,tr C,tr | come-. esceIlent inira,trucrure and administrait' e s% s- respect It ha; ne' ,er hA an ndependeni tamil. planning tvms hi_h le'el;otteducation and me-dernizationanmong a---eiattcn and rhego-rnmenmt a3; and.s . irtuallk the ', their populition- tlIc loiz ,tlevel; ot mortalit' in Sub- ,olc pro-:i&dr ot tamil pl13ning.n ,ri tee; and accourlted Saharan -\trica and stron,,; goernrner't omrnitment to Crabout "5 pr- ter aeeti etontroc.p LiSt,. in 's.s Famil', P- tamil% pianiningilirhoiLtgh ftt!Il3l1, 01l a, 3-ahevalthinltr- plannin- ,4 e-r i, are ba-ed in Jini,-' and deli' ered en- cnt ionl tirel' through ;n iniecrat-d Maternal and Child H1alth Zinibabmt has an imprs!%c tai-nitl planning pro- 'NICHi-F3mrln P.-inn,ng proeramn ichih oprat,e in gram Becau,e c,I the t.tccesstul hi,thorA ol a nongos ern- tr. health tacilit, Clinic nur.e-, do the bulk oI t3mi', ment. l itamit' planning is , tat flit the neot, . planningo irk There i, ka rudinmentar' cutrecli net- indepr-rldenlt co0erninent leeti-d to -rk , ith thi, a--- hrkih c,-nmunit, -,eIcted torker--t3anl % elltire ciaijon n,-i. a para-t3tal bed\ called the Zimbab-.e Na- Lducator-, ho are uppLose-d io earn out prte'entine tiunal Fimil'r Plannine Council ZNFPC. and to 4ne it h,alth 3cri. itic' in their'. dl.lges and do' -orrmani.l plan- mu.:h )I the res pn'ibii Itinr deli'ering .ind1 -roniotinig nimng prc.rnotion rettrra nid suppl% in- ln practice rno-t tai t3nl plannng ,e-rict-,. The g.%v erinnint no' rutid; ttork mainl', in mICH linic:' a' a4-,.rant; to nur,e; 4 jO about 71' percent ot ZNFTI'C budget. although there has Boit,anra ht31hh 'erx' i.e netn-lrk i. ,.- good and b been ,igntiicant donor 'upport-m.;inl tromn the L_S * de4pread-ii petrcent ot the pF-pulatiin Iv-e , ithin I- Agene' - r Internati,-nal Doe,elopment .and to a le;;'er kilomettrs 't a health I ict r, -thai acc- : - toamilk plan- t-.Atent the UN Population Fund ning ser\tes 1i not 3 con'tratnt lor mott people more The ZNFT(- njn' 3 netwvork at tamil' plannine clinic, 1`rious )omt- is the Linadqu3ie covi-ra? and quali- .-.t IEC but more important aconimmutl' -ba-ed distributoincut- ac:ti t- tor b0th heolth and ta3nil', planning coupId reach procram %% itch emploi' c, abour l:ll coimmunitk -rc .Aiti thh latk ot 'er ic. etgared t- nien and to teenagerv Icattd educator- and distributor- and accounts !.r about ncithtlr oi hich nermnall ire MC, F HI crrx ice, No%e erthe- hattilltamill' plariting trv-ice; ILrogram orker'; cnn V- the program ha, aic-. td ide'pread kn',' lvedge r9; trate -oled on tanil' planning 3nd are ie ell paid I mret and acceptance ,-i the benetit s ;o lanilh planning help to reduce women's work burden, protect the throughout most of Sub-Saharan Africa, however, environment, and control infant mortality. it is unlikely that the fertility reduction assumed in standard projections will occur. To achieve Required efforts World Bank projections, CPRs would need to rise from the current 0 to 10 percent to 50 to 60 percent The Bank's standard projections assume that by 2020. In the few African countries where this the TFR will fall in Sub-Saharan Africa by 50 per- represents no more than a doubling or a trebling, cent within the next generation, from 6.7 in 1990 it should not be an insuperable problem if strong to 3.4 by 2020. This implies annual population governmental commitment is forthcoming. In growth rates for the next three decades of 3.0, 2.6, others that have weak family planning programs, and 2.1 percent, respectively. Even so, Africa's it represents up to a tenfold increase in the CPR population will exceed 1 billion by 2020. during the next three decades. In all cases far more During the past two decades many non-African strenuous efforts in female education and com- countries have reduced their TFR from around 6 munity-based family planning are needed. to 3. Zimbabwe and Botswana seem determined More than three-quarters of African govern- to do the same (see Box 3.3). All African countries ments have expressed their commitment to family should strive to obtain similar results. Consider- planning, but few countries have matched these ing the inadequacy of family planning programs expressions with adequate technical, financial, 70 and managerial support to promote and deliver up. In 1985 about 35 percent of couples in Chogo- family planning services. At the 1974 World Pop- ria used modern contraception, compared with 8 ulation Conference in Bucharest all Sub-Saharan percent nationally. In a rural project in Zaire the African countries (except Botswana, Ghana, and rate is roughly 25 percent compared with a na- Kenya) were satisfied with their fertility and pop- tional average of 3 percent. In Zimbabwe the rate ulation growth rates and thought that population increased from 14 percent in 1980 to 36 percent in growth did not contribute to their economic de- 1988 with an intensified national program. There velopment problems. Most found family planning are, however, cases in which demand could not be acceptable as a way of improving maternal and created (such as Ghana), even when women had child health. By 1986 only Chad, C6te d'Ivoire, the required knowledge about the supplies of con- Gabon, Guinea-Bissau, and Mauritania were pro- traceptives. In such cases more needs to be learned natalist or gave little support to family planning; to achieve better results. seven countries had explicit population policies Even with present levels of demand for family by 1989, and five (Ghana, Mauritius, Nigeria, planning, the CPR in Africa could be increased to Uganda, and Zambia) had declared specific tar- 25 percent compared with present rates of 0 to 10 gets for fertility reduction. Even so, support needs percent in most countries. To do so will require a to move from expressing concern in policy docu- significant expansion of family planning services, ments to acting and committing public resources. helped by the private and commercial sectors, Besides Mauritius, Botswana and Zimbabwe which can also provide information and training. are the only African countries to achieve a sizable Among urban and educated groups the main decline in fertility-from high rates of 8 and 6.9, objective should be to publicize where to obtain respectively, in 1965 to 5.7 and 5.0, respectively, in services and to raise awareness of the benefits and 1988. They have the highest rates of modern con- risks of different methods. Among rural, unedu- traceptive use in Sub-Saharan Africa among mar- cated, and more traditional groups the aim should ried women of childbearing age-36 and 32 be to prepare for the arrival and acceptance of percent, respectively. Government policies have modern family planning services. Family plan- played a key role through education and ensuring ning programs can be extended by mobilizing that family planning services are widely available. community and women's groups. The key, as Experience has shown that official endorsements Kenya shows, is to get both education and commu- of family planning have to be buttressed with nity-based family planning to women. clear fertility reduction goals and followed by spe- The scope for stimulating demand through in- cific operational strategies to ensure success. formation, education, and communication (IEC), so successful in other regions, remains virtually Demand for family planning unexploited. IEC activities include mass media campaigns, talks by health workers, campaigns in Only 3 to 4 percent of couples in Africa use schools and workplaces, promotion by outreach contraception. Pockets of demand for family plan- workers, and seminars and study trips for high- ning are emerging, however. Field investigations level officials and religious leaders. The private suggest that roughly a third of all African women sector can also play a part. In Kenya, as in India, it desire child spacing; younger, more-educated offers effective and innovative family planning women want fewer children. In Ghana, for exam- programs for company employees, as well as for ple, women aged 40 to 44 want seven children, but the community. Over the long run it would also those aged 15 to 19 want only five. On average be necessary to address the major research needs, African women with at least 10 years of education especially how to create demand and to make want three fewer children than women with no services more efficient in small, scattered commu- education. Finally, 25 to 50 percent of maternity- nities and among people with little education. related deaths are associated with abortion, which suggests an unmet need for family planning Supply of family planning services services. There is increasing evidence that where family Studies have shown that increasing the avail- planning services are available, contraceptive use ability of services raises the level of use; in Taiwan is high. In Chogoria, Kenya, a rural area of 200,000 in the mid-1960s, for example, each 1 percent in- persons, a pilot program provides accessible crease in the number of family planning health and family planning services and follow- fieldworkers produced a 1 to 2 percent decline in 71 fertility. According to the Contraceptive Preva- cultural factors, including their husband's wishes. lence Surveys and Demographic and Health Sur- This suggests the importance of reaching men, veys carried out in Africa during the 1980s, 30 to either at the workplace or through other means, 40 percent of women not using modem family such as the agricultural extension system. It also planning cited lack of access (such as ignorance of suggests that women's groups would be a good methods or of where to get contraceptives or the channel for delivering family planning services high costs) as their reason for not practicing because they foster solidarity among women and contraception. may help them make fertility decisions on their In many African countries information and ser- own. vices do not exist outside the big towns. In a few countries, notably Botswana and Zimbabwe (see Costs Box 3.3 above), most urban and rural communities have easy access to family planning services. Oth- What would a large-scale family planning pro- ers, including Burkina Faso, Kenya, Mali, Mozam- gram cost? Based on recent experience, bique, and Tanzania, are gradually introducing Zimbabwe, spending 0.6 to 0.8 percent of GNP such services nationally, but progress is slow. annually, could reduce fertility by 50 percent from In Africa most family planning services are de- a rate of roughly 6 in 1985 to about 3 in 2010. livered through, or integrated with, the public Botswana could halve its total fertility rate of 6.5 health care system, usually as part of maternal and by 2010 by spending annually an average of 0.8 child health care. IEC is handled in parallel by the percent of its 1986 GNP. Annual costs of 0.6 to 0.8 health and educational systems. This can be suc- percent of GNP are not only modest, but are also cessful where public health and education net- more than offset by the savings in education and works are strong and widespread, as in Botswana health budgets and in food imports that lower and Zimbabwe. In many countries, including fertility would produce. most of the poorest and neediest, the public health care system (like other social services) is so weak Food security and nutrition and limited in coverage that it cannot deliver widespread and effective family planning Chronichungersapspeople'sproductivityand services. increases vulnerability to disease. Food security Thus the rapid expansion of access to family has deteriorated since independence in Sub- planning in most parts of Africa will require Saharan Africa, and severe food shortages, excep- strengthening and expanding public health care tional in 1960, are now widespread. Food security systems as well as developing alternative and sup- at the household level is directly influenced by plementary channels to deliver family planning agricultural performance. In many countries mal- services and IEC. These include private family nutrition is seasonal and increases before the har- planning organizations; nongovernmental health vest, when food supplies have dwindled. The gap care networks (such as missions, employers' in food intake widens further in years of drought. schemes, and private practitioners); other non- Recurrent famines in the 1980s have graphically governmental groups working in development illustrated the high degree of food insecurity in the (such as women's groups and community-based region. associations); non-health-based government out- In terms of energy value food consumption in reach networks (such as agricultural extension Sub-Saharan Africa between 1965 and 1986 aver- workers and community development workers); aged 2,100 calories per person per day, or about and the commercial sector (such as pharmacies, 85 percent of recommended requirements. It is rural general stores, and market traders). At the estimated that about one-quarter of Sub-Saharan same time efforts must be made to relieve both the Africa's population-more than 100 million peo- environmental degradation (for example, loss of ple-obtain, on average over good and bad crop soil fertility, deforestation, and depleted water years, less than 80 percent of the daily calorie resources) and the overall work burden on supply recommended by FAO and WHO. In women, which can fuel the demand for additional drought and other bad years the numbers would family labor. be even larger. In some African countries women prefer to The Sahelian countries and the southern central have fewer children but are discouraged from region (Botswana and surrounding areas), where adopting family planning because of many socio- rainfall is meager and unreliable, form a core area 72 of food insecurity, but all subregions have coun- the demand side is also necessary, however, espe- tries with the same problem, albeit with varying cially for households with low or fluctuating in- intensities. Apart from those vulnerable to peri- comes or purchasing power. odic droughts, such as Ethiopia, there are coun- tries in which income distribution is particularly Projected food needs skewed and a part of the population is very poor, even though the agricultural base and national Assessing the food needs of African countries income levels are strong (such as Kenya). Food for the next 30 years is difficult because any such insecurity is also common in countries with civil projections have to be based on assumptions wars (Angola, Ethiopia, and Mozambique); coun- about the prevailing levels of calorie consump- tries with poor infrastructure (Uganda and Zaire); tion, future population growth rates, and future those with large poor urban populations (such as production performance. It is, however, necessary Zambia and perhaps Sudan); and others in which to estimate requirements in order to project future economic management has either stunted growth needs for imports and food aid. The methodology or not supported equitable distribution of its ben- used is outlined below. efits. The average daily calorie consumption in Sub- Any public program addressing minimum food Saharan African countries in 1986 was about 85 intake must distinguish between chronic food percent of the nutritional requirement. Although shortages (that is, trend-level shortfalls) and tran- in eight countries in 1986 the average calorie in- sitory food crises caused by crop failures, eco- take was 80 percent or less of the recommended nomic crises, and civil disturbances. Further, intake, for the purpose of projection it is assumed within poor households, women and children are that no country had an average calorie intake less more susceptible to malnutrition, which suggests than 80 percent of the required minimum in 1988. that interventions should be designed to reach To ensure universal food security, the average specific vulnerable groups. consumption of calories is assumed to rise to at To provide universal food security by 2020, ac- least 110 percent, as is the case of countries that tion is needed on both the demand and supply have achieved near food security, such as China. sides. Improving agricultural production is im- This is because purchasing power is never evenly perative, because widespread access to food is distributed, and the better-off consume more cal- ensured by agricultural growth. Public action on ories than required for good health. The gap be- Table 3.2 Population and food security in Sub-Saharan Africa, 1990-2020 1990 2000 2010 2020 Case I 1. Population (millions of persons) 500 700 1,010 1,500 (with constant fertility) 2. Food production (mtme) (at current trend growth 90 110 135 165 rate of 2 percent a year) 3. Food requirement (mtme for universal food security 100 160 250 410 by 2020) 4. Food gap (mtme) 10 50 115 245 Case 11 1. Population (as in Case I) 500 700 1,010 1,500 2. Food production (at 4 percent annual growth) 90 135 200 300 3. Food requirement (as in Case 1) 100 160 250 410 4. Food gap (as in Case I) 10 25 50 110 Case III 1. Population (millions of persons) (with total fertility 500 680 890 1,110 rate declining by 50 percent to 3.3 by 2020) 2. Food production (mtme at4 percent annual growth) 90 135 200 300 3. Food requirement (mtme) 100 150 220 305 4. Food gap (mtme) 10 15 20 5 Note: mtme = millions of tons of maize equivalent. Source: World Bank data. 73 tween requirements and regional-level food sup- Figure 3.3 Projected food gap: Alternative scenarios ply is derived under three alternative sets of as- for Sub-Saharan Africa, 1990-2020 sumptions: Millions of tons of maize equivalent * Production grows at 4 percent a year, and 260 population growth gradually declines to 2.75 per- 240 - cent during 1990-2020. 220 - Case I * Domestic production grows at 4 percent a 200- year and population at 3.3 percent. 160 - * Domestic food production and population 140 - grow at 2 and 3.3 percent, respectively. 120 - These alternatives are shown in Table 3.2. The loo - Case H1,,- sharp widening of food imbalance in the latter two 80 - cases (see Figure 3.3) shows how crucial it is to 60-- maintain a production growth of 4 percent a year 0Case III and to reduce population growth in order to en- 0 . sure long-run food security throughout the 1990 1995 2000 2005 2010 2015 2020 region. Note: Case 1: a 2 percent annual growth rate in agricultural production A growth rate of 4 percent a year in food pro- and a constant fertility rate. Case 2: a 4 percent annual growth rate in duction allows for an average population growth agricultural production and a consant f declting Certility ratec of 2.75 percent during 1990-2020, a 1 percent an- Source: World Bank data. nual growth in per capita food availability, and a 0.25 percent growth to reduce dependence on food imports. Even if domestic food production farmers in access to credit, extension, and research grew 4 percent a year, food imports would double and development. Reform of financial institutions from about 10 million tons to 20 million tons by through liberalization of lending criteria and re- 2010, but then would decline to 5 million tons by payment procedures would also increase the pro- 2020. Food import needs would have to be met ductivity of women in agriculture and their through a combination of commercial imports income from trade. and food aid and in ways that will not discourage Chapter 4 examines the critical issues of agricul- domestic food production. tural policy, including the technological and insti- tutional needs that must be addressed if domestic Supply side food production is to grow at a high rate. This chapter emphasizes that the pervasive discrimina- To meet the growing food needs from tradi- tion against agriculture in general, both for food tional crops, complementary improvements are and export, has to be reversed. Although aggre- needed in the technology for processing and stor- gate growth in production may ensure long-run ing local foods. Rising demand for foreign grains food security for the region as a whole, it may not in Sub-Saharan Africa is due, in part, to their faster be achieved for every country; food trade within preparation time; this characteristic will become Africa is therefore essential (see Chapter 7). increasingly valued as urbanization proceeds and as women face more demands on their time. Vari- The demand side eties of grain amenable to central processing and easier transportation need to be developed. Im- Even if food supply improves, the distribution proved storage means a regular supply of foods to of income and wealth and regional concentration local markets. of production may leave large segments of society A large part of the food insecure population in without the purchasing power to buy enough sta- Africa consists of small farmers-often women- ple foods. The long-run solution is to improve in isolated parts of the country with high transport income and employment. costs and little or no access to markets. In most of In the short to medium term, interventions such these cases increased production of food and as food subsidies or programs to support employ- greater stability in availability are likely to be the ment and income may be needed during crop only ways to provide assured food security. Food failures, in addition to direct nutrition support security considerations on the supply side indi- programs to overcome chronic maternal and child cate the need to redress the biases against women malnutrition. Women constitute a large portion of 7I-1 the vulnerable population, and they should be essential micronutrients, and poor sanitation and helped to participate in employment and feeding water supplies all affect nutrition. So do specific programs. In many countries subsidies have been behaviors, such as how mothers feed children and misdirected, often for political reasons, toward treat diarrhea, how household income is con- urban residents who are not poor. Food subsidies trolled and spent, and how food is selected and must be sharply targeted to vulnerable groups. prepared. These behaviors appear to be indepen- Given weak institutional and administrative dent of income levels attained by most in Sub- structures, it seems imperative to introduce self- Saharan Africa and are compounded by poor targeting into programs by using economically health. This explains the persistence of malnutri- (but not nutritionally) "inferior goods," such as tion despite rising incomes, as in The Gambia, coarse grains. Following the Indian model, "area Kenya, and Rwanda. Until progress is made in targeting," which restricts programs to regions in lowering birthrates and increasing food availabil- which a large percentage of the population has a ity, hope for nutritional improvements must rest history of food insecurity and malnutrition, can be primarily on family-centered interventions to tried. Food subsidies managed by government are modify feeding practices. inconsistent with the objective of removing the Nutritional risk begins before birth. Millions of state from food marketing. Therefore, unless food African women are malnourished and suffer from aid is made available directly to vulnerable chronic iron deficiency anemia, which, along with groups, such as those hit by famine, the link must malaria and intestinal diseases, weakens their be broken between the provision of subsidized ability to cope with the physical demands of preg- food and food aid. New initiatives are necessary. nancy, childbirth, and breastfeeding. Undernour- For example, the counterpart proceeds from the ished pregnant women are more likely to have sale of food aid (through commercial channels low birth-weight babies, who, in turn, are suscep- and auction) could be used for food subsidies and tible to infection, disease, and early death. If the income supplements for vulnerable groups. If ef- infant dies, the mother stops nursing, and ovula- fectively targeted to the food insecure, the expen- tion resumes prematurely, which enables the diture on food subsidies could be modest. mother to get pregnant sooner than if the infant Income support schemes for low-income had lived. The next baby will be weaker, and so groups can provide cash or food in return for work the vicious circle continues-maternal malnutri- or as a transfer. There is no single prescription. tion, infant death, and high fertility. Income generation through public works, which Children who survive the neonatal period add to infrastructure, is particularly relevant in enjoy a few months of adequate nutrition during Africa. Payment for labor should not be above the breastfeeding (which is nearly universal in Africa, basic market wage if public works are to meet although declining in urban areas). Between 6 and targeting criteria. The cost to government of such 18 months is the most critical period for child schemes is variable, ranging from $0.50 to $5 or survival, partly because 0-3 years is the time when $10 to increase income by $1, depending on the the highest percentage of energy intake (approxi- wage offered and the costs to participants of trav- mately 27 percent) is needed for growth. Solid eling to the site. food is often introduced too late, too few calories The absence of discrimination in wage pay- are offered, or feeding is infrequent. The resulting ments can attract women to public works inadequate food intake, combined with diseases schemes, as happened in the Maharashtra region (often due to unhygienic feeding), constitutes the of India. Such productive employment of women classic interaction between infection and malnu- helps improve nutritional status, especially of trition that explains much of the high child mor- children. Public works have the potential to help tality in Africa. women whose livelihoods in traditional activities Nutrition strategies should be directed toward are being increasingly threatened, although only overcoming poor dietary habits and specific defi- Botswana and Mauritania have implemented ciencies. Nutritional status can be improved at such schemes. any level of food availability. Women are obvi- ously the main (although not the exclusive) audi- Nutrition programs ence for nutrition education programs, especially those on the value of breastfeeding and young Suboptimal feeding practices, household con- children's needs at weaning and beyond. Growth straints from pressures on women's time, lack of monitoring serves both as a screening device and as an excellent way to impart nutritional informa- in Tamil Nadu State (see Box 3.5). Notwithstand- tion. At weighing sessions mothers (and fathers) ing the differences between Africa and Asia, the can be shown how to identify and treat the causes management systems developed in the Tamil of inadequate growth. Beyond better information, Nadu project could be replicated in combating other supports will be needed, such as energy- malnutrition in Sub-Saharan Africa. The Iringa dense foods for children to make extra meals un- project in Tanzania has achieved similar results in necessary and time-saving devices for women. nutrition improvement through social mobiliza- Direct feeding programs are also necessary for tion and community involvement, such as making malnourished children. A project in Zaire exem- effective use of local media, although more could plifies a low-cost approach to nutrition interven- be done by integrating complementary services. tions (see Box 3.4). Such programs should be Given the prevalence of serious (second-and-third established with primary health care provision; degree) malnutrition among 20 to 30 percent of the growth monitoring should identify children in child population (age 1 to 5) in Africa, the cost of need of extra food as well as disqualify those who nutritional programs comparable with that in no longer need it. Tamil Nadu would be about $200 million annu- Direct feeding programs need not be expensive, ally, or roughly 0.1 percent of the GDP of Sub- if effectively targeted to those children most at risk Saharan Africa. nutritionally. India has developed such a system i ,,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- Box 3.4 Cost-effective nutrition interventions: producing a low-cost wseaning food in Zaire The U ,geni tr International Peielc'pment i AID' in thil '.ried re ith hu-,ehŽild mn.-me CERE% AP v.a ihE p Zaire u ed d. naletiood n, hElp \ ic-toria A;'rttd Pr.od- .onk manutaciurdr it.an. n iood abl: to ntaint3in rt I.:n .i uct- 1 AP' 1 Pritt a:kmpan% reduce the .'-t ot Irrn-L priee Juriang rhL lortizn e:.:h:.ngc criil b.-3au.sc it vai tactulrinr CERE% VF a nutrint.u-u tood rn.rure dc .n,d nmade Entirjl trom io-ul' ;.nurrodati,, The comnierc31 j tor c%anrng hiLlr,n and , :m.er. at ri-l. c!t mnintrTition 3ile^ ct CEREi i'e\P\p.-nd.i thlnk. in part ti thtr marlket M[D.s;;itc:d \ -APin purch n-3 n .1r.,r\truer %u ii,h ii a, dt.elopimcrnt ouect ot th, 4o%,,mrnmnt d,;rrvbution, 15k : sub-eq+.,nih u-id t,- manke v eanir.g tood tr.-rn loc.alli rEdiuein : th, ri4 I t.:. pri%ae in% tor; in nutrition pr.! 3 i produc,d to.-.-d In e,;h.,ng. tlor this equipntni % AP grani- thts;ordinari anuun-ali:.cal bu,,ne,sa:o ve rr . .u ri. d to -ellitz cninnS tod at,ndr n Kilt t . f rm.. .. n ri td .!dIa enZairc .... thr puLt.c -d ltor N.CC) t_C1dn pro-ramr. in tht puthli a lo,,i -coiit nutriniou. i-anin.d t-d that helps por urbarn \ICH .:Iinic.- 3a-lMn13rn-e,.arn kn i baird on mrnthern meet tamik ndntrtinnal necdeaik a3n1 ineyr-pr 1ood aid w:vrr .and l.oca*.. iloi. ,\ ?mied :nd .old it ...pri,C -I'el. Bo\ 3.5 Integrating health and nutrition services for children under three ind3 Tatiil Nadu pr.eci init,ated inl ICsil .iarzer,d pro4rani had redu,ed milnutrtir.mi in Tanil N udu bs tohclldr.:n , .- mon- k !orid andp.d.rnt;d .sn.,i rur lna ;pF°\mia_tli 5i p,rh::nt ai a3i annual c--t 01 u! N l p r i- onlen Kse a-;p.c- . t the proec:t u:er;a gri,. th mont- bonit'lc.ar%-.ich,e'.1 incidsnt.all ,n aeriod uit x.- I n .rine s %tem t--- ernab moth,er- ind heathti .L -*rk_rz t. n.nii,: decline ih, pr.or.,mn iL;; i !attributable t;,the id.ntilh childrEn ho he. LErt nutntlilnall il r.4k ,hort- tr_innrlg ind i lit ntnricnr dlivcr. * .tern t. it thhr- ternm 5uppleenlontar- l:dJin- to bcip werio.iu4l mnalnour- - u ,hraininua3nd.-u .:.n ct tuper%-olthenurnrionolok- * iKd childrn reachan.Luc;prtb3e pattern it !veichtgain cr- r.i, th monit,,rine proeied to te -n .3curate tood *uppltenn- t, nvJbh,cr 3t rik rnlorhLr* .ith a -creenn - c ic it n-r .tni , :hitdrcn at rtesutEt riw- and nialnouri4hcd child inr % ho had lo-t a child irDd a -orn- in ~tlectri.e ;-oh,l;c lor dLI.C.Mrtn~rnwth.sr4 to nr-aina'n ii prehenm.. ,--mr,unr .-;t1ron- pr.-,r3nm rhat nchJded both ibkir children * nutr,tio-n tbrouizh pcrmanent beh.av,,,r racc-io-ltae in;tru:t-hnand ni- mcdi,) chnir4ea Finatlt on-mat-rnvkchildiren sred. nttrerd the - Ninei th'u;anJ ;0nmmun,ti nuirnti-un cxnter-4 %%rc e-- pr L-, ra m rn-u l nincdilte.F, r , i deupplrmentar% rd tatlizbed in tour c tar- 3h , t.uttkd t! a l,icallt r,ruit. a 3 pre :riFtior or mr1natrition :.mnmunih~ firnttin r L ri..r i' h. hid .:ei nr rh. rh-: pr-rc. v. i -0 --t-:tt5.5tite ta:;-* It .:I.:l: t.- i.-ihth Z rid a as *uii-dercd :, mod.l mether The eoted heneticiarie-! innimized the ned lor tt,od -uppic. - , ,.rl .r ie. reinltorc.:ed b, healit- outre.-ich anr irtc rral rile ot'- t1, d tt ...t. . t t r, t. pr.blenii carl, tIimilted ver'. cc:- rcin thr;ic.lth dte p'rtnenr Th-.:den r- z. ~tid ;uppl.:rmentrt r edin to: *hort-t.:rn therapeutic rtm- childrct. m.nthik ind prc-. !d td id br %iU d3l ' t.r chtl- eLd until thc motherc.riu Id Ita. ron her- in. and wa; *drin- h-!I I. cre not 4ro,' nc Epeni .p-,r edtI.h !t.ntici nft connunirt ia vik en irelirnitar% tind'nm indic.ate that aittr t-..en ;ar, th, 76. ::---- - - -- -- --. --;- --A-- Box 3.6 Cost-effective nutrition interventions: delivering vitamin A supplements in Burkina Faso In 197 the ,okrnniEnt ot Burl,ina F3;,' the LUN Interna- HEI,n Keller lnternational aretrain,ng Burkinibetrainer- tional Children - Emrrgenc; Fund L UNICEFi. and Helen etio i, ill in turrn tr.uin pro% incial idnJ wkal go% ernnent - k0lIer International initiated a pilot project ti) drisncall health -,orker, and ^;hoolttacherr reduce C itamin A dei !t ie nc. ; hich tan le ad to b i nine;k * E ncurLia ging the pr-d ucl on ot I'11a m ian A-rich toc.dsi In The% de% eloped a.t,--v-earaction plantobeiniplemented communiu h and ;ch'cil nardr.en al.ng i itlh nutritil.n ed- i in tour of the countr- pro-vince; This plan in%olk e, ucation and a broad public education campaiprn it prc: D*a Dotribunng megidosei. ot v- tamm A. three tinme 3 mote their consunmptioun 3 sear, to I mlllion hhildrtŽn under age li and to approi- From the beginnrng the got emnment ha.l bon trnnql% R matelk 2&Otii.iij omeneatt:r1he% ei%ebirth The ,apsu conmitted to this eltort The protect ,a, to b epanded pro Lded b% LNICEF. are dihibuured b% % lre health t . Icur more pro% inces in the toio%% ing %ear and eVtentu- orlkerr n and inic Ptr LinnriJ Ill. na tionwide Similar ,t trto tJddre, i ramin . A .4r- - * Training Zo%errnient health %%orker, hoi, tcdetectand cienc% .re lot beine mplmcnrted in Nl13.rrania Nig,'r treat vit:rmin A dchci,ercx tierophthalmial UNICEF and Sudn. and the enlergenc; rone ol Ethio,apA - ~ ~~w--~~~--- -. - s-~ i o a 6 -L.--a:s K w F ->.aTUx2.si- E Micronutrient deficiencies are a serious nutri- tratively feasible, as Botswana's experience shows tional problem in Sub-Saharan Africa. Three con- (see Box 3.7). ditions are widespread. Blindness (xerophthalmia) is caused by vitamin A defi- Primary education: revitalization and ciency, which is also linked with pneumonia, mea- universalization sles, and diarrhea in children. Iron deficiency, the most common cause of widespread anemia, un- Increased investment in education can acceler- dermines work and health and may also affect ate growth in several ways. For example, educated psychological functioning and cognitive develop- farmers have been found to achieve higher pro- ment. At least half of all women of reproductive ductivity levels than those who have not gone to age, more than 60 percent of pregnant women, school. Research has also established that a and about half of all children under 12 years suffer mother's education enhances the probability of from anemia. Iodine deficiency, also widespread, child survival. Cost-benefit studies during the is the cause of goiter among 30 million Africans past decade in 16 African countries suggest that and of cretinism among half a million more. the social rates of return to investment in educa- These disabling conditions can be overcome at tion are 26 percent for primary, 17 percent for only modest cost, and African governments could secondary, and 13 percent for higher education. plausibly aim to eradicate them before 2020 (see Education is intrinsic to development in the wid- Box 3.6). The iodizing of common salt costs $0.04 est sense; empowering people, especially the a person a year and the addition of iron another poor, with basic cognitive skills is the surest way $0.05 to $0.09. Since centrally processed grain, to render them self-reliant citizens. which could be fortified with vitamins and min- The goal of universal primary education, how- erals at low cost, is little consumed outside urban ever, has often been interpreted as simply expan- areas, micronutrient supplements could be pro- sion of enrollment. This will not serve any vided in rural areas alongside health services, purpose if quality is not ensured. In Africa not such as immunizations. This is a cost-effective only are enrollments stagnating, but the quality of approach, since young children, who are immu- primary education is low and declining. Tests on nized, and the reproductive-age women, who ac- reading comprehension, general science, and company them, are the primary targets. mathematics suggest that many African students Thus a comprehensive approach to food secu- are learning very little. Ensuring quality is, there- rity would involve not only the critically impor- fore, an important prerequisite to expanding tant programs to augment domestic food enrollment. production, but several other programs targeted One reason for the low quality of primary edu- toward vulnerable groups. The cost of a compre- cation is the low expenditure on educational ma- hensive food security and nutrition program may terials per student-$0.60 per student a year in thus range between 1 and 2 percent of GDP for Africa, or 1.1 percent of recurrent primary educa- different countries. Such an approach is adminis- tion expenditures. This situation has been aggra- :7r / Box 3.7 Botswvana's food security program - Bot'..ana ha1 t1 S malnuMIrUtiOn than an, other drought gvsted b; %illiaeconirnitteei l he \lini7trr oI \.ricilture prone countrx in S1outhern Atrica tha-ink, to its COmpre- adLnuini,tt,rthetarmrtlItt-land recoter e programthrough. hensite 1.'d 4-ecuratt program. 5niceitsit inception in he the eten;,on ind .ettrinart cer%.icEs A bai4c ,eed pack- e.;rh lSu9 . the program ha, eliminated st vere nalnutri agc i, g,c.ren to all tarmer, and lo0t -cost drati pi.tr is - tionanongchikirn underhveand has reduced nmderate pro% ided to tho,e ,hc hate ti cr no3niml3. Tc. protect undtrnuitrton sutb-tntialt% de-pite a -erie- oF droJic hi tarmer- andpastoraih,tr prodit.ctt c.pJcilt oldercattle \ears and driasti: tall in local gr.3ri prediuction. ire purchased at .i lio.-.r pri.cL 1. rcdu.ce razMing pr.s-urev : The principleunderl ,ing thedesuign organization.and and to protIdt hou-Eliold In:ome Thece measures help rnm_nagemtnt ot tht prognram t as to e\pand the cap3cir; mirnizehthneed tor emer %nc camp- ard rc--ltlemcnt ' andJt1cilitv oltin'tiruhon concerned *.ithditterent as- although in m,me .earz the tritntii\ to rcduce grazin Z pecks ot tood ,ccurm Thi proia3m comprise, pressure, *ere not 'uitt.irnt rk * Direct teetding through primar% ,cht.'ls ain healh Program c imporents 3re`toirdin3ttd ban interNlln- \ (t ner5 isterial DrouLght C_ommittele. -c Iced bh st:.t ct ih, NI n- * Additi,nal i,3er 'uppI% ,tnrr 01 Finance and Eeteltopm.n .irinine Thi, S * Emereencuc public -.hork ,cher- t p Pro ide ,hort- C.mmitec ilsoha,an important rle, in mTnit..rn. mn ts term ,upplenieitar\ income rLr, .nd :ropping c:cnditiin. and in prca din, Mirk * Farmn lpponr and rehabiltatton preram~ to'% petdtte trning inntcrmatintothenceriedm mi,tri' The in- - revoert en tr drutight oh ement or man. ministries ha- enabled BotJ,.: arni to The program in.-lves -c'eral ministries The Nlinitr, handl' -irought- readle-; t the lt'cl ot tcreign 354r- olc LoculCt.n ertinienttad L.nUs haiid-eanoid aild nimp.ri' t.t11ec Allthough Iti -tting ri t, -it r . -i, 1 gOle local purchases and dJitriution to ;:hool, aind health in m1.ibilit% -,It retp,.-n-c arc- nmore aluable tacilitie T'he Nlini4trx .t Health mornitLrs the nutritton The bti,dgetarx r. st t th,; interr. enttc.r, ha3 aried sirtIticn and org mize, on-sire tcldn, in clinic; and the % ith tile -ci erit% of the droaught. In lci\2-S total cost Nlnisrnr e-t Education o%cerset_ the te-dinri ot primars ct cluding tiood atd. amrounted t.o 34 percent ot all dJi el - chool children I\ htn there is no.drought a linited teed opmente\pe,nditurt and ini l% Sit n, a- Is pter:rit The ing progr3nm reacht, tiung school-agechildren pre- do.nor-runded ;haredroppedl trenm 33prcent in 1%2'-5 ;i school childreii and pregn3nt and 13t.-ting ic nl-n tii cpercent in 1"M-4s The aluoe'tlcd aid ichich i3as - Duringadrouchi the pregrant i, depped tip to teed trig a ll chic entl.:ornr.iatc b'. t dn.irs a, coak-ut percentot children up to IliJ ear, aind vulnerable group- c d tot.al ct-re31 c.-n.tsiLmpnrin or alttoc.,i 3" kilogram- icr each b3ai Its ltoed :upplie4 conic mr'tl. frim lcod aid but percon in hIU - h.her thanthi aerageto!rall5bata1ran - then Lupplle- cannot be ;ecured lui.kih -ni.tigh the Atrica and Jen inr nan1 other 'much poor,ri drought - government purihh-es toedgrainsn .n the international proneLcountrie-. : market out ot it-ca,sh rese-rie- tlmh-e art nimbur-ed later E a.n.-, an i r t.- ,OTit e tent a -ptc:ial case \o,t Ci the b-% d.-ni r 3gent,i. s The \ lint,trt ot Mineral Rs ource,and p.pul3ttn10 is-oncentr ited in the cou ntr - eastcrn region I\ ter Attjirs hind ieSdonme-ti\1c water suppl% in contulta- The regul.iriN o't drought predispose- the got ernntent to ti ton . ith local cot ,rnnlent ard tra dumestl, i3ater take stabili.3tion mea-ures-. The ceuniri relat. El-I high supplied as nece-san through ienipor-irs drilhingorether nirionAl inc.me. gi'o-l toreign t\change positicrn and means;. The i hok countrr i-cot ertd 'o th3t no commu- ree.c r elromm tiineral ret ienue' prot dea htlpt-ul ttn3ncial : nir is. without rea,onabl, i,e,t- to Later b;se tor the program in p3rticulir ti r fle'ibilit% in impOrl- 1 v prot ide short-ternm upplementar\ in-.me labor- in b.loo N,rnithelu-ss Bc.t''.ina- ca, derrmon,trate, that mitens',.e protects are . in. aible i all rural -trlernenti intitutionalized support -. tem, can be! dJeeloped ton Each vear riifiii ito cit. 1.1-1l pe -.ple et-rn ca,h t.. ate*rim F'ro. ide toed securit. building localii nrirtructure or tronm other acit% tle, nue!- A vated in recent years as salaries have been pro- Enhancing the quality of education will also tected relative to other parts of the budget. It is require raising the professional competence of estimated that the minimum requirements of teachers while keeping the costs of teacher train- books and materials cost $5 per pupil a year. But ing down. This can be done. Some countries have the problem goes beyond money. It is also due to shortened the duration of preservice training (as the limited national capacity of most African in Burkina Faso), while others have incorporated countries to develop low-cost teaching materials distance-teaching techniques in preservice train- that are pedagogically sound and relevant to the ing (as in Nigeria, Tanzania, and Zimbabwe) and national curriculum. Depending on individual innovative in-service training (as in Ethiopia) (see circumstances, countries will need to develop na- Box 3.8). tional skills at least in the areas of adapting and Improved testing can help monitor the quality editing materials and, in some countries, in writ- of schools and ensure that students are develop- ing, publishing, and printing their own materials. ing cognitive skills and not merely engaging in |! Box 3.8 Ethiopia: effective in-service ieacher training In Jo43 Ethiopia in-ifutted a 11.1 Yar D telopment Plan. huill and Ahout 11.0 .uikr.-q pedlago,cfl centers. Thee; *ihich a. lined-a high Frioril t. educatio.n. The long- cnlter prov idictlhcx-l ~upL.r- i-inand In-~r n.e 1t-cher termobjecti et *er'isa.hie%eunlier31I prim.r educa- trTninrg urellrat educit nal upr -rl ice- tion to di-tribute educational ipportunities nore In lussreacher trainingintiture gradLi.ed rmreuhan equiabii bewleen nural and Urban a ra;.and l emrpha- 4.21ii0 leachorr. compared k.ith . 20Li gr.du.ue, liM O e ,1r- size practical 41ilk. Tle go ernmnent -upphled ne%s betoire.Btc.3.zei ltheir prro.mit\ tolo .al hool,.teadiher ;chiol rei i-ed currinulum- dJitributed new tehol,;- are able to attend *unimer or hort arwe- to upgrade and de%eloped training .%.tvrn their sl,illk v Ithout incurrin, large travel c;-t. Thereiornil-o tnattuted pt,% incial ped3oogicalcen- This model ha le4on4 toroth~rrbecaue it encourage Ij l ter and regional te.clier tTaining The po% ernnient il nox the training ot lox31 per4onnel aoid' oSercentr..Iizd' dc%Eloping the administrative and planning capacitvY l .lt`rTinini progr3m; nd is condl. 1iv tu rnalsin - r,gional and o; r.ipa 'adminivtrat3 v;bre-lion l cvuca- leacher tratuinm re pon eto ;pecttc, local conduttion1 tional otihcez. 4e%n teacher-traIning jn4jtutc~ hi., been rote recall. Quality can also be improved by ensur- In 1983 girls in Sub-Saharan African countries ing that curriculums and teaching materials meet accounted for only 44 percent of the students in the needs of the African environment. Finally, primary school, 34 percent of the enrollment in using the local language in the first years of pri- secondary school, and 21 percent of those enrolled mary school may also contribute to quality. in higher education. Female students are more Although improving quality is paramount and likely to drop out than male students, in part the immediate priority, the long-run goal is also to because of the demand for female labor within the expand enrollment, especially of girls. There is household. Illiteracy is much higher among wide variation in gross enrollment ratios-from females. Niger and Somalia with ratios of 29 and 20, respec- The gender gap in education comes at a high tively, to Kenya, Madagascar, Togo, and Zambia cost. Evidence shows that the mother's education with ratios of around 100 in 1986. Female enroll- is perhaps the single most important determinant ment ratios are generally lower than those of of a family's health and nutrition and that educa- males even in countries with high total gross en- tion enhances agricultural productivity. Thus, rollment ratios; see, for example, the situation in since most agricultural subsistence producers are six countries shown in Figure 3.4. women, basic education can be expected to im- prove their incomes, opportunities, and decisionmaking power within the household. Figure 3.4 Primary school enrollment ratios Further, even a few years of learning at the pri- by gender in six Sub-Saharan African countries, mary level has been shown to lower women's 1986 fertility either directly, by increasing awareness of Ratio contraception, or indirectly, either by reducing the 130- 120 - demand for children because women perceive en- FM Male hanced earnings opportunities or by raising the - Fema' arigso 100 - E=l Total _ age of marriage and thereby reducing the number of childbearing years. 80 . 0 E For many countries improved quality and ex- panded enrollments in primary education imply an increase in total expenditure on the education 40 - 1. _ -1 - 11 || ll sector as a percentage of GNP, as well as a gradual G_inea Senegal Be| n . ote d'Ivoire Togo increase in the relative share of primary education 20 - in total education budgets. There are, however, significant differences among countries. Some countries may reach universal primary education EthIopia Benun Togo (UPE) well before 2020; others may not. Figure 3.5 Note. The primary school enrollment ratio is the number illustrates the recurrent budget implications of of children enrolled in primary school as a percentage of the primary school age population. achieving UPE with an improvement in educational Source: World Bank data. quality for five low-income countries with low Figure 3.5 Universal primary education: Cost can be reached well before 2020 with only modest scenarios for countries with low enrollnients additional expenditure. Gross enrollment ratio Although a reduction in cost for each pupil in 140 - Zimbabwe primary education appears unlikely in most Afri- 4.2% can countries, there is some scope for using re- 120 - Case t sources more efficiently. In certain circumstances 100 - Kenya 3.6%, double shifts can be introduced, teaching loads 100 , Kenya31% increased, and distance-teaching techniques im- 80 - plemented, although care must be taken to ensure 20 / that quality is not jeopardized. Planners in Sene- 2.9- gal, for example, expect to raise by 6 percent the 17% number of students enrolled by 2000 through a 40 2 1.7% double-shift system in 20 percent of the over- 1 --__~L~---~ V - @ crowded classrooms. In Burundi double shifts 20 have helped lower unit costs to $35 (compared 1980 1990 2000 2010 2020 with the African average of $52), without any noticeable adverse effects on quality. Increasing Note: Figures on the graph are actual (1983) and projected (1990-2020) class size is another way to reduce costs, especially expenditures on primary education as a percentage of GNP. For com- parison, actual (1983) expenditures are given for Kenya and Zimbabwe, the rural areas. Finally, as Kenya's experience which have already achieved gross enrollment ratios greater than 100- shows, interactive radio can be used to improve Case 1: expenditure on primary education as a percentage of GNP remains constant at estimated 1990 levels. Case 2: expendituie on the quality of teaching and to enrich the classroom primary education as a percentage of GNP increases to accomodate a environment. gradual increase in gross enrollment so as to achieve UPE by 2020; this case includes a provision for quality. The low-enrollment countries are For every 1,000 children who enter primary Burkina Faso, Ethiopia, Mali, Niger, and Somalia, whose per capita school in Africa, only about 600 enter the final incomes range between $130 and $290. Per capita incomes for Kenya y and Zimbabwe are $330 and $580, respectively. year. Dropouts and repeaters increase the cost for Source World Bank data. each completer of primary education by an aver- age of 150 percent; in many low-income countries the cost is more than doubled. Students repeat years in the highest levels of primary school to enrollments. These projections are based on four better their chances of getting qualifying marks on assumptions. primary completion examinations to enter sec- * A systemic provision of $5 for teaching ma- ondary schools. The change to a separate test for terials is added to the public recurrent expendi- entering secondary school has been shown to re- tures for each primary pupil (observed in 1983) to duce the number of repeaters. In some cases drop- enhance quality ping out and repetition may be due to impaired * The revised country-specific expenditures mental abilities resulting from poor nutrition and on each pupil remain constant in real terms micronutrient deficiencies. In such cases appro- * School-age populations grow in line with the priate interventions, such as targeted school-feed- standard fertility reduction, and GNP grows at 4 ing programs, complemented by supplements of percent a year micronutrients, could improve learning abilities * Substantial community contributions are and reduce dropout rates. available to build schools Most African countries face a growing demand Given these assumptions, it is projected that for the limited number of secondary school places. these countries would have to gradually increase Here too expansion should not take precedence recurrent expenditures on primary education over improving quality. The key lies in reducing from 1 to 2 percent of GNP to 3 to 4 percent of GNP costs, especially through measures directed at to achieve UPE by 2020. Case 1 shows that if the teacher training and utilization. In many countries present level of expenditures continues, these capital and teachers are seriously underutilized at countries will fall short of the goal even by 2020. the secondary level; the student-teacher ratio is 23 These projections do not represent a uniform pol- to I at the secondary level compared with about icy recommendation for all countries. Some coun- 30 to 1 in South Asia. Making use of distance tries that have nearly achieved UPE are already teaching in secondary education is another way to spending 3 to 4 percent of GNP on primary edu- reduce costs, as Malawi has shown. Finally, in- cation (such as Kenya). In these countries the goal creased cost sharing is imperative, provided bur- saries are offered to those from the lowest income graduates, however, the rate of return may have groups, based on merit. Given the paucity of pub- fallen recently. lic resources, private resources should be mobi- Notwithstanding the growing number of grad- lized for investment in secondary education, as is uates and the rising rate of unemployment among being done in Kenya. Although the scope for ra- them, there is a scarcity of skilled workers in fields tionalization, cost reduction, and cost sharing is such as science, engineering, auditing, and higher- considerable in secondary education, it is even level accounting and management. Despite the greater in higher education. large share of government budgets going to higher education, the number of expatriate teach- Higher education, skill formation, and training ers as well as technical experts in science, mathe- matics, and other professional fields remains high; To survive and compete in a competitive world there is apparently an excess of graduates in some in the 21st century, Africa will require not only disciplines and too few in others. literate and numerate citizens, but also highly One explanation for the shortages in high-level qualified and trained people to perform top-qual- skills is the brain drain. The United States alone ity research, formulate policies, and implement had more than 34,000 African students in 1985, programs essential to economic growth and de- many of whom are unlikely to return to Africa; velopment. Institutions of higher learning must be there are reported to be more than 70,000 trained able to produce, at an affordable and sustainable Africans who have opted to remain in Europe. cost, well-trained people in academic and profes- Underlying this migration was (among other sional disciplines applicable to diverse African things) a fall in real incomes of 16 percent between work environments. 1980 and 1985, which increased the attractiveness of overseas salaries. Other factors include unfa- Higher education vorable working conditions and political instabil- ity. On the positive side, migration of skilled A new spectrum of scientific and technological workers within Africa also has been significant, knowledge is unfolding outside the continent. especially into C6te d'Ivoire, Gabon, Kenya, Nige- Universities in Africa will have to develop a few ria, and Zimbabwe, which indicates a growing world-class postgraduate programs in sciences market for skills within the region. and engineering if these countries are to have The quality of higher education is low and pos- access to the new frontiers of science and technol- sibly declining. One reason is the low and declin- ogy. Unfortunately, given the present state of ing quality of primary and secondary education. higher education in Africa, the continent is unable Another reason is the shrinking of resources for to prepare itself to take advantage of the expand- nonsalary inputs (such as physical plant and ing frontiers of knowledge. At present higher ed- equipment) on which only 2 percent of total recur- ucation in Africa is confronted by an rent expenditure on tertiary education is being inappropriate mix of outputs, overproduction of spent. The immediate consequence is that aca- poor-quality graduates, and high costs. demic standards of many graduates are unaccept- Since independence, special emphasis has been ably low. As a result Africa is falling further given to higher education. African governments, behind in its stock of high-level skills and in its acutely aware of their dependence on expatriate ability to manage its economy. And yet the di- skills, have spent lavishly on universities and lemma is that by the beginning of the next century, training centers. Enrollments for higher education the quality of African higher education must be have increased from a few thousand in 1960 to half much better than it is today if African develop- a million today. The aspirations of people for ment is to become self-sustaining. higher education are high, and governments have For Sub-Saharan Africa as a whole the cost for responded to this demand. Public subsidization each student-year of public higher education was has been so high that the direct private cost of $3,655 in 1979-80 and ranged from $895 in Soma- higher education has been kept close to zero, lia to $11,081 in Zimbabwe. As a percentage of which has further fueled demand. In the past the GDP per capita these costs are six to seven times private rate of return to higher education has been higher than in some Asian countries and nine about 30 percent (higher than anywhere else in the times higher than in some Latin American coun- world), but the social rate of return has been only tries. Wastage, proliferation of small institutions, 13 percent. With the growing unemployment of excessively large staffs (especially nonteaching staff), and the nearly universal policy of charging many countries have invested in skills-training no fees all contribute to higher costs. In Nigeria, institutions. Few have, however, a coherent policy for example, only 10 to 20 percent of the actual and institutional framework for effective, relevant costs are recovered from tertiary education, vocational education and training. whereas 30 to 40 percent are recovered from pri- The efficiency and quality of vocational training mary and secondary education. The subsidized are improved by training oriented toward meet- allowances for housing, food, transportation, and ing employment demand, increasing employer health care for each student of higher education, participation, and strengthening the transition as a percentage of the average public sector salary, from training to work. Apprenticeship comple- amounted to 62 to 63 percent in Benin and Burkina mented by theoretical training off-the-job has Faso, 43 percent in Cameroon and Niger, and 24 been successful in many countries. Experience percent in C6te d'Ivoire and Kenya. A similar shows that this can be effective for both larger situation prevails in most other countries. Not firms in the modern sector and the smaller enter- only does charging no fees lead to an increase in prises, in which the bulk of new jobs will be cre- publicly borne costs, but it also contributes indi- ated (see Box 3.9). rectly to high costs, since beneficiaries have no Response to employment demand is central to incentive to contain nonessential expenditures. vocational training, including apprenticeship, To meet the crisis in university education, radi- and to improving the quality of training. A first cal measures are needed to improve quality, re- step is to create a national training agency to fi- duce costs for each student and graduate, nance and administer training in collaboration constrain output in fields that do not support with industry. It could focus on a range of nonfor- economic development, and relieve the burden on mal training activities and be located in the min- public sources of financing by increasing the par- istry of labor to facilitate flexibility in staffing and ticipation of beneficiaries and their families. If the responsiveness to employers' needs. Existing vo- principal objective of improving quality is to be cational schools and training centers should be achieved, additional resources will be required. consolidated and reformed to conserve scarce re- Given the current budgetary constraints, these sources and enhance quality, and only those re- resources will need to be found mainly through sponsive to labor market demands should be the reform of the higher education system itself. maintained. Curriculums should be broadened to Only by implementing policies to decrease unit include such areas as management training so as costs, constrain output, and expand cost sharing to be of assistance to enterprises. Some countries by beneficiaries will it be possible to free the nec- with strong modern sectors will be able to recover essary resources to restore quality. part of the costs from employers or individuals, In the longer term, improvements in quality can but in most countries costs will be met from public be realized and sustained by establishing pro- revenues. grams or centers of excellence for postgraduate The training scheme now being devised in education and research. These could concentrate Mauritius reflects many of these elements. The staff and resources to achieve a critical mass in objective is to respond to short-term labor market priority areas. By establishing such specialized signals through rapid adjustments in the size and high-quality programs and institutions, African content of training. Short-term, nonformal train- governments would provide able students with ing will be administered through an autonomous an attractive alternative to foreign study, create Industrial and Vocational Training Board, gov- incentives for university researchers to pursue erned by an Industrial and Vocational Training their work on the continent, and thereby also ad- Council composed of representatives from both dress the serious problem of "brain drain." To government and industry. The scheme will be economize and to ensure high quality, these cen- financed by a 1 percent payroll tax levy that will ters of excellence should be developed on a re- be matched by government budgetary allocations. gional basis (see Chapter 7). Where civil services are chronically overstaffed, governments need to reassess their approach to Vocational training training. The intake of the training institutes needs to be curtailed and training reoriented to upgrade In response to the pressing need to provide the the skills of incumbent civil servants. Public ser- work force with skills for specific occupations, vice training should also be linked to opportuni- Bo\ 3.9 Training for employment M e Forrmil eduk.ti.-in ard ,,:ational ;sool in mmust -.l Sut- 5chb-ne in Ni m ,ri.i L 1.itict:ed b% Ni., r., Dr3ci:r..,: Lt S Sah.,ran AFrica are orienttd to. ard the niodJrn -och ir Emnplo% nlnrt Ill , h. in- t,ir-t e.eir t. ..r.ain f' tUi ph-eopr niL ndhcn; ir,ace^-lblt rnan pople I Ia'S-,l Lc.: vlUll' pLr;tladl:.d pul-l arid parlstta I ; . i nd are a .nsnderahIebud:Letar\ Ltran -on the go -rn- v nterpr!;s and prI iite 1 uctnr nlo! r in.:Lid f. ni,.r r ment Thetr:iningiitere is inaJdeuakt toprepareo chool mal -.vt. r .- .rkI.,hp to IA. on, ippr j-et Fl filr' : r t a l. lr- or tlc. %-.-.rk lace A-;uch, prirmnoton o'! ir:oninz t or.te pr,.l i,l- tifnc I I.0id t. ic y uO.l rt It "t1' nair..A w '. qtemI that s.flit'ino on -the-jtb e,.perienric % ith thevret- nionth tor .ach tra,n-e an rd I'i ni ira a % ', ir ti th. trairtr r NA al tT.,ifnlin ha%e .onndrabke potentiai to pro.I& tde i ir c.cti Itrainee Leti Ii- trai ni n % eel andl tn r, 'uit-i crui.tA rni--nt nr middle in §uL'-Smhran A'rTica I hi; mrg plert lrnlam.n are 1 ii.gd 3nJ chL.Jd b. winitt-r, t 5 LSi e^F'nr;!.ci*1 -o -iLen tht unrelenting detinior.iphi: prre- lI-,.t nc-n Cerx\ Iv:. .iL'.- ti lu cr'Atlrl - qtuoali t, ure-. i' hichi are Lbound t contilue io denine the gap The Nicerianr .nlmplt dtn.nimr nIt r [he pt.!:n1[31 itir telt%et:n thout %' ith sob- ,nd thi j,-bl1 DeteriL-r.;tir,g o-hann ir, dvyrinnd r,rnt,d ;trti Jr-i -the ecoriornic conrditon5andrldovl% borproudcti%itI-, and kil tmprn.p or prn ldc-- trainin, 3nd tlt trainL%- . rk; t.-.r 1OL cl ornt-mntbrd iith decdinin; public ,ecl.,r em,lo Ii.cr .l.te Bcttcr u-Li .,I n.rnml train n, instituti,ln- nient Lurthr aggra%atM the probln mt labor ab4orptIi,n nnoid rurrther loi runito-i tlhu; alloinnmir appren I InnLIt ali c methIiod- ar. ric-,Jd tL train pLOPI cIcti ec tli ,::. f ipplenntI practicd atIr.i rning 1rid nleliorat l the tii el; in i %% ih1e 'petruni of tli itu -LaIprW- e Ihe Luihti pwr, sent -.carc ilt ot qriilitiEd traincr- Tr.tning in-tietuJltn; itrarine and oltter incentL ¢; or seltt-nipl mnient -lIttr and trraincr bKn:t ttFrnni h: iti act sith 3nd, te:dbwk trainin, tr,irn cnerpri,; A chanz. ir.rm the prw:--ent pre;er% icc tormal trairing T re ;re .thor ;mIar niti :,ti . *. T , ha- ,.-t.ihn d 'i stern ro%%ard on th* lo-ob and n--erm-tce training in the r. N a! ocatinatrira Ining ; nt,rlter- n aprt ritprentioe. i- iork place complevnented t-' lheOretica.l Irining tI .uld shitb, pr, id inrc2 u0pl-L'itnlrn tlrhe..rr.il tr.nljin - and i require pri ite s;ctor iL ol enienl and loc3l etlort- I ;Li,t. th;. suppl i ig r oac hing mn itirea I; lir ,nt rr,pie- and an ri c ratt and tworker :rganl?31ttn; I hile r,taining c-r. rall Ad izorl, :ppr, r.c, i i tor.iic Nev t -' rnm r tra,n- public manrzrement. i Iramnin Cir.c:sucdapprentici. hip ng -re al:. tths-rd in pr.ponni- '.ok ement. .-nd tooptimizc conntruction 3nd operaton.al te 1.: rap mainrtnance.re isonien i et .nk li tpercent or technique- The project wa3 confined initialk to, areas planning COmm,rteev-ihich make decision.onr re;Fon %%here gra'.ih-fted piped %%ater could be used. and the x ibilitie; and de-ivn-and -rt repair ieamu are %o.'mcn tvchnolog% could be ea;il, maintained. it hav no%% been ThE go%,rnmnnt ha; hulped co;mmunit.e to pro%ide e\tended to differeni condtion*. %%here ground%safer i^ nearl, I million peopleo t ith reliblearid 3cce.-ible -. afer a% ailable. supphIz The vuccov ot the prog;ram ha4 encouraged The program has defined the responsibilitks of co-m public ht-alth isorker' t.r begin cormplementars health munith and go%ernment .sell. The communite4. %shic:h program, ishich tnzuro thai thL health effect;s o ihe organize and mana4c ih, %%ater f.icilitiet are r¢.ponsible improvev at.-r *uppl\ are rcalized cir idntmfi ing -ite; olecting is ater comniitlee .irgani;- users can determine the cause and the responsibil- ity for action. If money is required to maintain or cal developments in their field. The interface of the repair the facility or to provide books or medi- centrally provided technical services and the local cines, there is no need to wait for the central staff and management is best developed through government to appropriate money. Users are programs based on regular visits and interaction more willing to contribute to the cost if they are between central agencies, trained local people, directly involved in the management. and beneficiaries. This training and visiting (T&V) Encouraging decentralized participatory man- method is used in agricultural extension and con- agement does not imply an idealized view of local veys information on production techniques to a communities. Elites and powerful vested interests wide group of people. The T&V approach, suit- can subvert the wider interest. But in an imperfect ably adapted for human resource development, world user-oriented management is more likely to could help to reach those with least access to social be responsive to the needs and demands of the services in a cost-effective manner. intended beneficiaries. This is particularly impor- The T&V system is particularly amenable to tant in Africa, where the availability of experi- health delivery because there is already a range of enced managers for highly centralized agencies is low-cost technical innovations that can be effec- limited and where group effort and community tive against the main causes of mortality and mor- action are entrenched. bidity among infants and children. One such Centrally managed agencies have an important innovation is oral rehydration therapy to counter role to play in supporting local groups with tech- diarrhea. T&V workers working one-on-one with nical services. This is well illustrated by the cases community members can teach women about the of Kenya, Malawi (see Box 3.10), and Zimbabwe, nutritional needs of their children and family which have well-run water supply programs. In planning. By using local people as community these cases centralized engineering services pro- health workers, who are trained at regular inter- vide technical guidance, support, and supplies to vals and work under close supervision, the mes- locally managed user groups. In primary schools sages of the T&V system are more likely to be and in family planning, health, and nutrition ser- accepted. A cost-effective T&V system was imple- vices, local staff need to be kept abreast of techni- mented successfully in the Tamil Nadu nutrition 85 project in India, in which a small number of low- Women as lead managers paid workers was locally recruited and trained. Implementing reforms and quality improve- African women are the lead managers within ment programs requires a well-functioning ad- the household for providing food, nutrition, ministrative system that can provide schools with water, health, education, and family planning to teaching materials and health centers with medi- an extent greater than elsewhere in the developing cal supplies, as well as supervision and support. world. They have always been active in agricul- In many African countries health, education, and ture, trade, and other economic pursuits. Women food security are handled by various parallel ad- are guardians of their children's welfare and have ministrative structures that have little functional explicit responsibility to provide for them integration among them. These administrative materially. structures limit the coordination of activities and But women's economic capabilities, and in par- programs. Horizontal integration is needed, espe- ticular their ability to manage family welfare, are cially at the village and community levels, to max- being threatened. "Modernization" has shifted imize the synergistic relationships among these the balance of advantage against women. The sectors. legal framework and the modern social sector and producer services developed by the independent User charges African nations (and also most externally spon- sored development projects) have not served Encouraged by donors, many governments in- women well. Legal systems have discriminated in sist on providing water free. But because there are land titling, by putting newly registered land in no funds to install or maintain pumps or taps, men's names (in their purported role as head of there is no water. Consumers must either pay a household), often overriding women's traditional high price to private water vendors or walk long rights to land use; similarly, payments for family distances to find water (see Box 3.2, above). This labor under contract growing schemes are typi- is an all too familiar story also in education and cally made to the male. It is often more difficult for health services. Whatever the merits of free social women to gain access to information and technol- services, the reality in Africa is that it means inad- ogy, resources, and credit. Agricultural extension equate provision or no provision at all to many and formal financial institutions are biased to- people and particularly to the poorest and most ward a male clientele, despite women's impor- vulnerable. If universal primary education, pri- tance as producers. Women have to pay higher mary health care, and water supply are to be prices for finance and for material inputs such as achieved by 2020, then each country must reexam- fertilizer (or have to do without them altogether). ine its policy toward user charges. Female education affects family health and nutri- In UNICEF's 1987 report, "Adjustment with a tion, agricultural productivity, and fertility, yet Human Face," the need for a case-by-case ap- there is a wide gender gap in education. Lack of proach is emphasized. There is scope for partial resources and pressures on time and energies put cost recovery, especially for such services as water enormous constraints on the ability of women to supply and sanitation. Full economic cost recov- maintain their own health and nutrition as well as ery from beneficiaries for nonbasic services-such that of their children. as university education and nonessential health As a result, women are less well equipped than services-deserves to be encouraged. Selective men to take advantage of the better income-earn- charging can be practiced for such services as ing opportunities that have emerged in Africa. secondary education, curative health services, Despite the facts that food and nutrition are and residential piped water. In all cost-sharing women's prime concern in Sub-Saharan Africa schemes, however, exceptions have tobe made for and that they are the principal participants in cases of extreme economic hardship or outstand- agriculture, women's independent farming has ing merit. Cost sharing is a means not only of been relatively neglected. By contrast, women's contributing modestly to the cost of social ser- family labor contribution has increased, but goes vices-perhaps 10 to 20 percent of total costs can unpaid; in industry and trade women have been be met in this way-but also of empowering the confined to small-scale operations in the informal beneficiaries to demand improved services and of sector; however vibrant these operations are and fostering a sense of individual and community despite the trading empires built up by the most responsibility for their delivery. successful female entrepreneurs, women's aver- 86 Table 3.3 Financial requirements for broad-based human resource development for Sub-Saharan Africa (percentage of GNP) Immediate required Required Comuonient of huntan resource develovoment 1985 actual exoenditure bit 2000 Food security interventions 0.5 0.5 Nutrition .. 0.2 0.2 Universal primarv education and quality improvement 1.3 1.5 2.2 Family planning .. 0.8 0.8 Water and sanitation 0.5 0.5 Primary health care 1.35a 2.0 2.5 Subtotal 5.5 6.7 Other related investments Science and technology .. 0.5 0.8 Secondary and higher education 1.7 2.5 2.5 Total 4-5 8.5 10.0 = Negligible. a. Total health care, including primary and nonprimary. age incomes are relatively low. Women are also delivery, to reduce unit costs, and to improve user handicapped in access to formal sector jobs by charges, a doubling of annual investment in peo- their lower educational attainments, and those ple from about 4 to 5 percent of GNP to about 8 to who succeed are placed in lower-grade, lower- 10 percent of GNP is called for in the future devel- paid jobs. Lower income prejudices their ability to opment strategy to 2000 and beyond (see Table provide for their children's welfare. 3.3). This is higher than in countries such as China, Alongside these disadvantages in the "public" Republic of Korea, Mauritius, and Sri Lanka, (income-generating) realm, women are facing in- which managed to ensure broad access to human creasing pressures domestically. The natural fuels resources by spending about 5 percent of GNP. and domestic water supply necessary for health But in Sub-Saharan Africa populations are widely care and food preparation are becoming increas- dispersed, and infrastructure is generally poor. ingly scarce, expensive, and time consuming to Significant variations in resource needs among obtain. Women are obliged either to devote more countries have to be expected, given the variation time to stretching available resources, or to draw in the levels of human resource development al- more on the labor of children, or to cut down the ready reached in different countries. level of feeding and nurturing. Time-saving de- In conclusion, the recommendation to increase vices, such as light grinding machines, efficient domestic and donor expenditures on human re- cookstoves, reforestation schemes, and, probably source development programs must be seen as most important, more abundant water supplies part of a broad strategy in which programs to can be a highly cost-effective way of relaxing some develop an enabling environment to stimulate of the constraints on women in their household growth in the productive sectors of agriculture nurturing capacity. By taking account of the diffi- and industry are to be formulated and imple- cult circumstances in which women have to man- mented. In summary, the strategic agenda for the age household resources, it may be possible to 1990s should aim to: increase the efficiency and cost-effectiveness of * Double total spending from 4 to 5 percent to human resource development interventions. 8 to 10 percent of GNP from now to 2000 and beyond to achieve universal primary education, Sustained financial support for human health and family planning, food security, and resource development nutrition-a substantial part of these funds may be expected to be contributed by donors Even if all the necessary steps are taken to im- * Improve the quality of all services, especially prove the efficiency and effectiveness of service education and health care 87 * Improve the effectiveness of expenditures * In implementing programs, increase the use by appropriately reallocating resources within of community-based NGOs and women as lead each sector, by targeting resources toward the less managers in all areas of human resource advantaged, and by sharing costs development. Agriculture: The primary source of growth and food security The task facing African agriculture in the 1990s rapid growth in food imports, an average of about and beyond is formidable indeed. It must cope 100 million people in the early 1980s were under- with the needs of a rapidly growing population. It nourished-many more in years of poor harvests. must achieve sufficient growth in foodcrops not Severe food shortages are now widespread; merely to maintain output per person, but also to drought and famine have been common in the reduce food calorie deficits and to lower food 1980s. Such transitory shortfalls are even more imports. In the process it must be a major em- damaging against a background of chronic food ployer of Africa's growing labor force and com- insecurity. pete on world markets to earn the foreign The agricultural potential of African countries exchange that Africa needs to fuel its economic varies widely. Central Africa, humid west Africa, growth. And it must do all that while reversing and southern Africa have large cultivable areas the degradation of natural resources that threat- and low population density. In contrast, most of ens long-term production. This challenge requires the Sahel, parts of mountainous east Africa, and a transformation of agriculture. the dry belt stretching from the coast of Angola through Botswana, Lesotho, and southern Mo- The challenge of transforming agriculture zambique all support unsustainably large popu- lations, and hence need food imports. To cope Transforming agriculture and expanding its with these difficulties, the productivity of cultiva- productive capacity is the prerequisite for im- ble land must be raised. Where land is still abun- proving living standards in Sub-Saharan Africa. dant and labor scarce, increased labor To achieve food security, as set out in Chapter 3, productivity is required. Land scarcity is more food production will have to grow at about 4 common-and is becoming more so as the popu- percent a year. Beyond that, to raise incomes and lation expands. Many African countries or regions meet Africa's import needs, the production of ex- have large surface areas but considerably less cul- port crops must grow by no less than 4 percent a tivable land. A recent FAO study showed that year (see Chapter 8). Thus Africa must set its target only 30 percent of Africa's land area is capable of for long-term agricultural growth no lower than 4 sustained production of rainfed crops. About one- percent a year. quarter of this is used. However, much of the rest This will be no easy task. During the past 30 is under primary forest that ought to be conserved years, agricultural production in Sub-Saharan Af- for environmental reasons. rica has risen by only 2 percent a year. Agricultural The FAO reports that acreage expanded by only exports have declined, and food imports are in- 0.7 percent annually during the past 20 years. creasing at about 7 percent a year. Despite the Assuming that the rate of expansion cannot be any 89 higher in the future, productivity must rise by within Africa. All this would require a better qual- more than 3 percent a year-three times faster ity of produce, more aggressive marketing, and than in the past. The necessary productivity gains less government interference. Farmers would can come only from technological change. This play a bigger role in shaping agricultural policy will involve a more intensive use of chemical and and rural development. Increased income, im- organic inputs; the integration of livestock into proved social services, and food security would farming systems to use animal power and ma- make rural areas more attractive and would en- nure; the introduction of new higher-value crops; courage further development of dynamic farming better irrigation methods, hand tools, and crop communities. storage techniques; and improved animal and Despite the enormous variety of ecological crop husbandry. The policy environment will zones, microclimates, and soil conditions-each need to make these changes profitable to farmers. requiring its own specialized crops, seeds, and Better rural infrastructure, particularly roads, farming techniques-throughout Africa there is a would make it easier for farmers to obtain inputs remarkable commonality in the principal policy and market crops; it would also give rural fami- measures required to spur agricultural develop- lies better access to consumer goods. Greater se- ment. Specifically those measures aim: curity of land tenure would encourage investment * To increase the role of the private sector in and land conservation. Improved financial ser- pricing and marketing agricultural products and vices would help farmers to save, or borrow, for farm inputs and in improving financial interme- investment. Better educated and healthier farmers diation services for farmers are more likely to aim for higher productivity and * To identify and disseminate new technolo- to conserve resources. More thorough investment gies to increase productivity appraisal would help governments to avoid envi- * To improve the security of land tenure and ronmentally damaging schemes, such as large ir- enhance environmental protection rigation and settlement projects involving * To develop rural infrastructure in order to deforestation. A combination of incentives and strengthen rural-urban economic links and im- sanctions is needed to deter businessmen from prove marketing supplying environmentally damaging chemicals, * To encourage rural peoples and associations, from logging destructively, and from dumping including women, to play a greater role in pollutants into rivers and groundwater. decisionmaking Migration from areas of high to low population * To promote regional cooperation, especially density should be encouraged, although this in food trade and joint research. alone will not solve the problems of the highly The first two priorities-involving the private populated countries. The less populated areas- sector and harnessing technology-are the most for example, the rain forests of central Africa and important. But too few African governments or the arid and semiarid areas of the Sahel and much donors are addressing them. The unsuccessful ag- of southern Africa-are unsuited to supporting ricultural policies of the 1960s and 1970s are still significantly more people. That is why improving common today. They include: the productivity of land is so critical for Africa. * Administering prices, input subsidies, mar- What, then, is the long-term vision? In the years kets, and input supplies through the government ahead African agriculture can be transformed. * Financing farmers through parastatal agri- Africa's plentiful labor, proximity to Europe, and cultural credit banks seasonal patterns give parts of the region a com- * Financing rural development through gov- parative advantage in the production of several ernment-managed regional development projects crops. By 2020 better educated farmers could be * Marketing export crops through parastatal using land, labor, and capital much more effi- enterprises, usually dealing with a single com- ciently. A vigorous private sector could process modity and market agricultural produce efficiently, and * Providing irrigation through medium- and rising investment could combine with new agri- large-scale government-managed schemes. cultural technology to steadily raise yields. Addi- These policies have depended excessively on tional domestic and foreign markets for new as public administrations unequal to the task. Issues well as traditional products could be opened, relating to land tenure, the environment, the role which would permit, in particular, trade in food of women, and the need for capacity building have been neglected. Governments have relied kets, where prices were uncontrolled, expanded heavily on technical assistance. And the farmers as a result. This reduced the negative impact of have been left out of decisionmaking. Progress is poor policy on farmers, but it did not eliminate it. more likely to be made if farmers are put in con- Price stabilization funds established to even out trol-and allowed to market freely; to invest prices have rarely succeeded. When the funds are freely; to establish their own cooperative credit, in surplus, they tend to be diverted to other pur- input supply, and marketing enterprises; to man- poses, so that when deficits occur, there are no age their own irrigation facilities; to own the land funds to cover them. One way forward is to put they work; and to take responsibility for protect- the stabilization funds under the control of man- ing the environment. Africa's future is at stake. agement boards representing producers and con- The best minds must be put to work, the best sumers so that governments cannot have access to policies and practices must be sought, and a new the funds. This approach is being tried in the sense of urgency must drive efforts on every level Central African Republic. to accomplish the task. Often governments have kept farm prices (in real terms) artificially low by allowing their ex- Mobilizing the private sector change rates to become overvalued. Alongside price subsidies for imported wheat and rice, this In agriculture, as elsewhere, many African gov- distortion accelerated the substitution of imports ernments have put little trust in the market. They for domestic produce. The markets for locally pro- believed that markets would fail because they duced traditional foods (such as sorghum, millet, would be controlled by rapacious traders-often roots, and tubers) have consequently been com- foreigners or people from ethnic minorities. And pressed. These policies have also reduced the in- they thought that profit margins would be exces- centive to process traditional foods into forms sive. Most governments, therefore, imposed con- more acceptable to urban and high-income house- trols on the marketing of key crops (cereals in holds. An overvalued exchange rate has the same much of East Africa and export crops in West effect on export crops as it does on import substi- Africa). Private trade was often banned outright. tutes-reducing their local currency value and Government participation in, and even monopo- discouraging production. lization of, agricultural marketing and processing Flexible prices, reflecting demand and supply was widespread. The state-owned enterprises in local and world markets, are the best way to concerned were frequently costly and inefficient. signal to farmers what, how much, and when to Where the private sector was left to operate produce. Local prices would then be free to rise largely unhindered, as for tree crops in Kenya, when supply is short-helping to stabilize both food crops (other than rice and wheat) in West farmer income and supply itself. A market-ori- Africa, and livestock in many countries, market- ented approach can also insulate governments ing remained relatively efficient. By suppressing from the political pressures to keep consumer private marketing and processing, governments (and hence producer) prices low. As for export have blocked the potential for African entrepre- crops, if farmgate prices reflect world market con- neurship. For their part, public sector agricultural ditions when the world price of an export crop is agencies have failed to seek out new export mar- low, farmers will have an incentive to switch their kets, new crops, and new product lines and tech- efforts to other crops with relatively higher value. nologies. Domestic prices of export crops fixed by govern- Most African governments have long regarded ments prevent farmers from making an economi- volatile prices as a deterrent to investment in ag- cally rational response to changing world market riculture. In addition volatile producer prices for conditions. food are seen to lead to volatile consumer prices, Flexible prices call for a marketing system in which may harm poor consumers. In response which private traders are allowed to compete. many governments have tried to stabilize pro- When trade is monopolized, governments may ducer prices. In due course the aim became not feel compelled to set minimum prices to protect merely to stabilize prices for farmers but to keep farmers from price fixing by the monopoly. A consumer food prices low. But prices were often better solution is to encourage broader participa- set so low that farmers had little incentive to sup- tion in trade. In contrast, African countries that ply the official marketing channels. Parallel mar- have allowed free domestic trade and export and 91 have left agricultural prices relatively uncon- ity control for export products, and establishing a trolled have had higher agricultural growth than legal framework that permits the development of those that have not-witness Kenya (for coffee, competitive marketing activities. food crops other than maize, wheat, and fruits and A controversy continues over whether incen- vegetables, as described in Box 4.1); west and tives should promote self-sufficiency in food by central Africa (for food crops other than rice and favoring food crops over export crops. The argu- wheat); and Ghana, Guinea, and Nigeria, follow- ment is misplaced. The distortion that needs cor- ing the recent liberalization of price controls and rection is the one that favors food over export marketing restrictions (for all crops). Where ex- crops or vice versa. Once the bias against agricul- change rates are overvalued and where monopoly ture is corrected, the remaining incentives should food buyers persist, however, protecting farmers be neutral between food and export crops, and through setting minimum purchase prices may be farmers will be guided by their comparative ad- justified as a "second-best" solution. Apart from vantage. Countries with a comparative advantage these cases, the clear lesson is that, except for food in export crop production should exploit it and security reasons in certain extreme circumstances import food if necessary. This will promote not (discussed in Chapter 3), price intervention is best only growth and higher incomes, but food secu- avoided. Governments do of course have an im- rity as well. In practice the policies advocated in portant role in pricing and marketing beyond that this report would significantly increase the pro- defined in food security strategies: for example, duction of food in most African countries and providing market and price information, promot- substantially reduce the food gap by 2020 (see ing private and cooperative marketing activity, Table 3.2). This conclusion is justified by the im- building market infrastructure, ensuring the proving comparative advantage of many African proper use of weights and measures and the qual- countries in food production that results from - ;~~--.- -1 z- -"-.- -i Box 4.1 Kenya succeeds in horticulture A'i Producti lcand inen Rn habeconie3arcerelati%etothe Au.jthcrihtHCE).-iCDA 4et.,pir, Ir7 Th,:HCtl A. Iapa r3 t.i- groti ing *uppl% oi labor In th.iv -.ituwrl.n hortic:ltL4r,il I.nl intituli.r-n that m6rk,tc 4ome -,t the pr.duce tronm culth-.iation b makinm intens4w. uSe ot both 13nd .ind -maliholJer4 it dL vel.-pid a mirko intornution *,temin labor. is highli 3pproprite It umplo - about 20i percent x ith the internaui..nal Trad,. Cntrei icer.,ed horticultur1l 1 ot the !abor orc; ' 9 mil nin pioplen I duinng the h r est evporters . tablished paJ.in *tat,on- participated in t cason and it pro% ide. ;rail-scale landholder5 i% ith arn a,ll.:rtm,. air car-. 4pac- imn worked to tancndarJze ; . addition31 source ol ,iiicomn and irnprc.cd -iod ,ecurit% conta,ner^. The Nhnlirrrr: ol Agrictiltur, helped hi, the International ani domtstic demand lor horticultural HCOA prr.oides e\rerisn and m.irl,etin- adJ, e Tt-,h products i high the gro% ing donie,tic niarket ak-nc at'- rnni4tr\ also c,-tr-li vte quahit% ,t produce to maintain - . s.rb. 01l percent ot tlle tnuit, .nd %epeta.bles produ,cd inmrrn.ati nil standard Trhe ken.a Ae,rncultur.o R-earch t thus replacing imported 3ples branasn.i nd !r.apes Int-t,ute under tilr. siri i\L Scence [ssearcl and r! i- a ens ta' orabt Jlimaln mnake' it pk-.ble t product. Tchnoloi'. c.irriv. out not.? crop irakaind vupervrs^thc * trlpical. -emirropical and ternperaie tru,rs and %eeet a- ale-lntnniarcr.iI TheprIvatesecrorandth HCDi ble-i. The range or produit; has increa-ed sieadi!; More comlpvt Irscel im hriesting. trani-prtation mrark,tin' S than 't;0 arietiejio tlower-arebeing r.o\n Klen%a. ' hich 3nd pricirip had A3mo4t no tl,'.'er e\ports 15 %ear' gc. i; no'.' the The prl%i'te s at-r;h.been the maini ource .t tinance world- tourrh large-t e\porter ot 'lower; ro-e- orchi-di \1arketirn h-. cots h 3; heen mo e becau,c .t tIc, clo.e and carnation- are the me't populir hnk' ni.an% e\p.rter; espccalh i:rr,.-r, mpanie4 ha%e [Erokiuctionotireshhorneultrl Ciraleports n:reased,dra- '. th e\tcrn.il market. Ebilateral as^s tance and prla'.ate m. mahcalk trom about I ii1 ton4 worth 9-3- Ii iui' - toreign i.tsrment trim St oral countrie rinnced hort,- lent, in l%.S to 3n.50Xi ron- it'.. rth i3-4 7 million' in Im-J7 cul-tiral re;earch and production igriculrural trairinrip T ihe\ are th. third lanrstt so:urce ot toretgn i.change crop re;earch %'ater do.elpment atid teohnical asis- a among agricultural e\port, Horticultural product, eo to tarc.; orsone 11' countries the largest inmgle marlet being the The- ,uc:,-.-t -e.nI a h.: .hriulrural prod.ctnon holds Lmnited l.indom. %' ith a har o0t more than -1i percetint niportant le,ont kor mther c.,ur.trie im. Atrica The go- Middle Eastern countries *re ako becoming a.n incroa-- crnnenit thr.-.uh the HCDA ackd as i tacilitator and ingl! important mark! t. co.rdinan,r but did noi crvak, 3 large b,,rc3ucr3acX it did Horth-ulture '.'a-5abietoe'.pano b-:aui4eloeatcntrepre. not intertere %' ith Ehe riarkEt neclhanrtmi but reli.d -i., .. neurs. -oreign !n n dtor4 and th. go% ernni.-Žit collabo- Fri; ite incentei. u j rated. t3cl,tated i th.- Horticultural Crop. Pe% elopmeni 9,: these policies, the added focus on food security, ways to improve their operations are under study. and the relative stagnation in the real prices of Given the sophistication and complexity of world some commodity exports. commodity markets for agricultural products and Trade within Africa in agricultural products, the conflicting interests among producer and con- especially food, should grow as domestic distor- suming countries, this will be no easy task. tions in exchange rates, agricultural prices, and Schemes that resist long-term price trends created marketing systems are eliminated. Reducing the by changes in world supply and demand are al- barriers to regional trade will open up opportuni- most inevitably doomed to failure, possibly at ties for specialization, depending on the compar- considerable cost. Compensatory finance, such as ative advantage of each country, and will expand the EEC's STABEX scheme or that provided by the markets. IMF to countries demonstrating a need based on It is sometimes argued that because world significant short-term shifts in terms of trade, prices for most African agricultural products have makes more sense. They provide relief without fallen, government intervention is needed to pro- intervening in markets that are increasingly diffi- tect export producers. Agricultural prices have cult to manipulate. indeed declined. Sluggish growth in developed Subsidies in North America and Western Eu- countries reduced demand in the late 1970s and rope have created abundant supplies and have early 1980s. At the same time the supply of some lowered prices of cereals and livestock products export crops increased, especially from Asia and that are imported by African countries in compe- Latin America (notably coffee, palm oil, and tition with local production. In this situation tariff cocoa). New substitutes for some tropical prod- protection from subsidized and dumped exports ucts (synthetic rubber and sugar made from corn is justified; recent examples include dairy prod- syrup and sugar beets) appeared. Because of ucts, cereals, and edible oils from Europe and Africa's low market share, except for cocoa, world North America. For these commodities, produc- prices are not significantly affected by the level of tion costs are lower in many African countries production in Africa. than in exporting countries. If these subsidies Lower prices, however, do not explain why were to disappear, Africa would have much to Africa has seen its share of the world markets in gain. Tariff protection will permit production ca- cocoa, coffee, palm oil, rubber, copra, tea, and pacity and enterprises that market domestic pro- cotton shrink in the past 20 years. Asian coun- duce to develop. tries-with more liberal trade regimes, stronger private investment, and growing productivity- A role for medium- and large-scale farmers have taken up the slack. Africa's experience has shown that governments cannot afford to protect Better incentives should benefit not only small- farmers from sustained declines in world prices holder agriculture, but also medium- and large- for their export crops. Instead, farmers should be scale private farming. Enterprises that can allowed to adapt and respond through free and integrate agricultural production, marketing, and open price and marketing regimes. Africa's best processing are more likely to develop new prod- hope for the future is to become increasingly com- ucts and markets. They will often sign production petitive. Government's role is to help farmers to contracts with smallholders, who will thereby re- improve their productivity. Encouraging cost ceive the benefits of modern technologies, quality cutting and maintaining a policy environment control, marketing, and other services. C6te that permits diversification in response to market d'Ivoire, Kenya, and Malawi have attracted pri- signals is the best way to beat depressed world vate money to plantations producing export market prices. crops-bananas, pineapples, fruits, and rubber in Wide short-term fluctuations in world agricul- C6te d'Ivoire; coffee, tea, fruits, and vegetables in tural prices are disruptive. Efforts have been made Kenya (see Box 4.1, above); and tobacco in to mitigate such fluctuations through interna- Malawi. A more open policy for such investment tional commodity agreements, as has been at- attracts domestic and foreign capital, as well as tempted, for example, by the international coffee technical and marketing expertise. Educated Afri- and cocoa agreements. In practice, international cans who might spurn peasant agriculture could price stabilization schemes have proven to be ex- be attracted to work in such modern agricultural tremely difficult to manage effectively; however, enterprises. -,3 Fostering rural savings and credit government for funds and would increase the incentives for savings. The banks would gain the To provide funds for farm investment and to resources needed to strengthen the management improve farmers' cash flow, efficient financial in- of their rural operations. Commercial banks might termediaries are needed to serve rural areas. Many also be attracted into agricultural lending or en- parastatal credit institutions established to serve couraged to lend to farmers through intermediar- the agricultural sector have been unsuccessful, ies (such as traders who sell farm inputs and mostly owing to poor management. Politically equipment on credit or who market crops). This motivated loans have been common and their has begun to happen in Kenya, for example. How- default rates high. Governments have also tended ever, significant agricultural lending by private to maintain below-market interest rates. Conse- commercial banks will develop only in the long quently, the demand for credit invariably ex- run. Even then there will be little progress unless ceeded the supply. Credit was rationed and the banks are allowed to enforce the default distributed according to criteria that often failed clauses in their loan agreements. to take account of the quality of the investments For smaller farmers the most promising way to proposed. It is hardly surprising that these insti- provide credit is to encourage the development of tutions have suffered big losses. informal sector financial institutions (see Chapter A better approach would be to let interest rates 6). These combine savings by members with lend- balance supply and demand. Funds could then be ing to groups that assume collective liability for allocated by the market. Higher interest rates the debt. Peer pressure increases the likelihood of would also make the banks less dependent on repayment, since nonpayment by one results in '-i.; =,'TifW_-4 U E. I', - _ . - ^-4 i17 F --i. - ._Zr . t - ..Ii ad- :.N; . i ,j Box 4.2 Savings and credit cooperatives in Cameroon Cameroo,n sredtunion^ ClI a raninipr *neevnl nime lendng .no..pr o. trom rC3inurcs pro.i dOld o% ot Qtlhomnt ruralr n tminanii:l n-tirutt-on; The ha%e bIE3r, i3\twrrl,a urctz built on intornmal *i ing.z 3nd l.ndin;: .3;-i.ciatic i to- TetiLl nC-L c-nmetifr ih lng.L_rn in tk . ev ilop I tiu' i.r r,u'u . Iiich hlc i lon, h! i ir- datinig to pre- 4fl id in4titutionz Tr.:. pro.n, ., in tirutii..nal -tindardiz tls. rmnentizdt n ma. tn ri..n rn ir.. oC t anieroon Thv- C3merL-nm CoTper rIii% e Cred it L nion i 3ague s.:-.en3tion- to.ter ;3a inu-. through rfgtilar crintribution iLANI CCUL V- I3b Lztibl!.h.l in 1s-mni a. Jn apein 3.irani- r3 and obljnernr mmeml,r:rv t.: , ulJr debi rLpa m,:ntz zti.on iopir, ide -pport .-r i.ce.bo .1kl,:epin..mand manr - CLitornialized their .hort rlm teripemprar , arr.un,nkr, r%ii 3vnnt 3aianc a centrat tnpnce unit irainir- and into rern3nent intit-ultuon*; I hc tirzt CLi- Liere 1,.rn--d lin audit and rinurtcc 4er\ 1ic- tr i fi n-Kr; Ebsofre. re,r- in ir the nrrthi%Ezi an area in i hich tvnntine-t, ere i;tr3tiona net% CL operate4 pro%. i4i.'nlai v' 31 preccx.perai * prialent From thin, ,art Ci- ;pread proer.z-\.:l% ro i,' ,au nc..,lut' E\.i.rrni:.CL'. that 3ii to nieteviztabjlihed net hboring areai and naiivnv.i de e%pan.ton i planncd pr.t-ivional standarrd- ire do`. nzradiled cIpre.6- oPeratO I C L' mnet ihi ii-d; partlculark of ihc lot i -inc.nic z: sau-.-and are -ub.eo ic the ,an.:ction oi :-%n riua! loure urban and rural popula.-tion Rural tlarile. ne-cd a -alc I h CL * and C NNICCL L ar.: genuinrc Ls-P*cJrdcI'ee J place io dep-sii their za%i.rigz C-LI- o.ter it lt.it i[., s3me e tibh-hed and c:nrri1ed Lt nmlnbcr; and their r,pr,- deer-E of s;t,t0 iz.l miinc; a ar gr-ater i.riet% ifot , rinv t-renitafii Althou.h CLi are .13kt r'g,I.tercd t.irmal LO- ,n-truments an a hij-hcr d&Eree oft acct -ibilit% t,. dL-po.- opt: r at i% e or n inz ton - rh. t n% -rnnmint ha; nor in ir ;3 ci t af . nced tr. t, iil-hdra%i Nlthoau h the iormal interened in theliir i r.. tio.-m banking ector inCarmnrson-in und,r;o.ing . .fren dificulit ln,tŽad the artili.ated CL'- s:ontrol .nd zLIpsr% i-e pcrio.d ilie CLi mo-nemntr uc ihro,ing *ang ri.rou.lh CA\ICCLIL cpeCraun. nd financc; thurouzh their board -i r:n,:s 3a erai=ad L.tn 25 penrcntotr 1a ,n ard b, the t diret-irs:.r. rd.upt -. .itte cconrnucu % hich ar electcd r:ndR .f Is1- '31 CL. i ith ,.min, ,t111i11 ne,,ir'Ler. had b- anrd re-pon.ible to th, nmlnib,r; Dependin- . the,r ,-~ ~ai. !ngm!sepo.|if4 aindu iloanc of ~' milli,n aiud 24 illtcn 1iz,: C mn ar en.ina1ed iolu-int . or paid nina_ 2;; Box 4.3 Fighting insects with insects C t.as-aa i sthe-t3plecrop tor moret han .nJmmIIIiin people c.4p. n-o1red b the I iA ind the goi ernmenit t Zaire in in more than 3; Aricarn countrites and si p.rt,cuiarlI tin- lune 1J7 B13cai.e C,;-.iI .1. i 3 l -' Mu.? crop grot, n z pL-rt.nt during pa.rtixl or complete nrop raiture. .4 leii Frimarl% bt h widel% scattered po...or iraners lnd beciu-e % ear- ag.- it ; a, reporled thit ., small bug is eating the the meil% bu a are hard to control .l ith chemn,al peil- heart out .,t Arri:a -the Cac3a%a meal% bug rirvt identi- cides a dual trateg% %as rcccmmendect breeding; ca- ned in Zaire in 10u7 Togetlhr w,ith the cas3a%.1 gretn a% a tar.htie. rc-istarli to the pest- and implementing a ; pldLr mite I tr-t reported In Uganda in 1,4-l i the meal% biolical eontrol progrin. buz has spread rpidl; in a ^'tde belt trom Nll.zanmbiqut The IIT X located nearli 31:1 specks 0t predators and 2 through Zairc and the Central Airican Republic acro,- parasitcs the mo-i pronisinig beinm a tin% parasitic: "%asp coa,ial % e.t Attic3 ti Senegal and G une3 BSisau Stiere IE;l.t'ir` IAJl -1 i it ha, become ihe star ot the %i nrld a2 ttaucks.ietther petC-3n reduc, ieldtsb% uptoNiperceni. largest aird fri5ti 'ucces'tul biclogcol control pr-,gram Economic ln,se- are eshnlated at alnro,t 4 2 billion a cEar Linder a % 3ri,t% -t -ciogical cenditn-. it rapidki multi- -ome tarmeri ha,e itbndoned th1 crop phie and disper--. Eis l¾ atter tour ears oI rele-;es a \oit hoe,'.ver. thank Ito the Iniernation3l ln,titite ot the par.aire- presence .m- co.nrirmtd in !I countries ^ Tropical Agricilture .TA1.m in ibadan. Nigeria a -ucces,- Indication, arc that it .:3n E>t[lr;h it-ell throughout ie '' iti biological control program ha; becun to re%c r-, th, ca3a ax tcit Houtvc r the ,iu.inon i' nIo ure rt for ihis tide The st'rx .i t the Alt ca-n ide biol4oical cemntrol pro- Pa)Zst` approach gram tor thr mnlt .; bug bone oI rem3rkabL, peri sienTc-. There !- lirrge and Tro. in-, dLnmarnd tron more .x un- b regional and nter-national cooperation and technical 3nd trie tor trmining inpu1 anl tichncai. asi-ianc e to set up econimic s.c;;ss. The progr.ni s benewit n. .oo ratio rination.l pre-ramr Bec:au-e .:.t killed labor ind pricduc- c r. er% -itt -elN etimated at IS)1 l tir.n short3ge- at the ci.nirol Fro, rim he3dquarters at tIre , The programn merit- speial attention becau- if lIT A ni-.t all ol itth dnr-arid can be rmet although net - * L ^e s ni nehennical pt-t control ' Iitch i, en' ronnmen tacihtines h:-i e been construc:ted Im CL-1c0iou Benin The 1 tall sun.nd Jnd,do-, notd.,ra.ninore!gne-.:ha e re-urce- greaer ne.:d a.re -r kille,d te:hnici3n, in: run th Fpara- U* tler, 3 permanent and ,-el sustaining ,o1lution io a sitt breed.ng opcration- IrnL to dirct ani iniplenirein thle nalioragricultural prob1lm natiln.il pro_-grams , Benetits noitl% 'ub[-stenc, 13rmer- Mant donors ha.k supported the core program but * l' a national program with inputs ol technical a--is- there N ttIll a chr. in: shoriage ot rundn Clue in part tance and training trom outside the regi,iIni itnicalli to its ;Lics, *i hicl zit es the mi'takn impres- * Is al,o a. di e\ample It the benctits driii ed tr..orn 'or thai the ca',a a F-i protlem ir Airica has ber-. 4 rteQonal cooppratior itort example the tI rga.tzatlion tr -ik- -d in t .t more .; ork N n-eded to di,dribure the Atrican Uniti ii)0NI- helped to t.cihifile i:.. .--border par .te-- in th: ati-cied r. gon and1 to Lipp-rr a p3rallel . tligiit~ re,giona l- .-irsh-ops and :ntormanon e%chlria e proirarm that is scarelhng r.r bli cal conirol .,I the Tthe pr.ram grer-\ out ot an intern.ational iorks;hoF cas,aX a ;rCeri ;pdcr t-rite .- … - -- '~~~~~~~ - ~ :l i? - -7 Controlling pests and diseases and canals onto smaller areas growing crops or trees) (see Box 4.4). Pests and diseases such as rice blast, cassava bacterial blight, and green spider mite cause Agricultural equipment heavy preharvest losses in Africa-ranging from 10 percent up to 80 percent. There will be increas- In many parts of Africa it will be necessary to ing demand for chemical pest and disease control raise the productivity of labor by using improved material, much of which has undesirable environ- agricultural equipment. Past experience has mental effects. Planned programs of disease and shown that full-scale mechanization is not the pest control will be necessary, using limited quan- answer for the short or medium term. Tractor tities of pesticides and fungicides, but increasingly plowing and bulldozer land clearance have accel- relying on cultural and biological controls (see erated soil degradation in many areas. Mainte- Box 4.3). Pest- and disease-resistant crops will nance of machinery has been poor, partly because have to be developed. Improved cropping and of lack of foreign exchange for spare parts. Animal cultivation methods are needed that reduce the power is often a more profitable alternative. In spread of pests and diseases. addition many small "appropriate technology" projects run by private voluntary agencies have Irrigation and water availability and control introduced simple mechanical devices that re- quire little maintenance and are cheap and easy to In Sub-Saharan Africa 5 million hectares are use. The jab planter is an example of a hand tool irrigated-just over half by modern means, the that can halve the time needed to sow a hectare by rest by small-scale traditional methods. Some 70 hand. Animal-drawn equipment, such as plows percent is in three countries: Madagascar, Nigeria, and seeders, has an enormous potential. So too do and Sudan. The area potentially suitable for irri- improvements in on-farm storage facilities and gation is estimated at nearly 20 million hectares. machines for dehusking and the initial condition- Further irrigation could contribute significantly to ing and processing of crops. expanding agricultural production in Chad, Ethi- opia, Malawi, Mali, Mauritania, Senegal, and Livestock Uganda, in addition to the three countries cited above. These countries have dry areas that are Livestock offers good opportunities for rural cultivable with water, which could be obtained income growth in Africa. Small stock (sheep and from rivers or from groundwater resources. The goats) and poultry have a large potential, which most promising possibilities are schemes costing has not been exploited in much of the region. $1,500 a hectare or less, which could be built and Cattle production is currently the most important maintained by farmers with some government and provides a large proportion of agricultural assistance. These indude surface irrigation from value added-more than half in some countries. wells, controlled flooding, and development of Africa's 160 million head of cattle are distributed inland valleys and basins, swamps, and flood unequally across the continent. Mountainous east plains. Such developments have often spread Africa, relatively free of the tsetse fly, has one-fifth spontaneously. Private small-scale schemes by of all livestock on only 11 percent of Sub-Saharan Mauritanian farmers in the Senegal valley are one Africa's land. The Sudano-Sahelian zone, with an- example. In addition expenditure on the proper other third of the total, is crowded with cattle, operation and maintenance of existing schemes while humid central Africa, where the tsetse is and on rehabilitation will be money well spent in endemic, has only 3 percent of the stock on 18 many countries. percent of Sub-Saharan Africa's area. Water management and conservation for Livestock can also be part of an integrated farm- rainfed crops is important. In semiarid areas and ing system by providing both manure and draft where dry spells are a danger, it is essential to power. However, livestock also contributes to the maximize the proportion of rainfall that filters into progressive removal of Africa's vegetative cover. the soil for crops to use rather than washing off The task is to increase underused livestock for uselessly or destructively. This can be helped by production and draft power, while reducing the waterspreading(divertingitfromgulliesontocul- pressure on the environment. tivated fields) and water harvesting (directing Solutions will vary. In the mountainous areas runoff from a broad area by earth or stone bunds integration of livestock in farming systems is al- Box 4.4 Soil conservation and %water harestitng in Burkina Faso An iZricultural re;.-irch and - stcn§in projot -l Pr,. sid . i s-nnion t.tIi s:tntnie ts-,l1fln!Kl s. flE.. Agr:-Forsn:r,er I FI ,n ih, ateil'.i re,io:n et Burkl,na t. lho'unindLot larm..r- F.;,;, liJn,hed min l- ilrnec lt redu ini -oil er;.-r rird Th. rP \F luolrnJ that thc; .:'uIud tri.n ir, mo or siater rur,t It uZ:dJ 4nipk nc mnvp..r.._- I bvr-nten; 'i.e thirec da,- t---ik tv a tl, Id tat t it t.1.,%- r thiin; is per;on; C3rhtnri b.m,;in- to o i r.;,n. ankr t,r oret 9 ; -.: IundJ- the VAF - tr:,inlrg r,cor.t i. nlpre-.m.c Tlod.ii Cr-rn built r,. sllm . cl run.ii ..I r,lintall trrcnl t,rra..:es. ha, *cr, .!on - i a-ur - ur rr,r,; tirn rn lioii hle.,rire, ind pro%eid o-:tth%e i r.wdu.irrc ,ro-i-n rj rd.t irmi nlc mc!- extend to thenorthern region. tUt, m thInIn -Il Crop yields have improved because the bunds hold Th,c h at.enpa regn!n Ia 1Icatd In tti, 3heahtihn .-r,.3 [hlr rainwater .n thl.E field which increases theabsorption of bt.rd.:r th-, souiliern iLz -.I T th, a ihJr , dc rt 11 .* Lrs water into the land and thus by the crops. Fertilizer (usu- I, ith a nnu.,l raint IlI .5t I,; 1 to n9 1 milim c r neter. -nd prrorl, ally manure and organic material) applied to the fields is dnourhi Tr.tttsl .alrtculIttrl Jechniruut ;.xuvec- less likely to be washed away, which makes the soil di- idcrabtle ...il crsiL.n d,dJd.FpE iJd n 1, n - lalioi tim,- I. rectly behind the bunds more fertile. As much as 200 r-:torre the *- P, duculi iri, i ot ntrone porpuatsion pr.. . millimeters of soil had accumulated behind some of the -ure torce.d tarmert 1k *.hs.ricn and ,A entu3l11 hiilnars barriers after their first year of use. First-year yield in- the[ l.;ol%n p-ri,_.d- and the tir.ditional1 nrethsd1 .i tc*rnm creases c;.n h, d ra ma ii 15 to 30 percent, but the system m I n* -,I *r. o^','n pro% ed rut ic lnt n Pa; I I tort hti S°' - needs to be rn.,n.i - sell, with restitution of organic ernnient and intsirn.rtci:nal orc4an%,zonu s nirproi, ile matter and fertilization, for yields to be sustained. The .iruat ion h3d IarZ,.s talt I. project is successful because: To hili lurilhr .n% Jv.risni.I .dr.,d.1r!rs sI. F, \F * The techntcl-.vis simple.Yatengafarmerswerefamil- ILund. l and nna nag ed ts~ t-. 13am. F k r- I~. , el _h t s1.3 rl iar with the general principles of soil and water conserva- to ,. .lure.icr land for thc %.perm.:r.r ':l.Žprt. tion, so they could understand the technology and do the calnl .iir.i thiK part,cipant. I'bsante mo:r. ntersscld is bhcn basic-sik -rind rnintcisansis.- thunsli hc largt: aniu nts.; l o r buill us ri th. nmiro,vatchnrlenr- * The extension program is simple. A few extension -eEserAi .Js*c,dd is pl.int upland rn,:e im th, bi-.n- .rnd workers can help many farmers so that an elaborate net- \-.rghum im.i intr-di.is,:d TIwserrTp.dld "\ell and --.-n workisnotneeded. imlrnerh -ti_J the, r attent ss.-n tr. nmn I.- 0_r.U F,r l .ts 1 t Iir * The benefits are obvious and the costs minimal. Farm- o I. n 13 d ers are not required to move, to grow crops they are iVhen P-tF -t311 Iltss.i thjt it., tarn,sr; ;.-rr inre unfamiliar with, to borrow money to purchase a new ntverLctOin pnlntmin cr..p4 th.in tr,... th-, ;h.t.,j tch. r itk:hno.lo,7 .sr b- dCo inything very different from what l.c sI. Tis P1'F al-. ;. m n,-d3 ,.rr>Dn; ..c s phe; e... e 1,n Li, Forasmallinvestmentoftimeand t-1r le4.; i on> t .:srtru.:rw.sn . the rt.:rin, hr effort, they canincrease outputand reduce risk. inicrT:s.:.-ichmonmt and b,can I. u7v a mntrh,:.d ,im;lr tI. -i ThePAFcanbecopiedcheaply.Thetechniquesidenti- traditional le,:hnlti:ue thai had '-: n it3ndJoridl F:r rn,.r. fied and developedare now widelydisseminatedbyother Cits,Cli.s ,5JtsŽinCssllsiciC5fl it.,h PAF d.,.! Fr ani in. en- NGOs and by the national extension services. This gives si%e and rather ngI-r:.u, de'it the s ,fler-tulbe eie%l hopethatamuchlargerareawillbereclaimedorprotected s huh i.i;;urr: el tidentaied thecontr ur line .r-nithe ...siIl dturitl4 i. n,<.t l ,sir- ready under way. In humid and subhumid zones Overgrazing is acute around public waterholes tsetse can be controlled, but not eliminated, and urban centers and is a major cause of environ- through low-cost traps and spraying. So a priority mental degradation. New water points should be should be the spread of dwarf cattle tolerant to widely dispersed in pastoral areas and allocated trypanosomiasis (the disease carried by tsetse), to user associations to help avoid the excessive along with the development of lightweight trans- concentration of livestock. port and draft equipment that such cattle can Veterinary services are essential for livestock power. In drier cultivated zones there will be in- development in all areas, and they can be pro- creasingly intense grazing pressure from farmers' vided mainly by the private sector. National ani- expandingherds,compoundedbythoseofpasto- mal health services should concentrate on ralists, who graze their animals on crop stubble regulating private veterinarians, organizing and and bushy fallows in the dry season. Greater con- subsidizing mass vaccinations, and undertaking trol of grazing is desirable, but no effective means other emergency measures that veterinarians in of achieving this has been found. The drier pasto- commercial practice are unlikely to undertake, ral areas have different problems. Although pas- except under contract with the government. Since toralists efficiently exploit the meager and shifting few private veterinarians will choose to practice resources of the rangelands, the potential for in- in the more remote pastoral areas, improved live- creasing their output and productivity is low. stock care will also depend on "para-vets" paid 98 from drug sales. In all areas extension workers ment of new agricultural technology in the past should teach improved animal husbandry and two decades reflects the decline in the quality of forage production to livestock owners. agricultural research in Africa. Often rudimentary and carried out by just a few scientists, agricul- Measures to promote fisheries tural research nonetheless contributed greatly to African farming in the first 60 years of the 20th The potential of African fisheries, both marine century. It enabled cocoa, rubber, mangoes, tea, and continental, is large, with a maximum sus- citrus, maize, and later hybrid maize to be intro- tainable yield estimated at 8 million tons a year. duced to African farmers-as were fertilizer and However, the catch is declining (it fell from 7.5 new agricultural implements and equipment. million tons in 1977 to 5.9 million tons in 1985) Weak government commitment and poor man- because of overfishing, climatic factors, and re- agement, rather than a lack of money, have caused ductions in river flows and lake levels. The value the current failure. In many African countries of African fish exports is about $650 million a year. more researchers than before are spending more African fleets account for about 30 percent of the money, with little to show for it. Donor-financed total, foreign fleets 45 percent, inland fisheries 24 projects have not helped. More has been spent on percent, and aquaculture I percent. agricultural research in Sub-Saharan Africa per Many African countries need fisheries resource farmer than elsewhere in the developing world- management plans that identify fishing potential about $360 million in 1980, the most recent year and the opportunities for exploiting this potential for which data are available, compared with in a manner consistent with long-term conserva- roughly $190 million in South Asia, which has tion and with environmental considerations. The many more farmers. It is an urgent priority for plans must also provide for the necessary policies Africa to rehabilitate its agricultural research in- and institutional development. stitutes, and tough action on the part of result-ori- Systems to monitor and control foreign fleets ented managers is required so that they can once are needed in many coastal countries. Such sys- again perform their critical role of creating, adapt- tems will increase the amount of taxes taken from ing, and disseminating improved agricultural foreign fishing, which is necessary since foreign technology, including new products. fleets are usually self-contained and provide little Most African countries are too small to afford benefit other than taxes and royalties to the coun- the agricultural research they need. Basic research tries whose waters are fished. Licensing agree- (as well as much applied research) will need to be ments with foreign fleets generally need to be done at the international agricultural research improved. Increasingly, coastal states should de- centers (IARCs) and at universities and research velop their own fisheries capabilities through pol- centers in the industrial countries. The interna- icies and financing that encourage private sector tional agricultural research effort devoted to Af- involvement. rica, particularly in technology improvement, Development of aquaculture can be greatly en- must be strengthened. Promising research on bio- couraged through both adaptive research and ex- technology in agriculture, which will have a pro- tension of acquaculture techniques to farmers and found effect on the world's agriculture by 2000, other interested individuals. Integrated agricul- will be done initially in industrial country re- ture and acquaculture farming packages have search centers and the IARCs because it requires considerable interest. The artificial stocking of high expenditure and high technical competence. natural and man-made bodies of water has some These institutions must play an increased role in potential. Finally, artisanal ("canoe") fisheries can the transferring and adapting of new technology be assisted through support to organizations of to Africa (see Box 7.4). fishermen; this support should also be given to International research will have an impact in women, who have an important role in small- Africa only if it can be adapted to local circum- scale fisheries and in fish marketing. stances, so it is crucial to rehabilitate national ag- ricultural research systems. The first step is to Better agricultural research draw up national action plans in which priorities are identified and provision is made for monitor- Better technology will be essential to achieve ing and evaluating results and for translating the targeted growth in output of 4 percent a year those results into recommendations for farmers. over the medium and long run. The slow develop- Faculties of agriculture should be drawn in. Donor efforts need to be firmly coordinated; the recently tried in Africa. Supervisors check that created Special Program for African Agricultural fieldworkers are visiting farmers as they should, Research (SPAAR) is an important step in this while regular training sessions and links with re- direction. The IARCs must also be drawn closer search allow extension workers to be continually into technical support for national systems. upgraded and to feed results and farmers' ques- Greater sharing of results among researchers in tions back to researchers. T&V is a good example various countries would be one way to achieve of capacity building. It focuses on improving Af- this. Regional networks would allow smaller Af- rican skills, on management, on building African rican countries to participate in specialized re- institutions, and on channeling information from search. farmers to government institutions. By consoli- dating various public agricultural extension ser- Improving agricultural extension and the supply vices into a single system, costs can be kept down. of inputs In Kenya some farmers have increased maize yields up to 50 percent as a result of a national Extension services, which transfer the results of extension system run along these lines. The T&V research to the field, have a further important role system has also been widely and successfully in- in transmitting information about farmers' needs troduced in Burkina Faso, Cote d'Ivoire, Nigeria, to researchers. Farmers experiment to adapt re- Senegal, and Togo, and is being started in other search results to their own circumstances; exten- African countries. sion services could do more to tap this source of Efficient mechanisms for supplying farm in- information. However, few African countries puts, equipment, and livestock are crucial, but have effective nationwide services. Most are frag- they have largely been lacking. As a rule these are mented, with separate systems for different crops best handled by the private sector. The role of or with special systems contained in various area government should be to provide adequate for- development projects. Multiple donor-financed eign exchange, to undertake research, and to pass extension services in the same country have often the results on to farmers. Government research caused confusion and have made the develop- and extension services, along with private volun- ment of efficient national extension programs tary organizations, should be developing inputs more difficult. Management and supervision are and investment goods (such as new hand tools, typically lax, links with research are weak, train- animal-drawn equipment, crossbred cows, grain ing of extension agents is poor, and feedback from storage facilities, and energy-efficient stoves) that farmers is almost nonexistent. A nationwide pub- can then be produced and distributed by the pri- lic extension system for every African country, to vate sector. which the donors could contribute collectively, would be more cost-effective. One extension Reorienting agricultural education worker would ideally be provided for about 200 to 1,000 farmers, depending on the population In most African countries agricultural institu- density. These workers would deal with all farm- tions presently provide inadequate training to stu- ing activities. Techniques that have been proven dents. After graduation students usually prefer to in similar environments could be suggested, with join the public service rather than become farmers. a preference for low-cost, low-risk techniques. Ex- Jobs in the private agricultural sector are scarce. tension workers should offer farmers, through The costs of training are high. Better training options rather than a single "package", the best should be focused on three distinct groups: on techniques to suit their circumstances. This would agricultural technicians, who will serve as staff or not preclude private companies or cooperatives owners of private agricultural and agroindustrial from offering extension services for crops that enterprises; on the staff of the research, veterinary, they market (as for tobacco in many countries). and extension services; and on high-level agricul- Also, where a single crop extension service is op- tural researchers and policymakers. This is an area erating successfully (such as in certain cotton pro- where donors can greatly help. grams), its activity could be expanded to cover other crops in collaboration with the national ex- Protecting the rural environment tension service. Programs based on the T&V system of exten- Reliable data on the state of environmental deg- sion, developed successfully in Asia, are being radation do not exist for most of Africa. However, deforestation is clearly a problem that calls for which provides denser soil cover, increases out- urgent attention. The most recent survey (in 1980) put, and provides more stable yields. Minimum showed that Africa's 703 million hectares of for- tillage (planting crops through a sod of dead ests were being cleared at the rate of 3.7 million weeds or stubble) can reduce erosion and increase hectares (or 0.6 percent) a year. Deforestation out- yields. A technique suitable for hilly areas is the stripped the rate of new tree planting by 29 to 1. planting of infiltration bands of fodder grass, such At the same time 55 million Africans faced acute as vetiver, along the contours. Vetiver, which pro- scarcity of fuelwood. Deforestation is causing the duces a dense hedge and is a complete filter, is destruction not only of much of Africa's unique cheap and self-sustaining. Simply farming along animal and plant life, but also of its preagricul- the contours in hilly areas will be beneficial. In tural cultures, such as the pygmies. Burkina Faso farmers are placing lines of stones What little evidence is available indicates that across the contours of land prone to soil erosion. 80 to 90 percent of Africa's rangelands and 80 The lines slow down runoff, increase water infil- percent of cropped land in the dryland areas may tration, and collect topsoil. They can restore be affected by soil degradation. Soil erosion, wide- desertified land (see Box 4.4, above). To stand any spread in all areas of Sub-Saharan Africa, is per- hope of adoption, the soil conservation must in- haps most serious in Ethiopia, where topsoil crease crop yields, cost little or nothing in cash, losses of up to 290 metric tons a hectare have been and involve no expensive machinery. If tree plant- reported for steep slopes. In west Africa, losses of ing is involved, it must produce timber and fuel- 10 to 20 metric tons of soil per hectare have been wood or fodder and not conflict with the labor reported even for very gentle slopes. Wind ero- needs of crop production. sion is significant in drier areas. There are numer- In Africa's often fragile soils trees protect the ous reports of a decline in the fertility of cultivated soil against wind and rain, provide organic matter land in many parts of the region. to improve soil structure, and draw on deep A common feature of degradation is the re- groundwater and nutrients that the roots of an- moval or weakening of vegetative cover by over- nual crops cannot reach. In many areas fallow grazing, overcultivation, or deforestation, which periods have been cut too short for naturally re- exposes the soil to rain and wind. With several generating trees to reach maturity and fulfill these notable exceptions government efforts to combat functions. Expanding herds of livestock exert a soil degradation have failed because soil conser- heavy grazing pressure, reducing the ability of vation usually requires the farmer to provide extra forests to regenerate naturally. The tree cover of labor-labor that is often unavailable. Moreover Africa is declining rapidly, and clearance for farm- low prices for produce coupled with uncertain ing will continue. If trees are to play an increased land tenure make conservation financially un- role in soil conservation and agricultural produc- attractive. It is cheaper to move on to a less-de- tion, it must be in the farmed areas, through graded patch than to rescue a degraded one. A agroforestry. This takes many forms, such as more prosperous rural environment-resulting planting shade trees around living areas or plant- from the removal of price, exchange rate, and ing trees and shrubs in tight lines along the con- fiscal and other distortions together with greater tour of fields to prevent soil erosion. Crops such security of tenure and improvements in produc- as cocoa, coffee, and tea have value as trees in tivity-is necessary for farmers, forest dwellers, agroforestry systems. More species that produce and pastoralists to have an interest in conserva- fruit, nuts, or fodder should be added to diversify tion. Conservation will fail unless it appeals to the food production. For semiarid areas windbreaks farmer's self-interest. of mixed heights and species seem promising. For Successful conservation efforts show what can humid areas multilevel farming, which involves be achieved. Kenya's national soil conservation intercropping trees, shrubs, and crops of various program, launched with Swedish funding in 1974 heights for total ground cover, may be desirable. and continuing through Kenya's national exten- Pruning provides fuelwood, stakes, and fodder or sion project, has terraced hundreds of thousands nitrogen-rich mulch for fertilizer. of smallholdings, with farmers doing most of the The fuelwood crisis in many parts of Africa can work without pay. Other successful techniques be only partially alleviated by communal wood- include the use of surface mulches, the develop- lots and plantations of fuelwood species. In addi- ment of crop varieties that emerge early and pro- tion measures are needed to ensure the systematic tect the soil against early rains, and intercropping, management of forest cover. The lack of financial 101 and other resources places this task beyond the fiscal policy applied to logging companies so that capacity of the forestry services in the Sub- they pay the real economic and social cost of the Saharan countries. If it is to occur, responsibility trees they sell. will have to be transferred to local communities. Africa's lakes, swamps, rivers, and coastal wa- The goal is to limit forest exploitation to what is ters are important resources to protect. They pro- necessary to meet rural energy needs and part of vide a habitat for fish and wildlife and perform the urban energy needs without causing environ- other significant ecological functions. Claims on mental damage. This will require a capacity to Africa's surface waters come from irrigation, hy- decide where fuelwood should be harvested, to dropower, navigation, water supply, and fisher- provide for regenerating stocks (calling in some ies. These water resources may be seriously cases for a change in traditional land rights), and affected by other economic activities. For exam- to ensure that costs are recovered. Trees for fuel- ple, agricultural or industrial chemicals may pol- wood will be planted on a significant scale (there lute drinking water. Soil erosion adds to the is some subsistence planting) only when wood sedimentation of reservoirs and irrigation sys- becomes a marketed commodity and prices are tems. Dumping urban wastes in rivers and coastal attractive to growers. This is already happening in lagoons reduces fishery production, which pro- much of east Africa. There are also efforts to slow vides food as well as income and employment. Yet down the rise in fuelwood consumption by intro- few countries have effective policies or institu- ducing more fuel-efficient wood and charcoal tions for managing water and fishery resources. stoves (see Box 5.7). Africa's unique wildlife is threatened in many Changing agricultural practices to conserve soil countries by uncontrolled harvesting, poaching, and water and to reduce the destruction of forests and loss of habitat in both forest and rangeland will not be enough, however. Tropical forest ac- areas. Large and diverse populations of wildlife tion plans recently completed by the FAO, the are commonly found in marginal land areas, UNDP, the World Bank, and the World Resources which offer relatively low returns to other forms Institute for a number of African countries call for of land use. Wild plants and animals provide sub- a range of additional measures (see also Box 2.1). sistence resources. Their preservation is an impor- These include strengthening forestry and park tant factor in food security and quality of life for services, which protect existing forests and wild- rural communities. Some African countries can life and replant where forests have been de- use commercially managed wildlife to generate stroyed; changing agreements with logging significant economic returns (often in foreign ex- companies to induce them to become partners in change) from meat and processed animal prod- forest protection and replanting; and changing ucts as well as from tourism. Involving local Box 4.5 Bicvcle transport: The "missing middle" . TranIport enr ice. [or hirare. ;3crce in th, rural are3a o1 ranegd blbetiv,e 41- ht,tr- r,r r,ril .i t3r m Tanzan,. v Airica rld lonvgrange motor rranv-pO`ervic-le; on rojcl in 3n_-5'houar;n C h.na k%oincn accounrecltor morethi~n o, orrUncperateonl% %% hen the ntare;t rnirket i;open_-nc. I percent ot gdo.carrled in T.n-anj a heelk in 4ome Ioc3tion- Thi- rccdlt L.n the par.3do\ that inierniediale lorm. nl ran;pori can ;readl% reduc, thc in millage.. ru4towsidecitie4. i,call gro' n prOd-t; old amnunt ot time 3nd human enerc. pe r.n a3rr% inl- b% at low prlce4 and 4iil inmd, iLi bu%er; , hiic IE.. than to backor hcad l-ad iI both FetLd and p.a% kI:,d ire iak, n irnk mlLk aew.al in an orbar c:enrtr ire4h produce s e\pcnse aUaccount otudie in n.rtherrl Glana d*monntratE,1 that a and hard to rind But tew rural peopkl, carattcrd an lorni b,w.:it tmikr could ir,-:reiz -e3:h pŽr n- :ln :It I i otran;port so:,lmor all inp.are madeon oi0t oth rural least five timit b% enaiIthng the ridcr to .arrA up to 441.1 i,.Omen btaringthe brunt or the rarnsport burden For the pcund! A 4peciall% dJL-itnetd mnill handc.irt carrie; az r man% i hoht a%as ftroM atilablemoirortran;pN,rt atrip much 3' 33ii pound4 zi\ timc tile mimmumfl hiad load or, a buc. or a bus,h laxi r.ill entaik a Ion, walk tronim the and con>,derabhl reduce; thr FpoIitc l 10r neck or .pinai F ; illage mn;urie Ghana Technoi (Ig Con,ult.nc' Cent.-r i no, 1 Bet3u-t ol thi- lack o! tran4port a high percentage ci promotht thlL. prOducr1ot ;nd LtI C. 4uciI b.c. cl irak.ir- i conmodfIlitE I b3ak or head-Iondev Con..equentl% and hhand.:art§ Bolth Ehctcl; ;d4nm ha. e K-en .il.ptccd to '. tran;prrt consurnev inordinate 3mounts ot houuehocld local condition, The pro1-1 include plans torcredt iine i t*mc and energZ rFor e ample. a recent ;ur e% tound that and uchn.cal a; istanc- lor loc.al tirm; tn n.'rt manuie - the a%erage limc pent bs IllagehousLh!dO4On rransport turing a en,Hir, andi 1aInt.,ninr Ihe ' ehikL 7.._ - f ; - - -=--- -, - communities in managing wildlife can help to nology can provide substantial value added to reverse present destructive trends and yield both distribute to members. Savings and credit cooper- economic and ecological benefits. atives also work well. Cooperatives are generally unsuccessful when organized by government or if Providing rural infrastructure based on high-bulk, low-value commodities that are easily sold through private traders. To suc- For the most part rural infrastructure is highly ceed, cooperation has to be voluntary and man- deficient. Improving rural infrastructure is an es- aged from below. Grassroots management is one sential requirement for the modernization and way to ensure this. Alternatively, cooperatives growth of agriculture. Better market incentives to can be based on customary social structures and farmers will be blunted if the physical barriers and groups, as they often are. Governments can, how- economic costs of transporting goods to and from ever, provide technical assistance, such as advice local markets are too high (see Box 4.5). The devel- on accounting, legal rights, and technology. Laws opment of roads in rural areas is crucial. that make it easier to set up or dissolve a cooper- The construction and maintenance of rural ative are also helpful. roads should not depend on central road organi- Women are perhaps the most important, and zations alone. These are already overburdened by the most neglected, rural people. They are respon- their responsibilities for main roads and are often sible for an estimated 70 percent of staple food far removed from the areas served by rural roads. production. In most African cultures women's Distinct institutional and funding arrangements rights and duties are complex. Women may be for rural roads will be required. These should allocated fields (usually from their father's or include the decentralization of some existing insti- husband's land), be responsible for specific crops tutions, with the appropriate involvement of local and operations, and enjoy independent income communities, and the use of local contractors and from certain crops or, as in West Africa, from technicians. Labor-intensive techniques can be marketing. Often benefits of initiatives such as used to keep costs down and to provide local promoting cash crops, mechanization, extension, employment (see Box 2.4). and resettlement flow to men, who manage these Although rural infrastructure is an important activities. Finally, as farms shrink through inheri- requirement, agricultural development also needs tance and population pressure and men turn to the support of market towns. Most of the nonfarm outside work and become part-time farmers, activities could be carried out efficiently by the women increasingly manage the family farm. In private sector, such as transport, trade, repair ser- many areas half of all farms are managed by vices, and the provision of consumer goods. The women; in some, such as Congo, 70 percent. necessary infrastructure will have to be provided Women's agricultural workload grows while in local market towns. Health facilities and their traditional work burden in childcare, wood schools will also be needed (see Chapter 3). In gathering, water fetching, and staple food pound- setting priorities forinfrastructure investment, the ing remains the same-or grows too. The burden usual bias against rural and secondary town de- on women means that land preparation, planting, velopment must be corrected. and weeding are often delayed, which depresses yields. Developing farmers' associations and African land rights that give women the use of recognizing the role of women land owned by a close male relative are being eroded as population pressure makes land more The political and economic elite are more likely valuable. Land registration and land settlement to take note of farmers' needs if farmers have their schemes have usually resulted in husbands regis- own organizations. These, if genuinely represen- tering as sole owners. Without land titles or secu- tative, constitute a step toward empowering local rity of tenure, women's access to credit has been people. Group action is deeply rooted in African limited, thus making it harder for them to buy societies. Many groups already exist-for land inputs. management, for cooperative marketing and There are several ways to help African women input supply, for savings and credit, and so on. in agriculture. Where land is being registered, Cooperatives in Africa have worked best when women's rights to their share of land during their organized to market and process cash crops such husband's life and after his death should be ac- as coffee and milk-crops for which a simple tech- knowledged and protected. Even where commu- 03 nal tenure still prevails, women's rights should be Secure land rights also help rural credit markets formalized. The labor burden falling on women to develop, because land is good collateral. could be reduced-for example, by providing Since many countries (and regions) are at differ- sources of water and wood closer to home. Fuel- ent stages of this transition, Africa has diverse and efficient stoves can decrease time spent collecting changing land rights. Agricultural modernization fuelwood. Agricultural research and extension combined with population pressure will make systems also need to be responsive to women's land titling necessary. Traditional tenure systems needs. Women farmers should be involved in on- need to be codified. Titles could also be provided farm research to make sure that the new varieties to groups for collective ownership. The transition and technologies recommended largely corre- to full land titling will take time to achieve in most spond to their needs and constraints. Women's African countries and should be attempted only representation in agricultural training, currently in response to demand by rural people. Nationally only about 20 percent in Africa, should be brought legislated land rights are likely to conflict with closer to Asia's 50 percent. Male extension work- prevailing customary rights. Judicial mechanisms ers should be trained to be aware of women's for dealing with disputes between owners claim- roles, needs, and problems, and women should be ing traditional versus modern land rights are ur- selected as contact farmers in proportion to their gently required. As with other actions needed for numbers as farm managers. In many parts of agricultural growth, the critical element in any Kenya women already make up one-half of all new land policy will be the administrative capa- contacts of extension workers, many of whom say bility to manage it. they find women more interested and committed than men. Women's groups need to be fostered. Can the challenge be met? They could then be used, for instance, not only as contacts for extension services but also for chan- The importance of an improvement in agricul- neling credit for the purchase of inputs. Finally, tural growth for Africa's development objectives, female education needs to be expanded, since especially to achieve greater food security, cannot farmers with higher levels of education have been be overemphasized. Yet enormous internal and shown to achieve higher increases in output from external difficulties must be surmounted. One new technology. constraint is Africa's lack of competitiveness. In- ternational markets for Africa's output exist. The Redefining land rights challenge for Africa is to recapture them by be- coming more competitive. For that African gov- The rights of African farmers over land vary ernments will need to undertake the whole range between the extremes of communal and individ- of policies described above, but especially those ual ownership. A commonly perceived paradigm concerned with exchange rates, marketing, and of the situation runs as follows. Initially, when technology. The target growth of 4 percent a year there was surplus land, rights were defined for requires an increase in labor productivity of only groups rather than individuals. Within the Ito 2 percent a year, because the labor force is itself groups, individual or family rights rest on elabo- growing. Land productivity must grow by at least rate traditions and customs, which serve to en- 3 percent a year. Many other countries have force group control over the use and disposition achieved that sort of productivity growth in agri- of land. To minimize social friction and to ensure culture and thus have become competitive on the group's survival, the entitlement of individu- world markets. als to specific tracts of land is transitory. As pop- The domestic market for food already exists but ulation increases and land becomes scarce, long is being partially met from imports. This market fallow periods can no longer be relied on to main- will expand with population growth, industrial- tain land fertility, and the transitory nature of land ization, urbanization, and improved food security use rights fails to provide incentives for individu- programs. With appropriate policies domestic als to improve their land. Technologies to restore and export markets will be found to absorb a 4 fertility require the investment of capital and ef- percent increase in agricultural output. Africa fort, but must be adopted. Accordingly, farmers cannot afford to stand still but must actively seek must be given incentives to change their ways. market outlets worldwide. Eliminating regional One important incentive is the right to perma- barriers in food trade would be an important step nently cultivate land and to bequeath or sell it. in this direction. 104 Africa's institutional weaknesses and its fragile independence, countries such as Botswana, and deteriorating physical environment are diffi- Malawi, and Rwanda were regarded as having cult problems. But if they can be remedied, then little potential. Equally few people would have most countries in Sub-Saharan Africa could meet expected Ghana, Sudan, Uganda, Zaire, and Zam- the 4 percent target for agricultural growth. Sev- bia to become agricultural failures. In the four eral countries did so for extended periods between largest countries (Ethiopia, Nigeria, Sudan, and 1965 and 1987-Botswana, Cameroon, Cote Zaire), which accounted for 47 percent of Sub- d'Ivoire, Kenya, Malawi, Mauritius, and Rwanda Saharan Africa's population in 1986, agricultural (see Box 4.6). Except for Cote d'Ivoire and Camer- production increased by 1.5 percent a year during oon, these are countries in which the natural con- the past two decades; this implies a decline in per ditions were not particularly favorable. Indeed, at capita production. Yet these countries (except per- Box 4.6 Rwanda: A case of successful adaptation J Rwanda ;lt.nd' Mut among the handtul ot couritr,e; thit opened upbi expensi%edrilnage schemni, Population I i hat e increa3ed agr,cultura l production t.i,rer than popki- nc.. ennm ing at 3 -percent 3 sear Frtthlrt and birth ralte lat,n. It has done sci 0 ithout thte inequitl.e that have arethehighetinAlrrica ndJlheused mcdJernconrr.r-cee-r ,-rnelime, i rcimpanied dcn etopment eketi hcre Ur the rii ev ,n 1% 1as ltc; than I percenl land abundanceo! ClteJd oireoand. Bslar lirg.h io,th- The a' erage iarmr iZt in n a3 onl, 12 htIctareu outchemical inpLits-r imprc.xcd '.ark the and as land i- subditidedt.imonz male heir- tht 1 Fooi production in Rt,ianda M p 7 ercent a vear dt. indling %nith ea.ch generation Alread, in lu-4 more bet,een l%n, and lcis while popul.atoin gre%% it 34 than a quarteroliah tarmrnc:cupied iE- than halt heciare g percent Rwanda a3%.idecl the urban bia, so common in The practi,c ol tllo, in,, has ' irtuall. di.appeared q Atrica Got ernmert rernaintEd attcriti'e to the tarming R. andan larmers ha% e a long tradi,_n ul using oroanic maniprtl indetermining pricing ,lic c;.:harigeratc pil4 ertilizer'andrmulches butmanureLSin increa.in k -sh, rt j ic; ti-al pririnties and ettecti.etural intitutions eupplt as tarms gro too mniill to pro. ide todder iLcirttle Market torce- it\e.1 thi: le tl oIt too)d priLe- y hich rcoe .r 'utticient null hinm material Ac a resull the i,ield, nt1 b lu to 17 Fer;: nt a iear dur.n, ltie 1l7Ci irnditi.ih%e -'ume nmor upland crop4-banan3a tbe3n- :cttee-hla e prices set b9% go'erminent at a relatlielt high t*el k-re been dJclining not cntorced but -erved as guidehrie, A reali,tic o s oluthcrn' thai ha;c e. orlked in thtc pa't cannot be the eJ change rate coupled %n ith an ibsenc-e ot t \ce'5i e ia\a- -olution- tiur the ne' t generalion The population zro,N th A tion ensured that producers o thih n,ain e,port crop n;u-t te curbted AercLuttural strategs mu-A locu . no"% on cot.:utee receiveda hi4h ,hareot theborder price A parasta- inien-iticaitin ind c n sus-tainable Zru;. thin \ ields. noton tal eompanm vas in charge ot gr.ding 3nd proct-.;ing xten.on :t th, area or c:ritinut dhiltts into lot' -protein S *:ottee. bLit purch3ring. '--as lett to pri ate merchants r o:t c rop, l !thon ihi, nablingen' irinment output greo. 13rgel) The change ha, begun Rwandas program A 'oil and j2 because o sp,ntaneous changes undtrlaken H tarniers crest con-.er%atri-n has become one o tlhe most ettecri'-ve The maine ''ur-~ itprjri.non n ra'. i., s 'in-io n.tr.,-i Think, r . a in.il it inn iii.' coniniunii\ tree-plant- rinarca aLtera:iri -3 er-enta '.eartrom lwot,.to 1'n3 Parl ing proeram Rv 3nda not hl. mcrn trres than it had jt at L i this % .a, Int' R 3ar,da - drier sai .nnah region.. n hich indepen.ilnco and has atrained - tt ulticiencN in tuel- haJ loi,vr p.,entril rh3ar it' %olanic highlands \uch "cod oil n,erv atin was tirst introduced H the Bet e j;3me tr-nm draining tertfile mniarh and tall, bottom'r giarn olonial .authorilie-. Bx I -i, more than -5ii 1t iOi 2 Lin\ part c.t the highland not' , n .. I:threecrp'a e ar hecl.ire' k'ere coxer:d Hb antierosion ditches but n the r nne in each 41 the rt% main ra,n, swasiin- a third in the ne\1 dec-.dt niost ot the oinzer%ation " %'rk' v'ere aban - Jr% scaon doned or de.ir i1e1d Sinc, 1073 prionrt has a3 tineen . There also havt: bC'en shitt; in production patt,rn- gien tconserx,ngres.-urces but- itrts becameitntvne 1 Bananas grcio. n m3tn. !or termentitlin inmt. beer dle onl alter l1Sii At that time only 13 percent it llarm- %eerT chned ir,m- p,trcentotprOJductiOin b olune in Inc. to protected bH terrace' inhitraron ditches or bind- ot 4> pircent in .l Ti.he shari c.t cereal, and lcunme- deep-rooled tlidder Mras%s along tht- contour B\ Icr, d t hn, t Irom In ,- ic 13 perce.nt %. herea.- root crops 'vith co. erage had reached ri3 ptreent the target i, lii perent 1, thvir h ihr %,m11 t *:,alort, p. r hocrar, gret. tr.m 22 to b% th. end rit 14'c N v %arietie lci pot3to tom in -in c i cIt percent ot pr.iduoiion. \s tarnt size re, mailler :ind and the L -e ot chemical, are bezinnine to 'Fread. Ne%% talilto.' aridt bdder dI.- intt therA.,- a hilti tr imn cattle mniz, and bea a3rietie, h3ve been identilied Fertiliztr . ti t;maIler ltvct.'ck cttle nunuber'declinkd H 1 tpercent trials hai.e gv.en mi\ed rc-ultl- but chema.31 tertltiz. tion bet1;.r en lui7and lot -maill iest-lckgre%% bh mor, than is -c. noniicAllv attrcti te tor potatov-n %eet potatoe- LT percent and rice. But to ~prend ner' a3rietie, and techniques. Ri.anda is tacing increa'ing con,iraint, to e\pandJin Rvanda need- tocrealte 3nettecl% e respons,ett\en-ion 0i pr 1ducton ¼ irtuill-, all cultv ibtc land im .ilrads in u-c. nenr. ork \eccpt or th- .ate. s or tn' la.r r. ers . hic.ti could be ,aa!@W9 -rc' .S --_ n- -ES .-b'5';..._ ''o-: _ . r trz. £ -. CTsji~ i . fl- _C - j Box 4.7 The growth of smaliholder maize production in Zimbabwe 7 Zimbabx e recent cereal production contrats h3rpl% tion 3a.o improved -naullholder. acces' to cTedilt %lth icith Atrican trend PLr capita cereal production in- ablout i' percent f ithern recei%ing loan, b, IS5 crea,ed 'i0 perc-nt and maize production doublud be- Impro%ed technolozie-Kcame ;iailIableca nd i%ere rap- twren 19 qand ,45 idIN absorbedl H brid- weredeMelop.:d or both high-and Smaliholders contributed nioit .it Zimbabte, p st- low-potential Zone- and ber'%en IQ-i and I'J5 h% brid 7 10-Omaize production gains During the !t-lTs producuti - ,eed supplies to the snmalihoider sector increased iti etold. it% tas 1-, elds atera-ged i)ne-setenth ot thos. Fertilizerttrialt proi,dedJrecommendations suitablettothie obtained bN the commercifl tarming ectror 3nd maize agrc-cologtcal;cnditin'ctthe small tarm secor b% lu:s ;ales accounted for le;- than 5 percent of total deliveries tertltzer purchase;s ,m3allh-l&der, had inaTea'ed b% 4(10t to national market- The war lack ot input- particulDrk Fprcent seed' ard tertilizert ind 1hi prices himpered prodluc- Dtitribution ot mputs imprn1 ed s -;hopkceper beg.an t lion Alter 17-O. hotvteer, nnize production b rmallhold- to) tock tertitzerh seeds instticide,. and tarm equitp- vr- r tinpled Areas under cultitation increas-d more than ment Fertilizer and aerochemricd comnpanies b.gan to cill percent vields dotibled andJN 1' rsmallholders pro- promote agrICultural input~ with %illage-b3aed sales and duced more thar, halt ot ihecuintr- - niaize suppl% Si\.h dcmonŽtratnon trials ccessiont arket, dcned when the percent ot the production gain, itere marketable .ur- Grain ilarketing Board cvpanded the number ol collec- plu-es and malholJder niaize 3accunted fr tne third ol lon pointsl Nleatnwhk-. pmnate sector iresitors- esab- total maize deliterie, to theGrain Mlarketing Board lihhed bu'er tacilitics authorized bu the board and :- This increase n prodUction bteltien l-7oand I QS9wa tarm-to-market tr.in.portoper.irton. lacilitated b, thc rapid e-p-n iitl oi input and product TheZimbab%' e3ne perienceshouis- hat ittchr'oloeies marketing infrastructure b% an increaen thiea;ailabdlih are perce,ied 3a protitabk a3nd .upporrtue igricultural ot credi, and b; a' n-e in producer prTices Belteen 1'1 4 sen ices are avatt3ble. ,mallhil&dr, ; .ill re-pi-nd , ith n- and I%I th g.ve-rnnment increased thb retl producerprice. creased productioin Mtaize productton gret' because I SOi percent nd allout ed th, ratio :t tht producer price available tethnhilogsc:incrc,ed rh, protitabilit% ot maize o mnaize to the price 1t tertlizer Io ri.e bN 51. percent. abit nmost competing crops rori.du,tion tk r the market Although the real producer prtc ot rn'iizt dl,chned alter expanded when producer pncEs increa'ed 3nd when mar- i 1i141 the pr,ic r3tio ot rnaize to rertiizer did not tall a- ket acce-s impr-' ed Thc marketl siruiture allo%t ed pri- much The got einrent Agriculture Finance Corpora- %3te -ector invettmenr5 thai complmenittd Ihose ot Ithe got ernment haps Ethiopia) have an agronomic potential that Furthermore some countries will fail to adopt the exceeds that of the successful countries. needed reforms. Projections of agricultural If Botswana, Malawi, and Rwanda could growth in Sub-Saharan Africa made by various achieve a 4 percent growth rate over an extended organizations are lower than 4 percent. The FAO, period, then it is only the shortcomings of policies for example, predicts about 3.5 percent. A 3 per- and programs in other countries that prevent cent growth rate would just keep pace with pop- them from doing the same. A comparison of the ulation growth. The 100 million people who are more successful performers with the less success- inadequately fed would grow in numbers, rather ful shows that in almost every case the former than diminish, unless food aid were greatly in- pursued policies to promote the private sector, creased. No economic surplus would be available technology improvement, rural infrastructure, ag- from agriculture to contribute to the development ricultural education, and in some cases land re- of industry and the social sectors. form. These are the policies proposed in this In summary, the principal elements of an action chapter. Recent agricultural policy in Ghana, plan to raise agricultural growth are as follows. Guinea, and Zimbabwe has moved in the same * The private sector, including cooperative direction, and agriculture has responded favor- and grassroots organizations, should be given a ably (see Box 4.7). bigger role. Agricultural products should be freely Success will not be universal. In the countries marketed. Prices should reflect supply and de- with low agricultural potential-for instance in mand to stimulate and regulate production. Pri- the Sahelian belt-higher incomes will come vate investment in production, agricultural mainly from temporary, seasonal, or more perma- processing, and farm input supply should be pro- nent employment in agriculture and industry in moted, not constrained by excessive regulations neighboring countries. Such migration could be and administrative controls or legislation. Rural mutually beneficial (as discussed in Chapter 7). financial intermediation by commercial and coop- erative banks and credit unions should be encour- * Governments should assist the evolution of aged, rather than hampered by government regu- land tenure systems by providing legal and ad- lations. ministrative mechanisms to ensure greater secu- * Intensive new efforts are required to rity of tenure. strengthen the management of agricultural re- This strategy differs significantly from present search at the national level, linked to streamlined practice in most countries. Governments still national extension services. The international re- manage agricultural prices, markets, and the sup- search centers and multicountry research net- ply of farm inputs; use parastatal rather than pri- works need to focus a more intensive research vate credit and crop development agencies; effort on Africa. But the quality of agricultural emphasize large-scale rather than small-scale irri- training must improve for this to occur. gation; and provide agricultural research, exten- * The development and maintenance of rural sion, and animal health services through separate infrastructure needs to be given greater attention, donor-financed area or crop development projects and beneficiaries should be involved in mainte- rather than through coherent national programs. nance and operation. With some notable exceptions little attention is * Environmental protection action plans for being given to the environment, to land tenure, or each country are needed to address issues of soil to enabling men and women in the rural areas to erosion, deforestation, and watershed manage- take full charge of their lives. Agriculture can ment. become the engine of growth only if all this * Programs to assist women as farmers and changes. More public investment in agriculture is traders require government assistance and en- not the critical factor. The key to success is to make couragement. Women's groups should be fos- the farm sector more productive through better tered; they are good channels for providing policies and stronger institutions and, most of all, extension and credit services in rural areas. by developing people. 107 Industry, mining, and energy Industry: Responding to markets In Africa industrial growth will depend heavily Lagos Plan of Action and the Industrial Develop- on the success of raising agricultural output and ment Decade for Africa. incomes. Rising agricultural incomes would mean For all the encouraging achievements, there a growing demand for manufactures, and the have been setbacks. In the 1980s industry declined availability of affordable consumer goods would in many countries, partly as a result of poor agri- give farmers an incentive to expand production. cultural performance, excessive dependence on Industry can process surplus agricultural output imported inputs, and a growing crisis in foreign and provide farmers with the inputs and equip- exchange earnings and debts. Too few businesses ment required to raise productivity. Savings gen- made appropriate use of local resources or built erated by agriculture can be used to finance up industrial skills. industry, and the labor released by rising agricul- To stimulate an innovative and competitive tural productivity can be used to staff it. Agricul- spirit, three issues need to be addressed: tural exports will still be needed to pay for * Expanding markets by increasing agricultural industry's growing import requirements while in- incomes (and thus demand) and opening up inter- dustry itself gradually generates more foreign ex- regional and overseas export markets change. * Creating an enabling environment for indus- trial investment by providing reliable physical infrastructure and business services; improving The challenge of industrialization financial intermediation; encouraging self-em- ployment and small-scale businesses, as well as Since African nations gained independence, bigger firms; and facilitating competition by cutt- their labor forces have acquired technical skills ing red tape and rationalizing protection (among andindustrialexperience-asworkers,managers, as well as within countries) and entrepreneurs. Indigenous businesses range * Building capabilities by strengthening educa- from self-employed metalworkers making tion, training, on-the-job learning, research, tech- cookstoves from scrap metal in Kenya to a firm nology transfer, foreign partnerships, making paper from sugarcane waste in Ghana. subcontracting, information, and business associ- African countries today export not only processed ations. raw materials but also manufactures, such as gar- ments from Madagascar and car radiators from A future strategy Tanzania. The challenge is to build on this base to achieve the dynamic transformation of industrial Africa's postindependence industrialization structures envisioned by African leaders in the concentrated on creating physical capacity. Con- log sistent with development theory at the time, it new techniques. Industrial strategy in Africa has assumed that lack of capital constrained growth. tended to overstress hardware (plant and ma- Import substitution policies attracted foreign in- chinery) and neglect training labor and manage- vestment through protected markets. Agricul- ment to master new technologies. Good working tural taxation and foreign borrowing helped to relations with international investors and market- finance public investment in heavy industry, ers can help close the technology gap; this will which served a narrow market at high cost. The require stable economic and political conditions to capacity created was not well adapted to local build confidence over time. demand and supply conditions, and much of it Each portion of the size continuum of African cannot be sustained. industry should be allowed to develop its Modern manufacturing remains mostly small, strengths. Despite official neglect, the informal stagnating at around 10 percent of GDP and 9 sector has played a dynamic role in providing percent of employment between 1965 and 1987. income-earning opportunities and serving the de- Most industries remain isolated from world mar- mand of the low-income population for inexpen- kets and new technology, with high costs relative sive manufactures. Small- and medium-scale to best-practice operations elsewhere. Protection- enterprises (SMEs), however, tend to be under ism has stimulated investment but not innovation represented (the "missing middle," discussed fur- to raise productivity or export growth to finance ther in Chapters 1 and 6). SMEs can adapt tech- rising import requirements. The future lies in niques to local resources and products to shifting industrial structure toward high-growth, changing niche markets at home and abroad. They competitive enterprises that are linked to the do- also build the technical, managerial, and entrepre- mestic economy. Reviving investment for this neurial experience necessary to expand the large- purpose will require restructuring or removing scale sector efficiently. Regulatory reform and loss-making firms and substantial efforts to mobi- institutional support would help informal and lize domestic and foreign investible resources. SME firms as well as large-scale industries, to At a meeting held in May 1989, African minis- grow. ters of industry committed themselves to working As the experience of the NICs has shown, with UNIDO and the ECA to prepare a new indus- growth can be accelerated by penetrating export trial strategy for the Second United Nations In- markets. It helps industry to transform by infus- dustrial Development Decade for Africa. A ing new technology and competition and by en- consensus has emerged that this strategy must abling some industries to expand beyond the address functional issues, such as the underlying domestic market. In contrast, overvalued curren- human, technological, and institutional capabili- cies and import substitution policies have dis- ties, and not concentrate simply on creating or couraged investment for export in Africa. rehabilitating industrial capacity. A focus on Subregional markets can provide an important building flexibility into the process by which in- stepping-stone to international competitiveness, dustrial transformation occurs is less risky than as well as build regional self-reliance. With more promoting specific products; witness the various favorable policies and agricultural growth around high-cost, underutilized steel, fertilizer, and auto- 4 percent a year, it should be possible to raise mobile assembly plants across Africa. industrial growth gradually to an average of 7 The most successful newly industrializing percent a year for Africa, with some countries countries (NICs), while protecting local markets, doing better. have gradually opened them to competition, pro- Each country must combine these strategic ele- vided export incentives, and identified the educa- ments according to its particular circumstances. tional and technical skills that build a flexible Low-income, agrarian, landlocked countries such labor force. In Africa this implies a shift from as Burkina Faso, Burundi, Chad, Malawi, Mali, central planning to a market-oriented approach, Rwanda, and Uganda are likely to emphasize the from regulation to competition, and from failed links between industry and agriculture. Countries attempts to transplant technology to systematic in the earliest stages of industrialization will be building up of capabilities. looking to build a foundation of education, skills, The core of this strategy is the step-by-step ac- and infrastructure to support future industry. quisition of skills necessary to operate and adapt Nontraditional export markets could be exploited 109 by the more industrially advanced nations, such Only oil exporters were able to sustain the growth as C6te d'Ivoire, Ghana, Kenya, Nigeria, Senegal, of manufacturing during the 1970s-at 9. percent Zaire, Zambia, and Zimbabwe. a year. Although manufacturing grew at 11 per- cent a year from 1980 to 1986 in China and India The current state of industrial development and 5 percent in other low-income economies, it was virtually stagnant in Sub-Saharan Africa, and During the colonial period manufacturing was its 10 percent share of GDP was barely higher than mainly in export processing (for example, in Cam- in 1965. eroon, C6te d'Ivoire, Ghana, Nigeria, and Sene- "De-industrialization"-a decline in manufac- gal);bulklow-valueconsumergoods (particularly turing output-occurred in 10 countries during in settler colonies, such as Kenya and Zimbabwe, the 1970s and in another 11 in the early 1980s. but also in Ghana, Mauritius, Nigeria, Senegal, Among the most seriously affected were Benin, and Zaire); and light engineering linked to mining Ghana, Liberia, Madagascar, Mozambique, Tan- (in Zaire, Zambia, and Zimbabwe). In the 1960s, zania, Togo, and Zaire. Some reported capacity when independence and protective policies utilization rates below 30 percent. Installed indus- prompted international trading houses to pro- trial capacity was susceptible to underutilization duce consumer goods locally, expansion took off. because of: During the 1970s direct state investment in heavy * Constricted demand from falling real in- industries dominated capacity creation (for exam- comes and stabilization measures ple, in C6te d'Ivoire, Ghana, Nigeria, Tanzania, * Unsuitable scale, design, or cost, particularly and Zambia). in some public investments The initial results were promising. In Sub- * Shortages of foreign exchange to support Saharan Africa during the 1960s manufacturing import-dependent industries value added grew at more than 8 percent a year- * Poor maintenance and lack of spare parts, nearly double the rate of GDP growth. By 1965 resulting in the total deterioration of some capac- manufacturing exceeded 15 percent of GDP in 12 ity. countries (Botswana, Cameroon, Chad, C6te Policies such as heavy protection, extensive reg- d'Ivoire, Ghana, Kenya, Madagascar, Mauritius, ulation, and directed investment contributed to Senegal, Togo, Zaire, and Zimbabwe) and by 1973 these problems and to more fundamental ones, in 6 more (Burkina Faso, Ethiopia, Mozambique, such as weak links to the domestic economy, high Rwanda, Swaziland, and Tanzania). Production costs of production, and lack of incentives to raise became more diversified in the number of prod- productivity. Attempts to promote particular in- ucts, although consumer goods remained domi- dustries have foundered because success depends nant. The share of intermediate goods industries on much more than product category. Whereas rose in the 1970s from about 30 percent to around passenger car assembly plants have consistently 40 percent, mainly through investment in oil re- proven uneconomic, for decades lorry bodies con- fining in a few countries. structed on imported chassis have provided with- out official support efficient vehicles for Stagnation, not transformation transporting passengers and goods. The public sector's ability to operate efficiently The 1970s, however, showed that simply substi- those investments that it retains clearly will influ- tuting local for imported consumer products ence overall industrial performance for some brought neither economic independence nor tech- time. Governments are likely to remain involved nical efficiency. The import substitution indus- in decisions on major new industrial investments, tries depended heavily on imports for inputs, whether or not as a direct investor. But many spare parts, and equipment and were vulnerable governments are downplaying their proprietary to shortages of foreign exchange as export com- role to avoid several tendencies of a centrally di- modity prices fell and oil prices rose. The growth rected approach that have run counter to the long- of manufacturing value added in the low-income run objectives of industrialization: African countries fell to 2 percent a year in the first * Political rather than economic criteria guid- half of the 1970s and was negative in the second ing investment choice, location, and management half. In the middle-income oil importers it fell * Regulation and wage controls that raised from 8 to 4 percent a year between the two halves. unit costs and undermined competitiveness 110 * High costs passed on to downstream users used domestic competition and export incentives of the output of heavily protected and inefficient to make firms reduce costs if they wanted to sur- basic industries vive and grow. * Expatriate entrepreneurs and managers re- * Imports were reproduced using trans- moved before qualified nationals were available planted techniques and equipment, without suffi- to take their place ciently adapting the technology and product * Private investment crowded out where the design to local conditions and materials. The NICs state controlled profitable monopolies. often produced a simpler version for the domestic An import substitution strategy can be com- market before upgrading it for export markets. bined with competitive pressures to ensure effi- cient production, as in the NICs. Few African World trends in technology and information industries have so farbeen able to raise productiv- ity enough to graduate from infancy to become Technological innovation and competition in international competitors. There are several dif- world industry has accelerated in the past decade, ferences between African countries and the NICs. thanks partly to the use of computers. Production * The domestic market size is relatively small, processes need to be flexible to respond to high- which makes it difficult to foster competition and profit opportunities. Access to market informa- efficient size for that market alone. tion and global marketing networks is needed for * The construction of capacity was not accom- an industry to grow rapidly. Cheap labor and panied by the development and application of economies of scale are less important than prompt knowledge and skills, whereas most NICs system- information-and response. atically infused literacy, numeracy, sciences, and To take advantage of this global market, African engineering through their education systems. industry will need links with foreign partners and * Domestic competition was forestalled by stronger incentives to export. In Mauritius the regulating new investment, whereas the NICs buildup of industrial skills, good external con- Box 5.1 Ntfauritius' success in export-led industrialization |: Nianutacruring pla.';d a 3rnai1 part in Nlautrilu- .ugar- double taxati,,r, oi di,den.l in L\port credit guarante b: - baed ecLin011 betore indeepndene in I9t$.5 L,-:iv iniome vcheme tO protect cininiercialbaInk lga . n.mt dietault dun, and 'mall .izo otfered little opportunit% tor ethcient imn drat%back- lor nee% e\port4 Irm ri tirmn orient,d toward .4 S port-ubtituttion the drme;ht mrnarket. and e'p...rt Frrn.-.tiin ibroad L Aller ird,pendence ?Ž\port- irienttid mrAnufaturing The.e ad1u-trnunt4 coin.-ided kith the emvrgence o e and I.wuritnt %.er, ideritilied a. potential ,ource4 ot capital Iromr Honsg Kone 4earching for in%etrtment- L - ) ow-th. along the ltine. ot vmral Asian eonimie. -ui:h as ibroad puzhed b% p.lirtical Lncertaintiz in the col.^i- ij .i Hung- K.ne Singapore and Taiwan. The E\port Proec.- and c4mkinp 3lt&rnati. e. to.ountrie, in which the 4ro%% h i mne Zone,Actot IC 10 aimed tc attract dortmtic and toreign of ts.tile export- ; .a; con,ir.;,,d M tiuota IndLI trti- in%?e-tors in et\pi.rt prcte. ming Ltv inentie e included t. im ent -urged i I 4-S1 with the nuniberot p X 'rt : hohlda%, on retained earnirgs aind dicdendc iutv-tree procesing indtil;`ic increa!n trri Im r5 ,n lcN-I thi 4it imported input. Ire r.patnamKin ol capital and di\i- in lnlt and to ;Sh in IQS> Led b: Ao%en and knittLd v | dend - Ileible emplo% ment and 13nd and Lactor\ Fp.ic garmtnt. m3nuiactured e\p,irts ere,% at 31-1 percent a oear E \Jchian,e r.ate and ige.Ž policies al.1o %% cre desii:ned to and o ertook uea.r as Mlauritiu r main ?\port i.ee Bo.. senure the proliitabilit\ ot e\port.onented produchon. table R I I. The reult' in the 1.71it w,ere Imprt.svt.t. lndu.irial ime.tment quadruplod in d iti. %ears and %% as; t,nanctcd Bo\ table 5.1 Composilion of Nlaurilius' e-ports, , argels throUgh proits irum tht bu,.mant -ugar indJU..r, 197-S8 Real GE)P grtw at ar average annual rate -it around It, rw :.'cc percent during the lirst halt .t th. I-ills . klanut.iKturir. grot' th halted in I74-i hC'. er 3S; I l4.8ii ...t thodechrlireof stuar prtce; the ;econdJ ol price hock. and Su:ar c5 hill I. ii' , ..-orldi. idle recei:njcn 4enerated seriouu tmnanc ii 3nd ceo- p- : noni:c nimb3lance. The go eriment r,-ponded rapid'. ck.tiC . rh isti ;horr-ternt ztabil,zirton rnel-ure, e% change ratead ZOthE ' - urmient ttade pohic retormni and an ettectt%e inconie- potl.-:; to hold doii. n Labor ci it.. ) it 1 ,iirt 1%, t - e : Total lilit LI I-it I 11 1 nldu'trial o?ports included bilateral agrvenient; t. avoid rr , nk d, --. - r..,----_ . --r........................ -- --._ . r .5E' ............................ tacts,andsupportivefiscalpoliciesandinfrastruc- Europe. When imports were unavailable in ture allowed garment exports to expand phenom- Ghana, local distillers used molasses instead of enally in the mid-1980s (see Box 5.1). On a smaller sugar, and mechanics learned to make automobile scale Botswana, Madagascar, Malawi, and Mo- spare parts and water pumps. zambique are following this strategy. Some countries have started to improve the Vertical integration into domestic basic indus- policy environment for sustained, efficient indus- tries is less important for successful industrializa- trialization and for private entrepreneurs to play tion today. Reduced bulk transport costs have a bigger role. Removal of price controls and more fostered integration across national boundaries. flexible exchange rates have reduced the risk that Products ranging from sweaters to computers in- profits will be squeezed by arbitrary decisions. volve processing and component assembly in dif- Import liberalization in, for example, Ghana, ferent countries. Kenya, Madagascar, and Nigeria has reduced Unless Africa can take advantage of these global scarcity rents, increased access to needed inputs, trends, technology and information gaps could and forced monopolistic firms to cut costs to com- widen. As world producers raise productivity, the pete. Improved agricultural prices have raised costs to African consumers of protecting indus- both rural demand and the supply of raw materi- tries with outmoded technologies will increase. als in countries ranging from Guinea to For example, blast-furnace steel technology re- Zimbabwe. Government withdrawal from indus- quires large-scale production and incurs high trial ownership in countries such as Cote d'Ivoire, costs; some countries have achieved high effi- Guinea, and Togo has opened opportunities for ciency in steel "minimills." Key elements of an private investors and created the potential for effective strategy for technology acquisition for greater efficiency through increased competition. Africa include obtaining good technical advice on These measures, however, often involve politi- suitability, adaptability (especially using interme- cally painful choices and do not guarantee an diate technology), and design; providing effective adequate supply response. The future strategy management of the technology transfer process; should attempt to create the complementary mar- and training workers to apply it. ket and supply conditions needed to transform industrial structures successfully. Positive developments on which to build Opening up market opportunities Experience demonstrates that African industry can compete on world markets. In Tanzania an To revitalize industry and to sustain manufac- automobile radiator producer uses Indian tech- turing growth at 7 percent a year in Africa requires nology and trainers to develop small-scale but building, seeking, and responding to domestic, efficient production; more than 10 percent of out- regional, and overseas demand. Policy changes put is exported to neighboring countries, India, are needed to link industrial production closely to the Middle East, and the United Kingdom. A domestic product and input markets and to orient Botswana garment manufacturer sells its fashion firms toward exports. Backward linkages will designs in London and New York. C6te d'Ivoire then stimulate the expansion of competitive, do- exports cocoa products and chocolate from un- mestic intermediate and capital goods industries exportable beans. A state-owned engineering firm and supporting services. in Zambia has rectified bus design flaws with minimal assistance from the foreign supplier. Ni- Domestic demand geria exports cloth, Senegal plastics, and Kenya jewelry and basketry. One objective for the Second United Nations African industry has often taken advantage of Industrial Development Decade for Africa in the market opportunities and adapted to locally avail- 1990s will be to reorient manufacturing industries able materials. Small enterprises in Nairobi turn toward serving the needs of the three-quarters of waste-packing materials into low-cost housing. Africa's population found in agriculture. Even in Firms in C6te d'Ivoire and Ghana can specialty the mining economies of Botswana, Zambia, and foods for Africans overseas. A firm in Zimbabwe Zimbabwe agriculture (which provides only 3 to exports custom-made parts for old automobiles to 12 percent of GDP) accounts for more than half the 112 labor force. The potential demand represents a The exchange rate is a key tool for linking indus- powerful engine of growth, if it can be met at trial growth more effectively to domestic supply. affordable prices. Incentives to use local suppliers are few when Past industrialization based on import substitu- currencies are overvalued and duties on imported tion has fostered large firms catering to urban inputs are low. Until Ghana liberalized foreign demand, with little regard for cost. The rural pop- exchange markets, the large soap factory im- ulation has a relatively high propensity to spend ported vegetable oil because it had access to im- increased income on simple, inexpensive prod- port licenses at the official exchange rate, whereas ucts of local, small enterprises. Besides clothing small soap producers used local palm oil because and furniture they need inputs and equipment to it was cheaper than the parallel market rate for increase productivity. Women need tools, food- imports. Devaluation favors substitution of local processing equipment or services (such as corn labor and inputs in which the country has a com- milling), and devices to lighten household work, parative advantage; it also favors the growth of which would release more time for agricultural activities that use local resources intensively, in- production and other income-earning activities. cluding agriculture. Small enterprises are meeting these needs. Since Africa's agricultural population is spread widely Regional markets and transportation is poor, small-scale producers using local materials often have advantages over Regional integration in Africa (discussed in centralized mass production. Low incomes make more detail in Chapter 7) is important for the low cost and serviceability more important than efficient development of many intermediate and standardization, and payment terms can be nego- capital goods industries, because few countries tiated between buyer and seller. Stimulating the have a big enough internal market to achieve ad- growth of rural income and recognizing the com- equate scale and competition. Investment for a plementary role small manufacturers can play in multinational market requires both competitive an economic development strategy centered on costs and stable trade policy regimes. agriculture would help start the engine. Remov- Neighboring countries can provide an outlet for ing barriers to growth and competition by these excess capacity and experience for tackling larger firms will also encourage large firms to raise pro- overseas markets. A Zambian garment firm sur- ductivity. Additional measures are needed to fa- vived the collapse of its domestic market by ex- cilitate subcontracting and other relations porting uniforms to Tanzania and the Federal between larger and smaller firms; such links have Republic of Germany, by drawing on the experi- helped improve SME technical capabilities in ence and contacts of its German partner (see Box Asian countries. 5.2). Kenya's breweries have moved from neigh- Rising agricultural incomes will also generate boring to overseas markets. The role of African demand for mass production goods. In the towns entrepreneurs in developing regional export mar- rapid migration ensures continued growth in de- kets can be expected to increase the more easily mand for such products; but firms serving this they can travel and transfer their foreign exchange market have grown inefficient behind excessive earnings. protection. They will find it hard to adjust as Liberalizing trade barriers against African man- protection is lowered unless they can reduce costs ufacturers can help underutilized and overpro- by, for example, exporting to neighboring coun- tected firms to adjust by increasing markets and tries to raise capacity utilization. competition, without exposing them too quickly Although informal enterprises producing for to international competition. Some firms might be low-income earners do not provide a major share unable to compete with those in neighboring of GDP, they make a significant contribution to countries. Others would-and consumers would the long-term growth of output by building up the benefit from lower prices. At present some manu- seedbed of experienced entrepreneurs from facturers export informally through traders rather which the "missing middle" can emerge, grow, than through official channels, where costs often and generate the successful investors and manag- exceed any benefits. Although difficult to achieve, ers of larger enterprises in the future. Less restric- an across-the-board approach to trade liberaliza- tive regulations would facilitate the dynamic tion is more likely to be effective than product-by- process of informal firms becoming SMEs. product negotiations in creating new trade and 113 Box 5.2 A Zambian-German joint venture Alter a promi4ing start in Zambia' domestic garment experienced Cerman technmcian This training envured market. Serio.e; Ltd a Zarmbian-German loint %enture lechnL'log tran.fcr rather than techncilogf acqui.ition companm iounded in 71. was hit bs -hrmking dometKl and it enabled local tall to rEplace expatriate- 3t the demand and reqtrictiori- on imported inputs in the late middle and higher le% els of management 197lis To overcome this. Serioes searched lor markets CoXntraction in the domestic market and l3ck oI loreign abroad It emerged as a strong exporter b ! explring a exchange tor imported inputs led -ericws to la% e,l '0 nche n the international m.rket-mnilitar and airline percent ci itsv orker- in WS3 The lounder accumulated unitorms. The compan% waJ LiCCeistul becau-e of it; expenence in productlion and exporring lcd him to ;seek a entrepreneurial .bili- to tind a market niche. its manage- specialized niche to surn i e. Building on an inihal sale oi r.il skills to achieve competiti%E co^tv and qualitt. 3nd militarx uniforms tc Tanzania. the companm marketed lechnologv transtlr through training un.torms !in other Atrican countries and recentli broku The tirm pr.duced men s %-ear. sports CIthing. umn- intk the German m3rlket Another nrche was round b\ tormni. and lajidfs . ear its output soon reached all LI] suppl ing airline unitormn Zambia and adjoining countries and the compans e\- 'eries success llis hot, a torIign partner can be a p3nded into rattail clthing kt\ catat- st bringing together the experience vision The companm s manager a Sri Lankan wvas llesible in technical skills m3nagerilcconmpetence.andcreat,vemar- 3dtushng nt Nincan condirions T-1gether , ith the high- keting necetsarx tor an -\frican- tonpan\ ,to find niche n qualiti equirment came training Lin the tactorl, Iloor t -' highJl ccimpetiti%e interna tional mrarkt. developing compensatory mechanisms to deal measures such as export financing schemes and with the possible adverse effects on some firms. processing zones. Meanwhile increased manufac- tured exports for many countries will come Overseas markets. mainly from first-stage processing of exportable raw materials. Although such processing can in- The rate of industrial growth that rising agricul- crease value added, countries must be careful to tural productivity and increasing urbanization avoid the danger of turning high-quality raw ma- can sustain within national and even regional terials into medium-quality processed products. markets is limited. Although penetrating new Converting nonexportable-grade raw materials markets overseas is a difficult and lengthy pro- into exportable semiprocessed products is a cess, it offers a critical means to accelerate indus- promising innovation (for example, chocolate trial output growth and foreign exchange from C6te d'Ivoire). earnings, especially in Countries looking for rapid growth of standard- * Processing exportable raw materials, which ized or niche market products should expect for- has suffered from a policy bias against exports eign entrepreneurs to play a significant role, as in * Handicrafts, although this market suffers the case of the Zambian-German uniform exporter from the vagaries of fashion (see Box 5.2, above). Taiwan's success derived * Other niche markets that offer high returns partly from direct investments and subcontract- from meeting specialized demand (such as ing by American and Japanese firms. Bangladesh wooden toys and tropical fruit juices) expanded garment exports rapidly after workers * Standardized products, in cases in which learned skills and technology from a Korean firm local labor and costs meet the requirements of and went into business for themselves. C6te international producers or buyers (such as d'Ivoire's success with chocolate exports was knocked-down furniture from Ghana). achieved through the technical and marketing ex- Successful, diversified export development re- pertise of the French partner. More developed quires a realistic exchange rate policy, a support- countries can encourage such developments by ive and stable policy environment, and time for lowering their tariff and nontariff barriers. investors to respond. Liberalizing foreign ex- To reduce Africa's dependence on foreigners, change markets can have some immediate effects, partnership agreements should be designed to as in the recovery of Ghana's timber and pineap- ensure training and technology transfer (as dis- ple exports, but the case of Mauritius shows the cussed below). African entrepreneurs should be importance of policy flexibility over time (see Box encouraged also through a less restrictive and 5.1, above). Positive policies include promotional more supportive policy environment. A Malagasy 114 woman's success in exporting children's clothes dollar terms have induced a Hong Kong firm to to Europe was achieved through improved incen- establish an export joint venture with a state- tives and without outside support (see Box 5.3). owned garment maker. Creating an enabling environment Competition policies To sustain relatively rapid industrial growth, Future industrial policy must go beyond mar- African entrepreneurs must respond to improved ket incentives. Governments need to back them domestic demand and export incentives. In the up with drastic changes in regulations and their past domestic competition has been constrained implementation. Measures fo make the business by restrictive licensing, direct allocation of credit environment more positive and competitive (dis- and foreign exchange, price controls, selective in- cussed further in Chapter 6) include: vestment incentives, and complex administrative * Eliminating restrictive licensing of capacity requirements. In some cases public policy has for most industries and facilitating legal status for even been hostile to private investment. Govern- smaller firms ments can help by * Automatic investment incentives based on * Deregulating to encourage competitiveness eligibility criteria and consistent with employ- * Rationalizing distortions in the structure of ment and efficiency objectives protection * A well-administered legal framework that * Investing in infrastructure (and taking other enforces contracts, facilitates asset transfers measures) to reduce the high costs of doing busi- through bankruptcy, and establishes property ness rights * Improving access to credit. * Labor laws and policies that protect Mozambique has shown that major changes in workers' rights without hamstringing firms. the policy environment can be achieved quickly. In two years the government has switched from a Rationalizing protection centrally planned, price-controlled economy to one in which even state-owned enterprises oper- Protection has been a source of industrial profits ate on a commercial basis in a liberalized market and incentives to invest but has also fostered un- environment with a competitively valued cur- competitive behavior. In many countries past pol- rency. This policy and the reduced labor cost in icies have permanently shielded industries both Box 5.3 NMadagascar exports high-qualit' children's clothing lo Europe i \id1ag:im.cr- tridwoniI 1ilI in mnbroidrn anj i the NlIadaa.c.3r. ma.ir de. aiu.,ij:.n!n i 1L'7 Her bu-in--- I lonpctr rt eldgc Fro' 1.dJ tci d & .3luati In hae cnribld mu4hr. . m on .l p.nrr. rr .n1 i tin . i, s *h |h f a Mdlaga; uLniman ri -p.nn rtttEhi: Eurpf.in n1arket tr %a3.mpkMrirNin 9111:1 orn,n F.;,ter ero th might ho%c J highI.quali chidr,r JIcithing T, o ear- aitEr mo. Kbn in)--bIc had it iinIn mg tnai ad ihIc alIh .ugh It trom iterh. rior d.r3tmng ml e~mbr.ider.. i 3blerh~ -h*:' ihr u n r r.u.,citanit t . e r terid ht r - pentI .n ' %a, ?\porng mor, thanmI million .ii childr,n. cl.othing \ irtuall. all Iher prinar. input- ar* pr,ducEd 10.aIlN 3nd ribIc:cloth. ui Eurn: Includ in, clorh manulacturtJ ir.-i dsy.: Jomc. olt n in Li Ermbrodor%ijr a . l A-kn , n irt in Nladag3car To tht aL>ence -.I adequitt clrdhIx.brd p,cking ;h adipted pro% kde high quAit% eni roidcred tableclorh- to hir hi- trad uional tbJ;l tI .i n tr rn, naturl tibern to. protect ' o entl the oung nterior ie. ritor hircd % onien tI v. rk the Iotrh in *h,prnent Airer becomin; pret?d;nr oi the i her ba,l,ard in lQs- +., ako had dr made rhtorhcr garment pnrkri hi nat on *he r i-area ;bith Air J 11ughtEr and ithe attracted ia orablk ittkntion durmin a \I.d,a :.cr r -duce ilr ireizht raler t- EurLpU % hich j -it to uropr in i'--47 .-h pr-n-i :ad a ;net high-qdAtI h.il .Cn much hti,her tihn thc,. tironrEuro.p to NIada- v embr.oid.r d childrn n clothe- at s -alon in ian. o.hc ga-:ar r :ho-c cla;;ic d'igne thai -chai licik ov en time and TIi '. emnent .F.ed bt makin2, \p .n' mnrepr-rr rmphi.ized the perle, t linl4ing tc. ater to lhb highei itlabh and b% mIit mg pno.:edures Th, local Enlrtpre. iend ot the markctt BF cho.in.k th.s nich,: 4h, cul..- near rc-Fpnd.d b%ad;pting a% .ilable-1kl; mind mnat,rl3 rminini2 h,.r dvpendcnc on i.ihin trend. t0 ,ecahzcd intErn3nronil markeI In thi;ca.c thecapa Her abilhrx to c;nipettm in inkrn.tion3l markel- epe- biIitie- t- it-d nd lackcd onJh a 13 orable en ironniment ciallk 3aain-l PhilirFine e.p.rter4 .- enh3an.-rd t,% anl mark,iing acun.en i. aid i.n ,der.,biL JalLue :::1_ from import competition, through tariffs, quanti- * Government agencies and many firms are tative restrictions, and foreign exchange ration- exempt from duties on inputs ing, and from domestic competition, through * Restricted and highly taxed imports enter restrictions on new entry. Import restrictions gen- clandestinely or under the guise of lower-duty erate scarcity rents that enable firms to survive items. despite low capacity utilization and negligible for- When duties are high on consumer products eign exchange savings, such as automobile assem- and low on inputs, firms can profit from the dif- bly plants in Kenya, Nigeria, and Zambia. A ferencebyimporting the inputs and incorporating patchwork of quantitative restrictions, high tariffs them into a protected product. There the protec- on some items, and exemptions on others for se- tion on the value added (which is the "effective lected firms and government agencies has created rate of protection") can be very high, and some- a distorted pattern of protection. times the real costs can exceed the benefits. Many The challenge is to balance protection, which countries have assembly industries in this cate- nurtures domestic industries, with competition, gory. When tariffs and import content vary which forces firms to innovate, raise productivity, widely, so do the rates of effective protection. A and reduce costs. Although industrialization nor- Zambian study, for example, showed that in 1975, mally involves business failures as markets and 24 percent of its consumer goods had effective productivities change, much African industry has protection rates above 500 percent, while 17 per- been insulated, at a heavy cost in lost efficiency cent were penalized by negative effective protec- and high prices to consumers. The costs of dislo- tion; for intermediate goods, only 5 percent had cation in terms of lost output and employment rates above 500 percent, and 30 percent had nega- when firms are suddenly exposed to competition tive effective protection. The resulting distortion also can be high. The gains from lower costs and of investment incentives toward the most highly new growth may come only slowly and only to protected products (often consumer durables and firms that can survive and adapt to greater com- luxuries with high duties for revenue purposes) petition. helps explain the bias of industrial structure to- Quantitative restrictions make protection ex- ward the upper-income urban market. The very cessively high, variable, and hard to calculate. high rates of protection explain why many firms When imports are restricted (or tariffs high), the could survive despite severe inefficiency and even price consumers pay for the scarce goods rises to foreign exchange losses. the point at which people risk smuggling. Substi- A more uniform tariff structure would reduce tuting exchange rate adjustment and moderate interindustry distortions in incentives by elimi- tariffs for quantitative restrictions and very high nating differences between inputs and outputs. tariffs reduces smuggling, increases revenues, Guinea shifted from a complex system of multiple and makes the level of protection transparent. duties to a dual rate, with a standard 30 percent Ghana shifted imports to legal channels and and a lower rate for basic necessities such as phar- raised revenues by liberally issuing licenses for maceuticals; luxuries are now subjected to an ad- prepaid imports and imposing on them a 20 per- ditional excise tax on both imports and local cent up-front tax. Exchange rate adjustment also production, which is a desirable shift toward con- helped increase official imports by reducing the sumption taxes for raising revenue. gap between official and parallel exchange rates. Tariffs on inputs generally ought not to be Tariff collections, lower than high nominal rates raised, however, to avoid penalizing export in- would suggest, have averaged about 13 percent of dustries by making them pay more than the world the value of imports during the 1980s for 35 coun- price for inputs. Although drawback or rebate tries. Only Madagascar and Sudan averaged more schemes theoretically can compensate for taxes than 20 percent for 1984-86 (compared with 14 paid, up-front temporary waivers or tax credits to countries in the 1970s). Chad, Guinea, Guinea- exporters work better. Bissau, Mali, Tanzania, Uganda, Zaire, and Zam- The key issues are how to reduce excessive bia had average collections of less than 10 percent protection and give firms sufficient time to adjust in 1986. These rates are lower than the average of and how long to carry firms that fail to reduce all nominal rates because: excessive costs. High protection should be low- * Official imports tend to be concentrated in ered gradually enough for firms to adapt through low-duty capital and intermediate goods rehabilitation investment, changes in product line, and cost-cutting measures. Governments can governments should avoid selective protection, so assist by ensuring that finance and technical assis- resources can be released to growth industries. tance are available. Exchange rate adjustment can Adjustment policies stimulate industrial growth help replace reduced protection, although it will when supported by liberalized access to imports increase the financial requirements of firms that (see Box 5.4). depend on imported inputs. Devaluation of the naira enabled a Nigerian tire producer to offset Overcoming the high costs of production increased competition in the domestic market by exporting to neighboring countries. African firms often invest in transport for mate- ;Once they have established a reasonable sched- rials, goods, and workers. Poor road systems raise ule for lowering high tariffs and eliminating ex- the cost of maintenance. Small firms without ve- emptions and quantitative restrictions, hicles have difficulty reaching beyond their local - Th_ U -_ _ __ l'Lw-J.n:_.T_A__r L .. _ :: . _;l_ Box 5.4 How adjustment programs have affected the industrial sector Adluitnient programv inialAlh ha'e both poNiti%e and r.iridl partly bccau,e lending in -upport ot adiu-tmrnen negatite ettect, cn irJdustrn and the net etfect %jries eaekd tlh *rontranrt on importrd nputr The a% erigt delk by product and lirm Deraluatic.n raises the prc'l utiti:ation rate in Nigerian indu-rT tncre3;ed1 b% atout a itabilit ol imporl -Ubstturtc* a' t ell ts c-ports and third to 40 percent mainli% in consun,tr 4'diindu t-itr higher agricultural prices rai'e rural dem3nd tor b3aic The intermcdliae and captial g,J,d indu4tries hot te'er cor,unier goods 3nd farm inputs But nIabtlizatiton nica- i%tre ad%-or.el attectd b tthe reduced protection and sures dampen in erall demand Lending in support ot n rnrm with onhtreri-ent ifFortcontent hI.i,- utilization rate- adtutment rthi-ve, Ihe loreign e.\ch3n%e :mcontraint and below 91v pcr-rnt Adlutimeni policit dappear to brirn the impro%es theacce, .t iirm.i tonetledr inputs but liber.il- stron4esi coniptltllte prtc-urit on large hichl% pro : izing imports ncrea-e competifle prcvsurel on mnlil- tLcted *tten public onttrprries in ba-ic Indu arIt- For L cient Iirm; in-lance in ti'c ot Zambia * less-ettcieni paraltati- ca- k industTriethat laced imporled inputcon lraintsor that p.:icik utli?ation t ItrIiro 'n to percent could e\porl hatee rtrponded po.iti%.ei% to .d1dustmrent In some, counries Labor c-ts ha.beb-cone mort nter , measures Industriev that -iercm litzhl% protected and de- natonaill% c-1tnprtrtIe a. i re stilt ot diA aluatiun Hourn ; pended on impiried input4 % crtre most lkeI tciulter The conipensation in doAllr term tll in madagascar to $1 N'- overall effect has been poirtve according to e'idenrc in I",.s asa.gainsiti ia, 41p in India andi $1 t.4 in H. -rgK-nf from countrie4 in tr hich industnal output sitvched troni vhich indiuced 0onre Hong Kong ,rm- ;-i ith garment declineto gnroth se-longas theadiu.rTientelliorts haite operation- in \1aiuritiu- to i mt in Nlidg -mcar -rme _i been maintained it* hich wvas not rhe ca^e in Cote d l'.co,re I ir,e-scale tirm, ha r.e r.sp.ndrd t.'in.-re3 rdcoinpeIinion or Zanbiai i-ee Bo\ table 5.4i. and relia.ti-on ot labor rc Culiii,.n3 b; reducin4 e?nplo. - !NIanutactur,d ecporls responded ~tronzl In im- menr to cut labor cost- Es\ptriata labor t-i3s cut back pro-ed incenrites and oerall output gre, in ;ill Cas- sharpl\ as do aluation matde t..retgn labor mi-re t\pen- albeit trom .i small baise ID)' 3luation in ze%eril counTries M'i.e Hotv'e'.cr N,izeria t \pericncc Lt,g2At5t that em- led to increased utiliati-r01n local iohnput' and e\Fprt-pro- plc\. ment ma' ri-er in mrnal ir lirnis that prc-'. i'ush ,\. !rc ce-in,g industine such as:tiniberandcocoa, havere'.ied le- *attectedl -% r-itn, on ce; abr Much ot the increast- reprtvents the recover-' ol e'.port Structural shit ., thin idu.tr. are I: iciduLed bL' rrmarketls and tht ewpan-ion ot etisting operation . tcr adlu'Inient olict; as hiihli proim-:ted. iiF,.rr-iepen- e\ample in tc\t.de trom Ghana and Nigeria to neighbor dent tirm' contract and epiorts and the prc'tt%ink ot .3 ing countries and in c,-,c;a product- trom Cole d 1 oirt domv,tic iniput- ncrc 3ae Industriatl uttput a' a ; h.-, : and Nigeria to Europe Nlior- lirms are seeking e\port e0port~ in particul3r-impr'., cd in the vhiort rerm in oJ- oppkortunithe, including new\ e\port product- *uch i' Iunnc countries Lut d.-.nie-iic dermand rr,utt be re% it-ed tt qarmenls troni kladagas;car and r i.ceril tmOM Ghana to st0tain the reca, vr- and1 ensurt- long,-ternm rto--ihi A Capacit. utilization rates inpro.ed ;jSnimli3ntl\ anti Box table 5.4 Growth in manufactlring output, exports, and capacit-* utilization before and during the reform period in Sub-Sahaman Africa - Oitt'iii / ___ __ _ E x -riE __i C_ Cl I,I 1iii. i ifii l i _-i i L -'ir rittl n _ _ _ __ ...1Et.ir,_ - _ _ _ _ rL ie r. ,~ - C B t . -- .i ' - ;___ _- t- . c -- r ~ _ __ Coted I *mre - IS1 -S 3 5i--- _. n Cn" i; MI Ghana -171 4i$I-3i l0iS.4-87i -10.4 5I i ! 32 Nigeria -r It ls'-i 0 i.n-i - 154 IS.I lu 4-!) Zambia -31 iS2-q 4 t1!S4-q!i 574 's4 - .",','.'. - :.r!, t.3r-k I ., .7 market. In Nigeria an unreliable electricity supply encouraged leasing companies. To follow suit, has led virtually all larger firms to invest in other countries may have to modify their legal and backup generators to avoid temporary shut- tax frameworks. downs. Extractive industries and others outside large towns have to build housing for their work- Financial intermediation ers. A comprehensive approach to industrializa- tion should include public infrastructural The financial system in Africa, like the size dis- investment (see Chapter 2) and other measures to tribution of firms, suffers from a "missing mid- lower some of these costs. dle." The commercial and development banking Some infrastructural investment by firms justi- system serves large, well-established customers, fies compensatory assistance, such as subsidies or often at subsidized rates of interest. tax credits. Extractive and processing industries, Microenterprises can usually be established from such as mining, timber, and vegetable oils, help to family savings and can get credit if needed open up rural areas. Many cases also exist in through informal mechanisms, although at very which high costs have been imposed by political high rates. But new investors in SMEs have little decisions. Many of Nigeria's steel mills are far access to the investment capital required, and from both their ore supplies and their market. small enterprises languish for lack of working Ghana's attempt to develop an integrated shoe capital at reasonable rates. industry foundered partly because the shoe fac- Financial systems have worsened with eco- tory was located far away from the tannery and nomic decline and often with adjustment policies the main urban markets. that suddenly increase the funds firms need to Without local suppliers of spare parts and re- repay foreign loans or import inputs. When pair services, maintenance of equipment is costly. Ghana raised the official cost of foreign exchange Firms either must carry an excessive stock of by a factor of 10 in one year, the banking system spares or risk curtailing production while await- was not prepared to handle the increase in credit ing air shipment of parts. Development of the needed for firms to utilize increased foreign ex- parts industry has generally been discouraged by change for imported inputs. Now Ghana has cheap imports and the concentration of protection begun to restructure its financial sector. So too on consumer goods and basic industries (raising have Cameroon, Guinea, and Madagascar (see the cost of materials to intermediate industries). Chapter 8). Devaluation in Nigeria has already led firms to Efforts are also needed to link formal financial switch to maintenance instead of replacement. institutions with informal credit mechanisms. The ideal is domestic production of equipment Even poor, self-employed persons can meet much that suits local conditions and can readily be re- of their modest investment needs through sav- paired. An Indian entrepreneur has designed sim- ings. Credit unions, tontines, and susu groups ple, durable grinding equipment for cassava and could form a basis for credit from formal financial maize in Ghana. Zimbabwean agricultural equip- institutions or provide business capital, perhaps ment is exported to neighboring countries with through nascent capital markets (see Boxes 4.2 similar soil characteristics. When imported equip- and 6.3). ment is purchased, the ability of local technicians to service it and produce spare parts should be Building industrial capabilities considered. Equipment leasing companies could help solve Acceleration of industrial capacity growth will technical and financial problems of SMEs. They be wasted unless the capability to design, manage, could achieve the economies of scale needed to and use it is also improved. Both the failures and develop technical and repair facilities that would the successes of industrialization are often trace- be beyond the ability of individual firms. By leas- able to a flaw or flair in entrepreneurship, man- ing equipment, firms could overcome the diffi- agement, or technology. culty of obtaining credit to purchase machinery The lack of domestic industrial entrepreneurs and could ensure that foreign suppliers pay atten- and private capital led most African governments tion to the suitability and servicing of their equip- to approach industrialization by courting foreign ment. Cameroon, C6te d'Ivoire, Gambia, Kenya, investors and by investing in state-owned indus- Malawi, and Tanzania have extended the hire- tries. Domestic entrepreneurial energies followed purchase system to investment goods and have more profitable opportunities in informal activi- ties and other sectors. Even so, the pool of entre- graduates who end up in business for themselves. preneurial talent and experience has greatly ex- In middle and secondary schools, basic technical, panded. Releasing this talent is critical to bookkeeping, and managerial skills, including industrialization (see Chapter 6). hands-on experience, would help prepare the ma- Improving technical and managerial capability jority who will not enter professional occupations. is important to raise productivity and move from Some advanced professional skills, such as ac- small- to medium- and large-scale modern enter- counting and engineering, may justify higher ed- prises. Although many countries have a surplus ucation programs. Some that are industry specific of well-educated labor, they do not always have (for example, textile design and electronics) the middle-level technical and supervisory skills should be supported by the industry by, say, en- needed. "Africanization" programs by foreign dowing a professorship. Industry associations firms tend not to give local managers sufficient also can set up training institutes, with manufac- responsibility for decisions. Nevertheless some turers providing tutors, as the Sri Lanka textile countries, such as Ethiopia, have succeeded in industry has done to improve its export potential. building competent management. Good produc- The possibilities for formal education, however, tion engineers in Kenya and Zimbabwe enable depend on scarce budgetary resources. A large textile industries to operate closer to international share of technical training is provided informally best practice than those in Somalia and Tanzania. through the apprenticeship system, especially in Better education and on-the-job training efforts tailoring, carpentry, metalworking, and vehicle are needed to raise the supply of good African repair, although governments hitherto have had professional managers and engineers. little to do with this system. On-the-job training, Both public and private investors need techni- one of the weakest areas in African industry, is the cal advice on project feasibility, design, alternative means by which workers assimilate technology technologies, sources of equipment, specification, (See Box 3.9). Overseas training in firms for man- and technology transfer. Examples in which inap- agers and technicians exposes them to the best propriate technology resulted in unsustainably practices in organizing production, quality con- high operational costs include a fertilizer plant in trol, marketing, and distribution. Expatriate tech- Benin, a denim factory in C6te d'Ivoire, a steel mill nicians working alongside the trainees can be in Nigeria, and a shoe factory in Tanzania. Adapt- effective if training is practical and responsibilities ing product design, equipment, and production shared. The government can assist by easing reg- processes to local needs and resources requires ulatory constraints on expatriates and by provid- skilled technicians and management, as in the case ing fiscal incentives for training programs. of a firm producing automobile radiators profit- Nigeria and Zaire offer rebates (funded by a small ably in Tanzania. payroll tax) to firms that institute in-house Development of technical capabilities in these training. areas varies with the complexity of the technol- ogy, market opportunities, and labor participants. Science and technology The key to building these capabilities is to identify functional skills that can be adapted to different Countries that have universities and research applications. centers can adapt them to serve industry better. Laboratories should seek contract work for man- Education and training ufacturing enterprises. Adapting products and technologies to the local environment should be a The approach to education and training in Af- priority. For example, the Technology Consul- rica, with foreign assistance, has emphasized tancy Center of the University of Science and bricks and mortar rather than the "software" of Technology in Ghana has worked extensively on teaching methods, programs, equipment, and using local materials in construction. practical experience. This is particularly true of National standards bureaus should not only formal education. Expanding general education regulate, but should help firms improve stan- can enhance the productivity even of informal dards and quality control. C6te d'Ivoire provides entrepreneurs, many of whom have little or no a testing service for agricultural machinery. education. At the lowest level, literacy and numer- Korea's experience suggests that industry may acy would help. Inclusion of elementary book- benefit from establishing its own quality control keeping skills in the curriculum would assist centers, especially to break into export markets. Governments can support technological re- Developing industrial capabilities is self-rein- search and development in firms. State agencies forcing, with different elements interacting to sup- may be able to assist trade associations by provid- port each other; the rate and continuity of ing information and contacts with counterparts economic growth affects the speed of develop- and suppliers overseas. Fiscal incentives are ment. Sustained rapid growth permits basic edu- needed for firms to set up their own research and cation and training to expand and allows new quality control units, paid for by tax credits or technologies to be deployed faster. It also permits industry taxes. Firms should also develop salary firms to take the long-term risks involved in re- and incentive structures that encourage innova- search, development, and training. Basic research tions to enhance productivity and the promotion in scientific institutes and applications in industry of the technically astute. are needed to adapt technologies and processes to Transferring technology from industrial coun- local conditions (see Box 5.5). tries to Africa has not been very successful. Effec- tive technology transfer requires technicians who Meeting the challenge can teach what they have learned from experience and local technicians to absorb and apply it. The The role of government implied by the strategy NICs can offer fruitful partnerships, since they outlined above differs significantly from that fol- have recently gone through a process of learning lowed since independence. Instead of directing and adapting technology. Mauritius' export suc- industrial development, governments would be cess has been catalyzed by entrepreneurs from facilitators. Regulatory actions would be confined Hong Kong. Technical assistance from Taiwanese to only a few overall concerns, such as protecting equipment suppliers enabled a Ghanaian entre- health, the environment, and the banking system. preneur to overcome foreign exchange scarcity by Government efforts would concentrate on build- making toilet paper from bagasse (waste sugar ing the institutional and human resources that cane from local distillers). enable entrepreneurs to respond to market oppor- tunities. They would provide adequate infrastruc- Linkages ture and basic education, maintain supportive technical and training institutions, assist industry Efforts should be made to promote linkages associations, and ensure that the legal and finan- among industries to enhance the spread effects of cial systems function smoothly. industrial growth and to facilitate the transfer of In time the increasing vigor of the private sector technology and skills. A firm in Zimbabwe has and the constrained budgets of the public sector designed agricultural equipment that is suited to will greatly reduce the latter's share of industry in local conditions and can be manufactured from most countries. But public sector restructuring is domestically produced steel. In C6te d'Ivoire a a difficult and lengthy process in countries that large shoe manufacturer shifted to marketing have decided they can no longer subsidize loss- shoes made on contract in small, more cost-effec- making state enterprises. The first step is to divide tive firms set up by former employees. With sub- public firms into those that are viable; those that contracting, larger firms train their suppliers in can survive only on a short-run, sunk-cost basis technical skills, procurement, and quality control. and that the government wishes to divest; and Industry associations can help by finding local those that need to be closed. suppliers and putting them in touch with buyers. Closing down firms is a difficult political hur- An exchange rate and tariff environment that fa- dle. But the middle group poses more complex vors local sources is a necessary precondition. issues. Some expenditure may be needed before Direct assistance can be provided to subcontrac- buyers can be attracted. As in Guinea, private tors on both legal and technical aspects. sector buyers may demand special concessions Consultancies are important for technology that are anticompetitive. Nigeria is trying to offer transfer. Governments should foster the growth of shares in state enterprises to the public, but this consulting agencies, especially in the private sec- approach is less feasible in smaller countries. tor by, for example, using domestic consultants as Meanwhile the public sector can try to improve much as possible and by encouraging foreign efficiency by setting policies, guidelines, and per- technical assistance agencies to work with local formance criteria and leaving managers free to counterparts. 7zw5 ._. : _: - . . . = .. . . - Box 5.5 Ghana's Suame Magazine: Building indigenous engineering capabilities i ' rna II;leindu;rtnr, in Chan3 ha% e-ho% n reil he nre.and 5ciuncE and Technoloqz% ha. opkrated in uamev klagazine groi cth snce the eark 1c[.-u7i The niormal s;ector rroed [or more 1h1rn a decade through ,t intern1ldate Tectnol- p parhcularrl resour.etul im surx i%ing the economic crisl;i ..'. I Traininc Unit. The Gcntre no% .:operate- with little r ot the late l7is and earlh lIb-0 Linder the econoimic voernn1ent tunding Thi goxernrment ha- e\tendetd the i reco%cr% program miniied in l3th intormal indu.trial training unit concept n3atwnw ide thircuigh an innoflf i se and sorvice eector ha3 been a ;pringboard c;r import-sub- .-rganization. Ghana Relional .\pprcpnrate Technologp 8 htituting labor-intcn ietecbnolc.igcalinno.v-atio.n Eilorts Indu.trial Ser ice; which pro. idc; o.n-ite traininm , in areunder i%a toimpr er. in e mitnttutional anJ tinancial con- product dettlcinment This or,anization and the Centre dhons vo th3t ent-eprenvur-hip and inJLVstnal te, hnol- re.earchi and le% ek.p appr.opriate technolo.gv; and the us;e ki 0g) ean deil op. .o loe.31 materl; m in important art..- *iueh 3a agneullur.il .ii An e\ample of ineenuit% and entrepreneir htp i; implemnent4 ntermediatetran^port ind buiidingm3teri -',uame N13gazine' in Kuma-ui-ab.ut 5.iit0 crtlt.men ak The% alopro% ide Wd ic, tooenrreprencur- mndtelop- , s%orking in malkeshtt hed. Themechanics in the'e 'nmlI inm ne%% products4 garages and w%orklhops rcpair and rehabilitate old %.ehi- lraining. threiugh inAit.itic.n, vuch a; the Kumi-i Tech Cle- and machinerl and tran-sorrm scrap material, using nical Insituto i, popular and ettecti%v Thro^ugh tt. IDA- rJ3latel primiti%e tool- A- much , sI1 pvrc;rnt 01 supported TIranlporl Rehibili[at! on Prol-1 Ithe Ghanas aging i ehicle 1leet i^ -er%-ced3nd rebuilt throutLi giihernmenl t> providing training to upgrade th. 4.ill-ol ;; these informal garaget: complees, in %% hich ;peciaIi;ts psr. mechanic: in intirmal -E or hop- 3nd to te3ch' them ba-k; f orm the me.:hanical bods lecirical and other 'corl, a;;ccuntir. and manracmenin, m,:thod.s e Thee meclhaniL learned to m.ke %thicle drid ri- The o% errnriierit ha-. ,N helped to e'i.ltili d aPlot 4 c hiner-' spare parts that %%erc una% ilableduinnm thŽeco- pro.ranm to pro% ide credit t:o rnalloperatorm in corrplexe- n LOmic CTi,iS The\ h.%e flournllkd under thi economric ike Suanimc M.lagazine R;:ipient; include a mer.chanli. recoveri program becau;e the 1111)-told incrcate in the ".'0oper)`aheeaabai-hLd topurcha;eand sharvequipmenl ot ticial price ot 1oreign e\chaneo since IcOs ha. madc such as lathe, and crank .4hati grindvrs The Nathon3al. F imported 4pare; rclaflckl e\pen4i%eand bvc3ute literal Grage 0%u ner4 A44..c..ianon ;unuarantre. the loan. e.%hLh hi izathon ot1!mport; ha4 increased thet a!ailablit\ of inputt aret pro idt d through theSc.1.ci.1i^curit, BankoncOmmer and took cialterms Averag aoth.3 (1111themove, ha-alreadc, G Theegoernment ha; upportodthe,eindigenou4 engi- helped ;malt mechanic; nmki. signific1nt gain- in qualitN - nereN through technok.g% .er ice. tr.ining. and trdit and cvmpetenco i The TechncloSg Ci.n.ullanc; Centre ., the L ni ers,,r ot1 3 1~~~~~~~~.- - -' -.= --- _- --- - _5 5- = - f r- -Z--- , ~ . manage. Operating by competitive rules is more and free from political risk. But private industry important than outright ownership. will be inefficient unless there is constant pressure Privatization offers a unique opportunity to from domestic competitors and imports to stimu- build up industrial capabilities by bringing in out- late cost-cutting innovations. side technical assistance to advise on and assist in Strategic choices, policy instruments, and in- rehabilitating potentially profitable enterprises. dustrialization paths will vary by country. Mining But privatization is not the only way forward. and petroleum will stimulate associated indus- Partnerships and management contracts with for- tries and influence trade policies in countries such eign firms are alternatives; they should be de- as Angola, Cameroon, Congo, Gabon, Nigeria, signed in a way that maximizes the transfer of and Zambia. In low-income agricultural countries technical skills and know-how. In Senegal, Bel- initial growth is likely to occur mainly in indus- gian investors who took over a defunct state agri- tries based on growing rural demand and agricul- cultural machinery plant were able to diversify tural inputs, including textiles, basic furniture, the product line into metal components for con- and hand tools. In time these will be able to diver- struction and to export half the production to sify into a wider range of industries. neighboring countries. Likewise in Togo an Amer- Some countries, for example, Ghana, Madagas- ican investor rehabilitated a former state steel roll- car, Senegal, Zaire, and Zambia, face difficult tran- ing mill, changed product lines, and now exports sitional problems in industries that were within the region. established under heavy protection. Like C6te Government attitudes toward regulation must d'Ivoire, Kenya, Mauritius, and Zimbabwe, these change in many countries for a competition- countries have the experience and skills to expand driven strategy to work. They can encourage pri- nontraditional exports to neighbors and overseas, vate investors to take up the slack left by failed if export policies are favorable and regional mar- public industries by making entry and exit easy kets are more integrated. Nigeria has the size to 121 develop industries with significant economies of this countries need to acquire from foreign part- scale but has to ensure that technologies and loca- ners technical know-how and market intelligence. tion permit efficient production. * A positive environment for private entrepre- The strategic elements suggested here are only neurship, which involves minimal control inputs into decisions that each country must make through regulation and investment in comple- according to its circumstances. Four important mentary services, is essential to permit a compet- themes stand out for each country's strategy: itive, innovative response to opportunities, * Industrial structure must transform in re- especially in smaller firms. sponse to market opportunities, both domestic * The key to an efficient, well-adapted indus- and foreign; it cannot be determined by supply- trial structure is the gradual, time-consuming pro- side decisions. cess of building entrepreneurial, managerial, and * To avoid a widening gap with the rest of the technical capabilities through education, research, world, industry must become competitive. For and, above all, on-the-job training and experience. Mining prospects Minerals: A mixed blessing countries. But this potential will not be fully real- ized unless a mutually beneficial partnership is Africa is well-endowed with minerals (includ- established between government and investors. ing oil). The potential of this resource, however, Such a partnership should incorporate manage- has only begun to be realized in most of Sub- ment and technical training. A policy framework Saharan Africa. For many countries relative min- must also be put in place that ensures that mining eral abundance has been a mixed blessing. Often revenues are used to promote sound long-term the increased revenues generated have been dissi- development and that systematic steps are taken pated and high debts incurred, leveraged on the to build African capacity to develop the mineral mineral wealth. Massive distortions in incentives industry. made possible by mineral revenues have hindered the development of agriculture and industry. The Potential and importance result is that some countries with developed min- eral sectors have grown no faster than those with- Geologically, Africa's mineral potential is equal out. Liberia and Niger, for example, each have to, if not greater than, that of other continents. substantial mineral sectors but have experienced West Africa, for example, is geologically similar to negative annual growth rates in GDP in the 1980s. Brazil, where there has been a mineral boom-es- World mineral markets are inherently volatile. pecially in gold, tin, and iron ore-during the past Recurring periods of boom and slump have had a 20 years. The southern African countries have severely disruptive effect on economies depen- much in common geologically with South Africa, dent on minerals. Only Botswana has established where mineral production increased strongly in effective mechanisms for building savings during the 1970s and 1980s. Evidence suggests that Sub- mineral boom periods to help offset the economic Saharan Africa has potential for high-value min- shocks that arise during lean periods (see Box 8.1). erals-gold, diamonds, and other gemstones; Africa presently needs the risk capital and tech- industrial minerals; and rare earths. These can be nical expertise of the transnational mining compa- developed over relatively short periods, without nies to help unlock its mineral wealth. In the past, the massive investments for infrastructural sup- relations with foreign companies have often not port required for bulk minerals. been well managed. At the same time foreign Botswana's diamond deposits are among the companies have not always dealt fairly with their richest in the world. Guinea has some of the host countries in sharing the revenues of profit- world's highest-quality bauxite reserves, and its able mines. Moreover foreign companies have fre- iron ore deposit at Mifergui Nimba is exception- quently withheld information and paid too little ally high grade. Ghana has considerable potential attention to training nationals for senior positions in gold, as do other countries (such as Burkina and building links between the mines and the Faso, Mali, and Sudan) in the precious metals. local economy. Another major gold belt has recently been found Mineral production could (and should) become in southern Ethiopia, while western and northern an important source of growth in many African Ethiopia contain promising mineral belts that Figure 5.1 Value of mineral exports in Sub-Saharan Africa (1987 dollars) Copper 56% Copp .e_ .o. Diamond -10% II-,. Gold 6% 25% I k! Bauxite Bauxite 2uJ0 3% 9% Uranium 5% 1960 1987 $4,710 million $6,430 million Note: Prices deflated by manufacturers unit value (MUV) index. Bauxite includes alumina and aluminum. Source: World Bank data. have been barely explored. Zimbabwe has plati- Table 5.1 Contribution of mining to selected num potential. The copper ore in Zaire and Zam- Sub-Saharan countries in 1987 bia is generally three to four times higher grade Mii Miui. Minng than that in North America and is frequently rich Mining exports as value taxes as in cobalt. Zaire not only has copper reserves suf- exports percent added as percent ficient for 40 years, but has the world's richest - -- (dollar total percent total undeveloped copper deposits at Tenke and.- . Fungerume. ~~~~~~~~Botswana 1,420 90 44 55 Fungerume. BowZaire 1,266 73 24 37 Despite limited progress in exploiting this po- Zambia 836 93 15 7 tential, mining already plays a significant role in Zimbabwe 609 43 8 Sub-Saharan economies. Excluding South Africa, Guinea 584 92 21 82 they produce about 5 percent of the world's min- Niger 290 8° 1 13 Liberia 217 58 14 eral resources, the major ones being copper, dia- Ghanaa 159 19 2 monds, gold, uranium, and bauxite (see Figure Gabon 120 9 3 5.1). Zaire and Zambia together produce 74 per- Mauritania 127 31 12 2 cent of the world's cobalt and 15 percent of its Sierra Leone 113 74 13 67 Togo 87 29 7 1 1 copper. Nine other Sub-Saharan countries ac- Senegal 65 9 2 2 count for more than 40 percent of world diamond Burkina Faso 50 20 3 production. Guinea is the world's second-largest Total 5,943 55 12 20 bauxite producer, Sierra Leone the second-largest Note: Mining includes smelting and refining. rutile producer. Zimbabwe is the third-largest a. Excludes aluminium. producer of asbestos and Gabon the third-largest Source: World Bank data. manganese producer. Africa also mines signifi- cant quantities of uranium, chromite, iron ore, nickel, lead, zinc, phosphate, and cadmium. Afri- 1980 to 1987-representing about 30 percent of can mineral output is important to the world's non-oil exports (and around 14 percent of total nuclear, aerospace, steel (titanium), oil (platinum exports) for the region. With improved prices for and alloys), precious metals, and abrasives minerals in 1988, mining exports exceeded $8 bil- industries. lion. Mining makes a noteworthy contribution to Mining contributes to foreign exchange earn- 14 economies in Sub-Saharan Africa by contribut- ings and fiscal revenues. Exports (excluding oil ing 55 percent of exports, 12 percent of GDP, and and coal) averaged roughly $5 billion a year from some 20 percent of fiscal receipts (see Table 5.1). Figure 5.2 Mineral production in Sub-Saharan Mining investment has been held back by re- Africa, Asia and Latin America and the Caribbean strictions on ownership, cumbersome regulatory Billions of 1980 dollars procedures, unattractive taxation arrangements, 15 and unstable macroeconomic performance. Wit- 14 - Sub-Sasaran Africa ness Zambia and Zaire, which previously dorni- 1 1il', 5;r,. jr,.i ir,.,- i - I nated Africa's mining exports. Zambian mining _ - has declined since it was nationalized in 1969; in l*' | - ' _Zaire state mining has been adversely affected by government intervention. Zambia and Zaire both _ I ; c-- . have large copper ore reserves, but their share of world mine production has declined from 24 per- - -' |--- N 1-- i B .cent in 1960 to 15 percent in 1987. 2 t ! :: I 1 -- B , - In the past two or three decades there have been fewsignificant mineral discoveries in Africa. In - 1XzIt - t_ , , _ i 1 1 1- 1 _contrast, large deposits have been discovered and 1960 1970 1980 1987 2000 developed elsewhere-copper in Chile, base met- Note: The data are actual and projected gross values for als and tin in Brazil, bauxite in Venezuela, gold in aluminum, copper, iron ore, zinc, nickel, lead,tin, bauxite, Papua New Guinea, and industrial minerals, gold, alumina and gold. alumiae andgorldBankdata. and diamonds in Australia. The lack of new dis- Sou-ce: World Bank data. coveries in Africa is not because mineral prospects are poor, but because insufficient exploration has Past experience taken place. During the past decade half of the world's ex- The late 1950s to early 1970s was a period of penditures for mining exploration and develop- growth and diversification for African mining. Big ment has been for gold. The bulk has been in new mines were developed, including bauxite in Australia, Canada, and the United States-which Guinea, manganese in Gabon, iron ore in Liberia provide a combination of good resource potential, and Mauritania, copper and nickel in Botswana, strong local investors, and attractive investment asbestos and nickel in Zimbabwe, uranium in incentives for both local and foreign investors Niger, and phosphate rock in Senegal and Togo. (especially in Australia and Canada). Developing Copper and cobalt production was expanded in countries that have good gold potential and pro- Zaire and Zambia, and diamond production in vide attractive incentives to private investors- Zaire. Many of these new mines were joint ven- such as Brazil, Chile, Indonesia, Papua New tures between government and private sector op- Guinea, and the Philippines-have also shared in erators and owners. this boom. Except for Botswana, Sub-Saharan Af- In contrast, during the past 15 years new invest- rican countries have missed out. Even where there ment has been modest, save in Botswana. As a has been gold or diamond development-in result Africa has lost its market share in many Burkina Faso, Ghana, Guinea, and Zimbabwe- metals and minerals, including copper, tin, chro- the projects have been generally small and the mite, and diamonds. Foreign investors have investments modest. shown little interest in new investments in Africa, and state mines have generally been limited at Higher investment in prospecting best to sustaining investments to replace depleted reserves. The low level of private investment has Mining depends on high-risk investment in ex- slowed diversification away from these tradi- ploration. Companies mining base metal ores typ- tional minerals into more profitable precious met- ically spend 1 to 5 percent of annual sales on als and industrial minerals. As a result, since 1970 exploration, some even more. For precious metals the value of African production of 10 major min- and other minerals with faster market growth, erals has declined by 2 percent annually in real exploration expenditures are usually much terms, whereas that in Asia and Latin America has higher. For example, in 1987 Australia produced grown. Based on presently known investment $2.1 billion of gold and spent $280 million-or plans, the divergence between Africa and the approximately 13 percent of sales-on explora- other two continents will increase in the 1990s tion. Canadian mineral production in that year unless new initiatives are taken (see Figure 5.2). was roughly $15 billion and exploration expendi- ture around $900 million. With an estimated an- foreign partners when the rest of its economy was nual production of $5 billion in Sub-Saharan Af- in disarray. rica, an annual expenditure of at least $250 million Past experience indicates that, as a general rule, on exploration would seem to be justified; in fact, expenditure of about $100 million annually on it is running at only about $100 million. Consider- exploration leads to the discovery of two small- to ing the long lead time between discovery and medium-size economic deposits. On average a production (typically 5 to 15 years), this shortfall new mine for such a deposit will require an invest- threatens to condemn Africa's industry to little ment of around $60 million and can be expected better than stagnation. to result in an annual value of output equal to the The reason for the low level of investment in cost of developing the mine. Although it will take exploration can be traced to the early 1970s. As time to reestablish investor confidence, it should state control of the big mining operations in- be possible to double Africa's present level of creased, many international mining companies exploration investment within the short to me- retreated from Africa because they preferred to do dium term and to raise it to between $400 million business in countries such as Australia and Can- and $500 million during the next 10 years. This ada or in other developing countries-such as should enable mining sector output to grow pro- Brazil, Indonesia, and Papua New Guinea-in gressively and to reach a growth rate of 5 percent which the investment climate was more condu- a year by the late 1990s. cive to high-risk capital. State mines have generally failed to mobilize An enabling environment for mining the investment funds necessary to maintain a steady growth of production. Constant political Unlike Australia or Canada, mining companies intervention in mine operation and management in Africa face difficult infrastructural problems has jeopardized efficiency. Given the heavy in- and high exploration costs owing to the need for debtedness of many mining-dominated econo- technical expatriate staff, imported equipment, mies and their overdependance on mineral lack of local contractual services, and the absence exports, state mining production has become in- of support facilities. However, there are better sensitive to mineral market conditions; high-cost chances of discovery in Africa. Most of the easy- mines have failed to improve efficiency and have to-find deposits elsewhere are already being continued in production even when making mined. losses. Profitable mines have been strapped for Setting in place the conditions for the long-term exploration and development funds because rev- recovery of the sector will require a partnership enues have been channeled elsewhere, with little between private mining companies, which can provision for reinvestment. Most African states provide the capital, management, and technology have been unwilling (or unable) to establish joint needed to revitalize the mining sector in Africa, ventures with international mining companies, and host governments, which can create a condu- and few have had a private sector strong enough cive investment environment that also protects to take up the slack. the interests of the country. Successful coopera- The stagnation in Africa's mining is due not tion depends on recognizing reciprocal obliga- only to low investment, but also to management tions and the equitable sharing of benefits. Taking deficiencies, shortages of technical skills, an un- a minority interest in new ventures is sufficient for supportive policy environment, and political in- governments to keep abreast of mine develop- terference. Sub-Saharan countries, however rich ments and protect the national interest. All this in resources they may be, are free market compet- will require African governments to rethink their itors; if the investment climate does not attract the roles and their policies for the mining sector. The financial resources and technical expertise of the main elements of an enabling environment relate big mining houses-either directly or in joint ven- to the foreign exchange regime, taxation, repatri- tures-African mines will continue to stagnate. ation of profits, and the regulatory and institu- Guinea's strong bauxite mining sector (from tional framework. By financing specialized which it derives more than 90 percent of its export advisory services, the donor community could earnings and more than 80 percent of its public help African governments to negotiate technically revenues) is due to effective collaboration with its sound and fair mining agreements. Exchange regime rights, mine development agreements, and man- agement, marketing, and export arrangements, Since most mineral production is for export, which are normally regulated in a mining code, as mining profitability is sensitive to exchange rate are mine safety and environmental standards. In- policy. It can be quickly eroded by currency over- vestors need to be sure of their legal title to mining valuation-as happened to gold mining in Ghana properties and will look for simple and objectively in the early 1980s. Overvaluation provides a pow- applied labor regulations. In short, private invest- erful incentive for gold and gemstones to be ors look for explicit, well-specified, nondiscretion- smuggled through neighboring countries, as were ary regulations that are broadly in line with Zaire's diamonds in the early 1 980s. Furthermore industry standards worldwide. It is not a question mine performance can be hamstrung by inade- of removing necessary controls, but rather of reas- quate access to foreign exchange. Mines require suring investors that the controls will not be im- imports of spare parts and materials and of capital plemented arbitrarily. goods to replace or expand capacity. Shortages of Even with a sound regulatory framework in- foreign exchange contributed to the difficulties of vestors may still hold back if the mining sector the Zambian state mining company in the 1980s, institutions are too weak to ensure the sector's and restricted access to foreign exchange in orderly administration or to assist prospecting Zimbabwe has held back mining investment in through the systematic acquisition of basic geolo- recent years. gical and mineral exploration data. In most coun- tries the government's mining and geological Fiscal regime survey departments need to be strengthened. Im- proving technical and managerial training is crit- Equitable and stable tax arrangements are cru- ical to strengthening the role of Africans in cial to a durable partnership between private in- developing the sector. Mining, like all industries, vestors and the state. Investors require a return also needs good transport infrastructure and effi- that justifies their capital investment; govern- cient utilities and other support services. Too ments expect a share of the profits to compensate often these are lacking, which adds considerably for the use of national assets and to ensure that to the costs of mine operations. mining will contribute to economic development. Tax formulas can be negotiated case-by-case to Future prospects take account of the special circumstances of indi- vidual projects. What is vital in building long- Recent weakening demand for traditional min- term investor confidence is scrupulous respect for erals (iron, lead, and copper) is balanced by a new agreements reached. trend toward high-technology products (light- weight alloys, ceramics, and rare earths). For the Repatriation of profits next decade or so demand for traditional metals is expected to grow at 1.5 to 2.5 percent a year. For Foreign investors will be unwilling to risk some chemical industry metals and other indus- money-hundreds of millions of dollars for large trial minerals the rates could be much higher. The projects-unless there are ironclad assurances mining industry will continue to face a volatile that they can repatriate earnings. This may in- world market. The African mining industry will volve not only legal agreements between invest- have to be ready to adapt to new opportunities ors and government, but also the use of offshore with the production flexibility to take advantage trusts to service foreign loans, pay suppliers, and of booms and the technical efficiency and financial provide for dividends and capital recovery to the strength to endure slumps. foreign investor. Given the high risks and large A resurgence in Sub-Saharan mining will de- investments involved, such exceptional arrange- pend on governments putting in place the neces- ments are justified. sary enabling environment and attracting international mining companies who will need to Regulatory and institutional framework see Africa as a place in which the political risks are not prohibitive. For example, exploration by pri- The importance of stability and transparency vate companies has picked up in Ghana following extends to the rules governing access to land, the a more promotional mining and investment code granting of exploration licenses and mining introduced in the mid-1980s (see Box 5.6), and 126 Box 5.6 A revival of gold mining in Ghana AtindependenceGhana %as the leadinggold producer in The vo% ernnwnt ncw approaclh .ilread% pa ingott. 1Ueqt Alnca. with an output clost tn I million ounces a Goli prociuction i.e\pecled toreichabout 4liioll-lllouncefl 1 tear Produetiondropped steadil% torhtodtecadesand hit in l 69-atorit 511 percent atbo the lcil 1.- c point In , lo% ot 27T.tri'it) ounces in l9IS owing to- -urrenc\ coer- mid-.lov Southern Cros- lirning o% ne.d 70 pe rcen b\ 3aluation nurncrousbarriers topnvale inmestnent. and a pnvalt. nve4tors and 31i1 percent b; thl- StateG(..d Minim, m lack ot tund. for public inte-tment in Ihe sector Ghana Companr opened the lirst net. go.ld min: in Ghana in gold mining industr\ hai the mineral poLtential lo recover more than 411 %ears and production 1 CUrrentl\ runnrig to.ande%ene\;red thepa tpeak leveloiprkduction The atabout3toitil,lunce,a .ear3ndislikelt t,-e .pand Thre, government has made ncrea3ing gold producticn a keN other mines-Canadian Bogosu Resource- Ghanaian i oblecti\eol it~ economic reco%erN progrlm AUt`trflian Goldtield-. .nd Teberebte Goldtlield;-v.ah I The government s srtateg' has been to encourage in- o%' ned 00 percent b' the pri\ ate sector and I') percent 1: 3j vestment in the nining s-octor bh retorming the poltlc the govIrnment are expected to begin operatirn i the en% ironment in 19Sh th, government ntroduced a nrw nevthwoyears.C)thcrnet% goldninereinz.rroustig - coherent mining code. ta'.ation rules, and a regulator% ol exploration and planning Finall\ A-hanti Goldlield, framework toattract private in%esiors A ihnerals Comn- another pri..ate sector.gov.ornmLnt tont *entlire and iht A mission no\ negoiates toreigne\changeace.sad tiscal largest and most prolitable gold mining cimpan\ in y arrange1ents according t% E ell-deiined procedures uni- Ghana. has alnimo-t cmpkted a mao lr eyparsion ti In-, torml, applied.and lsuIes leases and eseploration pernilts. crease its motli% underground production trorr, >) il These measures reintorce macroeconomic relorms- ounce- in "7- to 4Xit0ii0 ounc;sa \ear b 1041 it Is also most notabl% a 'igniticant e\change rate adtu;rment-bl about to start a necond e\pan:ion prolLCt to produce an attracting loreign capital and. at the n3me rime badl addintinal illi 0(111ounce, a sear trom .urtacedepo!its b' - needed managerial and technical e\pernie In this way 1;09 B1 that timrt Ghana's gold production . uld e\cet:ct impro%ements in mining and reco%er- technolog% uch I (iYli li tl ounces a \earandl vvillcontnue I. gro%% intoth. as heap leaching atrc.d 1s idelv utilizd else- here. ha c no\t decade been Introduced to Ghana - ~~s :,,s-s- -,-,!-.--z >- .r ,, ,,- _ --u-; -. t.*. - foreign mining companies have recently negoti- quate reinvestment, and the future of bauxite min- ated exploration licenses or mine development ing in Guinea will depend partly on investments agreements in Botswana, Guinea, Madagascar, in the early 1990s. Mali, and Zimbabwe. They are also in various The value of world mining production is ex- stages of negotiation in Burkina Faso, Liberia, and pected to increase from about $140 billion in 1987 Tanzania. The success of these early initiatives to about $200 billion by 2010 (in 1987 prices). may prove critical to the resurgence of mining in Provided an enabling environment is established, Africa, since other companies, less willing to ven- a production growth rate rising to 5 percent a year ture into new territory and less familiar with Af- in real terms in Africa should be possible between rica, will look for successful examples before 1995 and 2010. Sub-Saharan Africa might then taking the plunge themselves. The alternative ap- increase its share of world production from about proach-state mining companies using hired ex- 5 percent now to around 8 percent by 2010-or $16 pertise, with the country itself bearing all the billion in exports (in 1987 prices). This growth rate risk-has performed poorly in the past and is best would require annual capital expenditures of $1 avoided. billion a year from 1995 to 2005-on top of spend- During the past three decades investments in ing necessary to maintain present levels of pro- existing mines in Africa have declined. This trend duction, which would largely have to come from should be reversed. Most large mining projects are private companies. This would be a substantial generally designed with a life of 20 to 25 years. As increase above present investment levels but is by the mine ages, investment is needed to prove new no means impossible if the right policies are now reserves, replace aging plant and equipment, and put in place. open up new mining areas. Long-term sales con- African countries should be able to attract high- tracts may also need renewal. Many of the larger risk capital for exploration and development from mines developed in the mid-1960s and early 1970s foreign mining companies. The improving macro- are now entering this phase. If the work is not economic environment in many countries and the done, there may be unnecessary mine closures. willingness of some governments to promote and The decline of copper production in Zambia, for encourage new foreign investment have helped to example, is partly due to lack of funds for ade- stimulate renewed interest in African mining. 127 Mining investors generally take a 10- to 20-year In this situation multilateral and bilateral agen- view of a prospective investment and look not cies may have a valuable catalytic role to play. only at the ore body, location, market prospects, Even marginal participation can help to guarantee technical risks, and cost competitiveness in rela- fair conditions; provide governments with an in- tion to other projects, but also at the investment dependent, expert assessment of investment pro- environment of the host country-political stabil- posals; and assure mining companies of an ity, macroeconomic prospects, exchange rate risk, atmosphere in which sound concession agree- access to foreign exchange, ability to repatriate ments can be negotiated. profits and dividends, and taxation arrangements. Energy for growth Inadequate and unreliable energy supplies have commercial energy needs would be met by petro- contributed to Africa's slow growth during the leum products. past three decades, and the increasing demand for Natural energy resources are abundant in Sub- household woodfuels is leading to chronic defor- Saharan Africa; an energy growth rate of 5 percent estation. Ways must be found to overcome these would consume only a fraction of the known oil, problems if Africa's economies are to grow. gas, coal, hydro, and geothermal resources. During the past 25 years consumption of com- Known petroleum reserves are, for example, mercial energy in developing countries has risen equivalent to 120 years of supplies in the region at in step with GDP growth. Assuming the same is the current rate of consumption, and it is believed true for Africa, commercial energy production further exploration will reveal many more re- will need to expand by about 5 percent a year if serves. Africa's vast hydro resources have an esti- Africa's economies are to achieve the targeted mated gross potential of about 300 gigawatts, less annual growth rates of 4 to 5 percent (see Table than 4 percent of which has been developed. 5.2). This implies that commercial energy supplies Known reserves of natural gas are equivalent to would increase sixfold between 1986 and 2020, 250 gigawatts of electricity-20 times current in- with a total investment rising from around $2 stalled hydropower capacity and 5 times the hy- billion in 1990 to $4.7 billion in 2000 (at 1989 dropower that could be tapped economically prices)-equivalent to 2 percent of GDP. By sub- during the next 30 years. However, unequal dis- sector, electric power generation should expand tribution of resource endowments, large transmis- sevenfold, natural gas tenfold, and solid fuels sion distances, and the size of markets impose (coal and lignite) about threefold. The balance of limits on the supply development that is feasible. Africa faces formidable obstacles to realizing its potential and to securing the economic energy supplies needed to sustain growth. The environmental costs need to be carefully Table 5.2 Total primary energy supply considered in formulating energy strategies. Dam projections in Sub-Saharan Africa construction for hydropower floods forests and (mtoe) agricultural land. The production, refining, and A t~z-~ X - transport of petroleum can pollute air and water. Act. l Projected Hydrocarbon combustion releases carbon dioxide -2-'.'i -'2sl . -4,5n -986 into the atmosphere-contributing to the "green- Commercial house effect" now threatening the earth's climate. Petroleum 5.6 24.0 140 Environmental regulations for the energy sector Natural gas 0.0 3.0 30 Power' 0.5 3.0 20 need to be established, their implementing insti- Coal 3.5 4.0 10 tutions strengthened, and appropriate pollution Subtotal 9.6 34.0 200 control technologies adopted. Gas releases only Woodfuels 66.0 200 about half as much carbon dioxide as coal per unit Total 100.0 400 of energy and contains fewer pollutants, so its mtoe - million tons of energy equivalent; percentages are of exploration and development should be increased total primary energy supplies. wherever possible. a. Hydro and geothermal. Greater energy efficiency in industry, house- Souirce: UNSO, Energy Statistics Yearbook. holds, commercial buildings, transportation, and the power sector both save money and, by reduc- 2000. The rate of consumption of fuelwood greatly ing the growth in energy consumption, slow the exceeds the rate of natural growth in many areas. growth in the emission of "greenhouse" gases. Even if tree planting is accelerated (see Chapter 4), Several countries (such as Senegal) have mounted chronic shortages are almost inevitable. The main successful programs to assist high-energy-using reasons for the uncontrolled exploitation of the enterprises to adopt more energy efficient tech- forest cover, apart from land clearing, are that in nologies. Policies must be designed to accelerate most countries there are neither incentives for its the rate at which energy efficient technologies are sound management nor for optimization of its adopted. yields. Restoring a balance between supply and The cornerstone of any energy efficiency pro- demand involves: gram is a pricing system that reflects the economic * Improving the management of forest cover cost of providing power. Underpricing electricity by transferring control over exploitation to local not only encourages higher consumption, but also communities; local people need to have secure critically impairs the operating revenues of utili- rights to an adequate return from the resources ties. Marginal cost pricing of electricity could help that they manage and questions of land tenure, ensure the long-term financial equilibrium of util- usufruct, and revenues will therefore have to be ities and provide the resources for expansion to resolved in a manner satisfactory to the rural pop- meet demand (see Chapter 8). ulations involved. Long-term strategies for sustainable growth in * Pricing woodfuels economically (as is being energy supply should include research and devel- attempted in Malawi and Niger) to encourage opment of renewable resources such as solar, conservation and interfuel substitution, as well as wind, biomass, and small-scale hydro. Small- fostering exports of efficiently produced charcoal scale, decentralized energy generation from these from surplus areas, such as Congo and Zaire. resources might be particularly useful in the rural * Encouraging the use of more energy efficient areas, where electrification can have an impact on charcoal and wood stoves, including stoves and agriculture and rural industry, as well as living ovens used by rural industries (see Box 5.7), as conditions. Alternative fuels, such as those de- well as encouraging the adoption of more efficient rived from biomass, can be utilized in small-scale carbonization techniques through a better incen- industry and transportation. tive system. * Developing reliable, economically accessi- A 30-year perspective ble, and appropriately priced alternative energy supplies, such as kerosene and liquified petro- The energy sector covers noncommercial pri- leum gas, and assisting low-income urban fami- mary energy sources (mainly woodfuels) and lies with appropriate credit or subsidy schemes commercial energy (petroleum, natural gas, hy- for purchasing stoves and appliances that use droelectricity, coal, and some geothermal). Re- these fuels. newables (such as solar) could become important, * Upgrading institutional development especially in remote inland areas. through planning, management, and training to enable the public sector to formulate, monitor, Woodfuel: A growing crisis evaluate, and adjust effective fuelwood strategies. Four-fifths of the population of Sub-Saharan Commercial primary energy Africa relies for energy wholly or partly on woodfuels (fuelwood, charcoal, and agricultural Sub-Saharan Africa produces about 1.8 percent residues), which account for two-thirds of energy of the world's commercial primary energy (before consumption. Already more than 50 million Afri- conversion to other energy forms) and consumes cans face acute scarcity. Based on present trends, 0.5 percent of it. The main sources are petroleum the demand for woodfuels would at least triple by (70 percent of consumption in 1988), natural gas 2020. Demand is growing among the urban pop- (9 percent), hydroelectricity (9 percent), and coal ulation, which is expected to double in 12 to 15 (12 percent). Per capita consumption is the lowest years. If urban households continue to consume in the world and has been increasing by only 0.9 woodfuels at the present rate, urban demand will percent a year in the 1980s. By comparison, per represent between 50 and 75 percent of total capita commercial energy consumption in India is woodfuel use in most Sub-Saharan countries by now double Africa's, having risen at 4.9 percent a r,-. - .8. -;..* !2.7 *t!.... .. >eFF4., :_ _ ;.i_ ... ~7 -7- :; Box 5.7 Energy efficient stoves in Niger A, in mno~i sub-s.aharan -trcan c...untrie, *I ood Ih the! ol both con umer. and prodLiccr- it . a eaaX t1. u>e and -main ,urceo l.ner i -Nigeruand.: .i unct-rt lourIjith .un d local cookinic habi I HoIu l e pcndliture on - tth;oluntri r zri- energ% -uppR% lbout %percentor tuelhxoo'dtellbi 31-1percent utticrent a Ing t co' r thu htLi tehold- in the urbtn area! ui.e it tor tood prepara- ..t oht ~io in onh t;\ rnnth~ The 1 It, incdepend,ni - lion The inre. ing .an.umption .-it luhi .;od and thc metakmitIr t h. ier3invd b% thtprolec 3nd no. 11 c iniŽicinent %,3i t !^ har%e!t l and con.Limed hai,e had a the \lai sauLi hlave %,rtuall doubled ther pro it.. dektcriou, Impact on the cuntr\ en ironmcnt ard on The pr.iect ak .u.-:E..tuI Iu it °F a~ onto Wug- i! n econormn To addre; thes i U- thL g-. ernment -et-;.on. 3nd tle\ble in incorpor.itin: achli' itiE alread, m-urnted a proirrr to imprnroe the ncii:enc oi tul l In% ohed in 1to. c promontn %Ian, NigEr n;. ranging - - %. in.uniphon b~ urban h.uunehold. irom the distrTIt. chf, to the W.:rnen Organization and Ibe obe , tcFlace the itic-ert tradieleitnal the oulh Orgarazitionl ot Nicgr Fartiipatc1 in the .: -i.. it.- a :iex: mprii% edJp,irtablun metal tov e3nd prolec1. and technician, and engineer, ot the \atio:nal to e.tablihh an un ublidized autonomout. and elt- u - Sol3r Research Laborator% collaborated in d.-s*imina and taininz pro.Jduc1:,n anr nmarkeiine net; orrk usingemiqing t.Ž-tirI4 the to-qv e The proje; ak:. : orl,dvdi itih NGO, ; omimercial nri orls S oralct1 Iti i%ere carried out gra;sroiot9 34'ciatlii-nr and olunteer, u.:h aL Church .- inmult.;neoulx . A m-.tre er iciri t.t. e krno; n a, the \lai WVorid AcF oie n9o0iation BPot de Feu tl Peace C:irpF aukii n%as d mt;ned rtian oerr tr3mned to prludur it anrd the European \ oluntecrs lor De- elopment in Ework- the m3rkeling netiwork ea~ iinpre .%ed and the n, ai ing losli, .i ith theddtrerenit national a;nd tircgri o.rgani. 'auki .rn dit-ertied [During tI,e . arImptenta- Z3tion, the prolect *a able to b netilt rom thcir tonor the pr.-ictl ncarIk 4' i. - 't ;r-: .:rx piod.ced aind eFerivnict and in tLrn. I. la--l l theain the acl ir e b;i :- old 1-!1 pl4ccnrmor than.:riFmna1; planned channelin.gtheir ett1:irtb ~.thinthepr"rlc ttr.ameti irk The KIiic SauBli a' ,uc,ei;tul beciu4e it met th, need, year from 1970 to 1986. Assuming a 5 to 6 percent PROMOTING EXPLORATION AND DEVELOPMENT. growth in energy supplies during the next 30 Oil and gas exploration have lagged. In 1987,2,303 years, the share of petroleum in the commercial wells were drilled in Latin America, while in Sub- primary energy mix is projected to hold at 70 Saharan Africa only 237 were drilled-and they percent, natural gas to rise to 15 percent and hy- were concentrated in three countries. The success droelectric power to 10 percent, and coal to fall to rate has been good; in the Gulf of Guinea there has 5 percent. been one discovery for every 2.5 exploratory wells, compared with a world average of one for Oil and gas rich. .. and poor every 5.6. Further, production costs are competi- tive with areas such as Indonesia, the North Sea, Proven reserves of petroleum in Sub-Saharan and Alaska, where there has been intensive explo- Africa at the beginning of 1989 were estimated at ration and development despite difficult physical 20.5 billion barrels (2.3 percent of the world total), conditions. most of which is located in the Gulf of Guinea. Countries with potential for exploration and Angola and Nigeria together account for 80 per- development fall into three groups: cent of the region's annual production of 2.2 mil- * Existing oil producers (such as Angola, lion barrels a day, of which 84 percent is exported. Cameroon, Congo, C6te d'Ivoire, Gabon, and Ni- The other African countries spend a crippling 20 geria), in which most of the proven reserves lie. to 40 percent of their annual export earnings on oil Development costs and risks are relatively low, imports. However, it is widely believed in the and exploration will probably focus on known industry that important oil deposits remain to be offshore fields, such as in the Gulf of Guinea. discovered in some of the relatively unexplored * Countries in which exploration is likely to areas outside the Gulf of Guinea. result in discoveries of gas fields (such as Mozam- Although Sub-Saharan Africa has 3.5 percent of bique, Tanzania, and offshore Sudan). The main the world's known natural gas reserves (four- obstacles are uncertain prospects for foreign ex- fifths in Nigeria), consumption is limited. Most change earnings from the export of liquid hydro- gas is produced in association with oil and is carbons, small local markets for natural gas, long flared. Considerable proven but undeveloped re- gestation periods for investments, and the high serves of non-oil-associated gas exist offshore of cost of infrastructure. The Pandi field in Mozam- Nigeria and, to a lesser extent, in such countries as bique and the Songo Songo field in Tanzania re- Cameroon, C6te d'Ivoire, Sudan, and Tanzania. main undeveloped for these reasons. * Interior countries (such as Central African reasons of status or as a training ground for engi- Republic, Chad, Niger, and south Sudan), in neers (such as Cote d'Ivoire and Nigeria). Most of which limited local markets for petroleum and these refineries are poorly adapted to local mar- gas, the cost of infrastructure, and transport diffi- kets and produce a surplus of fuel oil, which must culties across frontiers to local markets or to coasts then be exported to Europe or North America at for exporting have discouraged exploration. Inter- considerable loss. More than half of total produc- country cooperation and a favorable environment tion at the SONARA refinery in Cameroon, for for investors would facilitate their exploitation. example, is surplus and must be exported. Exploration and development of Africa's oil Some countries have also invested heavily in and gas resources presently depend on a partner- surplus storage facilities that greatly add to cost. ship with multinational oil companies that can Cote d'Ivoire, for example, possesses unutilized provide investment and expertise. To attract the publicly financed storage facilities that can hold large oil companies, countries must put in place the equivalent of four months of domestic de- favorable enabling environments for exploration mand; meanwhile private sector storage is ade- and development. In Kenya, for example, oil com- quate to meet requirements. The cost of financing panies were willing to enter into exploration the capital immobilized in strategic stocks of pe- agreements once legislation, taxation, and royal- troleum products is another burden on public ties policy were revised. Many potential oil basins finances. In some cases these stocks could be re- extend over several countries. Cooperation duced without jeopardizing national security. among countries-such as the preparation of reli- Rationalizing refineries on a regional or subre- able multicountry technical data bases, consistent gional basis could raise capacity utilization, im- legislation across neighboring countries, arrange- prove efficiency, and save more than $300 million ments for regional transport corridors, and de- annually. Doing so will require improving the fined national boundaries to prevent efficiency of modern plants (such as those in Cote disputes-would facilitate exploration in these d'Ivoire and Nigeria) and pooling the product areas. A good example is the Rift Valley, a partic- requirements of small markets on a regional basis ularly promising area, where exploration has been around them as well as closing uneconomic refin- modest so far. eries. RATIONALIZATION OF REFINERIES. Africa has 23 LOWERING THE COST OF OIL SUPPLY AND DISTRI- refineries with a capacity of about 44 million tons BUTION. The supply of petroleum in Sub-Saharan a year-almost double the region's demand. High Africa is the most costly in the world, only in part costs and poor cooperation among neighboring because of the inefficient refineries. Shortages of countries make exporting unviable. Capacity uti- foreign exchange lead countries to buy oil in small lization averaged about 60 percent in 1986; 13 batches, which allows little flexibility to take ad- refineries have a capacity of only 30,000 barrels a vantage of market conditions. A poor infrastruc- day or less, low for an industry where economies ture makes supplies unreliable. of scale are significant. Except for C6te d'Ivoire These problems can be overcome. The Tanza- and Nigeria, old technology limits the proportion nian government, for example, has enlisted the of higher-value products to low-cost heavy fuel, help of the private sector and international lenders maintenance is poor, and domestic markets are to rehabilitate its old system. Chronic fuel short- small. Average refinery operating costs in Africa ages in the interior have cost some $100 million are $2 a barrel, against $0.75 elsewhere. State re- annually in avoidable losses. In other cases inter- fineries suffer many of the problems that afflict country cooperation could improve the supply parastatals in Africa (see Chapter 2). and distribution of petroleum products. A partic- African countries continue to operate unecono- ularly interesting example is found in Togo, where mic refineries for several reasons: some because the local uneconomic refinery has been closed and the price-setting mechanisms for petroleum prod- certain of its facilities converted into a transit ucts produced in the refinery generate rents that depot for reexport to other countries in the region, subsidize costly parastatals (such as Cameroon both inland (Burkina Faso and Mali) and coastal and Congo); others to maintain access to credit (Guinea and Liberia). The Lome storage depot made available by suppliers of crude oil in gov- now generates profits, whereas the refinery pre- ernment-to-government contracts; yet others for viously incurred losses. 131 Coal prospects slightly less than 2 gigawatts. In many cases the capital stock has deteriorated seriously. Invest- More than 90 percent of Africa's coal deposits, ment in maintenance could be a cost-effective way estimated at 135 billion tons, are in three land- to expand the energy supply. locked countries-Botswana, Swaziland, and Several severe problems face Africa's public Zimbabwe. Lack of capital, trained labor, de- utilities-overstaffing (averaging around 30 per- mand, and infrastructure, as well as high trans- cent) and tariffs too low to generate adequate port costs, will continue to restrain development revenue for basic operations, let alone mainte- unless the price of petroleum increases dramati- nance and investment. Moreover arrears range cally. Nonetheless there is scope to make greater from six months to one year; collection rates rarely use of coal to meet Africa's long-term energy exceed 80 percent of the power sold. On top of that needs. Any large-scale future development debt is debilitatingly high, reflecting overinvest- should be accompanied by measures to protect the ment and poor cost control. environment. Africa's untapped hydro power potential is enormous and its abundant natural gas reserves Cheaper and more reliable electric power largely unused (many gas wells are plugged or, where gas is produced in association with oil, it is Installed capacity for electric power in Africa in flared). Priority should be given to using these 1986 was 19 gigawatts, of which two-thirds came indigenous nonexportable energy resources by from hydro and the rest from thermal plants, developing larger markets on a multicountry mostly oil-fired. Consumption of electricity, less basis to allow the economies of scale required for than 200 kilowatt-hours per capita, is low even by the massive capital investment involved; by eco- developing-country standards (in India it is 435 nomic pricing and improved collections, which kilowatt-hours per capita). Consumers are mainly are vital to assuring financial viability and raising households and the public sector since industrial capital for new investments; and by attracting and commercial use is limited. In 1986, 86 percent foreign capital for investments without govern- of electricity came from public utilities and 14 ment guarantees or through privatization. Inno- percent from commercial plants for their own use vative financing is needed; for example, an or for sale. Because of limited cooperation among operator builds a facility, runs it until the invest- countries only 8 percent or so of the electricity was ment is recouped, and then transfers it to the traded. The share of self-producers could grow government. considerably if regulations would permit. There is much scope for rationalizing power Power utilities are mostly small and rarely can generation during the next 30 years, especially afford the economies of scale needed to justify through connections between national grids that large hydroelectric schemes or the costly infra- have been operating successfully, for example, structure needed to use gas. Installed capacity between Benin, Cote d'Ivoire, Ghana, and Togo in exceeds 1 gigawatt in only seven countries, the West Africa and between Kenya and Uganda and largest being Nigeria. Electricity losses are high- between Zambia and Zimbabwe in East Africa. 30 percent or more in some countries, of which a Ultimately all of West Africa could be intercon- portion is attributable to pilfering. Supplies are nected. A similar scheme may become feasible in unreliable, and much demand unmet (see Box East Africa, but it is not likely within the next two 1.2). decades. Increased integration of power systems Poor energy planning has led to costly invest- and improved capacity utilization could make 60 ments in excess generation capacity and too little gigawatts of additional hydroelectricity economi- expenditure on distribution facilities and mainte- cally viable. This could lead to the projected sev- nance. In Zaire, for example, because of inefficient enfold increase in hydro generation of primary load distribution between hydroelectric plants, energy by 2020, when hydroelectricity would capacity utilization is no more than 25 percent. meet 10 percent of commercial primary energy Although utilization of existing plant may be only demand. 50percentorless,poormaintenance-resultingin Africa has 107 trillion cubic feet of natural gas, breakdowns and lengthy unit outages-tends to yet gas production accounts today for only 3 per- force investment in new plant Nigeria, for exam- cent of Africa's energy consumption. In compari- ple, has approximately 5 gigawatts of installed son Argentina's 25 trillion cubic feet of reserves capacity to serve a power market that is today (one-quarter that of Africa) supply more than one- third of its energy needs, which are 50 percent only when ways are found to store power more greater than those of all Sub-Saharan Africa. As- cheaply. Africa's Solar Energy Research Center suming a tenfold increase in gas consumption should help to identify long-term economic tech- during the next 30 years, current reserves would nologies for solar-based energy applications in the last more than a century. Moreover the investment region (See Chapter 7). cost of gas-fired power plants is below that for hydroelectricity. The projected investment of $10 A future energy strategy billion by 2020 for natural gas infrastructure would yield savings, at 1989 oil prices, of $3 billion To realize a sustainable expansion in energy to $4 billion a year. supplies to underpin economic growth, Africa A good example of the potential to optimize the needs to: use of indigenous primary energy resources * Develop long-term national strategies for through cooperation is the interconnected grid of the energy sector based on implementing the Benin, C6te d'Ivoire, Ghana, and Togo. In times of least-cost mix of domestic, imported, and inter- drought the region is prone to power outages. country energy resources. Key elements of such Coordinated operation of the interconnections strategies are the ranking of investments, with a would optimize the use of hydro energy stored in better balance between expenditure on mainte- C6te d'Ivoire and Ghana and also ensure benefits nance and rehabilitation and investment in new from the existing thermal capacity in the four capacity; efficient use of local resources and facil- countries during dry periods. Substantial addi- ities; conservation of costly sources of energy, in- tional advantages would be derived from coordi- cluding petroleum and woodfuels; sound pricing nating expansion programs, which would enable policies; strengthening of energy institutions; and some countries to defer major investments for two maintenance of existing installed capacity. or three years to take advantage of a temporary * Promote strong intercountry cooperation for surplus elsewhere, and vice versa. In the longer optimum exploitation and delivery of energy to run, regional cooperation would be further en- create larger markets that permit economic invest- hanced by extending the interconnection to Nige- ments and optimum utilization of hydroelectric, ria, thus permitting the import of the low-cost gas, and other primary energy resources; to re- energy produced by gas-fired thermal plants and duce administrative barriers to joint procurement, the export of surplus hydro energy in wet years. processing, and distribution of petroleum prod- Similar opportunities exist in east Africa among ucts by the private sector and to eliminate barriers countries with large hydroelectric or gas potential to intercountry trade; and to jointly promote the (Ethiopia, Mozambique, Rwanda, Tanzania, exploration and development of geological basins Uganda, and Zambia) and energy-poor countries underlying several countries by establishing fa- (Kenya, Sudan, and Zimbabwe), but they are un- vorable investment conditions. likely to be viable within the next two decades. * Create an enabling environment that will attract high levels of investment, chiefly for oil and Solar energy gas. The key elements are similar to those for mining discussed earlier and involve creating a Electricity from solar energy remains a high- contractual framework that creates a conducive cost source of power and is as yet economically investment environment while protecting the in- feasible mainly in remote areas where the cost of terests of the country. other energy sources is prohibitive. Simple ther- * Encourage improved end-use efficiency and mal solar technologies can be used for such pur- accelerated research and development of energy poses as crop drying and heating water and would efficient technologies, promote marginal cost pric- ease demand for woodfuels. Photovoltaic energy ing of electricity and improve the efficiency of can be used, for example, to provide refrigeration price-setting mechanisms for petroleum products, for vaccines in rural health clinics. and pursue research and development of renew- The main drawback with solar energy is that it able energy resources. is available only during the day, but in Sub- * Introduce concerted measures to tackle the Saharan Africa the main power demand is for woodfuel crisis. lighting. Large-scale application of solar energy Efforts to develop the energy sector at present technology would thus become practical in Africa are haphazard and poorly coordinated. A rigor- ous and systematic approach-which takes into els. Multilateral and bilateral aid agencies have a account environmental considerations-is essen- large role to play in promoting and supporting tial at the national, subregional, and regional lev- these national and regional efforts. 134 Fostering African entrepreneurship The entrepreneurial catalyst petitive part of African economies. These enter- prises, many of them very small, are a training Africa needs its entrepreneurs. Achieving sus- ground for entrepreneurial initiative. Faced with tainable growth will depend on the capacity of restrictive regulations or official neglect, the infor- people from all levels of African society to re- mal sector has developed its own grassroots insti- spond flexibly as new market and technical op- tutions to meet the demand for credit and training. portunities emerge. During the next three decades But restrictive business environments, weak link- the population of Sub-Saharan Africa is expected ages to formal markets, and poor infrastructure to grow by at least 600 million persons-more make it hard for entrepreneurs in the informal than doubling the size of the labor force. Africa's sector to hire more workers and expand. entrepreneurs must create these jobs. Only their An improved business environment and initiative can ensure that the long-term demand greater support for entrepreneurial capabilities for low-cost products and services will be met. would help enterprises of all sizes to make their Entrepreneurs are people who perceive profit- contribution to development. Entrepreneurs able opportunities, are willing to take risks in themselves will need to play an active role in pursuing them, and have the ability to organize a improving the policies, regulations, and institu- business. In every country the number of people tions that affect them. By evolving a participatory who are inherently entrepreneurial is limited. approach that improves the responsiveness of Market incentives, not innate instincts, are the public policies and institutions to the needs of primary motivation for most entrepreneurs. They entrepreneurs, governments can build confidence are attracted to any activity that generates profit: in legal and institutional reforms, raise productiv- restrictive business environments generally chan- ity, and lower the cost of doing business at all nel entrepreneurial energies into rent-seeking ac- levels. Although details will vary from country to tivities. Potential profits to be gained by taking on country, this approach aims to: additional employees and new machines to pur- * Improve the business environment by re- sue productive business opportunities will be moving undue regulatory constraints, protecting judged against these "softer" options. For entre- property and contract rights, and improving the preneurs to sustain productive activities over the public image of entrepreneurs long term, they must be free to accumulate capi- ^ Broaden financial and information systems tal-both as a reward for success and to compen- to speed market responses, create employment, sate for occasional losses. and boost productivity for small-scale enterprises The informal sector offers a striking illustration * Stimulate markets through infrastructure of the strengths and weaknesses of enterprise in linkages, local and regional sourcing of govern- Africa. Unregulated and largely unrecorded, its ment purchases, and private sector competition to activities comprise the most accessible and com- provide public services 135 * Encourage associations (including trade The Gambia and Mali through informal commer- and professional groups, grassroots organiza- cial circuits. tions, and NGOs) that help entrepreneurs to pool People, capital, and goods have always traveled their interests and mobilize resources. in Africa, disseminating ideas and technology. Ethnic groups like the Hausa-Fulani have spread The development of African enterprise through many countries to establish trade links and market their skills. Foreign investment and Africa's farmers, traders, artisans, and manag- imported technologies have had a major influence ers of large-scale enterprises are a seedbed of in- on the development of large-scale industries, both digenous entrepreneurship. Because many public and private. In many parts of the region governments have relaxed controls on competi- resident non-Africans play a significant role in the tion and trade, these groups are starting to take transfer of capital and technology. Some of these advantage of new market incentives. There are businesses are an important source of training for already some success stories, but the gains in em- indigenous entrepreneurs. ployment and production that are needed over the long term have yet to emerge. To get their econo- Shifting roles of the public and private sectors mies moving on the road to sustainable growth with equity, African countries will need to take a During the first three decades of independence second look at past experiences, present con- policymakers focused mainly on promoting large- straints, and future prospects for enterprise in scale industrial enterprises. These were deemed Africa. the hallmarks of development and were gener- ously supported by public policy. Large firms Africa's market tradition enjoyed preferential access to credit, foreign ex- change concessions, and protection from compe- Entrepreneurship has a long history in Sub- tition through subsidies, tariffs, quotas, and Saharan Africa. In parts of the continent long-dis- exclusive licenses. Capacity was often expanded tance trade on caravan routes dates back to the with little regard to cost or profitability. 11th century. The records of several West African The state's role as entrepreneur was justified by cities-including Kano, Salaga, and Timbuktu- the argument that the indigenous private sector attest to their role as halting places for trans- had neither the capital nor the expertise to drive Saharan caravans of up to 2,000 highly organized rapid development and industrialization. Africa traders and supporters. Archeological evidence was seen as a continent without indigenous entre- indicates the presence of "Great Zimbabwe," preneurial skills, its "progressive" modern sector where mining activities were linked to Arab ex- at odds with a "backward" informal sector that port markets on Africa's southeastern coast. Tol- could provide subsistence but nothing more. In erant of ethnic and religious diversity, these viewing activities in the informal sector as mar- trading centers developed their own rules and ginal to development, however, policymakers institutions, a liberalized system of exchange, and have greatly underestimated the depth and poten- common languages of trade. tial of African entrepreneurship. Equally, they ig- Africa's market traditions are reflected in cities nored the extent to which their own policies have and towns across the continent. Today's traders driven entrepreneurs into the informal sector. and artisans continue to organize activities ac- From time to time nearly every African govern- cording to long-established customs and rules ad- ment has tried to promote small- and medium- ministered through grassroots institutions. In scale enterprises (SMEs). But the policy and West and Central Africa women trade clothing, institutional background has generally been unfa- jewelry, and shoes bought wholesale from Europe vorable. Most of the SMEs that have grown in and sold retail to local markets. "Market queens" response to market demand have done so despite are chosen by their peers to regulate the extensive official neglect or discouragement. In Ghana and trade in fish, palm oil, and other local commodi- Tanzania, two of the most extreme cases, massive ties. The "Nana Benz" of Togo are famous for their resources were directed to public enterprises, success in textile marketing. In Dakar while local entrepreneurs who attempted to cir- leatherworkers produce traditional footwear not cumvent price controls saw their premises de- only for Senegalese markets but also for export to stroyed and their property confiscated. Uganda's entire Asian community was expelled in 1972 in tive is hampered by regulation and limited con- an attempt to exert state control over the private sumer demand for local products and services. sector. These policies crippled economic growth Small-scale entrepreneurs find it hard to raise cap- by deterring long-term investment by both for- ital, to pool skills, or to gain access to efficient eign and local entrepreneurs. In less extreme cases infrastructure services. Still there are encouraging public enterprises simply crowded local firms out signs. In some countries new enterprises are of access to markets and financial resources. emerging despite the difficulties (see Box 6.1). In the 1980s the role of the public and private In other regions, especially in Asia, a middle sectors shifted decisively. As the weaknesses of ground of enterprises between the largest and the postindependence approach to development smallest firms has developed during the past 30 became clearer, governments began to include years. The products and services of these enter- local entrepreneurs in their long-term strategies prises are well suited to the conditions in many for employment and growth. In most countries developing countries: surplus labor, scarce en- the public sector moved away from economic ergy, foreign exchange constraints, lack of techni- dominance toward greater support for private ini- cal information and skills, scarce investment tiatives, both local and foreign. Controls over for- capital, and variable weather and soil. SMEs cre- eign investments were relaxed; local capital ate jobs at a lower cost and use local resources accumulated through rent-seeking began to move more intensively. These enterprises also contrib- into productive activities. Governments generally ute to equity by producing goods and services that became more conscious of the effect of policy on are widely affordable. They foster entrepreneur- both day-to-day business decisions and long-term ship through learning-by-doing. By thus reconcil- private investment. ing broad-based consumer demand, available resources, and indigenous and imported technol- Prospects and constraints ogies, SMEs perform a vital role in development. Outside the informal sector small- and me- PROSPECTS. The 4 percent growth scenario de- dium-scale enterprises are few and far between. veloped in Chapter 2 requires large increases in The paucity of businesses that can link imported the labor absorption and productivity of small- and local technologies-the "missing middle"-is scale firms. To bring this about, African govern- a major impediment to Africa's development. De- ments will need to take steps to support these spite recent policy reforms entrepreneurial initia- labor-intensive, high-value-added activities. By Box 6.1 Emerging agricultural entrepreneurs in Cdte d'lvoire A re,ntl completed t td' ot Cole d !%.-o,re notes the tion. %iih the suppoirt ol 121i salarind emplo%ee4 and emercenceot 3 net% group oi 3gnrcalrural entrtpreneur- laborers largel% Irom he; home countr-. Although the The group i- dii erve it include, ozomrn and immigrants farm ;cnhnue tlo oper3te minrmal4. it. eyport capaoiti A; hLiI as entrepreneurv v ith traditional tarminm and has been recocnized bN the issuance oL an olicial eyport urban %u ag,e.-arninA background;s LiN eizing opportunr. code number Among the 'S other emerging agricultura ties n Lx,lth the dorne,ic and e\port markets the% are entrepreneurs 4urxeNed ire an urban buminessivoman e'lablishingenterprlse thatretutcthe old Iuali,fic im.ge thu 3tarted a poultrr farm and 3 lormer direnror ol a -ti -parate intormaland modern mector, The% u,e form3l pubic: iwork; entrrproLe %'ho developed a l(ii-hectare bankine and m3r-i.tm_ :i ciliiie, iav vell 3i upI.iodafe pineapple pLanlarion production technique- but theN alo get support trom B% combininge d%anced agricultural technologies and traditional network; w hich altord themes^enil acce;ss commnrcial methods %'ith medium-s-cale production. tc. lator land and a ring. the eenrrepreneur;areable to.chie e much hightr le%els For example an enir,prencur %ho trained a, . rnr- ot produci, .1% than .n;all and laree-ncalk iarm- chanic and ac.roechniciarn % a. v orking lor an urban- Through learrnng bl doing. the! are tinding ihe right b,3ed compn} v. htLn. in ]"S. h. lot his icoband decided balance beti een ime-tment risk 3nd potential profint. tomnvirtolulltine tarmirn He no% operatts. cocoa The,e e\aniple4 illustrate how toth nraditonal and mod- and coftet farm of l1-1 hecnires that emplc.; a full ringc ern netcorks stand revad to assist spont3neous entrepre- ot agricultural machinerN to achieve high level of land neurial iniliati%es that emerge in response to market procducti it, A torriier plantation tc.rker Irom Burkina demand Fa-o ha- ;oi up his .o%i n tamils -iinancct b3nana planta- 2020 a substantial share of African value added tions graduation from the informal sector may will have to come from the service sector, where seem too risky even for the most innovative entre- labor intensity is high and proximity to markets preneurs. In any case the scarcity rents generated affords natural protection not available to the by restrictive policies often create higher profits goods-producing sectors. This ought to be feasi- than economically productive investments. Be- ble. In rural areas, for example, nonfarm enter- cause of these obstacles few small-scale entrepre- prises can supply basic financial, construction, neurs have the chance to innovate and grow. health, and educational services. Together with Many are operating far below their potential. better agricultural productivity these activities can in turn boost demand by raising rural in- Entrepreneurs in the informal sector comes. Even Kenya, one of Africa's industrially more Small owner-operated enterprises that function advanced countries, has recently taken steps to outside the official regulatory framework contrib- promote its small-scale and rural nonfarm enter- ute substantially to employment and productiv- prises. In its "Sessional Paper No. 1 of 1986" the ity. Recent estimates by the International Labour government outlined a broad program of support Organisation (ILO) indicate that the informal sec- for SMEs. tor accounts for 59 percent of Sub-Saharan Africa's For Kenyans to enjoy even modest improve- urban labor force and an ILO survey of 17 African ments in their current standard of living, it will countries found that the informal sector contrib- be imperative that ... the great majority of jobs utes, on average, 20 percent of GDP (or $15 billion be created, not in the cities or in large industry, a year) to the economies studied. but on farms and in small-scale industries and Contrary to their image as "tax evaders," many services, both rural and urban. entrepreneurs in the informal sector pay a signif- In many other African countries the prospects for icant proportion of their income in some form of large-scale industry are even more limited and the tax. The ILO estimated that more than 40 percent need for productive employment through small- of informal sector enterprises in 10 Sub-Saharan scale enterprises will be much greater. countries pay fiscal taxes or registration fees. Taxes on licenses for small repair shops and street CONSTRAINTS. Burdensome taxation and regu- vendors provide a large share of municipal reve- lation deter small-scale entrepreneurs from link- nues in cities such as Bamako and Ouagadougou. ing their activities with formal financial and These enterprises are also subject to indirect taxes. information systems. As a result their ability to Because they do not qualify for special tariff re- pool resources is limited to informal networks. ductions on imported equipment and inputs, Trade policies have generally favored large-scale, most must buy from local retailers-absorbing the capital-intensive firms while increasing transac- cost of taxes on sales, fuel, and imports. Since tion costs for SMEs. Interest rate ceilings and entrepreneurs in the informal sector have only sectoral credit allocations intended to benefit limited access to savings facilities, they are partic- SMEs have, in practice, distorted financial mar- ularly vulnerable to inflation-in effect, a "tax" on kets and impeded the efficient allocation of finan- holding money. cial resources. Banks avoid lending to SMEs The informal sector thrives because of its re- because small firms generally lack collateral. sponsiveness to market forces and because of its Long-term finance remains limited in many coun- close links with grassroots institutions. Ease of tries because interest rates do not favor long-term entry and exit makes these small firms an outlet deposits (see Chapter 8). for the skills of entrepreneurs from all sections of Government run extension services and pro- society. For women, the poor, and minority grams of technical assistance to SMEs have largely groups, the informal sector is often the only such failed because of unsustainable overhead costs, outlet. Women play a big part in the informal limited participation, and poorly adapted ser- sector largely because their property rights are vices. Political instability has also discouraged in- insecure. In some countries a woman needs her vestment by increasing economic uncertainty. husband's permission to take out a commercial Erratic and arbitrary law enforcement has blurred license or to open a bank account. Businesses with the "rules of the game" and made many entrepre- low levels of investment and rapid turnover give neurs extremely cautious in their dealings with many disadvantaged groups a way to escape legal formal markets and services. Under these condi- and social restrictions of this kind. 138 Start-up costs in the informal sector are typi- stimulated demand for local services specializing cally low. Small-scale investors obtain much of in maintenance and repair. Some African govern- their initial capital from personal and family sav- ments are adopting policies to build on the ings: amounts from this source range from 92 strengths of this sector. For example, Kenya's percent in Kenya to 99 percent in Zaire, according small-scale manufacture and repair shops now to recent ILO estimates. Most of these enterprises qualify for assistance wherever they are located, are sole proprietorships with much of their labor in contrast to the earlier approach of trying to provided by proprietors, apprentices, and unpaid move them to isolated industrial estates (see Box family members. Grassroots institutions and fam- 6.2). ily networks provide, on average, four-fifths of the training. RESPONSIVENESS TO MARKET SIGNALS. Traders, many of them women, have devised informal dis- The dynamism of the informal sector tribution networks to keep pace with the growing demand from Africa's expanding urban popula- Entrepreneurs in the informal sector engage in tion. These networks provide an important link a wide range of businesses: agriculture, manufac- for moving food supplies and consumer goods turing and repairs, trade, and construction. They between rural and urban areas and across interna- also provide transportation, water, communica- tional borders. In Ghana and Senegal, for exam- tions, training, and financial services. Their back- ple, grassroots agricultural cooperatives have grounds are equally diverse. In rural areas they successfully made contact with these networks, may be small-scale farmers, agriculturalists en- thereby reducing their marketing costs and im- gaged in off-season nonfarm activities, or full- proving their access to inputs. For economies bur- time providers of products and services to the dened by unfavorable markets, civil unrest, lack countryside. In the cities they may be migrants of infrastructure, or environmental crises, unre- from rural areas, members of traditionally entre- corded trade across borders is essential both as a preneurial ethnic groups, school leavers, workers source of supply and as an outlet for local goods. redeployed from public service or private firms, Traders are very skillful in using their informal or public service employees seeking to supple- networks to overcome difficulties. But their initia- ment their official incomes. tives often conflict with government regulations concerning prices, street vending, currency ex- EFFICIENT USE OF LOCAL RESOURCES. Manufac- change, and trade across borders. Increasingly turers in the informal sector use domestic labor policymakers have begun to appreciate the and raw materials more intensively than the traders' vital economic contribution and to parastatals and transnational corporations that change their policies accordingly. For example, dominate large-scale manufacturing. Lack of the Ghanaian government recently legalized mar- working capital and other constraints of small- ket-based foreign exchange shops that had for- scale production compel them to produce on a merly operated in the black market. made-to-order basis. As a result they respond al- most immediately to shifts in demand. Their tech- FREEDOM FROM REGULATORY CONSTRAINTS. nology is simple but flexible. They innovate, Through the informal sector entrepreneurs can particularly in their ability to recycle scrap mate- respond to the demand not met by strictly regu- rials. In Tanzania, for example, artisans make ker- lated firms. Most African countries have housing osene lamps and charcoal cooking stoves from codes and land-use restrictions that increase con- thin metal plates hammered from old oil drums. struction costs beyond levels that most can afford. In Zaire blacksmiths make agricultural tools with But although population growth and rural-urban steel salvaged from wrecked trucks. migration have multiplied the population of the The demand for small-scale manufacturing and largest African cities 10 times during the past 25 repair services has grown. In Ghana, as foreign years, the number of people living in each house exchange dried up in the early 1980s, producers has remained approximately the same, largely be- substituted local for imported inputs. Under sim- cause of unregulated construction. According to ilar circumstances Uganda's small-scale manufac- some estimates, this activity accounts for around turers produced spare parts for domestic 20 percent of gross domestic investment in most industries. Nigeria's adjustment program has also African countries. Tanzania and Zambia have Box 6.2 Small-scale enterprises in Kenva fl In the pait decadeemploi merit in KEn; a urb3n iniormal t3a4 lor;e to in,- ttt leg3al contraint n c mall-scle F' ector has ben gr..-t ing rapidl; The groit th cithis ect.:r tnterprises ind local b; la-,% that .nhtinue to resrtct their h has! een the man tactor holdinge dot n increa.es in .pen c:ti ities Beginning in the l1"7Cs kena i.)rm3ll% opened urban unempl-s ment S`imilar! noniarm acnvities ar- the transportation sector to competition the mntabiii t ere pear to be the most rapid?; incre.;tnm componenl ol rural recognized and allo31 ed to :rganize an :''^ociation to rep- * inci)meandemplo%meni No ntarnimenplosment %iilh.a',L resenther intere-t Butarecente;ecutteorderbanned to be the largest engi *ourLe ol net, tobs to! the rest ot the tiiiitian aiss;c'atton atter il attempted to raise lare- thecEnrun in the riet decidie sn .alle..t: and hous.e-hold abo%,e thce- eilmnes .et 1!i th, g:oternment Kven%as iti,irari aetit ilttesin cities and market tio. nr must aitsorb at least .asiation could plai a sell regu l.itg rolethat promotes 75 percent ot the ne,t w orker; entering the libor m.irket impro;Ld rc.ad condilt.nsand traittc -alet; but o.nl; r it it unenipit menti i n *t to rise authorir to rc preent its con;tituents is -onisitenthl rec Hi;tortcal;s ome mall-;caIl enterprises h3a eut- ogzed tered hana;sment and lack% ot reco;gntiion tr!m Kenman Th, got ernment h.a; mad.: -u7tained progress in en authorittc4 Linder regulators pronmulg.ated in l4.n ;trtet .:oura1ging n mall-sale nmanutacturmng ind repair enter- r endor; holding hicen-e- it%ere permitted onlh one em- prise; knot' n in R ahisattis.l.iWh me-.:ningthose t ho H plo\ee it t .a the practic olt :i auhoties to arre't orl, under the hot un Simple sheds equipped oth additional emplo; es lor it orking thout lietnse; Li- pe:.t' r oater public telephones and rest rooms ha;e c;n-e tees soireninic quadruprld it ernighi cau;ing been establi'hed through1 the support ot the goternment great hardshipt ...th trader-atteIlct inth, transport tien \GC0s and local banks B1 pr.\ iding essential inlrast-Tuc- sector nmall eakliti.ar.:. cpefte.rs ere restricled irom rure it htle m.intainirg iniornial linkageis and pro' imnit f .omnpeting %, ith Lui comp.anie that operated i.-ng cer- ct I. cal m.arkets tile goternment is enabling small-scale FA tatn roule- Sn.aIl-cale manutacturer' and repair .hops nw3nutacture and repair ;erk ices to organize pr...Jucer or si iuitered ncrea-ed production Costs because ot policies tnescooperatitesto improttheiraceesstc.cptaland ;i* torng larg --cale citterpris-; and Frohibtion; against techn-el.g At least one Nairobi bank has begun lending * ;t.Abl .htng their premi seu close to. onsumer markets to nti t.i cooperatives Iniproti ng the i. orking tac it; The 1W74--' ne .etopn;. nt Pln admitted thc-: prib- *:t the sector ham .t' 1 ne urage tInkaem z -o larger enter- lems-ard statd that there ha3 bern mene counter-pro. prise- In i"S a pricate Ktn;arn compan S.p3retv!;e duc:ti%e haraimicnt ot th se Ent,rprse-, - h;lih ilt L., Limited i as estt3bh;hed io pr-i d, the iai r /i t ith ad. promptll ended Rtalrni has been slot% het\e%er a' a.ned mac hiner, -n 5p-eil hire-purcha-e termn iJ indicated b5 the 14.S Sessional Paper scall tor a speci:l taken steps to encourage low-cost construction by from the grassroots, may be slow to adapt. In granting property rights and developing infra- finance, training, and policymaking, formal orga- structure services in squatter settlements. nizations would work better if they could forge Some governments have brought greater com- better links with the informal activities already petition into public services. As noted in Chapter underway at the grassroots. 2, small-scale entrepreneurs offer inexpensive transportation alternatives that-despite lack of FINANCING. The informal financial system com- official franchises or subsidies-are competitive prises savings clubs, rotating funds, mobile bank- with state-owned services. These transport pro- ers and moneylenders, and financial dealings viders reduce costs by adjusting their routes and among family and friends. The services provided stops to maximize capacity utilization. Drivers are accessible to clients with modest incomes be- typically wait until their vehicles are full, rather cause they rely more on personal relationships than operate on a fixed timetable. They reach oth- than on formal guarantees. Across the continent erwise unserved markets because their vehicles rotating funds, known in some countries as ton- are suited to travel over roads that are inaccessible tines or susus, have evolved, which are specially to conventional public transport. adapted for ease of access. In Ghana, for example, designated collectors make daily tours of the mar- Institutional development at the grassroots ket, accepting deposits from market women in the workplace. In rural areas they do their rounds Enterprises in the informal sector are organized early in the morning before farmers go to the field around, and supported by, local values and tradi- and later in the evening after they come back (see tions. This fosters institutional arrangements that Box 6.3). are able to adjust quickly to changing conditions, In several countries informal arrangements whereas formal organizations, operating further have evolved into large-scale financial organiza- -A tions. In Cameroon, C6te d'Ivoire, Guinea, Mali, resource for small-scale firms because they are and Senegal, savings "clubs" have been estab- inexpensive to employ; they often receive just lished. Like informal arrangements these are room and board plus a small allowance. As they based on interpersonal loyalties, but they can also become more skilled, their terms of employment function as effective financial intermediaries with are likely to improve, and they may be permitted the capacity to make mutual loan guarantees. La to sell some share of what they produce. Financiere, a Senegalese savings club started in Apprenticeship arrangements are successful 1983, expanded within four years to include al- because they provide training in skills and occu- most 400 members with a combined capital of pations that are in demand. By combining learn- CFA 167 million. Congo and Togo are assisting ing with work, they can reach a broad section of groups of entrepreneurs to mobilize their savings the population, including those already em- through similar links with the banking system. ployed. Given the financial and administrative constraints on governments, these low-cost and TRAINING. Most entrepreneurs in the informal largely self-financing apprenticeships should be sector acquire their skills on-the-job through trial encouraged. Nigeria's recently introduced Na- and error or by watching and helping others. tional Open Apprenticeship Scheme, for example, Many start out as apprentices to experienced en- supports the placement of apprentices in informal trepreneurs already established in a particular workshops by paying a share of costs, monitoring trade. Entry requirements for apprentices are typ- the quality of instruction, and providing supple- ically low; family ties or friendship are often more mentary off-the-job theoretical training (see Box decisive than formal education. The average 3.9). length of apprenticeships may vary from as little as one-and-a-half years (for textile dyers) to five SELF-ORGANIZATION AND ADVOCACY. Informal years (for carpenters). Apprentices are a valuable associations regulate business relationships by re- Box 6.3 The diversity of informal financial institutions Nmonri the bv t.knroi n intornal amIonancifl mechanin,, i ini o.rmentr ina?riCUrtinO and,.il enterpnat -- the % -trernt rrtaurz fund,. %.wruu% kniiiwn 3 i.i 1 in In adddition tv their tunaion .i mobilizers ,rlt ri..:urce" Gh3nal , -i. in themudanr, I t imi, linCamerooni rJnd .3i the rr.il.roit le%.l ni nn iniorm.if.nfnd al in.-tnru la,gl. un &onhaIi ' lomentrirn iu,.t a li,% Partio:pant in tionm al;u oporte rt a, oc. I n,uranc,, ^>enit in rot.iarin. lundz lunctic-ri i4 . cr0 borrow, r, and Ih rder, Frhmi-.pia io, r ,.iniple m nibero makeperill 4 durinC the cNcl,;- t the Lund T, pioaill . roitin,4 tund iz ihbulk thaientlethon tnohvnLit in ih-e% ntoiideath S r..rg3anizd L' a eroup ; ho knon' . ne an. th,r cither .ir oicknc'.' lo;~. ot lot or inlpri;onrnent Group tIiiŽ can ;. ihrou.,zh reniderntia nenZhbirhuc.d' V.irnitl.r iccupaill'i'l ht: b'aed onconimunirlr oroWar.izaticnal niIatii.itl.m Th,e ' or e tended iirnrik rIaution-hip. kto'.t rotatine Si% init lalter i'r rnire -ormnnion in urban areaz- e -.hre mrn,nber- ,ca;t .-3no.n retain .I portioir o0 the oirnt .ia ing tor a cor Ihare OOnie inwltirutionai .itljchrnr uch .1 *erkeriIn ai niin mr.urince lund to cor ervnerg,ncIe and -Octil -er. nimir,tr r irm or graduarc. 0ot a particular 4.hool cci The menbmer; meet reeulirlr d.tierm nn the Int,rmM nrehii,nirt u..ud l.tacilitateinterna- arnount, to NK contributld bL each ccillect the. il;rced tonal tr3de Ir, 5:omialia tor t nmple a -izable piirtion :,I , ,harc a3nd decide the niethod itl ~ilocation Thi . rder mlerrt.oxpirr u,in.- ntoren iAchango renrittanoco ^ rtilaricin can be ditcrrnrrien b, ,enmorit ele-ion dra3- ar, channcltd Ihrh,n01 th, -t mechaniorn; Li' e"tock et mn_l lt; nezotiation lucut-on cirrheurgnrc i 3 mtnmbtr prtersr.tan p.ortono1theirexportearnmnco ihelorm ri-ed-but in ,:r, c3,e b, c,mmmonconment tot loretZn \,hange held abroad lmpirnttr- bu% these Fi ed ltunJ a.-octaitiorn arE ormlkar te ^a% ings bank; torel:n e\chl3ng rir,tnlcir,. at parallel market rat,. co l. r'articipinto entru,.t rlotir sa, in, at regu!ar intore al,- tco; 4ct r,mitt3nce; rr.rn oOrnatr nationals %x orking in the-e troa'urer hi hohld tl. m lorrh, agretd period and then n,untriet tcr their lamnli, at honm. and mi et them nionet rerurn- rh, lump *um Th, lund- can te loaned ti. mum ni impa r;! b orncirnnmeniberz u ith mntcre-i pa% nint4 ac;nin;Z to mailor tactor behind the su;cc- ot themt niirnimiltimnan th,. rund Fund; h- Iod b% these ;;ocratton' are u4ed ronr a il31 ;% ,t,n' ,1 in cn iphtiblitx v i rho soooculturl vnr i - a.rit. Coi rpUTeO rne,ng ,trm t,.od and ck1thingm n rinmerit in i% trich it uperares. The arnaztnzls Io'i delault link- 01 d,;tre- w. n-,r-c.rmrial e\ponditure4 and c-ri rateot inirial tinancial niechanm,ni- io nilt nl% beciuoc -univ r durable- i ;uch a9 car- and applia3ncoi. The6 are 1t peer pre~;ur, but al-u becau4e it the corre-pondence 1 a;-i used to bu% incomg,%2neratin7 itenri isuch a- truck, b,tb%een lo%alt- to th. grc.up and the tuntimon, LO! th.- e-%ini machini.- and gramncrinding mlIl,l %%hichi ar ,rstern I snometimes jointl, ors n.ed and to hn.nce Ir3de and C:apital 141 lying on peer pressure to enforce agreements, set- are forced to rely on high-cost radio communica- tle disputes, and promote common goals. In Mali tions because the telephone system is largely in- and Togo informal craft associations are improv- operative. Some informal remedies carry ing access to production facilities through joint unsustainable long-term social costs: illegal purchase and leasing of equipment. Rwandan as- house connections impose unfair costs on paying sociations originally formed to resist unfavorable consumers, environmentally unsound methods of government policies now enjoy legal recognition; waste disposal pose serious health dangers, and they routinely negotiate with official authorities uncontrolled exploitation of natural resources on issues such as work permits, credit, taxes, and threatens the welfare of future generations. the right to occupy public land. Several governments are trying to build on the As both intermediaries and advocates for their demonstrated strengths of the informal sector and grassroots constituencies, indigenous NGOs are to correct its weaknesses. Burkina Faso and working with informal associations to design, or- Kenya, for example, have incorporated strategies ganize, and implement initiatives to support for supporting small-scale enterprises and grass- small-scale enterprises. Through consensual roots institutions in their most recent develop- decisionmaking, based on local tradition, infor- ment plans. Cote d'Ivoire and Senegal have mal associations can help the smallest enterprises implemented special licensing arrangements to to improve their access to capital and information improve the legal status and security of small- through links with formal markets. They can also scale enterprises. With lower costs of compliance identify specific resource needs and give help and better support, many entrepreneurs now in where it will do the most good. With increasing the informal sector will have a greater incentive to official recognition, associations of small-scale en- formalize their activities and to pool their re- trepreneurs can begin to represent their common sources through linkages with formal markets interests much as chambers of commerce do for and institutions. larger enterprises. Improving the business environment The limits of informality Entrepreneurs seek a stable business environ- Although the informal sector offers entrepre- ment before they invest or increase their produc- neurs a competitive environment and grassroots tion. Involving representative associations in the support, it cannot provide all the physical and policymaking process is the first step toward re- social infrastructure services that investment and ducing entrepreneurial uncertainty and confirm- growth require. The informal sector offers limited ing the stability of regulatory and institutional recourse when contracts are breached, property reforms. This dialogue requires a change of atti- rights are violated, or merchandise is misrepre- tude from all sides. Policymakers need to ac- sented. Small-scale entrepreneurs can ensure that knowledge the critical role of the private sector obligations are met and payments made by limit- and to avoid arbitrary actions that disrupt its ac- ing business contacts to close acquaintances and tivities. Structural adjustment programs should staying small, but this may raise costs and reduce support broad-based dialogue that encourages as- efficiency. An accessible and predictable legal sociations to participate in the process of regula- framework could help entrepreneurs escape the tory and institutional reform. For their part constraints imposed by informality, while also entrepreneurs must learn to operate on a level helping to eliminate some of the barriers that pre- playing field on which the ability to compete and vent graduation to a larger scale of production. produce efficiently, not privilege or evasion, is the Sometimes even big firms may rely on informal key to long-term success. systems to provide water, electricity, communica- tions, and waste disposal. These improvised solu- Tax policies tions often offer only second-best alternatives; costs could be considerably reduced if large-scale Taxes should not stifle enterprise. Using them public utility networks were made more reliable to steer private investment toward officially pre- and efficient. Frequent power outages and voltage ferred trade patterns and social objectives can pro- fluctuations compel Nigerian manufacturers to duce undesirable side effects. Tariff and exchange obtain their own electricity using expensive pri- rate policies designed to protect large-scale indus- vate generators (see Box 1.2). In Zaire businesses try have often discriminated against small firms. 142 State marketing boards that extracted revenues impede the development of local enterprises and from rural areas through price controls have discourage them from achieving the productivity sometimes discouraged increased agricultural needed to compete in international markets. production. But it does not have to be that way. Bureaucrats are much addicted to controls. But Incentives can be substantially improved by re- if the emergence of SMEs is to be encouraged, placing tariffs on imported industrial inputs and licensing and other regulations need to be rigor- taxes on agricultural exports with consumption ously scrutinized-and retained only if there is taxes and user charges for public services (see compelling justification. The goal should be sim- Chapter 8). ple, automatic registration that confers legal status Special incentives, usually embodied in invest- on an enterprise and permits statistical monitor- ment codes, have been used to promote certain ing. For certain types of activities-self-employed investments. Exemptions from import restrictions persons, for example-registration and licensing and preferred access to credit and foreign ex- should be eliminated unless they serve some valid change are often part of such schemes. Most in- statistical purpose. Care should be taken, how- vestment codes were initially intended to create ever, to ensure that exemption from registration large-scale industries through foreign invest- requirements does not deny these firms their legal ments. Although explicit biases against local in- status or disqualify them from access to necessary vestors have been largely eliminated, the infrastructure services. case-by-case approach inherent in many codes still has great drawbacks: it invites corruption, Legal and political conditions and it limits access for small-scale entrepreneurs who do not have the influence or resources to A simple and transparent legal framework, lobby for discretionary approvals. These incentive properly enforced, is indispensable for the long- schemes need to be reformulated to promote em- term success of an enterprise (see Chapter 2). In ployment through labor-intensive technologies most African countries entrepreneurs have had to and to increase value added through greater reli- operate in very unstable legal and political envi- ance on local resources. Qualifying criteria should ronments. Such conditions, in which the official be simplified, with the incentives automatically rules of the game are uncertain, exact a heavy price granted to all eligible firms. Benefits should pro- from firms and the economies in which they oper- vide real incentives, not merely compensation for ate. Entrepreneurs need consistent and enforce- other policies that discourage investment. able laws, which subject all parties-from the politically or economically powerful to the The regulatory framework microentrepreneur-equally to the rule of law. All enterprises can benefit from a legal framework Excessive bureaucratic interference breeds law- that defines contract and property rights clearly lessness. It encourages entrepreneurs to find and provides an equitable forum for settling shortcuts around the rules and causes those that disputes. comply to lose their competitive edge. Removing Compliance with legal provisions can be im- burdensome regulations would help to eliminate proved by adopting more participatory rule-mak- the hidden costs that many entrepreneurs must ing procedures. As experiences in the informal pay to obtain licenses and register their enter- sector indicate, effective rules depend more on prises. Bribes are only one sort of cost; long delays social pressures than on coercive enforcement. and complicated procedures inflict further costs in The conventions that have developed to guide lost efficiency and competitiveness. financial, political, and commercial practices in The purpose of licensing enterprises needs to be the informal sector can help to shape laws that fit reconsidered. Protecting the public from health each country's own economic and social needs. and environmental hazards may justify govern- Official statements recognizing the value of en- ment regulation in industries such as pharmaceu- trepreneurship, such as Kenya's "Sessional Paper ticals and chemicals. But using licenses to keep No. 1 of 1986" can help to create a more secure and capacity at officially targeted levels is generally predictable climate for long-term investment. But counterproductive because it substitutes adminis- a friendlier view of entrepreneurship will be most trative fiat for entrepreneurial judgement. By cre- effective if it changes the official way of doing ating unnecessary barriers to entry and things. Tariff reforms, for example, will be more graduation, restrictive licensing and registration reassuring if they follow a realistic, preannounced 143 plan. Small-scale enterprises are particularly vul- able estimates of project rates of return. Equip- nerable to inconsistent enforcement. In the most ment leasing schemes, such as that recently intro- extreme cases businesses that have taken years or duced in Ghana, base payback periods for leased generations to build have been disrupted or de- assets on the cost of the equipment and the net stroyed by unforeseen new regulations. By pro- cash flow derived from its use. These could be a claiming the economic and social contributions of useful option for many SMEs. entrepreneurs-both large and small-officials Banks should be given incentives to develop can reduce uncertainty and promote a more stable links with SME and microenterprise associations and competitive business environment. that pool their collateral by providing mutual guarantees for on-lent funds. The Grameen Bank Supporting entrepreneurial capabilities in Bangladesh and the Bedan Kredit Kecamatan program of Indonesia have both demonstrated Despite efforts to liberalize Africa's economies, that such arrangements can be very effective. the number of entrepreneurs engaged in long- Rwanda's banques populaires, Cameroon's credit term productive investments is still small. African unions, and Nigeria's Savanna Bank are success- countries can help entrepreneurs overcome the fully using similar approaches to improve access barriers that remain by improving the institutions to credit for small-scale borrowers. and infrastructure that support enterprise. Both private and public organizations need to speed INFORMATION SYSTEMS. Entrepreneurs can entrepreneurial responses to market incentives by broaden their markets through cooperative ar- mobilizing capital and human resources (both lo- rangements that disseminate information on local cally and internationally) and by stimulating local or regional products and services. Extension ser- production of goods and services. Programs that vices based in the public sector have largely failed. target assistance to specific groups-redeployed The new consensus is that privately managed pro- workers from the public and private sectors, grams are better at sustaining information flows school leavers, women, and the poor-can also and technical assistance to local enterprises. The perform a catalytic role. success of these voluntary efforts depends on the ability of locally based trade and professional as- Mobilizing capital and human resources sociations, NGOs, and grassroots organizations- sometimes working with governments and FINANCIAL SYSTEMS. Banking systems need to be donors-to develop demand-driven mechanisms reformed and strengthened to mobilize savings for delivering these services. for investment and to improve access to credit (see Local consulting firms are well placed to de- Chapter 8). In the past, government policies have velop the feasibility and implementation studies attempted to lower financing costs for SMEs needed to attract finance. In Ghana and Togo as- through interest rate ceilings and directed credit. sistance is being provided to improve access to These policies, however, have largely failed be- these advisory services. Such programs should cause they did not address the more critical prob- reward only consulting firms that turn out bank- lem of improving access. Publicly managed able projects rather than encourage the mass pro- development finance institutions, created to com- duction of useless studies. These kinds of pensate for perceived market failures through programs can promote a sustainable information subsidized lending programs, have proven either system that provides entrepreneurs with technical unable or unwilling to recover debts. Access to expertise specially adapted to local conditions. credit for SMEs will be more sustainable if chan- Large enterprises should be encouraged to sub- neled through commercial banks that are permit- contract to smaller ones and to assist their devel- ted to charge interest rates that reflect the real costs opment by helping with credit applications and and risks of small-scale lending. market studies and by providing equipment, The problem of lack of collateral can be ad- training, and quality control. Private schemes that dressed in several ways. Official titling of unreg- bring together small firms for joint leasing, pur- istered land and buildings would increase the chase, or time sharing of equipment can increase supply of collateral for many small-scale entrepre- efficiency and economies of scale. Voluntary co- neurs. Training bank loan officers to appraise pro- operative arrangements, like those in Kenya and jects can reduce the demand for collateral by Mali, can help smaller firms to find inputs from balancing the need for security against more reli- local and regional large-scale manufacturers. Such efforts can also be supported though data eign and domestic investors who may otherwise banks that help entrepreneurs to locate equipment be reluctant to negotiate the present maze of re- (including used machinery) or to make licensing quirements. These centers should be given full arrangements for imported technologies. decisionmaking authority, accompanied by a sys- The media too can help improve market effi- tematic simplification of the approvals and proce- ciency. Privately operated newspapers, maga- dures previously assigned to other government zines, journals, and newsletters encourage offices. contacts between potential buyers and sellers. Modified procurement rules, including reason- They also help entrepreneurs to share information able preferences, can be used to stimulate local about investment and technology. More gener- and regional sourcing of publicly purchased ally, publications give business interests a voice goods and services. The size of orders and specific and ensure that governments are accountable for quality requirements should be monitored to en- their policies. Governments should permit private sure that they do not discriminate against small- groups to disseminate their own publications and scale firms unnecessarily. Governments can help should promote an environment of open discus- private exporters by making export formalities sion and press freedom. quick and simple, by running ports more effi- ciently, and by helping to spot foreign markets for Foreign and public sector catalysts nontraditional products. Central banks can help successful exporters to acquire the imported in- FOREIGN CATALYSTS. Transnational corpora- puts they need by allowing them to retain foreign tions (TNCs) have traditionally been valued for exchange. their capital investment. However, their role in the Public enterprises can have a catalytic effect on transfer of technical, marketing, and managerial the development of entrepreneurship and techni- know-how can be much more far-reaching. TNCs cal skills. In several countries, including C6te can foster enterprise by discovering new business d'Ivoire, Kenya, and Zambia, former parastatal opportunities and by assembling the initial capital managers have formed their own private firms. To and human resources to pursue them. In Mada- fulfill this seedbed role, public enterprises them- gascar and Mauritius garment industries were es- selves need to become more entrepreneurial. They tablished through initial investments by need to operate with managerial autonomy and foreign-based firms; TNCs collaborating with do- on strictly commercial principles. Managers and mestic counterparts were a catalyst for local entre- workers require market incentives for good per- preneurs who later followed their successful lead. formance; salary and hiring policies should be Foreign companies and institutions are acting designed to reward effective workers and em- as catalysts in other ways. The African Manage- power managers to fire employees when neces- ment Services Company, a nonprofit organization sary (see Chapter 2). established by 40 TNCs in cooperation with bilat- eral and multilateral development agencies, sup- Investments in people ports African enterprises through managerial training provided on a commercial basis. In 1986 Sustainable strategies for fostering enterprise the International Finance Corporation, the United depend on the ability of entrepreneurs to mobilize Nations Development Programme, and the Afri- their own resources. Even if it were possible to can Development Bank initiated the African Proj- "spoon-feed" financing and skills to every entre- ect Development Facility. Through its regional preneur, governments alone could not assemble offices in Abidjan and Nairobi, the facility helps all the capital and human resources required to African SMEs to find investors and technical part- sustain a vibrant, growing economy. Nevertheless ners but does not itself invest in the projects. targeted programs to identify and develop the entrepreneurial skills of particular individuals PUBLIC SECTOR CATALYSTS. Governments can as- and groups can, play an important role. Carefully sist entrepreneurs directly through specialized designed and implemented, these programs can agencies. For example, to help new investors over- bring economic and social benefits that greatly come bureaucratic obstacles, Mauritius has set up exceed their cost. an investment center that centralizes licensing, registrations, approvals, and applications for util- ENTREPRENEURSHIP DEVELOPMENT PROGRAMS. ities. Such "one-stop shops" can benefit both for- Short-term programs designed to encourage indi- 145 viduals with entrepreneurial potential have improved. Indigenous NGOs can also help to de- proven effective outside of Africa. Candidates fine the needs of targeted groups, to reduce ad- typically undergo self-selection procedures or be- ministrative costs, and to improve the distribution havioral testing before qualifying for training. The of resources. Programs geared toward developing Entrepreneurship Development Institute of India, participatory, self-sustaining associations can for example, provides instruction and counseling yield benefits many years after external assistance from the original screening up to the actual oper- has ended. ation of an enterprise. In Ghana former public sector employees are receiving advice on invest- Broad-based infrastructure and services ing some of their severance pay in new businesses. Nigeria and Senegal are trying to use such pro- CONSTRUCTION. House building employs local grams to promote self-employment among school masons, carpenters, brickmakers, and leavers and the unemployed. Pilot programs in metalworkers. In rural areas construction pro- Kenya and Malawi assist owners of existing enter- vides off-season work for farmers and a smooth prises. transition into rural nonfarm enterprises. Hous- Entrepreneurship development programs must ing construction creates jobs at little capital cost, ensure that the demand for training is a genuine generates income from rentals, and often provides response to the opportunities of a competitive an entrepreneur's first workshop or warehouse. economy. They should avoid creating new win- Contractors who coordinate these activities de- dows for privileged access to subsidized credit velop managerial skills. Better access to housing and other forms of special treatment. Training for credit and effective protection of property rights the select few chosen from targeted groups will could broaden the scope of formal finance and not by itself solve Africa's long-term employment help to increase demand for these services. and productivity challenges, but successful train- After getting their start in housing construction, ees could provide a useful example for others to entrepreneurs can move on to larger projects, such follow. These programs can also guide govern- as road construction and maintenance. Govern- ments in identifying and removing the constraints ments can ease this transition by contracting civil that the business environment unnecessarily im- works projects to local enterprises. Burundi, poses on entrepreneurs. Ghana, Kenya, and Madagascar, for example, have all begun to shift away from arrangements MICROENTERPRISE DEVELOPMENT. Support pro- that rely on public management of civil works. grams targeted to economically and socially dis- Instead they are giving work to local contractors. advantaged groups are proving to be a This reduces infrastructure costs, and it increases cost-effective way to increase incomes and im- employment through more labor-intensive tech- prove productivity. Although experience in this niques. Competitive bidding and timely payment area is still quite recent, a growing body of evi- can reduce the uncertainties for private contrac- dence suggests that the development of Africa's tors. Associations of local construction enterprises smallest enterprises-typically owned by women, should play an active role in planning the techni- rural residents, and the urban poor-can have a cal and scheduling aspects of civil works projects. substantial impact on employment and incomes. By increasing the incomes of the poor, these pro- RESEARCH AND TECHNOLOGY TRANSFER FACILI- grams can also boost the demand for products and TIES. Entrepreneurs capable of exploiting the busi- services. ness opportunities presented by local or imported The most effective microenterprise develop- technologies are the vanguard of the "missing ment programs are locally run and aimed at spe- middle." Governments and donors should en- cific objectives. Although the number of courage them by funding basic research facilities prospective recipients is large, the individual as- and by helping to disseminate commercially via- sistance required can be quite small. Loans of $300 ble technologies. Schools can support this process or less, for example, can make a big difference. by encouraging careers that combine technical Microenterprise associations can screen borrow- expertise with business skills. Programs that bring ers and monitor the repayment of loans, and ac- students into closer contact with local businesses cess to credit and information can be quickly will help build the necessary linkages between 146 academic institutions and the business productive employment and economic growth. community. People also need a healthy business environ- ment-one that enables them to plan for the fu- SERVICES. Privatization of public enterprises en- ture, that rewards achievement, and that gaged in trade, transportation, finance, and social encourages entrepreneurs to invest in themselves services is under way in many countries. These and their enterprises. They need financial and reforms are opening up fresh opportunities for information systems that give them access to re- entrepreneurial initiative. When privatization of sources, infrastructure that supports links with public services leads to increased competition, it the rest of the economy, and institutions that pro- can become a catalyst for local enterprise. The mote the full development of human resources. abolition of Nigeria's cocoa marketing boards, for By working with governments and local associ- example, has opened the door to new initiatives ations to improve the business environment and led by traders and private farmer associations. In to support entrepreneurial capabilities, donors Ghana and Mauritania competition in the trans- can make a valuable contribution to this effort. portation sector has created new opportunities for External resources-financial and technical-will entrepreneurs to run large-scale bus companies. be most effective if they help governments to con- Education and health services can provide im- centrate on: mediate opportunities and long-term support for * Shifting state spending from public enter- entrepreneurial initiatives. As public expendi- prises toward support for infrastructure and ser- tures for human resource development have con- vices tracted, Africans from all sections of * Regularizing the legal status of enterprises society-from the wealthy to the poor-have in the informal sector and building on the grass- demonstrated their willingness to pay for schools roots institutions that support them and health care (see Chapter 3). These activities * Removing barriers to the entry, exit, and should be encouraged because they promote expansion of small-scale enterprises, protecting broad-based access and sustainable systems for contract and property rights, and ensuring fair achieving social goals. Governments can support settlement of disputes them by removing unnecessary barriers to entry. * Supporting financial and information sys- Professional and trade associations, NGOs, and tems, led by the private sector, that broaden access grassroots organizations, in cooperation with of- to capital and technology for all enterprises ficial a~encies, can certify the quality of social * Helping targeted groups to respond to mar- services provided by the private sector. ket forces, to create employment, and to improve their productivity. Answering the need Entrepreneurs will play the central role in trans- forming African economies. A consensus, increas- Enterprises begin with people. The future de- ingly reflected in policy reforms and other velopment strategy should recognize that al- initiatives, is forming around this vision of though governments can facilitate progress, Africa's future. By creating an environment in people will make things, happen. Africa already which people develop their skills and talents to has many who will seek out opportunities, take their full capacity, African countries can make the risks, and respond to market incentives. But this entrepreneurial catalyst a key strategy for promot- is not enough to meet the long-term challenges of ing sustainable growth with equity. Regional integration and cooperation: From words to deeds The preceding chapters have noted many in- many intermediate and capital goods industries stances in which regional cooperation and trade (such as paper, steel, and pharmaceuticals), and would assist Africa's long-term development. The regional cooperation can help these industries to most important of these are: develop efficiently. Neighboring countries can * Capacitybuilding.Chapter3callsforregional also provide an outlet for excess capacity and centers of excellence where resources can be con- experience for tackling larger overseas markets. centrated to achieve top-quality training and re- * Energy. Chapter 5 also argues that the explo- search in science, technology, agriculture, ration and development of Africa's hydrocarbon economic and business management, and a vari- reserves can be facilitated if these activities are ety of other fields. undertaken simultaneously in several neighbor- * Food security. Chapter 4 makes clear that ing countries with similar geological structures. greater trade among African countries would help Furthermore in the procurement, refining, and overcome imbalances in food supplies, thereby distribution of petroleum, costs can be reduced reducing Africa's dependence on food imports substantially through regional cooperation. And from overseas. Liberalizing regional trade in food the same is true for the development of natural gas would contribute to food security. Establishing and hydropower, where substantial economies buffer stocks and undertaking joint crop forecast- can be realized by interconnecting national power ing and livestock disease control are other areas systems. where a regional approach could result in gains African leaders have long accorded high prior- for all countries. For better pest control and natu- ity to regional cooperation and integration. It was ral resource management-in particular, river a central theme of the 1980 Lagos Plan of Action, basin development-regional cooperation is also the Special UN Session on Africa in 1986, and essential. numerous other high-level statements and reports * Industry. Chapter 5 points out that in the on African policy and development strategy. This framework of a general program of trade liberal- is particularly important for landlocked countries; ization, there are benefits to be gained from a Africa has more of these than any other continent. faster rate of liberalization within Africa. This The fragmentation of Africa has been arguably would help existing underutilized and overpro- viewed as a formidable constraint. tected firms to adjust by increasing markets and competition without exposing them too quickly to Experience to date international competition. Internal markets in most African countries are not big enough to Many institutions for regional integration and achieve economies of scale and competition for cooperation were created soon after indepen- 148 dence, although often without much planning or panded significantly and is now around 10 per- preparation. The Lagos Plan of Action provided a cent of total trade. conceptual and planning framework for economic All CEAO members, except Mauritania, belong integration. It divided Sub-Saharan Africa into to the West Africa Monetary Union and share the three subregions: west Africa, central Africa, and common CFA franc, which is pegged to the French east and southern Africa. Under the framework franc. They have a common central bank, which envisioned by the plan, each subregion was to holds their reserves in a French Treasury account. pass through three stages: free trade area, customs For the privilege of convertibility, the states be- union, and economic community. longing to the union have accepted limits on bud- In Africa there are more than 200 organizations get deficits and domestic credit expansion. But for regional cooperation; more than 160 are inter- convertibility is not a sufficient catalyst for pro- governmental and the rest nongovernmental, but moting regional trade; there must also be a sup- most receive government support. However, top- portive regulatory framework and factor heavy structures, politicized appointments, the mobility. reluctance to give power to regional executives, The Economic Community of West African and the failure of nearly all member countries to States (ECOWAS), whose member states include give priority to regional issues have reduced the those in the CEAO and the Mano River Union, has effectiveness of these regional institutions. Many made little progress toward economic integration. governments-even the better endowed-have Because tariff and nontariff barriers have not been failed to meet the financial obligations of member- reduced, trade among its partners is at the level of ship in these organizations. the early 1970s-about 3 percent of the group's Progress toward market integration has been international trade. The pattern of trade has not disappointing, with the share of intraregional changed. C6te d'Ivoire and Nigeria still dominate trade in total trade still at the level it was 20 or the export of manufactures. On labor mobility more years ago. This is due partly to the uneven there has been setback rather than progress; in distribution of benefits and costs. When countries 1981 and 1983 Nigeria expelled more than 1 mil- face budget and balance of payments problems, lion Ghanaian guest workers. There is no move- they seek to avoid the immediate costs of regional ment of capital within the region because capital integration. But these costs must be borne if markets remain underdeveloped. Furthermore longer-term benefits are to be reaped. The smaller ECOWAS' rule of product origin has become a and poorer members are also concerned that most source of serious disagreement. To qualify for the gains from integration will flow to the more de- organization's tariff preferences, products must veloped partners and that compensation proce- be made by firms 51 percent (or more) domesti- dures will be inadequate. cally owned. This rule (which the CEAO does not Regional cooperation efforts have been success- have) promotes indigenous manufacturers but re- ful when the objectives were limited and focused stricts exports from C6te d'Ivoire and Senegal and when the benefits accrued quickly to all part- (since their industrial plants are considered for- ners. They are typically cases in which a large part eign investments) and discourages foreign invest- of the financing was borne by external donors. ment. In the Central Africa subregion market integra- Lessons from market integration tion schemes also have been disappointing. The Economic Community of Central African States, AmongAfrica'smarketintegrationschemesthe the youngest, has had difficulties getting started. West African Economic Community (CEAO) has The Economic Community of the Great Lakes been most successful. It has achieved a high de- States has had financial problems, and no serious gree of integration that supports economic spe- efforts have been made to implement its trade cialization and facilitates the flow of labor from liberalization program. Although members of the the poor Sahelian countries (such as Burkina Faso Central African Customs and Economic Union and Mali) to the richer coastal countries (such as (UDEAC) have a convertible currency-the CFA Cote d'Ivoire and Senegal) while supplying goods franc-trade within the group has declined, while in the opposite direction. By reducing nontariff trade with nonmembers has increased. For exam- barriers and establishing a satisfactory compensa- ple, the main African trading partner of Congo (a tion mechanism, trade within the CEAO has ex- UDEAC member) is Zaire (a nonmember). Almost half of the UDEAC's African trade is with Lessons from regional cooperation ECOWAS, compared with less than 45 percent within the group. Taking into account the failings of the East Af- The slower progress in integration in Central rican Community, the Southern African Develop- Africa may reflect the absence of regional leader- ment Coordination Conference (SADCC) has ship. In West Africa leadership in the move to- avoided the market integration approach and has, ward regional integration has been provided by instead, adopted an incremental, project-oriented, Nigeria, (in ECOWAS) and C6te d'Ivoire and Sen- regional cooperation approach. SADCC's success egal (in the CEAO). as a regional cooperation organization is partly The collapse of the most promising economic due to its focus on actions rather than on building community, the East African Community, dem- an elaborate secretariat; governments take re- onstrates how the inability to solve political differ- sponsibility for sectoral programs allocated to ences can compound the economic problems them. Its programs aim to reduce economic links inherent in any economic integration involving with South Africa, and this has led to large trans- countries at different levels of development. The portation and regional industrial projects (with community began with a shared currency, a some donor financing) with immediate benefits to regionally coordinated infrastructure, harmo- member states. nized economic policies, a system of common in- More narrowly, there are regional cooperative stitutions, and forced labor mobility. It fell apart institutions strongly supported by national gov- in the late 1970s over the sharing of benefits, po- ernments and external agencies to address specific litical divisions, and conflict of interest among problems-for example, the riverblindness pro- Kenya, Tanzania, and Uganda. gram of West Africa supported by a consortium After a period of disillusionment economic in- of donors (see Box 7.1). There are also successful tegration has recently been resurrected in the form regional training and research institutions, such as of the Preferential Trade Area for Eastern and the Eastern and Southern Africa Management In- Southern Africa (PTA)-15 heterogeneous sover- stitute and the African Regional Standards Orga- eign states, stretching from the Horn of Africa to nization. Similarly the cooperation in the Zimbabwe and the islands in the Indian Ocean. management of hydroelectric interconnections All countries in between are members; Angola, between the Volta River Authority (Ghana) and Botswana, Madagascar, Mozambique, and Sey- the power utilities in Benin, C6te d'Ivoire, and chelles have yet to join. Togo, has been remarkably successful. The PTA aims to promote trade within the sub- However, many intergovernmental organiza- region by reducing tariffs and nontariff barriers, tions in Sub-Saharan Africa face a financial crisis. particularlywithpreferentialtreatmentforcertain Some regional technical services have been products. To be eligible for preferential treatment, closed-OCLALAV locust control, OICMA mi- a commodity must be both of export and import gratory cricket control, and the remote sensing interest to member countries, its producing firm organization in Bamako. The largest regional in- should be 51 percent (or more) locally owned, and dustrial investment, the West Africa Cement Mill not more than 60 percent of its components should (CIMAO), established in part with World Bank originate outside the PTA. financing, was closed in 1984, largely because its Tariff reduction has been slow and application clinker was about double the world price. of the 51 percent ownership criterion difficult. Five states, including Zimbabwe, have been given, A strategy for future regional cooperation temporary exemptions. The demands of the eco- and integration nomically less-developed countries for equitable distribution of the benefits of liberalization has How can regionalism work better? The limited become a bone of contention even before these achievement of the market integration efforts fol- benefits have begun to emerge. To facilitate trade lowing independence has opened a debate about payments, a clearinghouse managed by the Cen- its efficacy under present African conditions. Crit- tral Bank of Zimbabwe has been established, but ics have declared market integration a failure. it is underutilized. They argue that the model, taken from the experi- i 510 Box 7.1 The control of riverblindness The Onch.cercia,i, Control PrograniC LCP. -1 up in nual etpenditurer The progranm cot' ont, St per per0on 1024. illustrates the s.cope lor region3l cooperation in tack- prolected per year hng a common probleni tnchocerciasbi i§ a parasilic Transmission oi the dis;a;e hav ban halted in ' per- di4ea-e thaltcau-e, dtbilitation. o;ed3mage, and ec entu- cent Lol theonginal prograrr, arca-7n7t,0iIii 5quare kilome- alls I t riertIindness About _30 million people live in ters with ntarlk 20 milhon inhabit3nts The p3ra-ite i^ We-t Atrican irea; in tt hich the dJiease has been ior si di inm out in the human population People pret iouv-I endemic it iS pret alent in the sat annah and has contrib- intected are recovering. More than 4 millicn children born uted ic- tht depopulation o! retlatiels tertile rier vtatle5 s. in recent eoarsare growing up F ithout riA ol contracting It is c3used b a thread-like paraiitic worm which lodges the disasc lncrea3ingls the mer %alle%z treed Ir-n1 in nodule- in the human Asin and for 10l to 1r iears onchocerci.sisarebeing r-ettled Net' \llagc-'arebeing producet million lntt mbrs os Thebiteofatemalebla3c tl established 3nd 3gricultural production is increasing, A tranmLLs thedlise3a,e 14rn report b the L1, Agencst r International Detelop- The CCP aims rtocontrol theblackl, b\ devtroig itn ment eetirned that the ofi.Oud square kilometersot cul- larvae in the rterhreedint site, with insecticides sprased ti able land hat has been recotered could potentiall\ teed trom smanll aircraft and heliccopters. The env ironmental I1) million people each s ear impactit the- insecticide i-s conrinucusl\ monitored b an The program h3a bet n iucce%'tul bec3use ecological group. in cooperation w%ith the benetliciar * Participating countTies agreed to pool and sharc r.- tountrics Tocomplementectiorcorilrol theCXCPhasalso sources to support centralized and tlchnicall\ conple\ collaborated tx uth thepharmaceuti:al indutry- todet elop operation, .; drug. itermectin iterniectin has proted sateand ellec- * A plausible long-term tr3ategs tith a clear obtecn'e tite in reducing norbidis in largetcalelield tna-ando i;s included thetargetcl bringing theprogram to ,ucce4s.lu being integrated into the 0C P t %ector operations. conclu'ion The program required a unique institutional arrange- * Donor' impressed b; the prc-gram s promise ot health ment intolting 1i1 \est Airican goternments the spon- and econonic benetits.conimitted sulhcient resources *onngagencies thedonors. and an international technicaI * Donor and beneticiarx got ernment conmnumnent 1was * catI. The tour sponsuoring agencies ithe ULNDr. the FAO. reinforced b% tangible resuls-in health and ,ocioeco- the World Bank. and thet%HO estabi,h polict and ot er- normic benefits-earls during the program see operations Thti WHO is responsible tor carrs ing out * Program perlormance and ettectit ene-> hate been en- operations The t\orld Bankl mobilae4 donor tinancing. h3nced through 'trong management supporied bK tht manages the progran-, * trust fund and takes the load in intolvement ol the sponsOring agenctesand independent socioeconomnic detelopinent tollow- up The OCP em- e\pertcormmittee' plots more than ith,1 stalt 'h percent ct whom are Atri- B% the lIte l0its the resertoir ot parasrie~ is Etpecied cans Slatt are given prtkc oaljbuthateconsiderable to hate died out in mno-i ot the human population ulexibilit\ in attainint them The sustained donor conmiti- throughout tht 11-cLouunir s area Thereatter %u ith st rength- ment pro' ide rte13hltely 1-.ng-term emplo\ mnent. lelping ened health s r-tems. the bt neticar countries should be locreate highls morttated ,uati At present the program i' able to detect an\ reappearance ot nterblindnt,, and to tunded b\ '0 donorcountries and international agencles. suppress it through the new drLg. itermectin 'tith beneticiarN countries pas ing about I percent ot an- B_ fS JN> __ ;g. __ ____- -.:-___--- .--. - ~-- --- ence of highly industrialized European countries However, experience suggests that countries who have a high level of trade among themselves, are unwilling to buy high-priced goods from their is not relevant to Africa, where trade among coun- partners when lower-priced goods are available tries and the level of industrialization are low. The elsewhere. In the past governments have been range of tradable commodities is seen as limited, preoccupied with negotiating preferential agree- and consequently the transport and communica- ments and compensation arrangements. Less at- tion infrastructure is inadequate. They recom- tention has been given to the real issues: the mend that the market integration approach be noncompetitiveness of member states compared abandoned and that a new approach that empha- with third-country suppliers, the high cost of sizes broadening the regional production base doing business, the shortage of foreign exchange take its place. This would give priority to regional and credit because of distortions in macroeco- investment in heavy industries (such as chemi- nomic policy, the limited complementarity of out- cals, iron, and steel) and transport and communi- puts, and the restrictions on food trade. cation infrastructure. The supply of goods is The production approach does not address this perceived as the main constraint to the increase of range of issues. It does not identify how and where trade among African countries. the capital to be invested in expanding production is to be generated. The sizable volume of informal ted to a program of implementation. Given the trade shows that the constraint of poor transport fragmentation and pervasive jealousies and mis- and communications can be overcome. In the ab- trust between countries, the initial steps are likely sence of market signals, the production ap- to be the most difficult. proach-implying a state-led development of To overcome this, subgroups of two or more core industries (such as steel, cement, and chemi- countries should be encouraged to integrate more cals) at whatever cost and without regard to mar- rapidly than other members whenever they per- ket demand-can force the pace of regional ceive mutual benefits. Such an incremental ap- integration. In this approach all investment will proach should not involve further proliferation of come through the public sector. All past experi- organizations but would involve bilateral (or mul- ence shows, however, that public sector manage- tilateral) agreements between governments that ment combined with protected markets results in perceive benefits from a mutual liberalization of costly and unviable projects; this is an unsound product and factor markets. Donors can help by basis for integration. providing resources to support regional trade An alternative strategy proposed here has three across borders by private enterprises. elements: designing incremental but comprehen- There is no reason to channel all programs sive approaches to regional cooperation and inte- through established organizations; improvised at- gration, strengthening specific functional forms of tacks on bottlenecks may be more effective in cooperation, and creating an enabling environ- certain circumstances. But any approach must ment for the free movement of goods, services, contain mutually reinforcing, complementary labor, and capital. measures. Improved regional infrastructure is of little value in regional integration without policy An incremental but comprehensive approach reforms to increase the demand for goods and services. In turn this will depend on incentives- A step-by-step approach based on common eco- particularly regarding exchange rates and the lib- nomic interests offers the best prospects for inte- eralization of markets. And policy reform is gration. Even this will fail unless all partners are pointless unless physical and human infrastruc- convinced of the benefits and genuinely commit- ture is improved. Box 7.2 Rationalizing regional institutions Mlore than 20'1 regioi.ir erganizawn tior.co:peration and conivrtnces. together *Lith oth;r regional and irterna integration e'.t min 'ub-§aI.ir.;n Ai:rc3 Proliteration and tional conlerence; co;l go%trnment4 mone, that cannot duplication ol lunctione g,nie rice it the regional le el. to be lu;hlied b% the benetir gained Irm them coniliclk over rrm3ndates and to di% ided lo%alth among Proliteration aocreate3n unman3 ,eable problem o0 government. A.hetih ernmentletel tht% Imp1. eheav%- co,ordination The malor Ainran regio'nai and runctional tinancil1andadrnini4Tr.1ti,oburdenc EBencountrie,.uch organizahon- ha%e the lollo' ing structure! a supreme ac Cote d h oire and Nigeria are i.ndinz it ieasils poIlicxmaking authorit% comrprsc`d ot he.id, oi iare a dilticult tc meei their linncial obil,ations Arrear, in pohic -coordinating bods ot ministers 3nd an cecutl%i i:.o%ernment contributionoL tQ no,i cithoce inmtituti.on elected bN head, ol 'tate In mo-t ca;es thv head, cn ltaie budg4ts and special account- ar nimunt,ng .\s a re.ult meet oncec%er% t%oe e.ar; and the min.rter! e'.r% yr their exe.ule; tinmd it dit iiti 1.! ,mpklmtnt the ta,k. This is top-hea% 3nd -umbtr-omc. alread% asign,d tk. thcm. let alon, plan [or tuture acrt ii- Recoenizing the depth ot thece problemv the Lagoc tles Plan ol Action and Lib;etquent EC A and vAU .tatrnentm The institutions budget4 3re in%ariabl too smritl n:-r hta-eallexpressedconcern TheECAandC-)n Uhav maJde the tasks gouernments 3SSlgD tO ihemn Ben it govern- proposal. or rationalization that ha%e been endorsed bs ments %zerE tot ttentuaIlk pFa their contribution; ;ould Atricango%ernrnrnts butationrhai, en 1o% Nloribund notbe-utit.ient i.tn3bletheteiecative,. i:carT% out their organizations have n.t been closed doiu n. Oxerlapping mandated iassk; In;utticient tundingz ihu; pre%entrit n.ti- institution. ha%e not been combined At the *ame time tution4 trosm mak.ng beiter u4, ot thv reiourcem the% re regional inmt,tut,on4 in critical ticid, u.tch as agricuitur.l ccii e re;earch. ri% er basin pl.inning lighereducation and train- There arc o-th,r adminiTT3ative and inanciai burdens irg iinclUdinp center oft e\cellEnce' transportarion 'ar on gouernment, \loi necEnauton-arenmand3ted b: char- line; and ,.hippinzi. arnd pe:.t c,.-nirol need to be tcrc to ho'ld s.exer31 h,gh -c el conic rence, arunuall~ m Ian, ,trengthened or created gi-.Ž -3r th,-- add up ro a ;,zabi, igenda Air,can . . .~~~~ :- R - :- . _ _ _ _. _ . f - : : - -: Phased programs addressing critical barriers to locked countries. Overland transit costs are in- regional integration are essential. Each phase flated by cumbersome and antiquated customs would include advances in harmonizing policy procedures, poor operational coordination be- and maintaining and improving infrastructure. tween modes of transportation-especially at the As an urgent first step regional organizations interface between ports and railways-and weak need to be rationalized (see Box 7.2). They should harmonization of regulations on transit carriers. be reformed and consolidated into lean and effi- Furthermore regulations imposed by landlocked cient institutions with a clear mandate and capac- countries, particularly regarding reserve cargo ity for making decisions. These institutions could rights for national carriers and foreign exchange then spearhead the creation of a physical, techni- allocations for transit expenditures, have also con- cal, and legal infrastructure that would support tributed to high costs. regional exchanges in goods, services, labor, and Subregional organizations, in particular the capital. Rationalization would be greatly assisted PTA, have prepared proposals and plans of action if donors provided concessional finance to meet to deal with the nonphysical barriers to transit. transitional costs. Implementation has been slow and plagued with setbacks resulting from unilateral changes. Strong Regional transport, communications, and services policy commitment is required. Such a commit- ment has been the main factor behind the progress Inefficient highway, airline, railway, shipping, achieved in developing efficient regional transit and telecommunications services act as barriers to along the Beira corridor under the aegis of the regional trade and contribute to the high cost of Southern Africa Transport and Telecommunica- doing business in Africa. Much of the infrastruc- tions Commission. ture has been primarily designed to serve the The urgent need is for simple and coherent export and import needs of each country in its policies designed to encourage more efficient and trade with non-African countries. After three de- reliable services. The choice of route and mode, as cades of independence links between Sub- well as operational coordination along specific Saharan African countries still remain weak and corridors, should be left to shippers and carriers. therefore need to be systematically strengthened. This will require greater reliance on private sector Large new investments in infrastructure will operators, including those in the informal sector. not stimulate trade within regions when other African railways have lost ground to truckers in barriers have not been eased or eliminated. A stark long-haul overland transit services. To reassert illustration is provided by one of the few concrete their competitive advantage and to improve their achievements of the Mano River Union: a bridge prospects of regaining financial viability, African between Liberia and Sierra Leone that is hardly railways will have to progress quickly toward used because of restrictions on both sides of the operational coordination and joint marketing (see border. Box 2.6). The preferred sequence is to introduce coordi- Civil aviation and maritime shipping stand to nated incentives and remove administrative bar- gain most from service-oriented regional cooper- riers to trade and then to improve infrastructure ation. A recent decision to restructure Africa's in response to the growth in trade generated by poorly coordinated national airlines to achieve the policy reforms. New investment in infrastruc- greater regional integration should be accompa- ture should be based on a thorough evaluation of nied by decentralization and increased scope for current and potential trade and should be the private sector management and operation. A sim- leading element of an action program only where ilar approach to national maritime shipping poor infrastructure is the primary barrier to gen- would enable Africa to benefit from the world- erating new trade or to expanding existing flows. wide reorganization of international shipping. It should be complemented by projects to rehabil- There is considerable scope for national private itate and upgrade existing infrastructure. firms or public corporations to improve regional Regional cooperation programs in transport services. One of the most successful examples of and communications should focus on providing this is the state-owned Ethiopian Airlines. Its Af- efficient and reliable services. This is particularly rican regional network has established an interna- important for transit to inland regions and to land- 153 tional reputation for technical exceUlence, mana- priority. In the long term, however, this will make gerial efficiency, and entrepreneurial flair (see Box it easier to integrate the African network. 7.3). Transportation, electric power, banking, com- Education, training, and research: regional capacity munications, and insurance are some of the areas building in which national public and private operations could be extended to the regional level. Better Acquiring technical skills is costly. No African integrated markets and improved transport links country can afford all the higher-level institutions would reduce the costs of providing critical inputs required for training, research, and development. and distributing products, which would make Centers of excellence in various fields are needed them more competitive in African and world mar- in Africa, and they can be most efficiently estab- kets. Improved telecommunications can fulfill lished and operated on a regional basis (see Box vital needs in Africa by lowering transaction costs, 7.4). substituting for more expensive transportation, Because technical training and research are spe- and improving market efficiency by making infor- cialized, regional cooperation yields significant mation more readily available, economies of scale. Quality is also enhanced be- The Pan African Telecommunications project is cause regional institutions can achieve a critical a comprehensive regional approach to integrating mass in staffing and justify the provision of facil- the African telecommunications network by link- ities and equipment (such as libraries and labora- ing national -networks. Because demand for tele- tories) that smaller institutio-ns cannot afford; this communications services at the national level is enables them to set higher standards. And, by low, strengthening the capability of national tele- mixing students and staff from several countries, communications networks is to be a short-term they broaden perceptions and foster human and Box 7.3 Ethiopian Airlines Ethiopian Airlinc~- lormed ir. l04h a~ 3 got~ermient- in maintaining it'. el; con;.i;teni L ith other local empkoN - o'.mnedesnterpri.e h3a tabli-.he-.1a %orlds'%idE reputatioin Er§ icr lechruc~l excellencv. rnin3,erial eiticienc%. enirepre. Be%.ond itichnical manag,meni-~ primar% -~uc- neurial ilair and financial 4undlne" Thi~ reputation ha.; ce-4ha; beenin niaintaininga.purel'. commercial ailitude surl i'ed the political and c~ononmic diluiwullie~ that the t0.oardit; actni'tie4 Financial.i.&iabii-i has been ihedom- countrN tacedI belore and artter the reo,oluiion in Ic-3 inani criterion tor both old 3nd nei' roujtes. The managet- The airline h.-s de'.eloped a3 highi% proita3ble rneh%ork ment e'.acts~ light tinancial disciphine and require.; tim,l% ot international 3nd domestic routeu. It is the univ airline paN ment trom the Ethiopian gc.%ernmeni either bor trans- opcrating- a reli,:nal hub %with a,i linlk L-ernee.n all porting orlticials ,:n sch,JuIvJ iliehts or lor L-ing its air- cornersol '5ub-1~3har3n Atrica Routes k. ithin Africa C-pe. cralIi ciallk bent. cen EaAl and 1\eA~ Airica not'i gencrat.: 31 Ethiopian Nirline; i- cornpeiti%.e oin all ihe rc.utk it percent iLi is retenue- operates When. the go'. rnmerit consmidered protectinig it~ The foundati-ns- oi it- success la\ in a niaragement domesthcroute,trom 1lorei ',n comperitii.n theairline man. agreement %%'ith Tranzs World Airlines; during the lc5i.Is ai.ement in*.ited on and achie-,d an open-door pohic\ Not onl\ i, as the tEchnical qualit% ot ih~ ileet ul aircratt It %'as c4;ential the'. ariLled for de'. elopirng ihe airline coiniinuouslI% updated. but the technical capacit\ tc. main coimpetitie operations in Eurcopean mairkots oithLrx%is;e iain aircrait ind oto rain creti~ mechan,ics cabin statt )nd the cocoons oi protecii%, policies mna\ pro'.~ stiihng e%en m.ark.eiing, and tirancial -tait ".a4 alzo built up Theze tothEonesLbeingprotcceclthed rsl aben e r. lac iliti. no'., pro'. id, snri,ces notocnl% to )Ethi.:.pian Air- alote.er.er e..c.'pi rI7T1 and a consequentwuilling- linesbut io ri.lherAiricn andMiddl Easern arline nes o1 intrnatiomnal 1.nlendrs tu tinancv rie%%' aircrait The mans kol w,hi.:h ha%e tseco.nded Fthioptari air cre,%w, and airline rvcei'.c' no s;uosidiv- irom the go.e rnmenl excepi techniciar ~. a1 diniirii;hing ta\ ewnmption it; linancial independence Apart irorn a sor pcricod in the lat,. l07iIis political on both re'. enue account and capital account has- let man- urmperatii%.; ha%i? not intruded on the sclecticin c'l senio,r agers- more itre tol manage and hih go'.ernmernt le,s in- managers. Thte director-s include cabinet ministErs, b-ut clined tc, intrude The tinal prc.duct is; a lok%.-cost and the~. ha'.e ne'.er intertkrEd %' ith daN -to-da'. management etticicnit -tr,. cc that both siJpplrt rnatiional and r~eional Route de'.elopn-ent. pricing pohic. and hir,n,2 and linng integration ind earns t.:reien e.chan.AE trom its- interna- res4pons ibihtie~ h.v call rested %% ith managemnent Urnl' on iional ope:ration' wagc and salar- Ic' lels has. therc been a politicail interest Box 7.4 Entomology research: A case study in regional cooperation ThelnternornonalCentreot Insect Ph%,iolog% and Eo1ogE ea te In itrese.%rch oncr..ppe5tltiring 10 learn rom iICIPEI in Ken%a. % h,ch carries out research in entomol- Chinesesucce- in thebiolngrcalcintrolol insects thro1igh og', i. an exanmple of an African center ol excellence and irust. and micrc.bes that carrm tio\ic bacteria to dt:tro% or succe;,tul regional ilstitutiol building it %%a tounded crop borer-. such as a tun us that eats through inmect in the belief thal bavic scientfic research vs easential if lar%.ae Tomo%etechnolog% trc'mrthelabtothetield ICIPE Atricans are lo ;ctntrol their destiny. The mrere trin.ftr ot olten relmt on the c..-pertn or n t neighbor n b clud Wesutern tEchnolog% is not 5utlicient to .ol.e the crucifl ing their 1and in teld tril.. The center . mn.ct re;i4tarl problems po4ed bh inmectson heailthand 3griculturein th -trTain4 .- maize malure ea.rl\. and ,eid bMtore the rain rroplcs. ends This '.arit\ ta3te. good bit it. ; dIr doss not cor Founded in 1.07i and orginall; housed in a Nairobi respond t,o local prerternc.e-somelhing ICIPE ir. Inn to-h garage IClPE . new headquarter, ts at Dudu\ lIle. % ith a change malor held station at LAke ' ictoria lts current 3nnual ICIF'E is 1:.rkin4 om :in 3ntitick %accine 3nd L-n a %'3\ operating budget is $11 million It emplo. s 5i -9.tnor sci- to tontrol the tl-etl s hich iransmits blood paraitl.i; that entiist. w ith nnlAtrcan gradtiate and postdoctoraltello%. causv ir- panoomirnanks- ;cpngn .l,ntu , in bk.th humans tromn se%eral di!ciplines such ac ecolog'. biochemistr\ and animnah It has adapted a tecltnicjue deve-loped bL and to.\icolog\. IC-PE ha. receied emren;ike support Zimbab"eanjaid Brutishscinhntnistshatlm iscomprihble i'fth trom %cienititrc acadtmies .nd financial support trom a % lge-bas'd;cmpaign !oung lasaua men ha. e m.ide man' donors including OPEC and the LiN Dl' In IQS; it odor-baited traps that hatert reuced tlhe lsetmepopulation ' entthrnughaditliculitinanciaI periodalter locus rg too b ';L perc;nt ir n2 4quar. miles in the Ngunim3n high- i liltle on the practical appihation ot its research. A more lands The-e trap; ar. on. c\ample ot rc4earch on phcro- reahlilc a;pproach has ince been adopted. Applied rather mnnes-the chemicil codd- Ior inSect communication than theoretical re.earch is no'. emphasized 3nd permna ICIPE i' ir%. ing te. dentit. ithe phuromone blend u!ed b% nent program leader. h.i% rEplaced visiting directors ot the temale stemborertoatirct themalet-r mating w%hich research could then be u-ed t. make it rimpussu.ble or n,ale. and ThL center has no. matured into an internationaIk tenmale.- to tind each o.lher recognized research ind traininS in;titute that aitra.:tb -nother arte, ot re;arch ,; the Itud' ot %ectors th:.t qual,tied Atrican scienti-t- ilt 4ucccs4, and % ii..lit\ ca;31 be transmit par.a,tEc di-mieanv4 ;uc:h .3 lei hmman ,i a dis attribuLtedo leadersipp'.'utha cearsenseoturpc.4e.arid ca-e found in -mnarnd arp.*i". Thcusandsot people 5ulter to an enthusiastic and capable stat trom a t.rmr that rc.eni.le. l1prs.ix .r trom rnontt ah3ttccts ICIIPE . program nclud,s rese3rch on crop pF5t Ii% e- internal org3ns stock tick.s. tpets and other insect % ectors .i tiumanl dul institutional links across borders. A promising In the early years of independence there were initiative is the bilingual Inter-African Electrical several successful regional universities (for exam- Engineering College in C6te d'Ivoire, which caters ple, the University of East Africa and the Univer- to the training needs of Africa's power utilities. sity of Botswana, Lesotho, and Swaziland). With Institutions serving several countries are of two rapidly rising enrollments, however, the potential types: those managed on a regional basis and benefits diminished while the additional over- those run nationally but serving a wider area. The head costs of managing a regional university re- latter presents fewer management and budgetary mained. Consequently they broke up. However, problems. By creating regional centers of excel- under SADCC a different and more flexible form lence based on national institutions that take stu- of cooperation is emerging. To avoid duplication dents from several countries, the sending country of higher level training in agricultural sciences avoids creating and running expensive institu- and to meet the region's human resource develop- tions, while the host country can reduce its unit ment needs, SADCC has agreed to carry out spe- costs by optimizing the scale of its facilities. cialized postgraduate training in selected Already 62 national technical institutions in universities. The University of Zimbabwe will francophone Africa accept foreign students. In specialize in agricultural economics; Sokoine Uni- addition there are at least 86 regional technical versity, Tanzania, in agricultural engineering; training institutes and no fewer than 60 regional University of Malawi, in animal sciences; and the associations concerned with education and re- University of Zambia, in crop sciences. search. Nevertheless a sustained effort to coordi- Other areas of cooperation have emerged. The nate and rationalize the multitude of regional Association of African Universities, the Associa- facilities is still needed. tion of Faculties of Agriculture in Africa, and the Box 7.5 Regional netlvorking to improve professional capabilities r Tht Atrican Ecrnomic Re,-earch Con-ortum ,; a remark- Leading Airican rE,earch-r- and poicr mnaker, in the able ex.mple .) a vucces,rul regional capacitx *buildirlnz -on-ortium ^ adui,or. rommittee cho-e the re>,arch top- program T ice each sear M to 5 Atnai3n economic rt- i:c, National teams ha%, ,o lar bKn concEntrating on ihe -earcher, .*Iten troni th, un,.cr,itit; ccitrnment, and ssue,olbalanceo a rent,anddonic,tinarcialman- research insriture' .it more than 15 countrit- gather iL. a.-enment but he adi ,or c,.mmitteet i1no%, con-tdering di euss and .Aaluate their ongoing rt-earch addint t\ternal debl management mediunm-tErm adiust- Launched in t%S the con-ortiun; pro idtes runding, rn,ft and taa3rin polk; to the rese.irch agenda. The and technical ;upFort to netiverks or rv-vcrchers The cmmonr program tahilit.ite, c.rnpartvon and dJ;u ni.n initi3tive tt emi-pronged tc; prmote macneciornic re-. n 3 rteicna! b3sss For exampie Tanzanian re,earcher. -eareh and to strenEth-n local r.e-arch inmtirutions b I ha',e dirtctl% contributed to recent public: debait, on Jde'elopine their tall Itasoeek'to niak, ;en.:.r polw'x- irrucrural adlustnwenl n th3i countri The .on!ortium makers and polit.icians morc aa.;re ol applied re-earc:h Pr - ides a 'tnue l:r shairin, E\priences and a^e;.irg i and iti po.nttnt.al contribtution it thl dlecisiornmnking pro- their applcabl,hr. to other nrions. Tihe netaork creates ce The *)n,.ort!un ,s currentl% zupported b% s;eeral oippi runite. ti..r irterr.at3in.nl e\charlngt ot ideas and donors arnd admin,tered bN th, R0ckereller Foundati,_n r!ndingC -!nce nitmb-r, ot the nervorks tra' el and work Ba'ed in Nairobi its current annual budget ot $1 I million abroadiromninme lotime schoIarv mi Europv Nc.rth.-\mer- ' -upports sormef1teamr ach o:ah ruror It eresearchers cd and other rcg,ons participate through meetnne iclint in the earl\ l.su1 neik l traintd Atrican eoonomi;t4 er c.i..perati, re,earch and as teconded per;onnel in L%err challen,ged h. contribute to thc tar-reaching rem. i"s t..ther Atrican inmtituiton, National ncilatng to pubicize - ol domestc polc b:eming Undertaken t n lhetr go,ern- ind discuss research lindingn and their implications tor ment4 At th3t time o0' inri lo the dearth Ml e\perenct,d p.ltci, also link -eno.r technocrab 3nd politicians so that local ecimnon`,nist and the %-aknes- -.t Arrican re-,arch thelatterm3 betterappreciatetheeconomic imp%litions institut,ons. most ecunc'm!c Folici an `iti ,is "a3; c:.n- t.-t politic31 dec.sion, The corl,orhum al-o supports a ducted b5eiparriatt con'ultant- or stati ir~.m muiiila3ttral sclolarb: lournal E Itcr riLi E.u.oIiL R.: ,;, w%hich tinanctal. nstitution a.a rtnult t a- pocmrl iternalized pubhsh4v re-earch en,anatin, trcm the net%, ork and 13aked cont,nuit; Tl-t conŽortium * ucc;;s largel% due to itt lk\iible. rhe con,ortiuni grec -out ol i a \:,nturc initited in 1m plLnra6lic approach %hich talorp r'rograms tim the needs r h. the Canadi.n International Decekpment Re,earch ct mdi, dual oroups Bven3bling nell-trained Alrican,to , Center that proi ided runding i comircorne the hurdlm> to rt-nm m in conta:t i, icoll ':HeaeLs in Atrica and oierseas qualits r,-',arch %%ithin the Iocal inituiions .,t Ea'terr. it is helping them to -t.ai at the tr. nner ot their Protessior and So;uihrn Atrica lack ot equpnk-nt tricltrc and li breaking do, r. the traditional barriers b~t%m een go% - ltbrarx resmur:es bureai,craic bottleneck, that delased ernmeni and uniitr'ttts i N helpig poicl makers ap r tht transter ot grant, m.ide in tort,ion e\chan.e Ir.m thr-rie thc potentia! ot local3 aadJn.i, resource, It ,. a central :irttice, to the res- rch teams and the intell,:ctu3l model that merits replication in other di,ciphnlns * tolarion ot anals;sis tr..m both acad&nwtc peer; in the * ret,ion and *enic-r otticti!a si-_ African Teachers Association might, with modest gional clientele and providing assistance to na- support, play a key role in promoting communi- tional institutes in, for example, project manage- cation among African educators and educational ment and administration. ESAMI is generating its institutions. Networking also holds great poten- own revenue by providing consulting services tial as a highly cost-effective way to enhance pro- (see Box 7.6). fessional standards and skills (see Box 7.5). The appeal of regional approaches and organi- Another example of regional and subregional zations is also evident in high-technology areas, cooperation is found in the professional develop- such as solar energy, because relevant skills are ment programs of the Consultative Group on In- exceptionally scarce, capital requirements high, temational Agricultural Research (CGIAR) and and the population to be trained in any one coun- several of the management development insti- try small. The Solar Energy Research Center, tutes. The CGIAR has strengthened national Afri- sponsored by the CEAO and based in Bamako, has can agricultural research capacities through a matchless physical plant and the potential to be institutional support and training of individual on the cutting edge of applied solar research. researchers. And the Eastern and Southern Afri- Regional approaches to education, training, can Management Institute (ESAMI), the West Af- and research have a positive long-term effect on rican Center for Administrative and Management economic and political cooperation in the region. Studies, and the Pan African Institute of Develop- It enables institutions to be built that are more ment are developing training programs for a re- indigenous and better suited to local conditions. Over time this will lessen both the dependence on such as poaching. The East African Wildlife Soci- expatriate teachers and researchers and the need ety is a model for building efficient organizations to send students abroad. in areas in which wildlife needs protection on a subregional scale. Natural resource management In watershed management close regional coop- eration is also vital. The record of organizations The quality of natural resource management established for this purpose-the Senegal and determines whether growth will be sustainable. Gambia river valley organizations, the Niger Much of Africa is caught in a downward spiral of Basin Authority, the Lake Chad Basin Commis- desertification, land degradation, and deforesta- sion, the Mano River Union, the Great Lakes Elec- tion that is threatening its economic future. Many tricity Organization, and the Kagera Basin of these issues are specific to a particular country, Organization-has been mixed. The main prob- but some, such as pest management, need re- lems are overly ambitious objectives, inadequate gional approaches. Regional locust control in west finances, and the lack of qualified staff. There has Africa used to be highly effective, but in recent been insufficient attention to river basin planning, years it has broken down. and member countries have rarely formulated The protection of wildlife can also benefit from their national plans with regard to coordinated action at the regional level. The transnational regional watershed plans. game parks in east Africa, for example, require The river basin organizations should be rehabil- coordination and joint action to address issues itated, but with more limited objectives. They Box 7.6 Eastern and Southern Afncan NManagement Institute (ESANII) In 17-4 the member -t3tc, ot the Eawt Alrncan C.,ninu- .outhern Aflrica nd rain- national trainer- i, ho can ,n nit -K,tnv-a Tan7an;i and Ligindi-iounded th.. Fa,t turn ottcr ,iniiar couriec in rlteir ox'n ifnuiitilion;-tor Atrica Communiv Nlarrigemcnt in4titut in Aruhia. Jan e\rmple ~-n;rtucthon m3na3trmnnt under a protct ipon- zanim a a mr3nagomrnt ce% .1openi cter lit trainir . re b the LCU and a orflhopon casememthd; run in ;.n4u.fianc;s and re,eirch ;eruce for public .ectrorgta- cooptration % ith the Econ,rnmic D~ elopmenm lntirtut, o nizatiwn Folk.% ,ng the 10- breakup ot thc comniunit% the I\ ,rld Bank Technical aw,.-tance c ti,. ha-, h3i n il rnemberthipc\p.indvld bt ond the three oriinal alatei to cludld zupport to th, Nlan.agement Serx ice Board in Z,rmn Angola Boti%u;na Cc.m,nro Dlibloul Eth,opia Lenothlo ha and nationil intiltute; 'tilt trom national instittition Nladaga;car. hblat i.a \lauritiu4 Nlozanmbique. Namitia in Le-otho and Lig.inda ha'.e been on 4horlrterm a -ign. Seschrelei SsjN;ia Zambia and Zimrrbak In l'IQ' the ment; at ESANi1 mn titul, %%a4 renamed the Eaitern and `.uthern Atrican E- SANl earn, atvut ill percent ot it- ret enue itron, Nlanigement in;titut, ESA \III coure teiwand rece,.:- 110 percent et it! budeet inannual ! E`.A\t1 c.bie,:n% e !t.- irmpro%e the prrkrnrmance and :nrtribution4 trom member countries Smrne 1i) interna: tfecrineri I.t management in the region public and tional agencie with ihk LNDP a, the latrget wupporter pri\at c sector Each \car it oItcr; about ;LI hort-term h3iat .ontribtitCd to EtSANliI. programn through grant- in-scr\ ice management de%eloFment tra,ninm progr.ani! primaril-; for participant lees equipmnent :hort-term min runha andabout hailatmanm el m ean\ her,- iheregtc.n 4econdnieniot.mri.and alir .upporl Ott'rdonors.are These a re attended b% nmore than I 500 per;;cn-. ESANIAi noe. a iHtngESAN1l lnB; cmesilt-; utticientand cnieet collab,_r.a tilitt national managemnent in t.tution; and i-auknonoustentertot ennterpr,>e4 to 0deelopand Pr Lrrt their coursez and ha3 African Trtn:.p,rt Nl3nigelment. in initiati;e that is al tre l.,ent t ailormadc 1;our,:. tt pri rate .iand1 publiclier- read% recvi;m ing donor and re Lonal support prie- F Vitli 4upport Tron) the LiNDP ind other ic:nors ESANi ha3 a himh-cqualith permancnt ;tatl ot zorne ESANlI ha piconeeredla %wnoen Lnde%elopment pr:granm Airican nai.innal- ,electd rni a compehtitm ba'is Ironi that Is unique in Atrica member countrie- Local consultant trtanin6 s,tat are Training concenirate: or core tunctional manageinent h.red 1a. nreieddl t.: tkach Fpecal1 cour;ew A director and secioral area: ,uch a; proicct planning and maniaE- general and a rnanagenmeni team o.er-rc riianagemenl nient public linance tran.iFortahon roh;c 3nan m.anae- anld tinancc. The dir ctor ceneral rEports to ESANII . mcnt trad& and baraing and dataproc tin4 : vsiemn c vcrring board - h ich i; compor ed ot high i,\el rvpre Short-trrnm cour ,. art dJ,gned and run in c p ratlion siintatnvt:e trorn membvr :.tam 1 ith Jlinl organizaticn- ,uch as Air lanzania Kenma ESANII ittir a \ ' able AIrcar, alternaiiue that i: one- Ra!hl ax . xkena and i LgandaCommer.ml Bank. and ih1 third a epen:.xe ia trainin satroad And it4.con ullanc% Zambia Agrculhural ank tbaen are tar more cornpetilt, than those paid to e\patri ESANII akio *er%ec a; h-qd uarter:. ui rhe As-ociation ate k%ith internanonal commumni :upport ESANMI ev ,,r NlinaRrenrenr Training ln;irurti.n-n t r Eastern and peFet tio K b hl-,ulnctint b\ ii-i) should be given only those responsibilities that The justification for action also arises from cur- member countries cannot discharge indepen- rent realities. African economic integration is al- dently: planning basinwide and comprehensive ready extensively practiced through informal river development and monitoring the implemen- trade and other unofficial exchanges. The growth tation of river development plans after their adop- in informal trade across borders partly reestab- tion by member countries. The regional river basin lishes the extensive trade in goods and the migra- organizations would integrate national develop- tion of people that were a feature of economic and ment plans into comprehensive development social life before colonization. For many Africans plans in consultation with national governments. the benefits of greater economic integration are Specific projects would be undertaken by govern- already visible in daily life through this informal ments either separately or jointly. exchange that keeps prices down by increasing competition, supplies products across borders An enabling environment for trade, competition, that would otherwise be unavailable, provides and factor mobility opportunities for employment in neighboring countries, and encourages entrepreneurial activi- The most direct way that greater regional eco- ties. Informal trade also involves profiteering nomic integration would benefit Africa is through made possible by official barriers and discrepan- enlarging markets. Some countries produce sur- cies in incentives among countries. plus meat (Ethiopia, Mali, Niger, Somalia, and Sudan), others surplus fish (C6te d'Ivoire, Mada- TRADE LIBERALIZATION. Raising the returns gascar, Mauritania, Mauritius, Mozambique, Sen- from integration requires broadening market lib- egal, and Somalia), and yet others surplus cereals eralization from timid tariff cuts on selected prod- (Burundi, Cameroon, Kenya, and Zimbabwe). ucts to opening up factor markets, as well as those Some export cotton (Cote d'Ivoire, Sudan, and for goods and services. The challenge is to create Zimbabwe), rubber (C6te d'Ivoire, Liberia, and market incentives that encourage the private sec- Nigeria), tea (Kenya, Malawi, Mozambique, and tor to engage in wealth-creating exchanges across Tanzania), cocoa (C6te d'Ivoire, Ghana, and Nige- borders. ria), and sugar (Mauritius, Swaziland, and Trade within Africa stimulates economic Zimbabwe). Others have spare hydropower (Ethi- growth not simply because it permits countries to opia, Ghana, Zaire, and Zambia) or oil and energy exchange complementary commodities and ser- sources (Angola and Nigeria). Some have already vices. Trade between countries producing similar developed modem industrial capacity in con- goods is most beneficial because it helps increase sumer and intermediate goods (Cameroon, Ethio- the efficiency of firms and farms against alterna- pia, C6te d'Ivoire, Kenya, Mauritius, Nigeria, tive sources of supply. Japan and Korea are often Tanzania, and Zimbabwe), while others have not. cited as countries that built industries behind high The benefits of economic integration through protective barriers, but they adopted tough poli- trade could be significant. Official trade among cies to ensure that producers became efficient, Sub-Saharan African countries amounts to a mere particularly through domestic competition. This $4 billion-only 6 percent of total African trade approach needs to be built into Africa's develop- estimated to be $65 billion-and has stagnated or ment strategy. declined for most countries since the 1970s, when Increased competition would provide an incen- most of the market integration schemes, such as tive to raise productivity, lower costs, and remove preferential trade or customs unions, were policy distortions. The internal markets for many formed. This has been due mainly to macroeco- products are so small, however, that there is no nomic policies-overvalued exchange rates, dis- room for competing firms; competition must torted credit allocation, and heavy domestic come from imports. Liberalizing markets within market production-that have spurred the Africa could help greatly to create the conditions growth in Africa's parallel markets and informal for competition among African producers, border trade. It is estimated that even today up to thereby stimulating efficiency and economic an additional $5 billion of Africa's imports from growth. the rest of the world could be supplied by other Overall trade liberalization needs to be a part of African countries that are already exporting sim- the effort to restructure African economies. Uni- ilar products outside the region. lateral trade liberalization has proceeded slowly, however, and gains have sometimes been re- ances in the flow of trade between member coun- versed. This reflects both the difficulties African tries are inevitable. Subregional clearinghouses producers face in competing on the world market have been established to settle balances between and the opposition of interest groups who have countries. Settlements must ultimately be in con- traditionally benefited from trade restrictions. vertible currencies because no member can afford Governments, for example, fear the political costs to build up balances of other members' currencies. of lost employment and output, especially in the But, given the shortage of convertible currency short run, when weaker firms face retrenchment earnings, members are anxious to use these hard or closure before new activity has picked up suf- currencies for purchases from non-African ficiently to provide an offset. Regional trade liber- sources rather than for settling accounts with alization would permit a phased approach by neighbors. Governments could help by enabling allowing a competitive environment within a re- the private sector to freely hold and dispose of gion. African currency at market clearing prices. To A more rapid regional liberalization, in parallel achieve this, the clearinghouses could expand with overall trade liberalization, could accelerate their existing arrangements with central banks to trade expansion and secure benefits that could not include commercial banks. be achieved through unilateral liberalization. The greatest benefits are likely to come from combin- MOVEMENT OF LABOR AND CAPITAL. To sustain ing a phased overall trade liberalization program regional trade liberalization, it will be desirable to with a reciprocal phased dismantling of barriers free the movement of labor and capital that could to the free flow of goods, services, capital, and compensate for chronic trade deficits. Freeing labor within Africa. labor and capital flows within the region would By limiting regional preferences, overall trade improve growth prospects by creating condi- liberalization will ensure that regional liberaliza- tions-through increased competition and wider tion mainly increases trade rather than diverting market access-for mergers, acquisitions, joint it. Further, the more extensive and rapid the over- ventures, and other forms of horizontal and verti- all trade liberalization, the less likely that new cal integration. These would provide additional resources will be misdirected to produce noncom- opportunities for African firms to reduce unit petitive products for a regional market created by costs and to become more competitive interna- high protection against third parties. Thus the tionally. proposed approach should increase regional Some countries are short of good agricultural trade largely by replacing less efficient national land in relation to their population, whereas oth- production with regional imports. As capacity uti- ers are short of labor. The economic prospects for lization of the most efficient firms is increased, people living in the Sahel region, for example, are unit costs would be reduced to lower levels than limited. Their growing populations can be accom- could be achieved at the national level. modated only if they are allowed to migrate to the coastal countries where there is greater economic FINANCING REGIONAL TRADE. Increased intra- potential (see Box 7.7). Similarly, during the next African trade will also depend on the availability 30 years, the heavy population pressure around of finance and financial instruments, such as the Great Lakes will need to be relieved by out- banking networks providing letters of credit, ex- ward migration. port credits, and other financial services to traders In recent years the migration of skilled workers and firms. Even if African suppliers could be com- who cannot find work in their own countries has petitive on price and quality, inadequate financial increased within Sub-Saharan Africa. Ghanaian arrangements place them at a disadvantage with professionals, for example, are found in C6te non-African competitors. At this microeconomic d'Ivoire, Gabon, Kenya, and Nigeria. Skilled and level the banking system should expand and de- semiskilled workers are also moving across bor- velop, particularly by improving private sector ders without formal documentation. Such mi- access to hard currencies and credit. This will grants have made important contributions to require the banks to shoulder the commercial risk innovation and entrepreneurial activity, espe- and donors to assist governments in absorbing cially in the informal sector. noncommercial risks. A realistic structure of exchange rates is critical The most difficult issues of financing regional to intraregional trade. Trade among members of trade arise at the macroeconomic level. Imbal- the CEAO (whose currency is the convertible CFA Box 7.7 Labor mobility in west Africa * West Africa en3s a long rradit ion 0 labor mot,.hlir ing perctni of it n n p.pu I:,tion n ho had to look lor wocirk back lo precoloma3l time' During thi4 crnturx iht rel3 mainIl in C.Scd l%oire mnd Nigeri ti%elv more pro-perou; coa,tal area' ha'ealtracted labor Senegal and Sie'.rr: Leo re ha t also beernimportant host trom the poorer interior area. Although imnigration LountrIe tormigranril in 1 I5thes had 30 -liliailnd K 1n laws imposedalterindependeneeha'ecreattd rigidtie. imrmilrant, respectivekl The n.)it3a1ract;eeconom% in this flow 0- tatter racrli, border; ha scontinued as migrants the at ItC70 ho c'.er 3a, Nigeria duringit! oil boom respond to economic and cmplo% ment oppcrtunitte Amron the Chan aia, migrating to Nigeria u cru man; ! Bilateral agreements *uch as the one bet een Burkina skilltd and ,erniskilled %c-rkers a 1043 urt ct *hott s Fa0o and C.te d' ci re that replaced the lo nier A t,nm ' t pcrcent cI migrant.s a, killed and 14 percent as .emri direct recruitment. hatve lacilitaied labor mobilit% The -killtd lborersi The e% en tt'tnd public ctor lots as CEA memnlber countriessigned anagre rmenton thc tree tl:acher, doc-tor, 3nd nurs-e, tIling obh lett 3ant b$ circutation ctf people and a IL,, ECOWAS pr-tocol pro Nigerians %%h. had auken up higher-pa; tig poi-tions in 'ides tor tree moi cmEent ot persorF. betticen menrhur the pri% ate sector But i th the ;cmonoin; re;eion trom tatMs lPi to 1053 Nig l ria tr\pelld morethan I million loreign Cote dXi onre ha been particularlh elcomimng to immi- % kr. grants As a matter of go' ernient pol?ic migrnaticn and ReiLonjl Il3taor mcbilitt berialitt both host and our:e uigh labor moblitx -, ereconsidcerd importint ccntribu- co utric4 Nhcrint- contribL1It i., the host *:'intr; s Eco tors loeconomic grok th Thepopulation ,I non-I; irrlan nomic grc.t th bs hlping to 'ploit it' potential n ore 1 practicall; doubled L%ithin a dtcade tror -tl)-11! in 0tn5 Iulls V\ rkers lea'. rig their countries riv- lc pressureon to 1 4 mnilion in 1C5a C3tEe d lI.rc i craplo.mint lalbormarlkt- nid crnd homerr n;itianc,- inBurki naFl's - opporrunmiie in plantation agriculture industr%. corn- Ih arnouni li labLut s p,rcontrit t DEir hich not onh merce. and sen ices attracted %%orklrrs trom nrieghboring augments the scarce !, re ign eac:hangeu arning- but al9 : countrie- In the mnid lCCO;4 nmgrant' helped ott.l- the pr, l dk,a -'urcl:dd1r.td on; t3 anr,s3nd capitarl torm- .xodus c'i rural I%orians Ic' urLbn centurs k%here higher tior. i ages in indtu*ir and tc-ri tee ' ere: nr-ore aitrcticn e Nli- But thcrr are cost' too The Iabc,rx;pcrtng cLurtrie. grant- came mainl tram BLurkina Faso Ghana. Cuine3 00P uiput the mort d; nanti and able m n tend to j lali. and Nigtr Initialik the i%orian labor market at- migrate and lea% e "-omen behtind o mana3e the iamilmd tr3cted primaril; %ocung less * ell-eduwated mnale i- tea- tarms In the hast; cuntrie, go' %rnment e\p-nditures on 0 sonal %'ork!ers But incresini;m ni,grant hai e -t. r.d miocial sermi ice nina; nw. and conict ha; e occurred v. hen ' longerand ha't ettIkd th their tamrlic local. %orktr, petrcet:.cd thcni,el- diplaced bn toreir- ; There are man; othr r\tamplc 1of such libor mohilirt er, particularl\ during period' ..i E:oni'-mi rece;sion In the llicnO Ghana . pro perii; attracted man' mnigrant E[perienie: -uggc-t. that taking immigrants ha' been w%orkers Ircim Burkina Faso Cote d Ih ire Nigeri3 3nd hc n,iical t countrie, in permid- ot econorrlnc grcit th ' - Togo In lhti m orr th3n NmJ.1iOu 112 perctnt ot t a pp- Diiiou t-ieris1uring rconumicrcess on' Inthelong lation "ere immnirar3nt ; ho %%orktd in the ;1coa tarns tern ire, ni .eonlniou labor i ill b; central tothe dv%el - and mine, and engaged in peit; tr3ding Ho. - er th' cprnm nt t Atrican\rcin n.me3 and the init oration ot their flow re; er'ed during the economic recessic'i in the is-71 mairk,i. bi I'¾3 Gh3na had lst notr on; the toreignera baut al-it franc) currently represents 10 percent of their total OTHER BARRIERS TO TRADE. Once a more appro- trade. This compares with less than 1 percent of priate regional incentive structure is in place, trade for the other members of ECOWAS, for many regulatory and procedural barriers to intra- whom currency convertibility has been sus- African trade should be simplified or eliminated, pended because of accumulating debts and de- including quota and licensing arrangements. Sim- layed settlements. plified procedures that have already been agreed Monetary convertibility is not sufficient, how- to, such as the PTA Road Transit Customs ar- ever. Trade among UDEAC members-the only rangement, need to be enforced. Border checks other union in Africa to have a convertible cur- and unduly complex transit procedures cause rency-is 2 percent of total trade, one of the lowest long waiting periods that reduce intraregional percentages in Africa. Also only these two unions trade and contribute to the high cost of doing have relatively free internal movement of capital. business in Africa. Currency convertibility and capital mobility are Up to 70 administrative steps may be involved important for sustainable increases in regional in moving goods legally across African borders. In trade but are not sufficient. Zaire there are 39 steps for exports and 30 for I at, imports, including signatures, validations, li- vate agents, as well as the state, and that they be censes, and authorizations from innumerable ad- geared toward reducing costs arising from market ministrators, with each official collecting a "fee." and bureaucratic imperfections. An open general license system for imports from With scarce foreign exchange and budgets se- regional partners is essential to increased trade verely constrained for the foreseeable future, the and integration. temptation to renege on regional responsibilities Lack of information is another barrier to in- may continue to frustrate integration. Donors can creased trade. Cape Verde, for example, seems help here. This is particularly important for the unaware that Cameroon could replace Portugal as poorer members of a regional group, especially at a source of aluminum discs for making cooking the outset. utensils. Private sector manufacturers should help spread information. African producers-both in- Promoting a pan-African identity dustrial and agricultural-need to take a more activist and aggressive attitude toward marketing Beyond actions on policy, infrastructure, and and competition. Encouraging such an attitude institutions lies a more fundamental need: to mo- will require an incentive system that rewards bilize the media and educational and cultural in- those who move in this direction. stitutions to promote the concept that cooperation Uniform standards and specifications for prod- within Africa is likely to enhance the progress of ucts are also necessary. The metric system is not all African societies. A systematic program to universal in Africa. Beyond this there is a common achieve this could include organizing seminars, perception that product specifications are more workshops, and exchange visits for African jour- easily verifiable and quality control and reliability nalists; establishing a regional information center of delivery are better from suppliers outside Af- to produce and distribute feature articles, pam- rica. Witness the Nigerian bicycle manufacturer phlets, videos, and films; and incorporating whose products became more acceptable to courses on African history, culture, and econom- customers in neighboring African countries when ics into school curriculums, especially at the uni- sent to the United Kingdom for reexport than versity and postgraduate levels. In addition when exported directly. relaxing travel restrictions and residence require- ments would encourage increased contacts within Compensation for unequal benefits Africa at the personal level. Only when groups of African teachers, intellec- Without explicit sharing of benefits among tuals, and community leaders are committed to countries, regional integration is likely to encoun- greater cooperation among countries and articu- ter insuperable political obstruction. Experience late the steps needed will popular support be built from successful common markets-for example, and sustained. Ultimately regional integration the European Economic Community-suggests cannot be imposed from above; it has to develop that creating larger economic units increases spe- from the grassroots. More access to information cialization and improves overall economic effi- on other African countries, more exposure to ciency. African integration too should improve them, and more education about them are vital resource allocation; this in turn will raise absolute parts of the process. incomes. Schoolchildren could learn more about their Yet integration may increase the relative in- African neighbors. They could also learn that self- comes of some partners faster than others with reliance does not mean looking inward and de- new poles of industrialization emerging. For this pending solely on their own national resources. It reason there is a need for compensation mecha- means being able to interact competitively with nisms, such as a direct transfer to the budget of the neighboring countries and with other parts of the weaker economies, as happens in the Southern world. It means making the most of national Africa Customs Union. Any compensation mech- strengths, but compensating for weaknesses by anism that is not automatic risks failure, since cooperating with neighbors. It means recognizing participating governments may withhold pay- that no country, particularly the poorest countries ment during a budgetary crisis. It is also important of Sub-Saharan Africa, can go it alone. that compensation provide direct benefits to pri- In conclusion foster regional and subregional programs. The priorities for action now are: Progress toward market integration and in- * To devise compensation arrangements to fa- creased cooperation in a whole range of areas- cilitate rapid progress in rationalizing and economic, technical, environmental, food strengthening regional and subregional security, educational, and research-is central to institutions Africa's long-term development strategy. To this * To simplify procedures that currently hinder end, firm leadership is needed to overcome paro- regional trade and investment; in particular, to chial and entrenched interests and to ensure that harmonize fiscal and monetary policies, and to benefits are shared equitably. The watchword is liberalize the flows of goods, labor, and finance. pragmatism-to move forward on a step-by-step Donors can facilitate such initiatives by funding basis, nurturing new industries supplying re- regional structural adjustment programs, which gional markets, but avoiding investments that are would support measures and help meet compen- not clearly justified by a hardheaded analysis of sation costs aimed at both promoting market inte- market prospects. An active role for governments gration and strengthening selected regional and the OAU is critical: initiatives are needed to institutions. 162 Sustainable funding for development The future development strategy proposed in this of GDP to achieve an annual growth rate of more report emphasizes policy reform and institution than 9 percent in 1980-86. Yet, despite high aver- building. These activities are not resource inten- age investment rates in Mauritania (30 percent) sive, but neither can generate a supply response and Togo (24 percent), the average growth rates without costly supportive infrastructure-social achieved were quite low, 1.8 and -0.3 percent, and physical. The decline in spending on infra- respectively, in 1980-86. Thus it seems that a crit- structure during the 1980s has damaged Africa's ical minimum rate of investment is a necessary, prospects for growth and must be reversed. Fund- but not a sufficient, condition for sustained devel- ing for this must be sustainable, and over the long opment. term it will have to come largely from domestic The rate of return on investment in most Sub- sources. Nonetheless external resource flows will Saharan African countries is low compared with continue to play a crucial role into the next cen- countries in other regions and has been declining tury, falling gradually in importance only after (see Chapter 1). The future development strategy 2010, and then only if the policy reforms and aims to raise the efficiency of investment, but this targets proposed in this report are achieved. will be slow and difficult. Even if the rate of return Adequate public spending to operate and main- on investment can be increased by 50 percent tain social and physical infrastructure is as impor- (from about 13 percent in the 1970s to 20 percent tant as new investment, if not more so. In setting by 2000), the rate of investment, both public and targets for savings-both public and private-es- private, would have to be about 25 percent of GDP sential recurrent expenditure must be provided to attain a growth rate of 5 percent a year. for. Reorienting investment Development expenditure The future development strategy emphasizes More and better investment developing human resources and improving physical infrastructure to provide an enabling en- The evidence of more than two decades sug- vironment for producers in the private sector. The gests that the best performing developing coun- composition of investments among sectors should tries have had high rates of investment. As a group reflect these priorities. the countries with growing per capita incomes An illustrative level and sectoral composition of have had investment-income ratios of around 20 projected investment (equal to 25 percent of GDP) to 25 percent. East Asian countries, which grew is as follows: fastest, had investment rates averaging about 25 * Agriculture (including rural infrastructure). to 30 percent. China invested roughly 33 percent As noted in Chapter 4, public investment should be related mainly to introducing better technol- will be high because of the high proportion of ogy. The scope for high-cost projects, such as large young people in the population and the high pri- irrigation schemes, is limited. Instead growth will ority accorded to investing in people. Achieving have to come from improved seed varieties, more the basic goals of human resource development and reliable supplies of inputs (such as fertilizer, would require total expenditure to rise from 4 to water, pest control, and agricultural machinery), 5 percent of GDP to 8 to 10 percent annually; a and better management of livestock. Investments substantial part is expected to be of a recurrent that would most likely yield high returns would nature. New investment would be about 3 percent be largely in research and extension, small- and of GDP, with special emphasis on primary educa- medium-scale irrigation, forestry, soil conserva- tion, improved science and technology, family tion and land development, livestock and fisher- planning, primary health care, water supply and ies, and low-cost rural infrastructure to serve areas sewerage, and nutrition. with good agricultural potential. For the agricul- * Other sectors. An investment of 7 percent of ture sector as a whole, including rural infrastruc- GDP would be required annually to meet the ture, an investment of 4 percent of GDP would be needs of financial, insurance, and business ser- needed to achieve an annual growth rate of 4 vices; housing and construction; hotels; restau- percent.. rants and tourism; transport and storage; * Manufacturing. The strategy outlined in wholesale and retail trade; and other services. Chapter 5 emphasizes that the informal sector Public spending needs to allow also for operat- (with low capital intensity) would be the domi- ing costs and the replacement of capital. Reviews nant source of growth. The main investment com- of public expenditure in Africa have repeatedly ponents would be selective expansion of key confirmed the neglect of operating and mainte- industries, a major expansion of informal manu- nance costs. For most countries more analysis is facturing, development of appropriate technol- needed to establish the norms for properly main- ogy, technical and managerial capacity building, taining and operating service facilities (such as and the rehabilitation and maintenance of existing rural health, water supply, and primary school- equipment. Investment totaling 3 percent of GDP ing), to maintain existing investments in the road is required to achieve a yearly growth rate of 5 networks, and to estimate the recurrent costs of percent in manufacturing. new investments. Emphasis must continue to be * Mining and energy. Large investments placed on the systematic review of all public in- would be required to open up new areas for ex- vestment and spending programs for the appro- ploration and prospecting and to replace aging priateness of size, composition, mix of new and plant and equipment. In the energy sector there is current projects; the funding for operation and good potential for investment in hydro power and maintenance; and the protection of core pro- geothermal plants, natural gas, solid fuels (coal grams. This is a prerequisite for sound and lignite), petroleum, and the development ol management. energy-efficient technology. An investment of 2.5 percent of GDP in these two sectors is expected to Mobilizing domestic resources achieve an annual sectoral growth rate of 5 per- cent. The overall domestic savings rate has declined * Infrastructure (excluding rural). A key com- dramatically in Africa from about 18 percent in ponent of the enabling environment is sound in- 1972 to roughly 13 percent in 1987. For many frastructure. An investment of 5.5 percent of GDP countries the decline has been even greater. Be- would be required, with major investment com- hind this is a drop in the rate of public savings, ponents being to clear the backlog of Africa's which is not only negative but declining (see Table maintenance and rehabilitation, to rehabilitate ex- 8.1). Reforms have reduced budget deficits in isting facilities to avoid further deterioration, to some countries, but more must be done to raise make infrastructure improvements with high public savings. rates of return (such as telecommunications), and to provide new investment to catch up on the Raising public revenues shortfall in infrastructure urgently needed to sup- port the productive sectors. In the late 1970s tax revenues in Africa averaged * Human resource development. The invest- around 20 percent of GDP. Loss of exports and ment required for human resource development falling export prices in the 1980s have reduced 164 Table 8.1 Gross domestic savings in Resource mobilization and development would Sub-Saharan Africa be better served by a gradual shift from taxes on (percentage of GDP) trade toward taxes on consumption and income. 1972 1981 1987 There should be less emphasis on taxing exports . v . = . n and more on carefully targeted domestic sales and Gross domestic savings 17.8 15.3 12.6 Public savingsa -3.3 -5.9 -7.2 excise taxes, revenues from the consumption of Private savingsb 21.1 21.2 19.8 public utility services, and an extended use of fees a. Current account budget surplus or deficit. on a selective basis for certain social services. The b. Residual. potential for "rent"-and revenue collection Source: World Bank data. through taxing that rent-has shifted away from producer surplus (taxing exports) to consumer surplus from the use of modern utilities (for exam- these percentages in some countries in which most ple, transport, power, water, and telecommunica- of the revenues were raised directly or indirectly tions). But given the dependence on trade taxes, through taxes on trade. In terms of aggregate rev- this shift should be on a selective basis. It also enues raised, both low- and middle-income Afri- needs careful programming and phasing. Most can countries in general did well until recently. countries move their tax systems in this direction Between 1966 and 1979, when the tax effort as per capita GDP grows. peaked, the average annual rate of increase in public revenues was 20 percent faster than the rate CHARGING FOR SERVICES. Large increases in of growth of GDP. public revenues are potentially available from full-cost pricing of infrastructure services-roads RESTRUCTURING TAXATION. Despite the growth and drainage, water and sewerage, electricity, and in public revenues the pattern of taxes and prices telecommunications. Charges for infrastructure of public services, as well as overall levels of rev- services in most of Africa are lower than economic enue, fall short of what is needed. Taxes on trade costs and cannot even finance infrastructure retard the development of agriculture and indus- maintenance (see Chapter 2). Moderate increases try and generally work against growth and pov- in financial returns would yield revenue equiva- erty alleviation. In the 1960s and 1970s they lent to about 20 to 30 percent of current public accounted for about 45 percent of total revenue, revenues. Such reforms would be relatively easy although their share declined slightly in the 1980s. to administer, monitor, and audit and would en- If the financial transfers from the surpluses of the tail negligible "deadweight" or efficiency losses. export marketing boards are counted as an indi- They could also be administered without impos- rect tax, taxes on trade amount to more than 50 ing new burdens on low-income groups. Greater percent of revenues. This dependence has arisen cost sharing is also possible for health and educa- because such taxes are easy to administer. tion services (see Chapter 3). Consumption taxes are preferable because they A recent review of Bank-assisted projects in do not adversely affect production. Unlike import several sectors estimated the difference between tariffs, they do not draw capital and managerial actual rates of return and the returns that would resources away from agriculture and more em- be achieved from marginal cost pricing. For elec- ployment-intensive local industry and commerce tric power, the gap is about 5 to 10 percentage and into capital-intensive industries with poor points. For water, financial returns are generally returns to investments. And they do not reduce zero or negative, some 10 percentage points below the incentives to produce for export. With com- the potential return from marginal cost pricing. modity taxes all domestically consumed goods- C6te d'Ivoire has been an exception. Up to 1985 whether imported or locally produced-are taxed water charges reflected the long-run marginal at one rate. All other goods are tax free, including cost, about $1.0 per cubic meter, and the sector was imports of raw materials and both intermediate financially self-sufficient and generated revenues and capital goods. Unlike taxes on production, equivalent to 5 percent of public revenues. This commodity taxes do not "cascade" through the enabled the utility to finance and maintain an production process, and they enable producers to extensive water supply program. In most African choose between factors according to their relative countries infrastructure services are paid for in cost. part out of general public revenues. For telecom- munications, the prices charged are frequently no sources from the informal sector. As economies more than half of marginal costs. Even less is become larger and stronger, the use of these ser- actually collected. For roads, the main forms of vices would increase, providing a channel for rais- user charges are taxes on vehicles and fuel and ing revenues-without disincentives and license fees. These vary greatly between countries administrative complexities. and are often greater than actual road expendi- The main difficulties of the cost-recovery ap- tures, but well below the requirements for main- proach are institutional-improving metering, tenance, rehabilitation, and new investment. billing, and accountability, without which extra An increase in overall public revenues of 20 to revenues may not be collected. Hence the need to 30 percent is feasible from full-cost pricing of in- improve the institutional capacity to collect taxes. frastructure services and greater cost sharing for Public finance analysts have paid too little at- health and education services. Excluding roads, tention to the private sector's willingness to pay price increases should not be viewed as taxes but for social services. Yet household spending on rather as charges that reflect their marginal costs such items as medicines and education can be of supply. Public services would earn sufficient considerable and is just as much a "development returns to meet their maintenance and operating expenditure" as is public expenditure on the same expenditures, would show a good return on cap- items. Likewise the propensity of even poor ital, and would have sufficient resources to fi- households to invest in productive assets is nance expansion. Thus, instead of appearing on largely overlooked, although these expenditures the debit side of the public accounts, the infra- are an important element of private savings. structure services are capable of earning apprecia- ble income. Controlling public expenditure The impact of such an increase in charges on the main users of infrastructure services needs to be During the 1960s and 1970s the growth in gov- assessed. An increase of 20 to 30 percent in public ernment revenues led to unsustainably high levels revenues is equivalent to about 4 to 6 percent of of recurrent expenditure, accompanied by the in- GDP in a typical Sub-Saharan country and would discriminate hiring of staff. The problem was ag- be about 8 to 12 percent of the income of the gravated by donors who financed projects modern sector. However, part of the increase without assessing either how they would affect could be offset by reductions in trade taxes. recurrent budgets or whether they were consis- The benefits of infrastructure investment are tent with a coherent public investment program. largely enjoyed by the higher-income groups in Moreover fluctuations in export prices had a the urban areas. There is no social or economic ratchet effect on public expenditure: commit- reason not to raise tariffs on power, telecommuni- ments taken on in periods of high revenues could cations, or other such services. Moreover greater not easily be reduced when tax revenues fell. cost recovery for services rendered to the modern Worst of all, during the 1980s large and continuing sector would not be a great burden for businesses falls in revenues forced many governments to cut if they were phased in gradually and related to back on expenditures, especially on materials. The improved service. The likely effect would be to result is that schools are now short of books, clin- raise incomes by reducing rationing and queuing ics lack medicines, and infrastructure mainte- for services and by minimizing congestion. For nance is neglected. With prudent financial example, the efficiency of power service could be management countries can avoid these problems improved by reducing demand shedding, which (see Box 8.1). As revenue measures take effect, is costly to consumers because it requires them to much stricter fiscal discipline will be needed to invest in standby power (see Box 1.2). ensure that spending reflects development prior- This approach has other advantages. The reve- ities-particularly human resources-and that a nues would be relatively easy to collect and ad- better balance is maintained between expendi- minister. They would also tend to rise in line with tures on wages and those on materials. incomes and would help to stabilize public reve- Expenditure could be reduced through stricter nues. They would make labor-intensive, high- management of public expenditure, particularly yielding programs for rehabilitating and by cutting subsidies to the parastatals and public maintaining infrastructure financially feasible. enterprises, tighter control of public sector wages, They would also provide a way to generate re- and lower defense spending. Many public enter- - o6 Box 8.1 Botswana: Managing commodity booms and busts Commodit' boo msand bu-t hatc had a negati-e imp3ct di%er,ilica.on ould not b- adcr.eIl atecied. on the pertormance ol manv exporters ot primarx prod- The continuit% ot leader.hip ~ince independence i ith uct~ in Ainca Ecess:te e\penditure during the boom a procen record of succerul macroeconomic m3n3ge- period hasgenerall been followed bK daniaging retrench- ment. has contributed to Boti . arna' relatit pro'perit\ mnent when ret enues collapsedl Although Botsw ana relies M\an\ ke\, polkx makers ha. e remained in otlice and hat te greatl on the mining seclor, hich has le' hnkagesw ith participated in the long-running dc-bale- on tcnomtc the rest ot the economy it ha, been a notable exception issues. The lop political leaders reco-nize thu importance Botswana has becn able to manage the boom and busl ot the economic dimension ot the problems th',- lace and c;cle relatitel\ succe,,tull% During theboom periods the are e\perienced in weighing economic oblectttes 3gatn-t government avo-id4 e\cess;ite increascv in public e\pendi- olher cn'iderations Bots" 3nas trad nv nonotpen di,cus- ture an insted builds up international resert es and bal- sion ot issues tacing the conimunurN has helped the got - ances at the central bank to be u'ed w hen the boom ends ernment reach a consensus on longer run ptlicie- NMator When the diamond market weakened in lQS. the -e- pohic decis,on4 are mad onl :ilttcr -\tensite cin'ulta- tent-i and duration 0l thv recession werequiteuncertain lion within the bureaucrac. and in trLewheelingdebales Quickl', the goternment adopted a \arietv ot adjustment in Parlimnent Poicie' agreed upon therelore hate somr policies, which included lowering the e\change rate. re- sta% ing power. ducing bank lending raising interest rates cutting public A sound administrati e s\ ltem ha& bccri entrenched. e\penditure and capping ptiblic sector wages. Subse- which reintorces the leadership s pragniatic appro3ch to quentl% with the continued improtement in the balance n3honal economic man3aernent Detelopmieni plan~ and ot pa', ments the main challenge lacing the go ernment annual budgets are tormulated in an orderlt 3nd di;ci- ha been how tomanagc thelargereesourcesatailabletrom plined manner- Recurrent e\penditure 's tightll con- e\ports to promote sustained economic growth Faced trolled Critena tarpublicimn estmenteemphasizeposiltl e %ith cunent accountsurpluse.ot about 13 perceniolGDP economic rates ol return A strong and it idc l rr pected in 19S4-$n iand 37 percent in I,%7i, the goternments Nlinsirt ol Finance and Development Planiing ensures polic has been to sterilize about otl percent of the increase that public tunds are nct misallocaled or mis,pent Parlia- nmonevsupplv A ubstantial partlolthedi3mond reve- mentary otersight ot public penditures has entorced nue wa, dellected into a ~pecial tund earmarked lor use accountabilitv Lon: e\pene e ith drought; and e; on long-term inv-estments Unlikeothersurpluscountries. nomic uncertaint' helped to scscure popular tUpport tor Botsw ana devalued the etchange rate in real terms bK 42 he htgovernment prudent iinancil nmanagernent percent in 19$i to ensure that its strategy of economic measures. prises in Sub-Saharan Africa still run large losses, varying success. In most countries wages have adding to the pressure on budgets. These enter- fallen in real terms since 1980. This has not re- prises present a depressing picture of inefficiency sulted in many voluntary departures, but rather and poor quality. The noncommercial objectives in less effort and more "moonlighting." In practice used to excuse their poor performance are rarely the first and easiest cuts have been in the comple- achieved. Reforms introducing better policies, mentary inputs and materials required for effec- tighter management, more appropriate pricing tive delivery of services. and user charges, and liquidation or rehabilitation On average African countries spend 37 percent of unviable enterprises are showing results (for of revenues on salaries. Given tight resources, it is example, in The Gambia, Mali Senegal, Somalia, desirable to limit the wage bill. For example, and Tanzania). Over the longer term these mea- Ghana has decided to limit its civil service wage sures, together with some privatization, should bill to 5.0 to 5.5 percent of GDP. To this end the result in greater public savings. civil service (300,000 employees strong) was re- The government wage bills in Sub-Saharan Af- duced by 24,000 in 1987-88. As a general rule rica are typically high in relation both to GNP and governments should aim to hold spending on government spending. For some countries, such wages to no more than 25 percent of domestic as Burkina Faso, wages account for almost half of revenue. central government expenditures. To contain the Lower military spending could also increase wage bill, countries have attempted a variety of public savings. In Sub-Saharan Africa defense ex- measures-hiring freezes, discontinuing the auto- penditures as a ratio of total expenditure is rela- matic hiring of graduates, early retirement, and tively high. Some countries have inordinately even dismissals with compensation-but with high ratios (see Table 8.2). Most of the countries Table 8.2 Military spending that no opportunity to rationalize public expendi- (percentage of total government expenditure) ture should be neglected (see Box 8.2). 1980 1981 1985 1986 Mobilizing community savings Sub-SaharanAfrica 12.1 11.7 10.0 Ethiopia 30.0 34.0 34.6 32.0 Uganda 25.2 31.2 15.6 26.3 The notion that national development in Africa Zimbabwe 25.0 20.5 15.2 16.3 is best pursued through comprehensive planning Somalia 19.2 22.7 and state controls has been discredited. Self-reli- Burkina Faso 17.0 18.4 19.2 18.3 Kenya 16.4 10.7 8.7 10.6 ance and decentralization are now seen as offering Senegal 16.8 11.8 10.8 10.6 more promise. Faced with declining public and Sudan 13.2 12.3 12.2 10.2 private savings, governments are more willing to Source: World Bank data. consider alternatives. In the rural areas health ser- vices are increasingly treated as a local affair in- volving a mixture of modern and traditional health workers. Public utilities, such as water sup- with good economic performance (such as Botsw- ply, are being taken over by the community. Tech- ana, Ghana, and Mauritius) have low defense ex- nologies are being developed with community penditures. involvement; so too are approaches to protecting There is also potential to increase public savings the environment. by tightening procurement for government pur- Africa has rich traditions of community and chases through competitive bidding, bulk pur- group welfare. This is reflected in the widespread chases, better handling, and proper audit and practice of sharing among people, with its empha- accountability. Donors bear a heavy responsibility sis on grassroots initiatives and community-based to help bring about such improvements. projects. Such cooperation tends to be spontane- Vigilance can pay off in many ways. The lack of ous and informal. Community-based develop- resources facing many African countries means ment projects provide an avenue for mobilizing Box 8.2 Burkina Faso: Cost-saving procurement of petroleum products Burkin'a F3s0 is a landlocked c,untrr l.'catcd I Olui, kilo- The-u mrne. urt, h.i e produced sci eral resultI meterz run' the ne.ire-t port It thcrelore icIt the con -- *-UNABI-h bu, 9 pttroleurr producL trIrn the cheap quen:ces or the 13-a o,I cri,i- mruch raster than other tAt 4ource bt international compelitle bidding on tire countries. Drat Inc: on hih \p,tri-nc:e the government -p,t mirket in Rotteriam rn tinsell or tce'thvr %%,th took a range c:t co)raz.:v.Lr nmt3-urc; to esr.-ure a co-t-el- n.cihboring co untT'` This poolinr, reduc,s rht pur.rchai. tect e suppl% or paetr.leum nproduct; Those menasLre- price and tran.port Co-t inluded d Llre s n R tiuppt% s:'urces and ports or entri, * Th, .upF.li:O are oL't.iined through the portl ol Lomt - and imrnro; ing local nlri;[iruQturc and *tock,ng: tlaeit t- C. tonou.and Tenra. more .:'urlets or petroleurn priduci. signrlcanitl Ir-e heen opened and railroad tanks are btt.or utdized The process in as ritnated lollrvinc 3a -rud% -in the !e;3Ue each peirrolurn compamn u-es thern rinancial imphlcarions or ru 1suppl transport anrd stock- * The dJi'r;,ltc.ailn *11 priurent,l o.'ur:e, and lrans ng m3nagement Th.: Sc. .etc :c.tt Nal tiona Ic des port ha% e sa d :in .n-tma.ted Sn million a \ eir H A.1r.:c-arburei d.: Burk-na §O4(NAE,H` i a st3te-cit ntd 1 in :ddi ton nciihbc'rng coLrntrie, enentt tron icht nt- c,nmpn'. created in l%. becarne .olel; responsible lor tiati.e- both rindlocke-d '1a1, arn N.g,r and t'-a-tal monitoring all a'pect' ol th.: petro.leum ;-tor Proc.ure- countrit; IBern C,',te d koire Ghana Jnd Tog,'i Ths ment .)t petrOleLIM product; . abased on bilarteral nezo- s-uthern p.art oi 1tMali is being- mupplied Iron. Boe., tiation. tith Algeria Nigeria ar.d more recentl brazil DituLa;-' and a part ot Nil,ger ;.'uld prtental.II be sup To di%ersil' transport rout.>- and ports ot cntr% oirrc'al phed Ir.r.m Ouaadougou 'nce the d,ztanc.i ber' c nezo-tiat,on- %rc C.folduted lor prelerential transit Nianle, and Cku3ncadoug,.u tS iii) kilon;eter Indirect lhrou'uch Lknei CIoton.o inid Tum ToL iprovx storage cs F °itt'ie ellkei result trom t rera-cd e: non'lc aclti t'% iU capacir . pr. atepetroicuni comrpaniic-irccd tonma.ntain th tran:.port banking and inmurance ee-eor. ;nd trom reserx e ie' eli 3r -l) d.3i - %% hiie the oc ernnerit agreed to. nTmprc:i ements in inirralructure More,' e- r ihe -,chen.e -: pr ri de .t,te Ior the depov.itorie, and to .ithorize bankl Lir ha- tbecn *.lt-t'n ;ncir, . thur an; iitia3l imt e-tment loanS tor nipro% inz inra;truc:rure and rnr.c.prting trrn- c.-.t t- tht get errrnent porl % ehicle; "community savings" in cash or labor for a range impact unless they are incorporated into a broader of local activities. framework. Involving central bureaucracies may Much community development in Africa has stifle local initiative. Thus NGO support struc- been carried out by local self-help-for example, tures should be encouraged to serve as a link the construction, repair, and maintenance of com- between the state and thousands of small self-help munity facilities. Because those involved are di- and community development efforts (see Box 8.3). rect beneficiaries, motivation tends to be high. Such NGOs are closer than government to the Such projects are an effective means of using free rural communities (since their staff often are lo- resources to meet the community's most urgent cated in the communities, they develop an empa- needs. There are many examples. thy that government staff generally lack), highly * IntheJasikandistrictofGhanal8townsand motivated, cost conscious, and sympathetic to villages raised about $200,000 in 1988 to finance labor-intensive approaches, and flexible-a qual- the first phase of a three-year integrated develop- ity that stems from their small size and decentral- ment program devised by the local people. Pro- ized decisionmaking. Both local and jects included primary schools, primary health foreign-based NGOs should be encouraged. clinics, and drinking water. People provided labor or cash, and the district council provided building Boosting private savings materials and technical assistance. Elsewhere farmers are constructing, with assistance from the There is potential in Sub-Saharan Africa for mo- public works department, a feeder road to facili- bilizing household savings through a strength- tate transportation of farm produce to market. ened financial system, both formal and informal. * In Mali the Segou Village Fund has been The government has an important role to play in created from villagers' savings to initiate a system this. Easier access to financial institutions and bet- of self-managed development. The village com- ter financial intermediation would encourage munities have increased output of sorghum, in- households to defer consumption in favor of in- troduced and developed cowpea cultivation, and vestment. Unfortunately many financial systems reintroduced peanuts and maize (abandoned dur- have deteriorated, and the need for reform is ur- ing the drought). Managed by a village credit gent. In contrast the informal sector has shown committee, the fund also provides essential sup- vitality and could be encouraged to play a greater plies, such as seed and medicines for people and role in development. livestock, and improved marketing. * In Malawi community participation in water THE FINANCIAL SECTOR IN CRISIS. At indepen- supply-one of the most successful programs in dence the financial sector of African countries con- Sub-Saharan Africa-is based on strong commu- sisted of banks catering principally to expatriate nity involvement and limited, but well-defined, communities, post office savings banks, coopera- government responsibilities (see Box 3.10). tive societies, and moneylenders. Since then it has Many of the themes of this report-human re- expanded, but the quality of services has evolved source development, environmental protection, differently among countries. In some the banking and self-reliance-are consistent with the concept system has become virtually illiquid. This oc- of community savings and community-based ac- curred, for example, in Equatorial Guinea and tivities. In the future the mobilization of commu- Guinea in the early 1980s and is occurring now in nity savings, if encouraged by governments, to Angola, Benin, and Mozambique. In contrast, in finance not only public services and collective Kenya and Nigeria financial services have im- goods but also goods-producing and income-gen- proved and deepened. erating activities would make a major contribu- Macroeconomic policies have influenced the fi- tion to development, especially at the local level. nancial systems. Even when these policies have Of a total labor force of about 600 million in 2020, been inappropriate, commercial banks have been a significant number are likely to be seasonally able to operate as long as governments did not use underemployed in the rural areas. Community them to finance the public sector deficit. This has savings will be useful not only to finance develop- been the case in Uganda during the long years of ment needs but also to generate productive em- civil unrest, and in Sudan despite acute economic ployment. difficulties. In Zaire the commercial banking sys- Local initiatives cannot flourish without link- tem has remained liquid even with high inflation ages. Small and dispersed, they will have little and rapid depreciation of the currency. 169 Box 8.3 Toge: A promisitg partnership with NGOs The Togolese gc.ernment s inihati'e to Irengthen local communities must te moreexplicitl in% ol%ed in dOsign NGOs i a remarkable partnership aimed at establishing and implementation 3nd in defining their oni n contribu- an inno%ah%e institutional Iramework ior collaboration hons %with the NGCicommunit%. while pro%idingdirect finan- The eperience of the pilot prolect highlighted h%o cial support lr NGC)-spc nsored de% elopment prolect;. It interesting issues First 4electing NCO represent3tives or IS part oL a k,xal Participator\ De\elopment Program tor the steenng committee pro%ed tt b dilt-icult ant contro- mlcroprolects initiated and implemented at the commu- er.ialI whih demon4rrated that NG0'. are independent nitx le.el The program to,ters eltetive communmth par- and autonomous not onl% trom gc.%ernment but alo trom ticipation in building local cipacir% and 1nsituthons and each other It became clear that the NGO association can mobilizes iddiltinal conce vional resource-- lor mall- beonls a platform tor dialogue and a basis icrcollecrtve scaledeLelopment inttiatl es. particip3hon in a colaboranve tramework such as the At thecore ot this lramework is a steeringcommittee in steering committee it that role , accepted b% the entire % hich both government and NGCO are tquall\ repre- NGOcommunitm. sentedl * ith a imited but autonomou- mandate io select Second the piloLt program had detined the role and NGO prolects to bet nanced. pro% ide polich guidance and funniw.ns ot the ,teerin commrrittee poorlk and itS auton- direction and senerasa torum torrdialogue i carrnig om) ariddeciiormakingauthorit-x ~ereinitiall1nottulls outtheprogranm The government createda specialdiii- ac;eptedpb% thego%crnment This;lac ctclearlines ot ston in the Mini-rn ot Planning mld Nline- tk. coordinate authornt and decisiormakinS led to acnons that ettec- and administer the programand to serveasa laison % ith tivel undermined theauihorit% ol the4ieeringcommittee tht NGOcoommunir% and the NGOa-sociaion and w%ere -trongl retmnted b% the NGO communitt It During a pilot program the go% emnment and the NGO also re% ealed ihe NGO' organizational and operational communirm havegr3ppled w%ith the practical problemrrotl hmilationv and emphasized thet need lo strenethen the ;working together and have persevered in their ertorts to capacir Ior technical re% ie ing protect propos1as and for reach a consensus Their e\perience 311ords valuable in- monitoring prolect imFlementation sght inlo thedcln3mic;ot lorging 3anuteetiie partnnrvhip Thepilot program hasconwiderabl% benetittd both par- bent een go% ernment and NGOC tites and as a result the invtitutional tramc% ork tor collab- * REspect for the role and conthibunons of each partner orarion betle%eer the go%ernment and NGCO is stronger requires that the ollaborati%etrame%ork .ustauin lnotten The go%ernment ha; reattirmed its commilment to dMe- precarious balance beh% een the independenrc and auton- gate deci0ionmak ing aulhoritN to the steering committee omN ot NGOs and the legitimate concerns and priorities and ha. reorganized the special divt sion n the Nlnistnr ort ol government Planning and Mlirnes Agreement on NGC cligibilhtr and * Supporti%e political leadership L' cnbcal to reintorce protect selection criteria ha; been reached, and guidelines mutual respEct and conridence to loser awarenessotk the lor submission and admini;tration ol NGC) operatioins complementarit- of the relanon. andtodirectgo%emnment ha-e been drawn up A nev. Gr3azrouts Dekelopment I agencies totacilitatethe NGC) s ork Initati%esProlect rinarcedb% IDA supportsNGOde%el- * Partnership and participanon are important to the re- opment actions at the commiinit% lc%el 3nd build, the lahon benween NGOs and their beneticiar- communiries capacil% o local NCO- to de-.ign and manage their pro- ias the% 3rc to that bet%%Een NGOs and po%ernmenti If iects Thus it ill help _o%ernment and NGOs toconoli- prolects are to be uustainableand ield long-term bentitNs. date and deepen their promlsing parrnershjp The banking system in the CFA countries has financed crop credits on the basis of production deteriorated in recent years. Although budget def- costs (inclusive of export taxes) that were greater icits and inflation have been generally contained, than export proceeds. Sometimes credits have governments, unable to print money, forced the been extended to individuals because of personal commercial banks to finance expenditures that connections. Finally, the accumulation of large would normally have been met by government government arrears in payments to private sector subsidies. This led to the collapse of the banking suppliers and contractors, apart from adversely system in Benin and has put the system in other affecting the banks' portfolios, has been an indi- CFA countries under strain. The bad debts held by rect way to force them to finance the budget defi- these banks amount to more than $3 billion, rep- cit. Governments have not been responsible for all resenting 30 percent or more of the domestic assets bank failures. Private banks have collapsed from of the banking system. Governments in the CFA mismanagement and disregard of the central franc zone have also interfered with the allocation bank's regulations and codes of conduct. The re- of credit in several ways. They have induced com- habilitation and deepening of Africa's financial mercial banks to extend credit to public enter- sectors are necessary if the future development prises that were not creditworthy. They have strategy is to succeed. CREDIT POLICIES. In even the most market-ori- sures, has generally been excellent (see Box 6.3). ented countries credit allocation by commercial These traditional savings and loan associations banks is affected by political considerations. In can be promoted by building links with the formal many African countries the degree of interference financial institutions (see Box 8.4). has been too high. Experience suggests that the Banks or informal savings and credit associa- most efficient way to achieve growth with equity tions should be entrusted with the task of assess- is to use fiscal instruments-taxes and subsidies- ing the commercial risks attached to individual and to manage commerdal banks on business credit requests. Monetary authorities will need to principles. To reflect the risks and the costs of ensure that the pace of money creation is consis- administering loans, bank margins have to be tent with broader economic objectives. This equi- higher for a customer borrowing a small amount librium should ideally be reached with interest without guarantees than for someone creditwor- and foreign exchange rates that clear the markets thy borrowing a large amount. and avoid the need for rationing. This has not been Governments have tried to provide preferential the case in most African countries, but it should credits to particular sectors and deserving social be the policy for the future. groups, but these have frequently been misused. Most development finance institutions and spe- INTEREST RATES. When the inflation rate exceeds cialized banks (such as for housing or agriculture) the nominal interest rate, creditors lose and bor- have gone bankrupt. Moreover in most African rowers gain; no equilibrium therefore can be countries the market is too small to support many reached without rationing credit. When the ex- specialized financial institutions in a competitive pected rate of depreciation of the domestic cur- environment. Established commercial banks are rency exceeds the premium of the domestic often better placed to provide services to their interest rate over interest rates abroad, holders of clientele. With competition banks' costs can be financial assets denominated in domestic cur- contained-which is rarely the case in state-con- rency profit by transforming these assets into as- trolled banks. sets denominated in foreign currencies. This leads The objectives pursued through subsidized or to capital flight and further depreciation of the directed credits can be more efficiently achieved domestic currency-hardly conducive to domes- through price, trade, and fiscal policies. Thus ag- tic investment. ricultural income can be increased by raising pro- Recently some countries have taken measures ducer prices and by improving rural to bring interest and exchange rates more in line infrastructure (notably, feeder roads) and the with market equilibrium. Experience has shown quality of public services in rural areas generally. that such adjustments cannot succeed without re- Investments by small enterprises can be stimu- storing budgetary discipline and that it was often lated through fiscal and trade policies and by beneficial to relax controls progressively. Despite technical assistance. Some governments have im- these difficulties countries should aim to liberalize proved the housing of low-income urban house- interest and exchange rates if they are to maximize holds by providing them with service lots. growth. Concentrating public expenditures on infrastruc- ture has been more beneficial to low-income REHABILITATION OF THE BANKING SYSTEMS. In groups; subsidized housing loans often favor me- the short term the pressing need is to reestablish dium- and high-income individuals. an operational banking system where it has bro- ken down. Where the public has lost confidence INFORMAL FINANCIAL INSTITUTIONS. Because of in existing banks, the best solution may be to start high costs the formal commercial banking system from scratch by establishing new ones, as was may not be willing to provide financial services to done in Guinea at the end of 1985. Where the remote areas or low-income households. These banking system has not yet collapsed, it must be can generally be provided more efficiently restructured without delay, and the measures through less formal channels. In some countries of must be strong enough to inspire the confidence West and Central Africa tontines or their equiva- of the public and the business community. lent provide an efficient way to mobilize savings The package of measures has to be tailored to and extend small loans to low-income house- each country. If political interference in credit al- holds. The record of loan repayment, not assured location is largely responsible for the weakening by formal guarantees, but induced by social pres- of the system, steps should be taken to protect *y~~~~~~~~~ -=u~ | x-f - :8 qj r - Box 8.4 Rwanda: Banques populaires Thc obiectc' ot oi Parqii. : pepii/I are to mobilize rural l9t one branch n each .t Ri;anda 143 communes samings. to make loan, Ior producti%e purp-ses. and to Betneen 1l%O and 1 SSdepo-its in commercial and say * supp:rt and utimulate cooperarii es Since they began op- ings tank tincrca-e1db% rci percent%%hiledeposit'inthe cr3iion-in lL-5 the; hatebecomeR%and1a *itt§tek,rot%- Banques p. -pula.re- rose b; r26 percent. total a4seis eq- ing a;nd mns t imp,ortint linancial inbtiruhon- in rural ulit 3nd reVenuet; doubled in current terms Part ot the ar,as. Tht Banques popuIlaire ha,,e been su u be. succR i~expla3ned b the tact that there:arc tew commer- cause cial banksir. iheruraliarca, theorld other a mingsslstem ; *Tht% are ba-ed on a rnutualiste system well -lte-d to tile IL ttir; S otten u,E BanqLd- populairess tio man- it' con'tituenc, age their funds 2 Th; %are located rostl% in niralarcas not serx d t's other The entral 'Mtice et, a maXimum lo3n 3ppro%3I tinanctal institution-and thus lakead'antageot the rLral amountlioreachbrarch bnted o its portiiiLoqualit and Nppulahons relatisi high propenvitv to ;sae -ro. th in deposits The polic5 s to gi%t 'maller loans. to *Thev c-lier , !uolabiE mechanism to Pros ide small 13ian- more people rather than larg loan' toa3 le indi%viduals tor b.-rc n-cd. agnriculture and micTo.enterpri4eacti.. tiLs Although anrmers pro !o dc mnore than one-halt ot ihe de- in rural areas postts until I1S the, receivsd only about ',I 4 percent ol The L'nion Sui,se de! Banque. Ranileisen has helped loan-be.:ause merchant- andconstructionactivitieswere the Banque, po-pulaire' t become established train tech- tasoredl The Binque. populaires have now begun to nician andJ cisc! start-up cos-t The gosernmenl hac change the compo-itton ot their loan portfolios. Some of ,ub.idtzd the-agricultural loans sinc. 13.although thi' the intliatisesar. >hes' ingencouragingresults, butdiver- -utb-id; h;. ctecined each ear siticathon i- hamptr.d bs lack of project development - Th, central Itice -tail ot the Banques populairec -tart units and trained ltit Compared with other develop- branches bs spending necril months in the region edu- nent tinancial inshtuh on, the average of 30 to 60 days iting cormmunits member- about the purpii e *.t the bettween lo3nreque'iand disbursementisfavorable.Total mrintitution Thoce w ho *ign up a.s membte r, can bu% up to admini-trativeexpe rse and personnelcostsalsocompare I" s1harct and are enttled to make dep,.ts r-cetEe loans tasorabls i ith niot rural credit programs indeveloping and iot it3 the local Annual C.neral .As-cmbls atl hich countric- Th o.perant.n 01tbrancheshasbeenprofitable; the Board 01 Director- and 0oser'ight Board are elected ho%%ever central OtiC: ci"-ts forsupervisingthebranches The branch Board ot Directors. n nLrn tlects represent.3- hase caused the instirution isa whole to be unprofitable th e to the Narional Coun.cil. il htch 'ets; gneral polics. to late tut net lo-se. hare been declining. In 1988 the The board ot iLrector ppro e,lons and in orderto Banque' populaire: reached a consolidated financial bal- dlo 'o bKa.irdn membtrs recei% c training in loan analv-i- ance e\,ludinc loreign a;-i~tance. approsal and -uprrs isior procedures Central olnice su- Operatine -n the mutaaliste" principle well en- per-i--ors in pcct the bran:hes and 3 dele3ate from the trenchcd in Es%andan -ociety, the Banques populaires central otthce participares n I-in appro al mnteetings A appear to be .a elil uited to deepen the financial system. br.inch generalh1 has onli one Banque populaire stall lhs% ha%e been Ser\ successful in mobilizing savings member w ho-sze prime responciLildlt; i to record transac- becau'e the rural populati,on values the convenience and lions ti ubnlit minthl,1 statements to. thc central otilce securirN o0 pa-sbook accurnts. They have also been rela- and to- inlorm the Board -it Dtrcct-.r atb'.ur o%erclut loan tt. el su;cce.rul in de% lopingasuitable lending mecha- Pa. ments ni-in lor mall lcans tor 3gricultural improvements and branches are nmo.tsih locatdt in rural area, and the n'icrocnierpri-el in rural are3s an inherently difficultac- principal depo-itorc art ,nail sa er' w ith pa"book ac- litii Operoitons ha. ealso ben helped bythe relatively c: ount d Pos' o t ab..uit RH 3 nii 1ii ilii . -iP oi s t 12 * lable en iromenmnt ith lo1. nilation. branches hadbeen c,tabli,hed an1thc trget itohae at banks from such interference, if necessary by sell- mediation should be progressively deepened and ing governments' interest in them. Monetary au- diversified to develop flexible money and capital thorities may need to strengthen supervision of markets. The central bank could then regulate the banks by requiring regular audits and enforcing money supply through an open market policy by prudential ratios. If poor repayment is due to lack purchasing and selling monetary instruments. of guarantees (or to the difficulties of enforcing This would be far better than imposing credit them), changes in the legal system may be re- ceilings on individual banks, since they reduce quired. New financial instruments may also be competition and can be discriminatory. An open needed; leasing may provide a safer financial de- market policy requires monetary instruments vice than moneylending. (such as treasury and corporate bonds and bank certificates of deposit) that are liquid and available NEW FINANCIAL INSTRUMENTS. When the bank- with maturities corresponding to the needs of the ing system is operating securely, financial inter- business community. But bonds are liquid only if the market is active, which is not the case in most generally inelastic world demand implies that ag- African countries. The turnover in the secondary gressive supply behavior by any producer will bond market in C6te d'Ivoire was 0.7 percent in ultimately hurt the whole sector, initially through 1987, compared with an average of 50 percent in lower prices and ultimately perhaps through the industrial countries. forced exit of some producers. From a practical To mobilize savings and to facilitate investment point of view this "fallacy of composition" argu- financing, money markets can be supplemented ment is unconvincing. That producers compete by stock markets. They exist in some African for markets is a fundamental reality, as true for countries, but daily turnover is small. The Abidjan manufactures as it is for primary products. During stock market, established in 1976, has been dor- the 1970s it was aggressive exporting on the part mant for years because of regulations that favor of other developing country producers that Ivorians and the depressed economic conditions eroded Africa's export share, compounded by ag- during most of the 1980s. In addition well-to-do ricultural subsidies in developed countries. residents invest financial assets abroad rather African production for most commodities (ex- than at home. If nationals do not trust their own cluding cocoa, coffee, and copper) is a relatively domestic markets, foreigners cannot be expected small (less than 20 percent) share of the world to do so. The expansion of domestic financial mar- market. Even doubling production would have a kets requires a climate of confidence in the econ- small effect on world supply. Africa cannot afford omy and in the stability of economic and financial to adopt a passive role and lose even larger market policies. The authorities clearly have an essential shares to more aggressive Asian and Latin Amer- role to play in creating this climate. ican exporters. In negotiating commodity agree- Financial markets could expand sufficiently in ments, Africa's loss of market share should be countries such as Kenya and Nigeria to enable the seen as an argument for more favorable treatment. monetary authorities to operate an open market Since the prospects for significantly higher policy as a substitute for direct monetary controls, prices for most primary commodities are poor, such as credit ceilings. Every government should export earnings must grow through increasing the have a long-term view of the evolution of its finan- supply of existing exports and diversification. Di- cial system and should define the time path real- versification is also the most effective way to pro- istically. Since most African economies are small, tect a country from the impact of large fluctuations their domestic money and capital markets should in individual commodity prices, as shown by the be linked to others in Africa and abroad. This experience of South and Southeast Asian coun- would promote trade and joint ventures among tries. However, although diversification is an es- African countries as well as exchanges between sential long-term goal, in the short and medium Africa and the rest of the world. In particular it term countries must seek to expand traditional would stimulate private capital and foreign tech- exports since it will take time to establish a new nology to flow into African countries. product as a major export. In any event it would be best to provide neutral incentives for exports External resources and to avoid targeted policies that may end up misallocating resources. Governments are gener- Export potential ally bad at picking winners. Encouragingly, during the past 15 years or so, Africa's export performance indicates the some African countries have managed to find new continent's unrealized potential. The average an- opportunities in world markets for certain pri- nual growth rate of exports from Sub-Saharan mary commodities such as vegetable oils, soy- Africa fell from 6.6 percent in 1965-80 to -0.8 beans, and fishery products. Kenya has had percent in 1980-87. Africa's share of world mar- success in exporting fruits, vegetables, and flow- kets declined from 2.4 percent in 1970 to 1.3 per- ers. But except for Mauritius, countries have not cent in 1987. The expansion of world trade during diversified significantly into labor-intensive light the past three decades appears to have largely manufactures, and the few manufactures ex- bypassed Africa. If its economies are to grow, they ported are mostly processed primary products must improve their share in world markets and with little value added (see Chapter 5). diversify their exports. Sub-Saharan Africa needs to find new markets. An argument frequently advanced against vig- Its traditional market, Europe, has seen declining orously expanding commodity exports is that a imports from developing countries (down from 34 173 Table 8.3 Actual and projected macroeconomic framework for Sub-Saharan Africa (percentage of GDP unless otherwise specified) Actual Projected 1975-80 1980-85 1986-87 1990 2000 2020 Growth rate of GDP (annual percent) 2.8 -0.3 0.8 2.5 5 5 Investment 21.4 16.2 15.1 17 25 25 Gross domestic savings 19.6 13.9 11.8 12 18 22 Adjustment factora -3.0 -1.0 -2.9 -3 -2 -2 Net transfers 4.8 3.3 6.2 8 9 5 Importsb 29.0 23.7 25.5 30 33 33 Exports 24.2 20.4 19.3 22 24 28 Net transfers 4.8 3.3 6.2 8 9 5 Memorandum items Efficiency of investment' 13.0 .. 5.0 15 20 20 Import elasticity 2.1 . .. .. 1.1 Negligible or negative. a. Adjustment for interest payments and errors and omissions (discrepancies between national accounts and balance of pay- ments, including treatment of technical assistance). b. Goods and noninterest service obtained from recorded figures of exports and net transfers; includes items such as technical as- sistance expenditures abroad not fully reflected in national accounts. c. Additional value added per unit of investment. Source: World Bank data. to 20 percent in 1970-85) compared with the investment proposed nonetheless imply substan- United States, now the biggest market for devel- tial imports of capital goods. oping-country exports, and Asian countries. Since African countries have scope for using imports the share of Asian markets and the share of non- more efficiently as well as for reducing luxury and traditional items in world trade is likely to grow food imports. As domestic production grows, do- rapidly, special efforts will have to be made to mestic products can substitute for imports, partic- enter this market. Competition in international ularly in high value-added goods. Nonetheless in markets will remain intense, but continued eco- the early 1990s imports would need to grow faster nomic growth worldwide could expand demand than GDP to make up for the compression that has for African exports. African countries need to ex- occurred during the past decade. Imports in the pand trade with each other (see Chapter 7). But 1990s will need to grow at least by 1 percent a year there are no soft options; Africa will succeed or fail over and above the projected GDP growth rate of on its ability to compete. 4 to 5 percent. This implies an elasticity of 1.2 for The composition and level of export growth the 1990s, which suggests imports of about 33 will, of course, vary with the country. In the future percent of GDP in 2000. Thereafter imports may development strategy the ratio of exports to GDP be expected to grow in step with GDP. Recent is targeted to rise from an annual average of about experience of African countries with strong ad- 19 percent in 1986-87 to about 24 percent by 2000 justment programs (such as Ghana, Kenya, and and to 28 percent by 2020; the growth rate of Mauritius) suggests an import elasticity of 1.5. It exports should improve significantly from a neg- is assumed that success in increasing food produc- ative rate in 1980-87 to about 5 percent a year, thus tion will curb the growth in food imports and, reversing the decline in Africa's share of primary given the projected rise in investment from 15 to exports. 25 percent of GDP, imports of capital goods will rise faster than income. Import requirements Overall resource balance Given the modest prospects for expanding ex- ports, Africa will face a foreign exchange shortage The external resource requirements for a pro- well into the next century. The strategy proposed gram of growth and social development can be in this report is not capital-intensive, but the em- calculated either as the gap between investment phasis on infrastructure and the higher rates of and domestic savings or as the gap between im- port needs and export capacity. Ex post, the two signed to achieve this objective in the long run. By are identical. 2020 Africa's reliance on external resources to fi- An initial target for GDP growth of 4 percent a nance development and on food imports is pro- year, rising to 5 percent, has been proposed (see jected to be much smaller than today (see Table Chapter 2). With the best efforts to reduce popu- 8.3, above). lation growth, per capita incomes could be raised A high level of resource transfer may lead to an by between 1 and 2 percent during 1990-2020. The aid dependency syndrome and a decline in do- macroeconomic assumptions used to analyze the mestic savings, overvalued exchange rates, and implications of this target are set out in Table 8.3. high wage rates. With a proper policy framework, Given the weakness of the data base and the im- however, such transfers can be associated with pact of exchange rate adjustments on trade to GDP high growth rates and appropriate wage and ex- ratios, the parameters given are broad, and the change rates. In Korea, for example, resource scenario is illustrative. They are not econometric transfers amounted to about 10 percent of GDP projections based on historical trends and rela- throughout the 1960s and 1970s, yet impressive tionships since the objective is to modify the past growth rates of GDP and exports as well as high growth strategy. investment rates were achieved while maintain- The low levels to which savings have plum- ing competitive exchange rates and wages. meted can be raised only slowly given the long The momentum of aid generated in the past few time it will take to reorient consumption and be- years will have to be maintained during the 1990s havioral patterns. An overall domestic savings for several reasons. First, countries will have to rate of 22 percent of GDP must be attained by 2020 continue the difficult adjustment programs initi- to reduce dependence on external financing. By ated in recent years. Those that have not yet 2000, however, the savings rate may increase to embarked on reform will need to do so. Unless about 18 percent of GDP, which, after allowance these programs are funded adequately, they can- for interest payments, would leave a gap between not be effective or sustained; the successes of The investment and savings of about 9 percent of GDP. Gambia, Ghana, and Guinea, where funding was The effect of measures to promote exports and adequate, are to be contrasted with Zambia, the likely changes in the world markets for Sub- where inadequate funding made it difficult for the Saharan Africa's exports can be assessed only government to stick to its adjustment program. country by country. Overall a growth rate of ex- Second, there will be some major new entrants port volume slightly higher than the envisaged to the list of IDA-eligible countries. Nigeria has GDP growth rate would be a minimum and feasi- already become eligible and will increasingly de- ble target to narrow the external resource gap in pend on official development assistance (ODA) to the region. meet its external resource gap. In the past Nigeria Given the decline in African imports during the has received a negligible amount of ODA ($0.6 per past decade-and remembering that per capita capita in 1986). If by the year 2000 it were to receive imports are almost half those of the early 1980s- the same level of per capita ODA as other oil-ex- some recovery in imports is needed in the short porting African countries such as Cameroon and term. Over the longer term, however, it is assumed C6te d'Ivoire, it will account for about $2.5 billion that the ratio of imports to income remains of ODA a year; this would mean a 17 percent roughly constant. increase in ODA estimated for 1990. In addition The net transfer required to close the external Angola can be expected to join IDA. gap works out to be roughly the same: about 9 Third, special efforts are needed in the 1990s to percent of GDP in 2000. Thereafter the need for correct the backsliding that has occurred in areas foreign savings (as a percentage of GDP) is pro- such as food security, human resource develop- jected to decline to 5 percent of GDP by 2020. ment, and infrastructure and to fund initiatives in family planning and the environment. By 2000 Development assistance in the 1990s food imports are likely to rise to the order of 15 million tons, which will cost about $4 billion at Aid levels 1988 prices, a large part of which will have to be met through foreign aid. For human resource de- Self-reliance is an important objective of the velopment, additional expenditures of about $10 Lagos Plan of Action and in other statements by billion (1990 prices) a year will be needed by 2000. Africans. The future development strategy is de- The backlog of road maintenance itself is esti- mated to cost $5 billion on top of the $700 million tressed Sub-Saharan African countries at the end needed annually during the next decade to avoid of 1987, which provides highly concessional, further deterioration. For family planning and en- quick-disbursing finance. To be eligible, a country vironmental protection, large initial efforts are must have a donor-endorsed economic reform needed to give momentum to these programs. program with the World Bank and the IMF; by As demonstrated above, a net transfer of re- mid-1 989 22 countries were eligible. The SPA has sources of about 9 percent of GDP on average will four main elements: additional disbursements be required to achieve sustained growth during from IDA, concessional adjustment cofinancing the 1990s. The ODA required to meet these targets from bilateral donors and other multilateral agen- will depend on such variables as debt relief pro- cies, concessional rescheduling, and concessional grams, nonconcessional capital inflows from pri- financing of interest due on World Bank loans. vate and public sources, and reserve Eighteen donor governments and agencies requirements-all of which are subject to uncer- pledged an initial $6.4 billion in cofinancing, tainties. With sustained policy reforms private about half of which can be considered additional capital inflows could improve significantly to existing aid programs. through increased private remittances, reverse In 1986 the IMF established its Structural Ad- capital flight, and improved inflows of foreign justment Facility to provide assistance on conces- private investment. The evidence of several coun- sional terms (interest rates of 0.5 percent, with tries (such as Ghana and Senegal), however, sug- repayments over a 10-year period including 4.5 gests that restoring private sector confidence takes years' grace) to low-income countries undertak- time and that during the next decade only moder- ing comprehensive structural adjustment pro- ate progress can be expected. Moreover, given grams. It disbursed about $0.667 billion to the deteriorating creditworthiness, nonconcessional Sub-Saharan Africa countries in 1986-88. To en- borrowings should be lower than in the past. It is large the pool of concessional resources available estimated that the net receipts from these sources to low-income countries, the IMF established the will be moderate, probably about $6 billion a year. Enhanced Structural Adjustment Facility, which The external resource requirement of Sub- became effective in January 1988. Donor contribu- Saharan Africa during the 1990s could be met if tions were expected to provide new resources donors achieve two related targets. First, during totaling $8.4 billion and to increase the con- the 1990s gross ODA continues to increase at cessionality of IMF resources in Sub-Saharan Af- about 4 percent a year in real terms. Second, debt rica. By mid-1989 eight African countries had relief mechanisms are put in place so that the access to the enhanced facilities. actual debt service payments for countries with strong reform programs are kept within manage- Debt relief: A menu of options able limits (a menu of options for debt relief is discussed in the following section). For the region Africa cannot escape its present economic crisis as a whole it is estimated that adequate debt relief without reducing its debt burden sizably. Several will be available to keep the debt service payments important initiatives have been taken in recent in the 1990s around the level of the 1980s (that is, years to provide debt relief, and many new pro- about $9 billion a year). If this does not occur, posals are under consideration. Together they higher levels of external assistance will be neces- provide a menu of options for keeping the actual sary. Alternatively, if debt relief exceeds the above debt service payments within manageable limits. estimate, external assistance requirements would These fall into two broad groups: debt reduction be correspondingly reduced. and flexible and concessional debt rescheduling, Multilateral agencies, unable to reschedule which postpones debt service payments or re- their loans, have mobilized special additional fi- duces long-term debt burden, and debt swaps. nance for low-income African countries. Through the World Bank's Joint Program of Action for DEBT REDUCTION AND DEBT RESCHEDULING. For Sub-Saharan Africa, the Special Facility for Africa low-income countries several donors (such as mobilized almost $2 billion in nonproject aid and Canada, Finland, Germany, Netherlands, Nor- joint cofinancing of structural adjustment pro- way, Sweden, and the United Kingdom) have con- grams from mid-1985 to mid-1988. The World verted concessional bilateral loans to grants. Bank also launched a three-year Special Program Sub-Saharan Africa has also benefited from about of Assistance (SPA) for low-income, debt-dis- two-thirds of worldwide cancellations reported 176 by creditors, far higher than its share of global IDA-eligible countries could be rescheduled, concessional debt. More recently France has de- based on individual creditor countries choosing cided to write off concessional debt owed it by 35 among three options: of the poorest African countries; the measure is * Forgiving one-third of the debt service due expected to cancel some $2.4 billion of debt. Bel- on obligations rescheduled through the Paris Club gium has also decided to cancel government-to- * Rescheduling all eligible obligations at mar- government debt of 13 African countries. These ket interest rates, but over a very long time period debts are estimated at about BF7.5 billion (about (25 years' maturity and a grace period of 14 years) $200 million). In July 1989 the United States an- * Rescheduling all eligible obligations at con- nounced that beginning in fiscal 1990 it would cessional interest rates with long maturity (14 forgive development assistance (DA) and Eco- years, including 8 years' grace). nomic Support Fund (ESF) debt owed by Sub- By mid-1989 the Toronto initiative was applied Saharan African countries with reform programs. to seven low-income African countries (Central To be eligible, the debtor country must have in African Republic, Madagascar, Mali, Niger, and effect an IMF stand-by, a structural adjustment Tanzania in 1988; and Senegal and Uganda in facility or an enhanced facility, or a World Bank 1989). structural adjustment program. The total amount In March 1989 the US Secretary of the Treasury forgiven will depend on the number of countries called on the IMF and the World Bank to support meeting the eligibility requirements, however; 23 and encourage efforts aimed at commercial debt Sub-Saharan African countries carry DA or ESF reduction for major developing countries by cata- debt amounting to almost $1 billion. lyzing new financing. Subsequently the World The scope for further relief through this option Bank and the IMF agreed that for the next three is limited, however, since scheduled payments on years a proportion of their lending may be ear- bilateral ODA (concessional) debt is small. In fis- marked for debt reduction. It is expected that the cal 1988, IDA used a portion of its repayments to Brady Plan will include several Sub-Saharan Afri- provide supplementary credits to countries no can countries. longer receiving World Bank loans to help meet Beyond these initiatives, proposals have been debt service borrowings from their IBRD borrow- made to provide long-term relief on debt from ing. In addition IDA has allocated $100 million official as well as commercial sources. Among from its fiscal 1989 net income to fund on a grant these is a proposal from the African Development basis a new facility to finance the reduction of Bank, jointly with S. G. Warburg of London, commercial debt of IDA-only countries with sat- which suggests a securitization plan whereby isfactory medium-term economic programs and short- and medium-term claims can be exchanged comprehensive debt service plans. for longer term bonds of the same face value but At the Venice economic summit in June 1987 the carrying a lower interest rate for all debt, except seven major industrial countries (G7) agreed that concessional loans from bilateral creditors and "for those of the poorest countries that are under- loans from multilateral agencies. Under this for- taking adjustment efforts, consideration should mulation eligible debt would be exchanged for a be given to the possibility of applying lower inter- 20-year bullet (single-payment) bond, with a est rates on existing debt, and agreement should fixed, below-market rate. The debtor would make be reached, especially in the Paris Club, on longer annual payments into a redemption fund-to a repayment and grace periods to ease the debt single entity instead of a multitude of creditors- burden." Since then, reschedulings by the Paris managed by a board of trustees, which would Club have reflected that new approach, with manage the fund's assets to ensure redemption of Guinea-Bissau, Malawi, Mozambique, Niger, and the notes at maturity. Somalia receiving 20-year maturities, including 10 years' grace, and seven other Sub-Saharan African SWAPS WITH LOCAL ASSETS. During the past two countries, 14-year maturities with 6 years' grace. years proposals have been made to relieve the In 1988 the G7 countries further agreed on mea- pressure on foreign exchange resources by swap- sures to reduce bilateral debt service obligations ping local assets-physical or financial-for of very low-income countries to provide short debts. Nigeria has already converted close to $100 term balance of payments relief. million (as of May 1989) of its promissory notes Under the terms of the agreement reached at the into the Nigerian naira and has received applica- June 1988 Toronto economic summit, the debts of tions to convert close to $1.6 billion. Debt swaps 1177 vary greatly, but there are some common features. Impact of debt relief measures Most arrangements enable the debtor to share part of the discount on debt, determine the sectors of Many of the above initiatives benefit only low- the economy in which equity can be purchased, income African countries, and there are no com- and place restrictions on the dividends and prin- parable special programs for middle-income cipal that can be repatriated. African countries with acute debt problems. The The simplest form of swap-debt for equity- middle-income countries in Africa face long-term has very limited application in Africa because of development problems not significantly different the lack of perceived investment opportunities from the low-income countries. And, indeed, and developed markets for financial instruments. when the correction of overvalued currencies- The possibility of swapping debt for the assets of Nigeria's for example-places some of these a state enterprise is being studied in the Congo countries in the low-income category, they should and Togo, but so far no arrangements have been be considered eligible for the same debt relief concluded. measures as those granted to low-income African New and innovative forms of debt conversions countries, provided they are willing to implement are being explored. For example, several debt-for- adjustment programs. nature swaps have been proposed. One way There is a range of technical and legal problems would be for debt to be exchanged for local cur- to be settled-in addition to the "free riders" and rency or local bonds to be held by a local environ- the moral hazard issues. Each debtor country has mental organization for investment in its specific debt profile and special circumstances, environmental projects. Alternatively debt might and the solution to its debt problem must be de- be sold to a multinational corporation to support cided on a case-by-case basis. As a general princi- environmentally sound corporate investments, ple debt relief should be given only to countries or, more directly, official debt relief might be tied that are both debt distressed and willing to adopt to support for environmental actions. The first reforms to improve their capacity for growth and debt-for-nature swap occurred in July 1987 in future debt service. To truly benefit debtor coun- Bolivia, with an arrangement aimed at protecting tries, special finance for debt relief or concessional Bolivia's tropical rainforest. This approach can be debt rescheduling should be genuinely "addi- broadened to cover any form of debt-for-develop- tional" and not taken out of the aid budgets al- ment arrangement. For example, in December ready allocated to the beneficiary countries. In 1988 the Midland Bank donated to UNICEF its countries with severe problems of arrears, bridge holding of Sudanese debt ($800,000), which the financing may be needed to make use of debt relief Sudanese government redeemed in local currency facilities. to be applied to a water, reforestation, and health While debt relief can never be cost free, Africa's program for the Kordofan region. This donation debts, although devastating for Africa, are rela- can be treated as a tax deductible expense for the tively minor for the creditors in relation to global bank. debts. The kind of debt write-downs arranged Another variation would be for a donor to pur- with commercial banks for large Latin American chase debt (at a discount) and then pass the loans debtor countries are not likely to be offered to to an NGO, on the understanding that the debtor Africa and, in some important respects, are not government will redeem the loans in local cur- relevant to Africa. Significant debt relief from new rency or bonds. The NGO will subsequently ex- money cannot be counted on in the near future, change or swap the debt. The value of the assets and conventional debt restructuring is unlikely to received in this exchange may be less than the generate the debt relief required to restore growth. debt's face value but greater than the debt's pur- For most African countries the predominant prob- chase price. The NGO would then use the pro- lem is the official debt. Although the Toronto ceeds for development purposes. Such local arrangements are in the right direction, clearly currency swaps are useful only when the country more far-reaching relief is needed. Given the has domestic savings available for that purpose; acuteness of Africa's problems, its poverty and otherwise they may result in inflationary pres- social distress, when put alongside the major ben- sure. In the CFA franc zone the scope for such efits enjoyed by consumers in the creditor coun- swaps is particularly limited because of the con- tries from the fall in commodity prices, it is vertibility of local currency with the French franc. reasonable to expect that debt relief measures will Table 8.4 ODA requirements for Sub-Saharan thereby undermining the domestic commitment Africa, 1981-2000 to the program, as well as too little assistance in (billions of dollars) other cases. These are matters of judgment. They Annual are calls that must be made in a disciplined man- average ner. The judgment call on the optimal level of 1981-85 1986 Projected external assistance for a country should not be (current (current (1990 dollars) dollars) dollars) 1990 2000 influenced by narrow political and bureaucratic Net transfers 5 8 12 19 pressures in any donor institution. (percentage of GDP) (3) (5) (8) (9) Debt service payments 9 9 9 9 Impact on consumption Other flowsa 6 6 6 6 Gross ODA 8 11 15 22 __ - - -- -= Even with the level of special donor assistance a. This includes gross nonconcessional borrowings, net di- proposed, the improvement in per capita incomes rect foreign private investment, net private transfers, would be modest-less than 1 percent a year dur- changes in reserves, and errors and omissions. Source: World Bank data. ing the 1990s. If, at the same time, the savings rate is to be increased by 50 percent, the per capita consumption would remain stagnant during this keep debt service payments in the 1990s at or period. However, income and consumption of the below the level actually made in the 1980s (about vast majority would increase at a significant rate. $9 billion a year). As noted in Chapter 2, labor productivity in agri- culture and the informal sector (which together Need for continued special assistance account for 95 percent of the labor force) is pro- jected to increase by about 1.5 percent a year. With The above assumptions lead to gross ODA re- a deceleration of the population growth rate, the quirements of $22 billion (1990 prices) a year by dependency ratio would decline, and per capita 2000 (see Table 8.4). To meet these requirements, income would grow at about 2 percent a year. This ODA would have to grow at 4 percent a year in would allow per capita consumption of the bot- real terms. This is below the rate of growth that tom 95 percent to increase at about 2 percent a was in fact achieved in the 1980s. Given the pres- year, which would be reflected mostly in increas- ent prospects for aid, however, this may not be ing food consumption (projected to increase at 1 realized in the 1990s unless the share of low-in- percent a year) and increasing access to primary come countries in ODA can be increased, since health and education facilities. reallocating ODA from poor countries in other It is the top 5 percent of income earners belong- regions would seriously hamper their develop- ing to the "modern sector" who would contribute ment efforts. If adequate funding for Africa is not most to the reduction of public dissavings and forthcoming, Africa's decline is likely to continue consequently will see their consumption com- in the 1990s. If, however, the special programs of pressed. Since average value added per worker for assistance for Africa can be continued for another the modern sector is not projected to grow, this decade, through either higher total ODA or an sector can be expected to experience a stagnant per increased share of ODA going to low-income capita income and a decline in per capita con- countries, Africa should be able to reverse its de- sumption amounting to about 2 percent a year in cline and to level off, and eventually reduce aid. order to allow for increased savings and invest- Clearly the needs of Africa for ODA will depend ment. This would be largely the result of rational- on the number of countries that can introduce and izing the tax structure, reducing subsidies, and sustain economic programs that both increase the increasing cost sharing in infrastructure services efficiency of resource use and put developmental and tertiary health and education facilities. Be- issues on center stage in these programs. Donors yond 2000 the situation would ease. The correc- should recognize that their challenge is to ensure tion in consumption pattern would have been that no such reform program collapses because of made, and with rising incomes and declining pop- lack of adequate external funding. Determining ulation growth, aggregate consumption would what is "adequate" is not easy. There can be too rise by more than 2 percent, enabling both income much external assistance in some instances, groups to benefit. Downside risks nical change. Even in professed socialist African countries these sectors are overwhelmingly dom- Given the uncertainties of the world economic inated by private sector farmers and manufactur- environment and the optimistic assumptions ing firms-informal, intermediate, and about improving the implementation capacity of large-scale. There is some, but only limited, scope many African governments, the scenario pre- for direct public sector (including donor) assis- sented in Table 8.3 (above) is only illustrative, and tance to these productive units. Governments and there are serious downside risks. It assumes that donors must support private sector farmers and the efficiency of investments will improve about firms indirectly, however. First, this should en- 50 percent over the levels of the 1970s. Also, dur- courage the development of an incentive system ing the 1990s, domestic savings and net transfers reflected in improved macroeconomic and sector as a percentage of GDP are both projected to rise policies. Second, the indirect support should come by 50 percent. If there is no increase in the ratio of mainly from the direct funding of the human in- net transfers to GDP, the growth rate in per capita frastructure (such as research and extension, edu- income would fall to 0.3 percent. With the domes- cation, health, and training) and the physical tic savings rate stagnating, per capita incomes infrastructure (such as roads, telecommunica- would stagnate; and if the efficiency of investment tions, power, and shipping). Improvements in ag- does not improve, per capita incomes would de- ricultural and industrial production and capacity dine. Alternatively if improvement in all these depend on improvements in policies and infra- parameters is only half of the projected levels, per structure. The formulation of government expen- capita income would also stagnate. Any greater diture programs to expand human and physical shortfall in achieving these targets would cause infrastructure is essential both for closing the so- per capita incomes to continue to decline. More- cial gap and for developing the physical and over, if the top 5 percent is not willing to accept a human infrastructure on which growth depends. reduction in per capita consumption, the pro- Donor strategy before and during the 1970s had jected improvements in the consumption levels of focused primarily on financing projects and re- the bottom 95 percent will not be achieved, nor lated technical assistance to help improve human will the growth targets. In'such an event it would and physical infrastructure. Disappointment with not be possible to effectively tackle the backsliding the results of this strategy led in the 1980s to a that has occurred in areas such as food security, donor strategy that has emphasized quick-dis- human resource development, environmental bursing financial support for policy reform, prin- degradation, and infrastructure-so essential for cipally through structural and sectoral adjustment sustainable growth. Clearly this is not an all-or- lending led by the World Bank and the IMF. Both nothing situation; but there is a fine margin be- strategies have had strengths and weaknesses. tween modest growth with improved human How can they be modified during the 1990s to welfare and a spiraling decline that can easily support the changes in development strategies become politically explosive. outlined above? Aid composition SOCIAL AND INFRASTRUCTURE DEVELOPMENT LOANS. The composition of donor support should In line with the strategy proposed in this report, increasingly be changed from financing general ODA should be increasingly focused on support- imports as part of a structural adjustment pro- ing public expenditures on social and physical gram to directly financing domestic development infrastructure. Structural adjustment financing expenditure on physical infrastructure and will remain an important component in the 1990s human resource development. Most external fi- and beyond, but it should be used more selec- nancing should not be limited to project lending. tively. Lending for technical assistance needs re- This has often led to an overemphasis on invest- structuring, and NGOs should be used more ment in bricks and mortar and less on recurrent intensively for channeling ODA, particularly for outlays on instructional materials, medicines, and grassroots development. operation and maintenance. Moreover donor One of the central recommendations of this re- project lending has frequently meant projects that port is to promote a more enabling environment are import-intensive and proceed irrespective of in which agriculture and industry can grow rap- distortions in sectoral policies and programs. Ex- idly in response to market opportunities and tech- ternal funding of "time slices" of sector and sub- sector programs allows these programs to be governments, senior managers of operational modified during implementation and avoids the agencies, and senior technical professionals- potential distortion of project lending. It would technicians, nurses, and teachers. This high level also permit the level of donor funding to be varied of technical assistance has to be set against the more easily depending on progress on both mac- enormous growth in the number of educated, roeconomic and sector policy issues. This ap- trained, and experienced Africans that has oc- proach would have a desirable element of curred since independence. The human resource automaticity. Thus if donors agree to finance a capacities of Africans will continue to expand dur- specified percentage of development expendi- ing the next generation. The implications for tures in the key areas-human resource develop- donor technical assistance policies must be exam- ment and infrastructure-countries that give ined-particularly since donor and African gov- preference to these sectors would automatically ernment attitudes toward technical assistance receive a higher share of donor assistance. changed very little during the past generation. In education most African countries no longer de- STRUCTURAL ADJUSTMENT LENDING. Concern pend on technical assistance for primary or sec- over macro-sector policy will continue into the ondary schoolteachers. In many countries, 1990s and beyond. Structural adjustment is not a however, education still receives the largest share one-shot effort but reflects the need for pricing, of such assistance, followed by agriculture and exchange rate, fiscal, and other macroeconomic health. There are many expatriate experts in most and sector policies to be continuously appraised departments of government and in operational and modified. With population growing at more agencies. For instance, despite the education and than 3 percent a year, African countries cannot training of a generation of Africans in economics, afford to lose any opportunity to improve the ministers of finance and planning still choose ex- efficiency with which their resources are used patriates to undertake policy analysis. Many gov- through changes in policies. Therefore the ques- ernments lack confidence in local specialists and tion is: how can donors most effectively provide yield to the offers of expatriates-often at little support for structural adjustment programs? cost. In the past few years, however, many gov- Structural adjustment lending, as it has devel- ernments (including C6te d'Ivoire and Kenya) oped during the 1980s, is still needed. It links and donors have become aware of the need to World Bank financing and bilateral financing di- change policies toward technical assistance. An rectly to an agreed program of macroeconomic encouraging example of what can be done is Tan- and sector policy reform. Greater efforts should be zania, where capacity building for economic pol- made to internalize the process and to provide icy analysis is beginning to show results (see Box more ex post support for measures already 2.8). adopted rather than ex ante conditionality based Technical assistance will still be required. Ex- on promises of action to be taken in the future (see perts in engineering, agronomy, and finance will Chapter 9). In the 1980s there was need for ex ante continue to be in short supply. But the rush to use conditionalty, but in the 1990s Sub-Saharan Af- expatriates must be resisted by African and donor rica will most likely be at a different stage. As governments alike. Technical assistance must be countries make progress, they need support for increasingly used to build local capacity and insti- measures already in place. To sustain this trend, it tutions, which in the past has taken second place will most likely be desirable to strengthen to doing the job. The time has come for donors to countries' management capacity. switch technical assistance toward building up local capabilities and increasing the supply of TECHNICAL ASSISTANCE. Donor technical assis- qualified people through training programs. Re- tance to Africa was reported to be more than $3 versing the brain drain from Africa should be part billion in 1987. Average technical assistance for 42 of such a program. African countries amounted to about $7 per ca- Technical assistance not only reflects the short pita. Expenditure on volunteers and technical as- supply of certain African specialists but the inabil- sistance incorporated in capital projects ity of institutions, especially in the public sector, (amounting to $400 million for the World Bank to attract and retain qualified nationals. Reducing alone) was excluded. It is estimated that more than reliance on foreign advisers will only be realized 80,000 people are working in Africa as technical when questions of the supply of new talent and assistants. They include senior policy advisers to the utilization of existing talent are addressed. With changes in the quality of educational sys- nal technical assistance, thus helping poor people tems and public sector reforms, the technical as- to help themselves (see Box 5.7). This compares sistance could be focused more on training and starkly with the widespread concern that official over time be reduced in absolute terms. Donors assistance has created dependency. NGOs have and African countries should set targets for demonstrated a flexibility and dynamism within achieving this. the donor community that is comparable with that In the meantime the quality, cost-effectiveness, of the communities with which they work. In and management of technical assistance can be particular they have moved increasingly from improved. A first step is for donors to seek experts emergency assistance to development assistance, from other developing countries. Another is to particularly in agriculture, water supply, nutri- encourage networks and twinning arrangements, tion, education, and health. They have found new especially with like institutions in developing support in donor countries, partly because they countries, which would have specialists more are seen as helping the poor directly-without the likely to be familiar with Third World conditions. costly bureaucratic intermediation of donors and Reducing the high cost of advisors and stimulat- recipient governments and without the danger of ing more local self-reliance may also be achieved assistance ending up in the pockets of the rich, the by structuring advisory positions on a part-time military, or the corrupt. basis, with periodic visits, instead of full-time res- The strengths of NGOs are impressive but can idencies. Careful counterpart selection and moni- be exaggerated. Local institution building has toring of performance also need improvement. proved difficult, and it is common for projects to It is widely recognized that technical assistance fail when NGO staff have departed. A key issue is is poorly managed. Recipient governments rarely how to build on local successes in providing ser- have reliable data on the numbers, composition, vices nationally. The danger is that northern and disposition of the technical assistants work- NGOs will be used even more actively as channels ing in their countries. Nor do they have clear for donor assistance, which would threaten to policies governing the use and eventual phasing suffocate the flexibility, independence, and low out of technical assistance linked to long-term bureaucratic costs that have made them so effec- plans for public sector manpower development. tive. Some NGOs are responding by establishing Such plans could guide not only internal training field offices to enlarge and decentralize their op- programs but also technical assistance programs. erations. Others are working either directly or The UNDP has begun studies in several countries alongside governments to develop the capacity of with this objective. African NGOs more rapidly (see Box 8.3, above). Training, technical assistance, networking to dis- NONGOVERNMENTAL ORGANIZATIONS. A strat- seminate technical information among African egy of development that stresses the dynamism of NGOs, and other activities are being pursued. farmers, grassroots communities, and other parts Many of the difficulties mirror those in the rela- of the nonmodern sector needs to be matched by tionship between official donors and govern- changes in donor financing to reflect that empha- ments-the need to be less dirigiste, to have sis. The need for change has been recognized. confidence in local agencies, and to move beyond Donors increasingly channel assistance through lending for projects to lending in support of NGOs-both northern and African. In 1987 offi- broader programs. It is difficult to decide when to cial contributions for NGO activities amounted to extend financial support to a local NGO-too about $2.2 billion, representing about 5 percent of early and it may weaken the self-help motivations; total ODA. In addition NGOs from the OECD too late and it frustrates attempts to move ahead countries collected some $3.3 billion for develop- with schemes for water supply, schools, and so ment through private fund-raising. forth. It is not unusual for NGOs in some countries This reflects a growing belief that most NGOs to be critical of government policies, especially are committed to addressing the problems of de- when these are seen as hurting the disadvantaged; veloping societies and the needs of their poorest in such cases an element of tolerance by the gov- members in a manner not matched by govern- ernment would be desirable. All these are prob- ment officials. NGOs have learned how to work lems of success. Each will take time to resolve. This with grassroots organizations and how to put to- calls for caution, and money should not be thrown gether projects with minimal financial and exter- blindly at institutions, projects, and programs. g82 REGIONAL ECONOMIC INTEGRATION. This report is justified by the continent's need to improve its has emphasized the need for regional integration physical and human infrastructure and to build its for sustained development in Africa. However, development capability. However, this has to be the much-needed rationalization of regional insti- matched by a conviction that the external re- tutions, policy reforms, and social and physical sources will be well used. infrastructure building cannot be accomplished Will external assistance at the level projected without funding, much of which will have to during the 1990s and beyond run the risk of creat- come from donors. Some donor policies will have ing or reinforcing dependency? Will generous to be reoriented from country assistance to re- donor assistance undermine the willingness of gional assistance. Already there are innovative governments to make difficult decisions? Difficult proposals to provide funds for harmonized policy economic decisions have often been avoided in reforms in a regional grouping of countries, as in industrial and developing countries alike when a the UDEAC. windfall has made them seem unnecessary. How- All this suggests changes in the allocation of ever, additional ODA for countries that are al- development assistance among sectors in the ready receiving high levels of aid is likely to be 1990s. The composition would vary from country politically feasible only if it can be shown to pro- to country, donor to donor. It may, however, be mote growth and to alleviate poverty. useful to indicate the changes implied by the strat- Moreover assurance is needed that high and egy proposed above. In recent years about 20 per- increased levels of ODA do not end up financing cent of ODA has gone to each of the following: military spending, luxury consumption, ineffi- social infrastructure, physical infrastructure, pro- ciency, and capital flight. However, all financial ductive sectors, technical assistance, and program flows are fungible to some extent, some more than assistance. The proposed strategy calls for in- others. Linking ODA to specific development ex- creased assistance to social and physical infra- penditure may reduce this fungibility. structure and reduced direct public assistance (in If improved economic policy management is to relative terms) to agriculture, industry, technical be effectively internalized, then the monitoring of assistance, and program assistance. The sug- macro performance and the related donor pro- gested composition is 25 percent each for social grams should be on parallel tracks. The first track and physical infrastructure and 50 percent for is the dialogue. This should be as disciplined as productive sectors, technical assistance, and pro- under structural adjustment lending. But the un- gram assistance. At these levels ODA would cover derstandings would be in less high profile ways about half of all public expenditures on human than under structural adjustment programs. resource development and on maintenance and Moreover they should be based more on a improvement of infrastructure. Technical and government's own internal policy papers than at program assistance would be maintained at cur- present-with donors focusing on their analytical rent levels for another decade. Investment in pro- quality and on implementation. ductive sectors would rely increasingly on the The second track would be an agreed program private sector, both domestic and foreign. of donor support, which would vary according to performance in implementing the target pro- Aid effectiveness grams. Donor support should become far more selective. Those pursuing sound programs should The levels of ODA should be increasingly re- receive the external funding required; such exter- lated to performance. And the development com- nal funding should fully reflect the adverse im- munity, including Africa, should be better pact of world economic conditions and the debt organized to expose gross misuse of public funds. burden on their import capacity. Countries with This implies, among other measures, insistence on weak performance should receive much less assis- transparent procurement procedures, rigorous ac- tance, limited where possible to programs impor- counting, and prompt auditing. tant to long-term development (such as research, The estimates of external resource needs for health, and education). African countries are large and rising. They would In summary, donors must increasingly take on represent about $32 per capita by 2000, compared a bigger role to support national programs and with $26 per capita in 1986 and with $14 to $18 per institutions. This will require less dirigism, a capita currently for South Asian countries such as greater willingness to "let go" in day-to-day man- Bangladesh and Nepal. This preference for Africa agement, and the recognition that sustainable 183 growth with equity in Africa will be possible only that this in turn requires a widening and deepen- if African governments are willing to establish the ing of African strategic thinking and action on necessary enabling environment. development issues, as well as a recognition that This does not mean that donors should become many of the needed changes will take time to less concerned about the domestic policy perfor- implement, let alone to yield results. mance of African countries. The outlook for Africa The experience of the 1980s suggests that policy is so bleak in the absence of significant policy and program reforms need to be not only well action that the concern of donors is justified- formulated but also socially and politically accept- more so given their willingness to increase exter- able. That is why the proposed strategy aims to nal financial assistance during the 1980s, when ensure that those who have to implement the ODA in general has stagnated or fallen. The big difficult economic, social, and political changes increase in external support to Africa during the during the next decade or more actually believe in 1990s that is proposed in this report could be the policies and feel that the changes are of their anticipated and would be justifiable only if there own making. This is the only real basis for donors were confidence that it would lead to sustained to be confident that the development programs growth with equity. But donors need to recognize will be carried out. A strategic agenda for the 1990s The outlook for Africa is potentially devastating. be given to human resource and institutional de- This threat can only be averted through urgent velopment, on the central role of agriculture in action. Yet there are no quick fixes, no simple raising incomes and achieving food security, on blueprints. Although broad agreement exists on giving much more attention to protecting the en- the gravity of the problems, their complexity vironment, on nurturing small-scale enterprises makes effective collaboration among the many and grassroots organizations, and on promoting partners in Africa's development-the African women's role in development. Of course complex governments, the bilateral and multilateral agen- problems remain to be solved at the technical cies, and the NGOs, both local and foreign-ex- level. Professionals will continue to debate-for tremely difficult. The time has come to seek out example, exchange rate policy, the use of protec- the high ground of agreement and to move from tion to promote industrial growth, or even how words to deeds. best to strengthen agricultural research. Such de- bates are a necessary part of the continuing search The search for the high ground for solutions. They in no way diminish the broad consensus on objectives, which is the starting Successful development depends on getting point for working together. most policies reasonably right and none of them In a few instances the objectives themselves are hopelessly wrong, rather than on getting just a few still being strenuously argued. All in all the com- policies perfectly right. In defining joint programs mon ground is more important than the differ- of action, there is no place for fundamentalism. ences. The emerging consensus can be Fortunately disagreements in practice are few. A summarized under three broad headings: restruc- review of the many official reports on Africa pub- turing economies, putting people first, and foster- lished during the 1980s by the African, UN, and ing self-reliance. other multilateral agencies reveals many shared positions. Moreover the differences have greatly The need to restructure African economies narrowed during the 1980s. Yet the public percep- tion of disagreement is itself a cause of inaction. In times of economic and financial crisis, the Establishing shared viewpoints is essential if col- attention of policymakers inevitably shifts from laboration is to work. long-term development to short-term stabiliza- Existing areas of agreement cover both the di- tion. No government or country can function for agnosis and the main objectives. Whatever the long with gross macroeconomic imbalances. Yet it political vantage point, there is a broad under- is also now widely accepted that Africa's eco- standing, in particular, on the absolute priority to nomic problems are so deep-rooted that conven- tional stabilization programs are inadequate. Few by the dichotomy between capitalist and socialist governments question that Africa's present eco- development models. The Nordic development nomic malaise calls for bold reforms. Indeed two- paradigm (seeBox9.1) offers an alternative devel- thirds of African countries have embarked on opment model where the state assumes a leading some form of structural adjustment. The success role in building human resources, administrative, of such programs is a precondition for any long- and physical infrastructure capacity, while the term strategy. The challenge is to ensure that they goods-producing and noninfrastructure service go beyond stabilization to achieve a genuine sectors are left to the flexibility and incentives of transformation of production structures (as ar- private enterprise and market discipline. gued for recently by the ECA) and thereby shift Africa's economies from stagnation to robust People come first growth. The necessary structural adjustment programs Improving health, expanding education, ensur- are complex and difficult. They demand constant ing food security, creating jobs: these are the pri- review and modification. Most already aim to put orities shared by all the partners in Africa's measures in place that will foster private initiative, development. Everything else-economic reduce regulatory controls, and expand the role of growth, fiscal policy, exchange rate management, market mechanisms. Such reforms are under way and so on-is no more than the means to achieve across the world. They are designed to promote the fundamental objective of improving human (rather than control) development. In this context welfare. Poverty reduction is widely seen as a no measure is more controversial in Africa than central concern of policy matters. UNICEF rightly devaluation. But here too opinion has shifted. Sev- stresses that when economic policy is in disarray, eral countries-The Gambia, Ghana, Guinea, and it is the poor and the children who suffer most. For Nigeria, to name but a few-have implemented this reason all the partners in Africa's develop- bold exchange rate policies. The results are mixed, ment support UNICEF's call for structural adjust- but promising. Growth has generally accelerated. ment with a human face-witness the remarkable The lesson is that correcting exchange rate over- support that has been mobilized by the joint pro- valuation is a necessary, but not sufficient, condi- gram to address the social dimensions of adjust- tion for renewed growth. If exchange rate ment (see Box 9.2). adjustments are to be truly beneficial, they must Improving human welfare is closely linked to be supported by tough measures-especially moderating population growth. Few issues are wage restraint and fiscal discipline-to control more controversial. Yet during the past decade inflation. African governments have rethought their posi- There is also universal agreement on the need tion on family planning. At the conference of Af- to combine fiscal and monetary measures with rican health ministers in Niger in January 1989 steps to minimize the adverse social impact of almost all endorsed an active population policy; adjustment and particularly to reorient public at the World Population Conference in Bucharest spending in favor of basic education, health, and 15 years earlier most had been opposed. Several nutrition. To do this sensibly, governments will governments have already started to put effective need better information on the basic social indica- family planning programs in place. tors. Several countries have recently launched programs to address the social dimensions of ad- The drive for self-reliance justment. Reducing public sector overstaffing is causing particular distress. To ease the social dis- Fostering self-reliance is widely acclaimed as an location resulting from this necessary but painful objective for Africa; it was enshrined in the Lagos adjustment, those laid off can be compensated and Final Act and is generally respected by Africa's helped to find work in the private sector; food-for- partners. It means building African capacities to work programs can also cushion the blow by pro- take full technical and managerial charge of run- viding a safety net for those without an alternative ning Africa's economies-a principal theme of source of income. this report. An important measure would be the Many African governments have been reap- development of high-level training and profes- praising the role of the state. In the past the think- sional associations (organized on a regional as ing of African policymakers has been dominated well as on a national basis) to attain excellence in Box 9.1 The Nordic development paradigm In thc mid-lSIIullstheNordiccountries %%erc agrarian ccCOn- phastzng high-qualtr although limited. higher Lduca omies % ith lo incc-me le;els Starting with Sweden th!n These policie' encouraged inlormed public partick- around the Ii70s. theN h3ae all expen-enced high grohth pation in wocial and econ,-mic decisionmaking and te'becomead%ancedindu4trtaleconomies.lnl 1.%7rthetie pro idedahhealthsand tv.l-trainedlaborlorce Thepub- Nordic countries had in a'erage per capita GDP ol h; sector ^ enabling role and respect tor market mecha- Jlunr7lr slightI, abotelharoijapanand the L'nited States ni~m;allowed the Nordiccountries toachie% ea high lek'e and 4.s percent higher th3n the EC average. Moreover o economic ellicienci. Private entrepreneurship encour- -candinat ia, ocial indicatcirsi re among the best in the aged but not directed bk the ,tate. became the prime world Like cni other countries, the Nordic countries had mover in the elabishhment and e\pansion ot the goods- their o%% n uniqut circumsalnces Ho-weter. there are ti o piroducing sectors andJ thir trJding and rinancial tlSiWu- notec|orth, lactors behind their succtec- the relatie roles tioni ot the stlate and the market and the pattern ot trade ornen- Ir,l1 orwiitli, lii nt 41tii coopcruriori The Scandina- tation nd regionalncL:peration ia3n hatelongbeenopen to tradeand lechniealad% 3nce, T'l.- rofs o th/i st.ilt and the nwiar/ At an e.arl% stage o trimnabroad Thetp3aternsoiltTadeorientationemergedas de% elopment the Nordic states as~umed the role ot pro- a result vi market lorces in contra-l to the more top-do"i n viding intrastructure high-qualit; administrahon and mercantilLst policies it iapan and Korea, %%hich guided s,ocial servicev %%hile the goods-producing ,ectorsn %erL trade Further the earl; tspanuoin ot Nordic indu4trial largek lett topri%atetnlerpri4eand marketdisciplne The entreprcneur;hip %as linked to the domestic resource statea-tihel- promomtdiuniversalaccestosocialservices base and to deniand arising Irom the agricultiral sector cncourageda harmoniou,partnerThip betw%eenlaborand and intra,tructure investment, Ho%%ever exports in- entreprencurv and1 kept a light rein on tht; pri%ate sector crea ingl% became the drnimg torce in industnal espan- This %%as in sharp contrast to the practice in socialist sion countrie, iw-here go%ernment took oter ow%nervhip and -lie small Nordic counrnrc ha%e demonstrated the direction 0l the means ot production It %%a- al%o in con- scope toir regional cooper3atondespite reiativel homoge- trast to the planned1 economic, in the Third Wvorld. w here neous re,e.urceendmow mentand cornp,tih% e-rather than governments tried to caprure the commanding heighlt complemenntar-palterns ot production Stable and oLt the econom% in the g0ood-prodiLucing sectors It An,' peacetul politic'i relationstosteredc-conomiccooperation diliercd ircmmthepurek marker-orienteds;sltems. .'here carried out % ithoul e\perisi%e irsntutional shtucrures tree enterprise. i% ithout the state pro. ision or social ser- Tr.,detie thli the regiotngrek from 12 to 13 peinentiot total %ice,. led to large ncomt di4parities-great %%caIth along Nordic tradet betoret Iorld lar I to 3(i or more percent side acute povErtr It ditfered to) tTom lapan s and therearter kore:i s approach wehere the state plaNed leadt roles in TheNorrdiccountries remarkabletranitormattontroim targeting eslablishing, and protecting ket industries agrarians,cietties into niodernindustrialeconomiesotters The Nordiccountrie- haveconsistenntl% oughtconsen- a dikinnctite devtlopment paradigm Their success re- sus among organized labor capital and government sultud trom a t,cial market econom w%ith its combination Sharing economic prosperiti was ,etn as e,sn-,nhal tor ot tree--ntcrprise ecc.nomic polIcIe 3nd active 'ocial eConromiclIe;elopmentand political stabilih. E.rl onlthe policie4 Nordic s-cieties itro' e lor uni;ertal lierac; . while em- all technical and professional fields. Particular at- imports. Greater trade within Africa in food is one tention needs to be given to expanding top-quality answer; Chapter 7 proposes lifting present barri- science and technology training so that Africa can ers to the movement of food from surplus to defi- keep abreast of the revolutionary advances being cit countries. Yet many African countries now made in biotechnology and materials science. At importing food could well meet far more of their the community level it means empowering people own needs if the structure of incentives, and espe- to take fuller charge of their lives. cially exchange rates, were more favorable. The Self-reliance has sometimes been interpreted as same is true for industry-although it would be self-sufficiency in food and industrial products. naive to pretend that African firms can be trans- Here a sharp distinction must be made. Framed in formed overnight into effective competitors on these terms, the quest for self-sufficiency ignores the world market. Industries will need to be nur- the potential gains from trade. That is why any tured. Liberalization must be phased to allow time further delinking of Africa from the global econ- to acquire capabilities and to restructure ineffi- omy would enormously hamper its development. cient producers. However, trade should reflect interdependence, The strategy of developing "core" industries, not dependence. It can be convincingly argued advocated in the early 1980s, poses special prob- that Africa has become too dependent on food lems. Few countries have domestic markets large Box 9.2 The Social Dimensions of Adjustment Project T F. The I E)a [me n l-lrlo rl;- Ad u; tni rn i D A,Frrle,:t i,a,; * A p.-ltc component includ1in4dt~~ =n,n1 implernien- la u n c id m 1 7 a lo,n t %ntureoI t h LINOP R,gional t.non ol both macromoduhncEln trame%nork1 mplegrate ' PrkNr.inmme lor Africa ih. -\rc.in De, It prnent S.in k di-tribution3l and .rmplo% ment elt. mt,i. marooco.* a.ind the t\ Lirld 1sanlk [ts oL1 e is t-, itegrate pot ert normic polic' miing and core oial e\.penditrure pro- reduction polcie a r...... nd pr3rm. Int.- the de .ign mi d; cl- ..............Crims to bendi timh p:.,. opmcni plan To.date 'rm Atrican courtrie.Lind II donor; * Program and1 prol-fat .omp,.nenttt f.r the design and h arepartlcipatin: nrthcproiect rroiect acti ikeshav ebear .tlve. up ot 4p,itic interornticin, aimed 3t protecting ; .tarted both 3a h, regional ind at the counrrs level. uln,r-bIegroupsdLlringadlu-tment.nld tori%-terin_the At the r,vioal lI. l ithK prlect ~uppFrt, th. dt%elop. participartn oi the p.or in m.-ooe.onormk ai.!% it% i ment ot 3 co.nceptual. empirical .rnd ptdich tramrneorl, to particular bs proornine comrnuitlt- -Icel initlialik es e; ;t-r.-nvthen thc loundatiin; ot detelopmtnt plarns 3imed i3imed at -mall-c.ale. inmo.rngenerahng acht tile- 3nd at gr0i, th t. ith etuit% The pruqect al- ;.- ihElpirt,z to Lde- ;mall.;calt. 4oci.,d In.ratructurc %elop i regional training pr.ogr.im tor *ocil polh :iiualx - * Ar inhitunoinal and d& elopnientcomponent includ- and to *tren,then th. -taitvical databa-c;n.r the i. in4 inm., ;trcngthenini go-. :rnnmcnt cap.ta for .'C,al p0lic r cXnditio.n. -.t h.qusehold; it pr.tncote- both Alrican re- planning and programming pohltcs anaIl% of the socll .i *earch on thc icial 1trner',kn. of dutel.:pFment :,nd ointr dimen-ion4ot de .Ilorpm nt and thecrvaiion ol ltatlti9al ' vnture; berw.er, Air-can .rid non-Aflicn re earch In.tt* data bases ti:- as-es the %a% 1, ing .condittono it hi:.us tullonS t ani.!%ze po ert% redution poii,ec and pro- holdse voR e gramn in the c;nter of ;tructural adiu>imer't The malor chfllenit. t . the prolject Ill be to integrate At the eountr le. .l thte pro)t:et i; helpine to prepare a the ible:ti% - oi No% *'rt ru..ction is purt ot the de;ign of Countr\ A;-e4;rent P3aer - hih comntainan initial pv% macroe:onomic ;trai,eie- it-u help reorient public L\pen- erth proilid ct the ppJulathin and identiltis ke% polic; diture programv in ia.or of the poor and to promote the 1;ure; b.i;ed on cshting intrnrihon Thc prole:i then participation oo comnmunit% groups and NGCtI in !upports the inpltmtenarron ;i .i Countr, O)pcranon3l dining and nmplemtn[inc cieconnmicpcilice arid ,i MraieeA con~i;ting oI devvlcipmnrii plans enough to justify steel, chemical, or fertilizer in- competitiveness. Africa will gain nothing from dustries. If investment decisions continue to be enterprises that sell products that are more costly made by the public sector without regard for mar- than those available in world markets. Moreover ket signals, countries risk incurring heavy losses. Africa has spare capacity in many of the core Investments of this kind will yield benefits only industries that have already been established; the through regional integration that respects market challenge in the l990s is to exploit these resources forces. more effectively before investing in new capacity. Regional integration and cooperation among Meanwhile all can agree that there is enormous African states is a strongly held and widely shared scope for Africa's manufacturers to meet the objective. It is rightly seen as an integral part of continent's demand for basic consumer goods- Africa's drive for self-reliance. To yield results, building materials, furniture, clothing, kitchen- this goal should be pursued in a pragmatic and ware, and the like-and to do so at internationally incremental manner to overcome the many prac- competitive prices. This is where industrial capa- tical obstacles that have slowed progress to date. bility should first be built. Donor support could do much to help by easing Promoting local self-reliance is now widely rec- the transitional costs. ognized as an essential element of any future de- Export-oriented growth has been seen by some velopment strategy. The aim would be to mobilize policymakers as incompatible with self-reliance. local energies to provide basic services. The key is This is incorrect. Although import substitution to strengthen local organizations and to find ways often offers the most immediate opportunities for to enable women to play a greater role in develop- industrial investment, a drive for exports can be ment. Although there is broad agreement on these combined with production for the domestic mar- objectives, practical measures to pursue them are ket and is fully consistent with achieving self-reli- all too rare. In the 1990s explicit strategies will be ance. Viewing Africa as an emerging single needed to develop the capacities of local govern- market, successful import substitution would ment and nongovernmental organizations, espe- serve to build a large industrial base capable of cially those involving women. The ultimate goal exporting competitively. The key is to achieve is to empower individuals and communities to take charge of their own development. Clarifying spending on education, health, science and tech- land ownership rights is a vital part of this nology, infrastructure, and environmental protec- strategy. tion. Two specific targets are proposed: 8 to 10 percent of GDP to be spent on human resource A strategic agenda for the 1990s development and 5 to 6 percent on infrastructure maintenance, rehabilitation, and expansion. This report suggests seven main interconnected These increases will need to be met partly by cuts themes to shape Africa's strategic agenda for the elsewhere and partly by greater resource mobili- 1990s-themes that build on the emerging con- zation. As the ECA has rightly argued, markedly sensus. Despite the great diversity within Africa, lower outlays on the military could yield impor- enough similarities exist for these themes to be tant savings in many African countries. So too relevant for most countries in drafting their own would a progressive slimming of the public sector, specific plans (see Box 9.3). where overstaffing has become chronic. Public investment in agriculture and industry could be Adjustmentforgrowth proportionately lower than in the past, with greater reliance placed on private sector outlays. Structural adjustment programs have almost Revenues can be boosted by a more effective and always been mounted in response to an immedi- broadly based recovery of costs and by a more ate financial crisis. The problems of African econ- determined approach to tax collection. omies go much deeper. Evidence in Chapter 1 showed that structural adjustment programs are Developing people beginning to produce results, but only slowly. In most instances the process has hardly begun, and Human resource development should be too often the efforts have not been maintained. placed high on the strategic agenda for the 1990s Hesitation and procrastination-repeated cycles for all countries, thus reflecting a shared determi- of "go-stop-go"-stymie recovery, and greatly ex- nation to reverse the decline witnessed during the tend the period of adjustment and its attendant past decade. Spending for this purpose should be hardships. The hardest part of all for African gov- increased and a major effort made to improve ernments is to build investor confidence, and even quality. No longer should allocations to basic then the supply response inevitably lags. human services appear as residual items in the The challenge is to make African producers budget. Each country should establish monitor- competitive in world markets; in other words, to able programs to improve basic education, health, transform Africa from an expensive and difficult family planning, and nutrition, as well as a time- place to do business to an efficient one. For this table for achieving universal coverage. Some may reason the adjustment effort must be both radical be able to achieve that goal by the end of the 1990s; and prolonged-a deep transformation of the pro- others may need 20 years, but for no country duction structure is required. Structural adjust- should it take longer than 30 years. ment is necessary, but it must be Overcoming hunger and malnutrition is a criti- sustained-without dogmatism. It must be ad- cal component of the human-centered develop- justment with a difference. Different in the sense ment strategy. Assuring African food security that greater account is taken of its social impact; depends, first and foremost, on increased agricul- different in the drive to encourage competition tural productivity. The distribution of food can be gradually, by first lowering the barriers to trade improved through increased trade within the re- within Africa; and different in the use of the ex- gion. Food security is also a function of increasing change rate rather than administrative interven- real incomes and enhancing the capacity of the tion as the key instrument for bringing costs into poor to acquire the food they need. In the long run line with Africa's principal competitors. economic growth can be expected to help over- New priorities would call for a new pattern of come food insecurity; in the shorter term specific public expenditure. Switching budgetary alloca- interventions such as food subsidies or employ- tions usually encounters stiff bureaucratic oppo- ment and income support schemes targeted on sition, but even so development priorities can be vulnerable groups may be necessary. most readily changed through the central govern- Donors should see human resource develop- ment budget. The proposed future development ment as a priority for Africa in the next decade. strategy elaborated in this report calls for more Support for the recurrent costs of wages, salaries, Box 9.3 The Sahel-A special challenge The challenges tacing Sub-SaI.hiran Airlc3 are most acute In 3griculture tr.idirional produthon rechnique.appro- iritheSahel iThi,regionincludes BurkinaFaso).Chad.The prate tor the 3ari.ble r3irirall pattcrns and lot -terrilirr G3ambia M1ali 'laurt,ania. Niger and Senegal and con- soils included practices to ensure the .ust3inedJ-; icd ut.e tnrici percent clSub-Saharan AtTica s populaticn.C.AiUm- ol the modet anrd Iragile re,ourct base. notabl-, the riatu- pared with the resl t -.i .Airnca. the Sahel ha, relaliveh lett ral forest co%er. In the lace or rapidll nring population, a- ets on which r*. drai% Fulls -R percent ot the land is thesetechniquesare n.olongerelle't1ve Thustheprincipal barren desert Hall thi countrne; art compIletel 13nd- taskahead istosio-p and ipo.blc re%erse environmen- locked t, ith vast di;t3nct, ;eparating market- Since ihe tal degradacion in the drier areas ot the Sa.htl the focus de a-rtating dr.-ught or 1Q. raintall h3s been belost Ihe will be on water management and soil conservation and long-term i[tnd t%h,ther th!, iS a cihcal lout or the on % illage and pastoral land management, supported by harbinger or an irreter.iblE trend is uncertain. Rapidls tenurereform Inthebetter-wateredsouthernareas,agri- increaang populat-ren exacerb3ted b intern3a migration. culrural inten,iFicatio'n can be pursued as elsewhere, but ha, accelerattd detorvslarion and s-ol degradaiorn The with integrated % iliage action plans to conserve the in- htghl, dispersed population nmakes it both dirimcult and crea.ingl, thireatened naturai resourc. e\pensiw to proride ;octal and inlrastruct-re sen ices The development l f indu'ln and ervicesintheSahel Ba4ic ieltare ildicator, retlect the rnadequacz ol social depends on an integrated market, which should become serr ces in the Sahel [it et.pectanc-c i. 1D1 x earb less than part ot a larger regional market. Official statistics show the a%erage lior low-tncome countries inm3ni mort3litx limitedtTaduso faramnongtheSahelian0cLuntrie- andwith (1301 intarits per thousandi IS twie as high the primari the re-stlt IVest Atn3caSper:ente\pcrt and 1 3percent schoolenrullmetr.itraio 3rperceni is uvt half nOna\erage cf import,i1.initiall stimulus.to ndu.trial development there is onr docior br every 24i1)ili people could comne trom suppsk n 3aer,ulirure and transforming Barring a worsening of the climate, the Sahel has, how% - agricultural prod ucts. trom prod uc ing loti -costconsumer ever, important development opportutntries There i, un- goods and consrruction materials, and, in the long run, exploited agricultural p.-tc-ntia1 particularly in NMalt trom spt-cializingrt elcedlines of production, such as Burkina Faso, and Chad. Gold in Burkina Fa-o and Mali cotton-bas;ed textiles. Based on current trends, one could and oil in Chad :ould becomc sign ificant Iource, of re% e- wvell imagine ihat Senegal becomes a center for services nue If markets arc e\rended be% ond national borders (such as tourism, research,and education), Mali and Niger there j- a large putential lor small- and medium--cale for trade, and Burkina Faso for banking. For enhanced ma nuiaciurin-g Saheli.incountriesaru the eoeraphic link regional cooperation the barriers if real e\change rate bett%een the northern 3nd the w estern 3nd c;ntral regions distortivns and imrnpdiment- tocapital and labormobility (i tric.a Thi- canibinEd t* ith the tradirional comp;etence must be climinated and to rac-iltate the nxoiement of ot the Sahelian people lor commerce and intermed,ation goods and pec-ple. in' esimeni in the transport and com- 3re Isselr for the deo elopmentl -1 ertiarl actui itjes. The municationsinfrastructureisessential. ch3llenge , to rind1 a; stra2 that itbets the liabilitte As for the rest of the continent, important structural posed L, the dirricuir natural en' ironment and limited retlrms art' alreads under % 3a The\ aim at rtducing the rc.,.*urce. the priorities arc nonc.-thele- \ern imilar to burden oif ineltictnt putblc ector, esrablridinq, an en- rtho' Ior -.ther African counirie; ablntm polic% en' ironmnent 1 r r-rt\ atc nitrait e aild ;tim- Firr' and lorrmost i, ihe iteed to inet tar more in ulating a suppl% re!ponsc At thE ,ame rime public people NIs....t simpoirtant determined action i- needed in ? \ e pnnditur- ,h b u1I1 the shifted nol only in favor of pro- three pnrorir% area' Primarx education should be tm- crarm, t. protect ihe enironnment and develop human prc.t 5d and e p3nded to prot doe children and adults * ith resources,butalsotoprovrdeessentialphysicalinfrastruc- basic literac\ and numeracs s1, ils thu, builditig-the much ture. ne,eded prnitae and public capacities To furtiher enhance Tomeetthischallenge,theSahelwillrequiresustained th. im,pact cf these qu.rlilt Iis e improe vme nts affordable dono-r aa,,it3 nce as well as far-reachingdebt relief. While heilth 'en cc,- .nd proper nutrition throug.dth lood secuinh project aid will be needed for many decades to come, the a re c nnc 11.s needed tv e' tend the actit e t ie 3 nii ncrease long-term aim, however, should be to lessen the current the productivity of the labor force. These actions would in dependency on budgetary assistance. With needs so great, turn support direct efforts to slow population growth, nowhere is it more important to ensure that funds be used it hich i; - -enti.iM for tran'l air'g Gr-r etp.in ion into per c fficientlf . thi- calls for botit stramnl ining in c tnient pro- capita incomei 4arni arre'trng *zm1 degradation and gramming and rmpro'. ingzaid coordination broadening access to social service, . hile mitntainingz their quahit instruction materials, medicines, and other sup- Building capacity plies in the programs should be seen as a higher priority than buildings. This implies a willingness Africa's lack of technical skills and strong public to finance local costs; the preference of donors to and private institutions accounts more than any- fund foreign exchange expenditures might other- thing else for its current predicament. The para- wise easily distort priorities. dox is that Africa also has people who are educated but unemployed. The suggested reme- greater production. But those measures alone will dies are radical. not suffice. Agricultural growth depends on imag- * First, in education and training, better qual- inative research to develop new technologies and ity should come above all other considerations. on an effective extension service to provide the The pursuit of excellence must be ruthless. Africa link between farmer and researcher. Industry and would be better served if its universities used their mining development depends on attracting pri- present resources to produce fewer but better- vate investors with the resources and expertise to trained graduates with a strong bias toward tech- mount viable operations and on the willingness of nical and analytical skills. Quality matters right foreign entrepreneurs to forge genuine partner- down the line to the primary schools. ships with local businessmen. Private investors * Second, the reform of state enterprises needs are likely to be forthcoming only if a country's to be accelerated. The measures called for are well- investment code (fiscal regime and foreign ex- known-the most important is to give managers change regulation) recognizes that making profits a clear mandate and unfettered authority to meet and paying dividends are necessary rewards for agreed performance plans. taking risks. * Third, every opportunity should be taken to To be competitive, businesses need cost-effec- support local, communal, and nongovernmental tive and reliable utilities and other infrastructure organizations of all types-village associations, services. So the agenda for the 1990s must provide cooperatives, credit unions, professional associa- for rehabilitating and maintaining the infrastruc- tions, chambers of commerce and industry, and ture network that has deteriorated during the the like. These initiatives are most likely to suc- 1980s and also for building new capacity in critical ceed if the institutions have local roots. In many areas. One of these is telecommunications, in countries informal credit organizations (like the which there is a clear bottleneck and in which the tontines) have been more successful than the mod- rates of return are demonstrably sufficient for this ern commercial banks, and the informal sector is service to be self-financing. Good telecommunica- generally more dynamic than the state enterprise tions are the key to Africa's participating in the sector. The challenge is to build on this solid in- informatics revolution. The measures needed in- digenous base, with a bottom-up approach that clude improving the management and financing places a premium on listening to people and on of infrastructure services, some of which can be genuinely empowering the intended beneficiaries contracted out to the private sector. of any development program. There will be no growth without entrepreneurs. * Fourth, public administrations should be Much can be done to foster African entrepreneur- drastically overhauled and their role changed as ship by recognizing the role and vitality of the far as possible from that of controlling develop- informal sector-replacing discriminatory legis- ment to promoting it. Overstaffing should be lation, by unshackling small businessmen from gradually eliminated, with remaining staff up- unnecessary and unhelpful regulations and con- graded through systematic retraining. New hiring trols, and by facilitating access to credit and should be based on competitive examinations and markets. the reward system related to performance. Skilled It is not good enough for growth to be sustain- staff should be adequately paid. able. It must also be equitable. To be equitable, * Fifth, government policy analysis should be everyone should have some way to earn a liveli- strengthened by fuller use of the best-trained na- hood. And growth alone does not ensure that jobs tionals, local consultants, and university research- will be created rapidly. Agriculture cannot accom- ers and by better data collection. modate all the entrants to the labor force. Much of * Sixth, special measures are needed to re- the increase in the working population will have move the legal barriers and provide the adminis- to be absorbed in nonfarm activities, in small busi- trative support to allow women to play a full and nesses, and in the service sector. The policies that equal role in the economy. will spur job creation are therefore the same ones that will foster enterprise development. Mini- Resuming growth and creating jobs mum wage legislation and other restrictive labor regulations that discourage the expansion of em- Enhanced capacities and a supportive policy ployment need to be eased. As a safety net govern- environment provide the underpinnings for ments may mount food-for-work programs. Preserving Africa's patrimony standards will be raised and basic needs met is through growth in the productive sectors. That The 1990s will be a critical decade for the envi- requires investment. But a loss of confidence is ronment, as escalating population growth puts discouraging investors and producers alike. For increasing stress on Africa's ecological systems. too long there has been little stability in policies or Trees, and the species they sustain, are fast disap- public institutions in many African countries. pearing; fuelwood is becoming increasingly Failure of governance has become so common- scarce; topsoil is vanishing from fertile slopes and place that expectations are low. Yet there is an cannot be replaced; and grassland is being over- evident popularly felt need for renewal-border- grazed and turned into desert. Pollution is a fast- ing on desperation-that is widely expressed. Too growing threat to health in Africa's burgeoning often many of Africa's best-trained minds are in cities. exile or simply underutilized. Measures to address the accelerating destruc- It is not just the unpredictability of policies that tion of Africa's natural resource base are now discourages investment, but also the uncertainty increasingly prominent on the agendas of govern- about their interpretation and application by offi- ments and external agencies involved on the con- cials. This problem is exacerbated by the frequent tinent. Programs to halt, and hopefully reverse, lack of a reliable legal framework to enforce con- the process of desertification, the devastation of tracts. The rule of law needs to be established. In tropical forests, the erosion of arable land, and the many instances this implies rehabilitation of the pollution of the cities all merit strong support. judicial system, independence for the judiciary, Achieving faster economic growth for today's scrupulous respect for the law and human rights population at the cost of an unproductive natural at every level of government, transparent ac- habitat for future generations is not acceptable. counting of public monies, and independent pub- No time should be lost in putting in place, country lic auditors responsible to a representative by country, environmental action plans and in legislature, not to an executive. Independent insti- mobilizing broadly based popular support for tutions are necessary to ensure public their effective implementation. Extensive commu- accountability. nity-based programs to plant trees are also ur- The widespread perception in many countries gently required. is that the appropriation of the machinery of gov- ernment by the elite to serve their own interests is Accelerating regional integration and cooperation at the root of this crisis of governance. The willing- ness of the donor community to tolerate impropri- The objectives of regional integration and coop- ety-by failing to insist on scrupulous conduct by eration should be pursued with a new determina- their own suppliers, by not ensuring that funds tion to overcome parochial coticerns. The Lagos are properly used, by overlooking inadequate ac- Plan of Action and Final Act establish the basic counting and auditing, and by tolerating gener- framework. Decisions are now needed to rational- ally lax procurement procedures-aggravates the ize regional institutions, to liberalize trade within malaise. Everyone avowedly deplores the situa- Africa, to ease transport controls, and to facilitate tion and wishes it were otherwise. But it will not intra-African payments. Programs to ease infra- be so until accountability is instituted. structure bottlenecks should be planned in re- sponse to identified demand. A more systematic Consensus building within Africa effort is needed to exploit the many opportunities for mutually beneficial cooperation in education, The need to move from "words to deeds" does science and technology, health, research, and nat- not diminish the importance of the "words." Pro- ural resource management. grams of action can be sustained only if they arise out of consensus built on dialogue within each Political renewal country. Consensus will not be easily achieved. It will require facing up to difficult political, social, Efforts to create an enabling environment and and other problems: the vested interests that profit to build local capacities will be wasted if the polit- from the present distorted incentives and controls, ical context is not favorable. The only way living the political and personal expectations that must be revised, the intellectual and ideological posi- and persistence over decades, not years. Technical tions that must be questioned. assistance needs to be refocused and better man- Within most African countries policymakers aged to give priority to capacity building. have been reluctant to allow open discussion of * External assistance should extend beyond economic policy issues. This is a mistake; broad investment to cover development expenditures and vigorous debate on what has gone right and more broadly defined (including expenditures to what has gone wrong since independence is vital improve health and education, to protect the en- if options are to be understood and consensus vironment, and to maintain and rehabilitate infra- achieved about future policy directions. This de- structure). Donors should shift their assistance bate needs to be encouraged in the media, in the increasingly from financing projects to financing universities, and in open workshops. It is a pre- a "time-slice" of sectoral or subsectoral programs. condition for building a genuine and broadly In the human resource and infrastructure pro- based commitment to a future development grams support should extend to operation and strategy. maintenance expenditures. Donor assistance Since the action programs are country specific, should not apply just to government-to-govern- they must reflect national characteristics and be ment transactions, but also to the activities of non- consistent with a country's cultural values if they governmental and private sector organizations. are to attract popular support. This is obvious in * Last, donors should channel resources more sensitive areas such as education, health, popula- selectively to the governments that are already tion, and labor management. For example, in implementing reforms and making good use of Japan the typical Western model of labor manage- the external assistance they receive. ment clashes with Japan's culture; Japan's model is based on its own social norms. Africa too will Toward a global coalition for Africa need to search for the models that best fit its culture. Many institutional arrangements-notably Thus moving from words to action requires a consultative groups and roundtable meetings- favorable institutional context. It must emerge have been developed for coordinating the actions from, and at the same time support, political con- of donors, the UN agencies, and individual Afri- sensus. Each country will have to wrestle with this can countries. On a range of sectoral and func- problem in its own way. The most that external tional issues the UN agencies have special agencies can do is to support the search for that responsibilities. Arrangements such as the Con- consensus. sultative Group for International Agricultural Re- search (CGIAR) deal with programs that address Building consensus among the donors specific problems. And during the 1980s, as the depth and seriousness of African economic prob- Africa faces exceptional difficulties and merits lems were increasingly recognized, institutional exceptional treatment by the donor community. arrangements were developed within the frame- Just as Europe was seen to be especially needy work of the United Nations (such as the UN Pro- immediately after World War II and India in the gramme of Action for African Economic Recovery 1960s, so today Africa requires concentrated and and Development-UNPAAERD), the Develop- coordinated support to overcome its grave diffi- ment Committee (such as the World Bank studies culties. Donors must work together to focus their of Sub-Saharan Africa and related initiatives), and efforts in key areas. the OECD's Development Assistance Committee * Ways must be found to reduce the debt bur- (DAC), and Club du Sahel. These responded flex- den. There is no lack of options; what is missing is ibly to the immediate need for joint action on collective will on the part of the richer countries to issues such as food, drought, and debt. UN- deal decisively with the issue. PAAERD was an historic North-South compact * Donors should place their efforts in a longer- endorsed by the Special UN General Assembly in term framework; they need to recognize that ca- 1986, which has demonstrated the potential for pacity building is at the heart of the matter and united action to assist Africa. that strengthening institutions and developing ca- But it is becoming increasingly obvious that the pabilities is a long process that demands vision causes of Africa's economic malaise are deep and 193 persistent. Moreover they are so inextricably form efforts. To take this initiative a step further, linked that they demand a coherent set of pro- a new global coalition is proposed for the 1990s. It grams-programs designed by the government should be broader and more permanent and thus concerned and implemented through strength- widen the scope of consultations to cover both ened institutions. Donor measures are no substi- donors and recipients. Its mandate would be to tute for sustained political commitment to cover the full range of long-term development building institutional capabilities. And without issues. But "long-term" does not imply that action this strengthening, even the best policies and pro- can be long delayed. On the contrary, movement grams will not be carried out effectively. toward the objectives has to begin now. Can Africa's decline be reversed? The simple The proposed global coalition for Africa would answer is yes. It can be and must be. The alterna- be a forum in which African leaders (not just from tive is too awful to contemplate. But it must hap- the public sector, but also from private business, pen from within Africa. Like trees, countries the professions, the universities, and other NGOs) cannot be made to grow by being pulled upward could meet with their key partners-the bilateral from the outside; they must grow from within, and multilateral agencies and major foreign from their own roots. But Africa will need sus- NGOs-to agree on general strategies that would tained and increased external support if it is to then provide broad guidance for the design of meet the challenge without unreasonable hard- individual country programs. The coalition could ship. This support should be offered in the context seek agreement on actions to tackle the priorities of a compact that does not diminish Africans' identified in this report: environmental protec- right to determine what happens on their conti- tion, capacity building, population policy, food nent, but that at the same time responds to the security, and regional integration and coopera- concerns and insights of the external development tion. It could provide the impetus for channeling community. external assistance to programs in these areas and The need for such a new international compact for monitoring programs. The creation of this co- for Africa, which could build on the work of the alition would be a decisive new step forward for UNPAAERD initiative that ends in 1990, is urgent. Africa and its partners. It would mark a new re- The UNPAAERD has provided a framework for solve to work together for a better future. mobilizing resources to aid Africa's economic re- 194 Bibliographical note Chapter 1 contributions from Oyje Aboyade, Jonathan Frimpong-Ansah, Goran Hyden, Ali Mazrui, Har- Data in this chapter were drawn mainly from ris Mule, and Dunstan Wai. The analysis of em- the IMF, FAO, UNCTAD, and World Bank ployment issues draws heavily on ILO sources. Sources for the analysis of the high costs publications. Much of the analysis on environ- of doing business in Sub-Saharan Africa include mental trends was based on World Resources In- background papers by Van derTak and King, and stitute 1988 and FAO data and publications. Singh as well as Heller and Tait 1984. The analysis of external debt and price prospects for primary Chapter 3 commodities relies on work by the Debt and Inter- national Finance Division and International Com- The discussion on health care, population, and modity Markets Division of the International water draws on Birdsall and Sai 1988, Herz and Economics Department of the World Bank. The Measham 1987, Whittington and others 1989, analysis of recent economic performance also Churchill and others 1987, various World Bank draws on research undertaken by the Trade and policy papers on population and health care, UNI- Finance Division of the World Bank's Africa Tech- CEF 1989, and unpublished material from Althea nical Department, particularly from the UNDP Hill. The discussion on food security and nutrition project to monitor development programs and aid is based on the World Bank's "Report of the Task flows in Africa executed by the World Bank. Force on Food Security in Africa," Berg 1987, and unpublished material by Janet Lowenthal and by Chapter 2 Judith McGuire and Barry Popkin. The section on education draws heavily on the World Bank's This chapter draws heavily on the World Bank's Education in Sub-Saharan Africa: Policies for Adjust- experience with structural adjustment programs. ment, Revitalization, and Expansion and unpub- World Bank country economic reports were a pri- lished material from Ralph Harbison, Janet Leno, mary reference. The discussion on infrastructure Peter Moock, and James Socknat. is partly based on the research results of the ongo- ing multidonor Sub-Saharan African Transport Chapter 4 Program. The treatment of public sector manage- ment issues stems from the analysis in the World A major source of ideas and information for this Development Report 1983 and the program of re- chapter is the series of studies completed under search undertaken by the World Bank's Public the World Bank's research project, Managing Ag- Sector Management Division. The discussion of ricultural Development in Africa (MADIA). the role of the state was also influenced by a series World Bank agricultural sector studies were also of articles in IDS Bulletin in 1987 and 1988 and used. Additional sources include annual reports of the International Agricultural Research Centers Chapter 7 and numerous FAO publications. Of particular importance is FAO's Afrcan Agriculture: The Next This chapter draws extensively on background 25 Years. Publications from the International Food papers presented at the workshop on "Regional Policy Research Institute were also used. Most of Integration and Cooperation in Sub-Saharan Af- the data for the chapter come from the FAO, the rica" held at the World Bank in September 1988. World Bank's World Tables, and the World Bank's (The proceedings of the workshop will be pub- Price Prospects for Major Primary Commodities, lished in a separate volume.) Discussion of the 1988-2000. regional trade issues draws heavily on Ali Mansoor and others 1989. The work of Elliot Berg Chapter 5 and others 1988 also has been used. The African Development Bank's "African Development Re- This chapter draws extensively on World Bank port 1989" was also an important source. operational and project work. The industry sec- tion draws heavily on World Bank experience Chapter 8 with industrial development in Africa, some of which has been summarized in Meier and Steel This chapter is based primarily on the World 1989 and the ECA and UNIDO's 1989 review of Bank's country economic reports. The data on the Industrial Development Decade for Africa. growth, investment, savings, public revenues and The formulation of industry issues was influenced expenditure, exports, imports, and other macro- by Hawkins 1986, Mytelka 1988, the background economic variables are mainly derived from paper by Sanjaya Lall, and background work by World Bank reports, World Tables, and World Howard Pack and Thelma Triche. Sections on Bank data sources. Analysis on infrastructure competitiveness and exports draw on Frischtak pricing and charges for services benefited from and others 1989 and Rhee 1989. Much of the anal- the work of Anderson 1987. The section on the ysis in the mining section is drawn from World financial sector draws on World Bank reports, Bank operational experience in Sub-Saharan including the World Development Report 1989. The Africa's mineral-producing countries and from analysis on community savings and informal fi- background contributions by Peter Fozzard and nancial systems benefited from inputs from Afri- John Strongman. Much of the data in the energy can development practitioners. The discussions section, particularly on oil and gas reserves and on "development assistance in the 1990s" and exploration and drilling activity, was drawn from "debt relief: a menu of options" benefited from a historical database that includes data obtained useful contributions from the World Bank's Re- largely from Oil and Gas Journal and the American source Mobilization Department and the Interna- Association of Petroleum Geologists Bulletin. Various tional Economics Department, respectively. other sources were utilized with regard to energy, including World Bank appraisal reports. Background papers Chapter 6 The following papers are to be published in a forthcoming series. The discussion of entrepreneurship and the business environment is drawn from Elkan 1988, Abdallahi, Sidi Ould Cheikh. "Long-Term Per- Kilby 1988, Richardson and Ahmed 1987, and de spectives Study for Sub-Saharan Africa: The Sit- Soto 1989. The ILO's 1988 "African Employment uation in Mauritania." Report" provided information and data on the Addo, John S. "Exchange Rate Reforms under informal sector. Material on small-scale enter- Ghana's Economic Recovery Program." prises and grassroots institutions is based on Ake, Claude. "Sustaining Development on the In- Maldonado 1989, Sanyal 1988, and the back- digenous." ground papers by Ayittey, Gabianu, Giri, and Ayittey, George B. N. "Indigenous African Sys- MacGaffey. The section on supporting entrepre- tems: An Assessment." neurial capabilities draws on Aiyer 1985, Dessing Badri, Balgis Y. "An Analysis of Sudan's Develop- 1988, Pean 1989, Rhee 1989, Roth 1987, Tiffin and ment." Osotimehin 1988, and Webster 1989. . 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Processed. 202 Statistical appendix Contents Strengthening information systems and basic statistics in Sub-Saharan Africa 206 Introduction to the data 213 Maps Per capita GNP, 1987 216 Population growth, 1965-87 217 Under five mortality per 1,000 live births, 1985 218 Growth of per capita food production, 1980-87 219 Key 220 Tables 1 Basic indicators 221 2 Growth of production 222 3 Structure of production 224 4 Structure of demand 226 5 Growth of consumption and investment 228 6 Growth of production of major crops 229 7 Production of major crops 230 8 Agriculture and food 234 9 Structure of manufacturing 236 10 Manufacturing earnings and output 238 11 Commercial energy 239 12 Growth of merchandise trade 240 13 Structure of merchandise imports 242 14 Structure of merchandise exports 244 15 Major agricultural exports 246 16 Origin and destination of merchandise exports 249 17 Origin and destination of manufactured exports 250 18 Official development assistance 251 19 Total external debt 252 20 Flow of public and private external capital 254 21 Total external public and private debt and debt service ratios 256 22 External public debt and debt service ratios 258 23 Terms of external public borrowing 260 24 Balance of payments and reserves 262 25 Central government expenditure 264 26 Central government current revenue 266 27 Money and interest rates 268 28 Population growth and projections 269 39 Demography and fertility 270 30 Women in development 271 31 Status of children 272 32 Education 274 33 Health and nutrition 276 34 Labor force 277 35 Urbanization 278 36 Land use 279 37 Environmental indicators 280 Technical notes 282 Bibliography 299 Strengthening information systems and basic statistics in Sub-Saharan Africa In most Sub-Saharan countries before indepen- ties. Already stretched, the resources to statistical dence, data compilations were mostly limited to agencies were further curtailed by austerity mea- periodic censuses of population, records of trade sures in the 1970s and the early 1980s. Many peo- flows, and abstracts of administrative records. In- ple left the statistical services to seek the better pay dependence brought the desire and commitment in other fields. Governments generally gave very to meet economic and social development goals low priority to data collection, and in many coun- through formal multiyear development plans, tries there are virtually no reliable statistics. and the need for data became pressing. Statistical The current situation was well summarized in cells or units were created, staffed initially with the report by the Economic Commission for Africa expatriates funded from multilateral and bilateral (ECA) for the Joint Conference of African Plan- aid programs. Expatriates transplanted concepts ners, Statisticians, and Demographers. "Data gaps and methods current elsewhere without adapting affect every sector and every aspect of the African them to prevailing local conditions. The UN Sys- situation. In the field of demography, even the size tem of National Accounts (SNA), with its empha- and growth rate of population in some of the sis on market transactions, was not modified to African countries cannot be unambiguously de- take into account the predominance of subsistence termined. In the field of social statistics, there are activities in largely rural Africa. The measurement gaps relating to literacy, school enrollment ratios, of agricultural production was attempted in an the institutional status of the child and poverty environment in which cropping patterns were not levels. And in the field of economic statistics, basic conducive to scientifically based crop-cutting economic series like GDP and resource flows are tests developed in India. And even such demo- sometimes lacking. Data on national resources graphic concepts as the household, based on non- and the environment are, if available, in a very African situations, were applied without rudimentary state." If strategies for sustainable modification. growth with equity are to be developed in Africa, Not only were the data inappropriate, they the information systems must be improved, as a reached decisionmakers too late to be useful. matter of urgency. Modest human and financial resources were spread thinly over many sectors and fields of sta- New development strategy for information tistics. systems The emphasis on large-scale collections and on complete enumerations to increase reliability sac- This report makes many references to the types of rificed the timeliness of information, as did the information needed to formulate and implement inadequacy of computing and tabulating capaci- policies. Its call to address population as a matter 206 of urgency points directly to the need for informa- all successful, have included the Global Early tion on demographic trends, on changing atti- Warning System and UNICEF's surveillance sys- tudes to fertility, and on variables that influence tems covering nutrition and health-related topics. demographic change. The creation of an enabling The emphasis on single-topic enquiries has environment for higher productivity requires in- meant that the data emerging from such surveys formation on incomes, costs, prices, public fi- has been limited to the particular field of enquiry. nances, and investment. And building the Earlier expectations of integrating results from capacity for effective economic management in- successive surveys have not been met because volves the ability to undertake policy analysis and variations in sample sizes, concepts, and coverage to make rational choices based on solid informa- have hampered the production of multidimen- tion. The report's emphasis on equity implies the sional data sets. All in all, the experience to date need for information systems to identify the dis- has been sobering. advantaged and to monitor the impact of policies The World Bank, recognizing the need for cur- on beneficiaries and nonbeneficiaries. To address rent data to address immediate and pressing pol- the issue of sustainability, the concept of capital icy concerns in the 1980s, launched the Living needs to go beyond the "produced means of pro- Standards Measurement Study (LSMS) with three duction," such as machinery, to include natural broad objectives: collecting high-quality data resources and human capital-elements that con- through specially designed, multisubject, inte- ventional national accounting frameworks do not grated household surveys; tabulating results rap- fully reflect. The need is thus clear: to expand the idly for immediate use; and analyzing the data to scope of such frameworks and to collect and ana- address specific policy concerns. The study also lyze data encompassing these elements. was meant to develop national capabilities for the Action is required in four broad data fields: regular collection of data. The LSMS's compre- * Social and demographic data hensive coverage of topics includes savings, hous- * Natural resources and environment ing conditions, educational attainment and * Price and production statistics enrollment, health status, economic activities at * National accounts. the household level (including income and labor In each priorities need to be articulated more force participation), demographic characteristics, clearly. African governments and the interna- expenditure and consumption patterns, owner- tional community need to formulate an action ship of durable goods, fertility history and anthro- program. The concept of a partnership in devel- pometric data to assess nutrition. opment described in the main text applies equally The experience of the LSMS in C6te d'Ivoire and to developing data systems. Ghana shows that it is indeed feasible to canvass complex questionnaires through successive visits. Social and demographic data Further, by using personal computers for data entry, long lags in data processing can be over- Most African countries took part in the 1970 and come, and basic tabulations of fairly high-quality 1980 population censuses, but the African Census data can be delivered six to eight months after Program (funded by UNFPA and other donors) field operations have been completed. The inte- does not appear to have been sustained. The gration of policy analysis into LSMS operations World Fertility Survey in Sub-Saharan Africa gen- has also meant that data are rapidly turned into erated valuable demographic data. The Demo- analytical outputs needed and used for graphic and Health Surveys by Westinghouse policymaking. followed up on the earlier work, but created few The World Bank translated the LSMS experi- indigenous capabilities. The UN's National ence into an expanded action program to address Household Survey Capability Program and its the social dimensions of adjustment policies. The African variant, the African Household Capabil- Social Dimensions of Adjustment (SDA) project ity Program, have been launched in a few coun- (see Box 9.2) incorporates the canvassing of multi- tries. Household surveys have been conducted on topic integrated household surveys-linking the such topics as household expenditures, labor analysis to the design of compensatory programs force, and demographic characteristics, but many to mitigate the impact of adjustment on distressed field surveys have been either suspended or aban- groups, to measures to protect social investment doned for want of resources. Other initiatives, not in the face of tighter public finance, and to pro- 207 grams that target groups most in need of support. Natural resources and environment Central to the SDA project is establishing perma- nent national survey and analytical capabilities- A greatly enhanced flow of data is needed to and creating databases on the basic economic and manage Africa's natural resources and environ- social conditions of households. ment. The World Bank has been active in identify- The SDA project, even at this early stage, has ing existing and potential databases on the attracted widespread and enthusiastic participa- environment-and has organized a series of tion from 26 countries in Sub-Saharan Africa. workshops with the involvement of the UN Envi- Along with the allocation of modest resources by ronmental Programme (UNEP). Finding a consen- governments,supportfromthedonorcommunity sus on an appropriate framework has been has been equally enthusiastic. The UN Statistical difficult, with two distinct approaches in conten- Office (UNSO) and the ECA have agreed to col- tion. The first is concerned with the physical as- laborate with the Bank in countries in which both pects, and emphasizes the physical measurements the National Household Survey Capability Pro- of environment and resource variables. The sec- gram and the SDA project are active to coordinate ond is concerned with economic data systems that the implementation of the two programs. The new attempt measurement in monetary terms. The partnership between African governments and physical systems, although somewhat easier to the donor community represents a fresh effort to implement, cannot provide measures in common address statistical issues in Africa. Of even greater units. The economic systems are based on contro- significance, the coordination will ensure that Af- versial assumptions and generally are difficult to rican governments will be full partners in the implement. longer-term development of statistics in Sub- The World Bank-working with resource econ- Saharan Africa. omists, the UNSO, and the UNEP-is seeking con- The SDA project holds great promise for statis- sensus on a minimum framework that links a set tics in Africa. In addition to transferring new of satellite accounts to the conventional SNA. methods and technologies, the project should Through case studies by the Bank and the United build institutions through active collaboration in Nations and the testing of alternative accounting data gathering, analysis, and research, thus draw- frameworks, it should prove possible to evolve a ing together data users and producers at the na- practical set of guidelines. tional level. The SDA project will not only yield If income is viewed as the flow of goods and immediate and direct household data on various services that can be consumed without depleting topics, it will also feed its findings into the compi- capital, basic national accounting concepts re- lation of timely and more reliable macroeconomic quire modification. Existing statistical frame- aggregates of household consumption, invest- works, such as the SNA, embody narrow concepts ment, and savings-shedding light on the interac- of production and capital-and measure capital tions between households and the productive inadequately. It is heartening to note that national sectors of economies. The SDA project will also accountants currently revising the SNA are mak- train African nationals at all levels of the statistical ing some needed changes. The new SNA will system, and the training of field enumerators and incorporate recommendations for a set of satellite analysts has been assigned high priority. accounts for compiling adjusted aggregates that The SDA project must, however, not crowd out take into account the use of nonreplaceable natu- national efforts. The investment in capability ral resources and expenditures on protecting the building will need to be protected and nurtured environment. beyond the life of the project. External inputs will Micro data sets on the environment do not exist need to be phased out over time, with govern- for many countries. The reason is that global and ments assuming responsibility for funding the national statistical priorities and efforts have been survey operations after the first four or five years inadequate in developing appropriate concep- and with only modest external technical inputs tual, methodological, and classification schemes. continuing beyond the initial phase. Unless this The challenge then is to rapidly develop the micro happens, the large investment in this effort will be data systems along with accounting frameworks lost. that incorporate natural resources and address 208 environmental concerns. The application of these if integrated with the collection of production sta- systems and guidelines will take time, and na- tistics. tional users will need to determine priorities for work in this field. AGRICULTURALSTATISTICS. Agriculture will con- tinue to have an important and large role in Africa. Price and production statistics But most analysts and decisionmakers believe that available estimates of agricultural output are un- The skillful management of the interconnected reliable and grossly inadequate. The need for system of prices and incentives is critical for prompt and more reliable production statistics achieving sustained and equitable growth. Many has been reaffirmed at the national, regional, and countries' consumer price indexes are based on global levels. Sectoral policy analysis, early warn- outdated weights that do not reflect current con- ing systems, assessment of food requirements, sumption patterns. Price series for compiling and the study of nutritional standards all demand these indexes mostly reflect urban prices. Wage basic agricultural production data. And given the statistics, if compiled at all, reflect only the wages size and contribution of agriculture in GDP, pro- in a few narrowly defined sectors of the economy. duction estimates are critical for preparing macro- Given the importance of prices in government economic accounts as well. policy, the need for mounting an integrated sys- Statistics on agricultural production have been tem to collect prices and to compute indexes is compiled in most African countries through agri- urgent. With assistance from the European Com- cultural surveys, supplemented by poorly super- munity (EC),many African governments took part vised (mostly subjective) crop estimates by in the International Comparison Project (ICP). extension workers and other local officials. Where Twenty-three countries participated in the latest measurement techniques have been objective, the phase (Phase V) of the ICP. Although the informa- principal approach has been to use crop-cuts and tion has been used only to compute purchasing physical measurements of plots and areas under power parities for international comparisons, the cultivation. In many situations, however, the data rich body of data could be exploited more fully. from crop-cuts can result in systematic overesti- Based on the partnership with the EC, the ICP mation and variance resulting from different of could be expanded to develop an integrated pro- crop conditions in the plots and areas surveyed. gram for price statistics covering producer, con- Crop-cuts are feasible for cereal crops but inap- sumer, and import and export prices. With propriate for tree and root crops. Compounding modest increases in funding and expanded effort these problems are the high costs and time re- to train national statistical personnel, progress can quirements of crop-cuts. The need to station enu- be rapid. Additional elements in a program for merators in remote areas for long periods price statistics should include the preparation of increases costs, which leads to the use of highly manuals on methods for compiling and analyzing clustered sample designs and small sample sizes. price data. The regular collection of production data through External trade statistics, although in many a broadly based survey system has not been sus- countries the oldest and most established set of tainable and has led to increasing use of subjective administrative statistics, have in recent years be- methods. come less timely and reliable. The Automated Beyond annual production data, national ef- System for Customs Data-a computerized sys- forts to develop basic agricultural statistics have tem developed by UNCTAD and now being included large agricultural censuses. These have adopted by several Sub-Saharan countries-will been expensive but have not yielded the hoped- rehabilitate work on external trade statistics. In for results. Delays in processing censuses have addition to improving data on trade flows and the resulted in considerable lags in data availability- balance of payments, it will enhance the recording often three to five years-which limits the value of customs revenues and the ability to compute of the data for users grappling with immediate external trade price and volume indexes. concerns. A program to compile wage statistics in key Critics of present methods have argued for sim- sectors-the government, state-owned enter- pler, more cost-effective approaches to gathering prises, large and medium industrial and trading timely agricultural production data. Some argue enterprises, and major service trades-is feasible that farmers can provide reasonably reliable esti- 209 mates of outputs, which would enable cheaper should collect data only on production, employ- and more efficient sample designs. The World ment, wages, and capital formation. Bank, in cooperation with the FAO and with UNI- CEF support, tested the hypothesis that estimates National accounts of production obtained by interviewing farmers soon after a harvest can be at least as accurate as The foregoing flows of information would pro- estimates obtained through physical measure- vide African national statistical offices with the ment involving crop-cuts. The study found that: basic data sets needed to compile macroeconomic * Square cuts appear to result in serious over- accounts within the framework of the SNA. With- estimates-by around 30 percent on average, with out an integrated approach to developing infor- a range from 15 to 40 percent. mation systems, the goals of setting in place * Farmers' estimates are remarkably close to reliable and timely national accounts will remain actual production figures in all countries, varying unfulfilled. from -8 to +7 percent. They also displayed consid- In the context of building up national account- erably smaller variance than the crop-cut esti- ing systems, some key steps can be identified. The mates. SNA framework is complex. Although the SNA The decades-long problems with agricultural revision now under way at the international level production data can be overcome if these research acknowledges the urgent need for practical man- findings are systematically applied and further uals, budgetary constraints faced by the UNSO refined. An initiative is now needed to promote preclude their early production and publication. these methods through a program of seminars, The need for a modest increment in resources for training courses, manuals, and practical applica- the work to proceed is pressing. tions. African governments will require modest Improving the quality and timeliness of na- financial support for such an effort, in large part tional accounts is a long-term program stretching from donor resources set aside for monitoring and over a decade or more. Most Sub-Saharan Africa evaluating agricultural and rural development countries will find the task beyond their present projects. These resources could be supplemented statistical capabilities. Even when information from nationally funded budget allocations for ag- flows improve, the lags in compilation will com- ricultural censuses and ongoing crop-cutting sur- promise the timely availability of national ac- veys. The gains from such an effort should counts sufficiently disaggregated to meet materially improve estimates of GDP and of agri- analytical needs. A collective effort that permits cultural output. the compilation of preliminary, somewhat aggre- gative estimates, is called for. This is within the OTHER PRODUCTION STATISTICS. In many Sub- reach of most countries and ought to be done Saharan countries, production data for other sec- systematically. tors are equally weak, if available at all. Industrial production is inadequately measured. The contri- Rehabilitating and building statistical systems bution of services to total output is poorly cap- tured. Public finance data have gaps and long lags. The task of building sustainable capabilities to Information on external transactions is imprecise. support a flow of relevant, timely data to aid Addressing these issues requires a long-term pro- decisionmaking is complex and difficult. It de- gram to strengthen accounting systems and to pends on strengthening existing institutions by develop the overall capacity of national statistical developing a viable statistical infrastructure. It agencies. It also requires increased user awareness also depends on developing sampling frames, in determining statistical priorities. Conventional compiling registers of businesses, documenting statistical enquiries should satisfy specific re- processes, evolving classifications, and adapting quirements rather than try to catch everything. concepts. Equally important is the development of Paralleling the household surveys under the SDA a cadre of professional, middle-level and support project, there is need fora well-designed multisec- staff through training and upgrading skills. Bilat- tor enterprise or establishment survey covering, in eral and multilateral programs of assistance have the first instance, a subset of the large- and me- attempted to deliver a range of inputs and re- dium-scale entities in the economy. Such a survey sources toward these goals. Efforts at institution building have had only a users, analysts, and statistical staff-and will have modest impact. This can be attributed to six to be accompanied by a tangible set of actions. problems: * Inadequate counterpart resources by na- PRIORITY SETTING. Working with international tional governments, implying weak commitment donors, governments and policymakers must take to statistical development. the lead in determining needs and priorities and * Improvised or informal programs. in developing an action program. There are sev- * Loss of trained statisticians to other sectors eral areas in which consensus needs to be reached. and fields. First, for long-term institution building, training of * Low morale of staff in statistical services nationals at all levels of the statistical system because of unsatisfactory pay levels, motivation, should have the highest priority. Many training and image. centers at the national and regional levels already * User-driven assistance programs geared to a exist but need to be strengthened. Past emphasis narrow demand for information for high-profile on higher-level training has been somewhat mis- international statistical activities. placed. Future efforts must focus on middle-level * Absence of a long-term national strategy for personnel-with greater emphasis on practical information systems. training and less on statistical theory. Efforts at both national and international levels Second, inadequate capabilities for data process- are now needed to build statistical systems in ing have been a significant constraint. Although Africa. hardware has, in some instances, been a factor, the more significant issue has been the inability to National efforts develop software. The rapid advances in microcomputing technology now provide cost-ef- Most statistical offices in Sub-Saharan Africa fective alternatives to mainframe machines. Fur- are embarking on the task of building and rehabil- thermore commercially developed statistical and itating systems. They face a dual challenge of new survey packages, available at modest cost, satisfy demands for data and severe resource constraints: most requirements. And many packages pro- tight budgets, a continuing brain drain of trained duced by the United Nations and statistical offices staff, a weakened statistical infrastructure, and a in the developed countries are not widely dissem- general incapacity to produce the data on de- inated. Acquisition of these packages, along with mand. The challenge now is to tackle the different the right training, would eliminate the need for elements of demand by articulating a coherent customized software requiring time-consuming and focused national program for information design and program development by computer flows. Each country also needs to formulate a specialists. consensus on a minimum set of priorities. Diver- Third is the issue of timeliness, which has a gent (and sometimes competing) needs of the dif- dimension beyond computing capacities. Tradi- ferent users need to be coordinated to establish a tionally, statistical offices have regarded data as balanced statistical program. In each country a proprietary-and have refrained from putting out multiyear, incremental program of statistical de- tabulations without accompanying analysis. But velopment would articulate priorities and system- statistical offices often lack the capacity for such atically assess needs, against which the existing analysis. The analytical function should be as- capacity for data generation could be evaluated. signed to data users, who generally have subject- Beyond this initial set of actions is the crucial need specific specialization; this would enable for the leadership to commit-and continue to statistical offices to focus more on statistical issues commit-the needed budgetary resources. A re- and to direct their attention to releasing data more ciprocal commitment from users to commit re- rapidly. Nevertheless statistical agencies that sources and from producers to generate the have the capability for analytical work should be needed information will start the long-term task strengthened. of strengthening statistical institutions. Progress in developing viable statistical sys- FUNDING AND INCENTIVES. In addition to trans- tems will be made only if there is a change in lating the broad areas of work into multiyear attitudes toward a quantitative approach to plans, there must be a commitment of budgetary decisionmaking. The change has to occur at all resources with some assurance of continuity. This levels of government-among decisionmakers, commitment, both political and administrative, 211 will send clear signals to those charged with the achieve the benefits of economies of scale. It is task of reconstruction. suggested that an African consultative group on The existing incentive systems-the salaries statistics be established. Such a group, made up of and status of statistical personnel-are clearly in- all donors, both bilateral and multilateral, would adequate. Even with modest improvements in in- be concerned with the broader issues of support centives, it should prove possible to rebuild for statistical development in Africa, including morale and inject new vigor. The brain drain and issues that go beyond national statistical concerns. staff leakages can be checked only if actions are The group could also organize a modest fund taken to address the issue of incentives. Because through voluntary contributions from participat- the special problems of statistical agencies merit ing agencies to channel resources into regional attention, governments should assign high prior- programs-particularly to support regional train- ity to appropriate incentives-both monetary and ing centers, the testing and adaptation of methods nonmonetary-for statistical staff. Unless morale to meet African requirements, the preparation of is addressed through a better incentive system, guidelines and manuals with an African orienta- statistical institutions will continue to languish. tion, and the funding of research and experiments into appropriate statistical techniques. International efforts Following the SDA model, the group could act as the vehicle for the regional and international The absence of adequate coordination among aspects of the operations pertaining to the devel- donors, particularly at the country level, is per- opment of work in the four areas discussed above: haps the most salient feature of past efforts. Statis- social and demographic statistics, natural re- tical work programs and national priorities have source and environmental statistics, price and been distorted because of competing interven- production statistics, and national accounts. As tions by the donors. part of this effort it could fund an expanded group * In the choice of statistical fields, a heavy of consultants in the specialties mentioned above, emphasis has been put on demography, with little attached either to the Statistics Division of the on agricultural data. ECA or to other subregional agencies. These con- * Technical advisory services provided by do- sultants would deliver technical advisory services nors have tended to station long-term advisors at to national governments through short-term con- considerable expense. sultancies and periodic visits, thus obviating she * Little has been done to adapt methods and need for long-term consultants in each country. approaches to suit local conditions. To elevate the importance of information sys- * Considerable amounts have been provided tems in the framework of national and interna- for hardware and equipment without taking into tional programs, the periodic donor country account maintenance and operating costs or the Consultative Group or Round Table meetings need for associated software. should discuss the development of national infor- * Training efforts have been largely focused mation systems regularly. The national statistical on postgraduate training abroad. programs could then be reviewed in a wider con- * Regional centers have fallen into decay as text, and pledges of donor support including donors largely took a country-by-country ap- funding for local costs could be obtained. This proach. would greatly increase the attention of both Afri- * The courses at both national and regional can governments and donors to statistical issues centers have been biased toward theory rather and would provide the necessary coordination. than practical applications. Sustainable information systems in Sub- Coordination of aid programs is thus essential Saharan Africa can be built only gradually over to get the most from resources, to provide national the longer term. Working with international do- governments with the means to develop sustain- nors, governments and policymakers must take able programs for statistical development, to for- the lead in determining needs and priorities and mulate priorities, and to inject a regional focus and in developing an action program. 212 - Introduction to the data The following maps and tables provide informa- graphic and social indicators, and land use and tion on the main features of social and economic environmental indicators. development in Sub-Saharan Africa. Technical In most of the tables the presentation follows notes follow the data. that used in the World Development Indicators in the World Development Report. In each group econ- Content and format omies are listed in ascending order of GNP per capita, except those for which no such figure can The first section of the data contains four maps be calculated. These are italicized and in alphabet- which present key information on the 45 countries ical order at the end of the group deemed to be of Sub-Saharan Africa. The maps show groupings appropriate. The alphabetical list in the key shows of countries for per capita GNP, population the reference number for each economy; here, too, growth, infant mortality, and growth of per capita italics indicate economies with no estimates of food production. GNP per capita. The colored bands contain sum- The main classifications used in the tables are mary measures-totals, weighted averages, or the 45 countries in all Sub-Saharan Africa, Sub- median values-calculated for groups of Sub- Saharan Africa excluding Nigeria, 32 low-income Saharan Africa economies if data are adequate. economies with per capita incomes of $480 or less In general the format of the column headings in 1987, low-income economies excluding Nige- also follows that of the World Development Indi- ria, 13 middle-income economies with per capita cators, with some modifications. Data are given incomes over $480 in 1987, 6 countries with pop- for three years (1965, 1980, and 1987) or periods ulations of more than 22 million persons, 9 coun- (1965-73, 1973-80, and 1980-87) rather than for tries in the Sahel, and 5 oil exporters. Comparator two. In addition all of the tables include Angola groups presented in the tables are the 52 low-in- and the nine Sub-Saharan Africa countries with come developing economies, low-income econo- populations of less that I million. Summary lines mies excluding China and India, South Asia, and for total Sub-Saharan Africa and low-income Af- South Asia excluding India. The key preceding rica are shown with and without Nigeria because Table 1 lists countries included in the various of Nigeria's large share in weighted averages, es- groupings. pecially when population is used as the weight. The indicators in Table I give a summary profile The tables on official development assistance of the economies of Sub-Saharan Africa. Data in (Table 18) and on women in development (Table the other tables fall into the following broad areas: 30) are significantly different from the versions in national accounts, production, external trade, ex- the World Development Indicators. ternal debt, international transactions, central Several supplementary tables have been in- government finance, monetary statistics, demo- cluded to show production of major crops (Table 21Z 7), major agricultural exports (Table 15), status of Sources and caveats children (Table 31), land use (Table 36), and envi- ronmental indicators (Table 37). The table on The data in the maps and tables are drawn from growth of production of major crops (Table 6) the United Nations and its specialized agencies, contains information for total Sub-Saharan Africa the International Monetary Fund (IMF), and the only. World Bank files. National accounts data are from For ease of reference, ratios and rates of growth member countries obtained by Bank missions are shown; absolute values are reported in only a and, where appropriate, estimates prepared by few instances but are often available from other Bank staff. Data on external debt are compiled World Bank publications. Growth rates are com- directly by the Bank on the basis of reports from puted, unless otherwise noted, by using the least- developing member countries through the Debtor squares method. All growth rates for economic Reporting System. The data in the environmental indicators are based on constant price series. De- indicators table come from the World Resources tails of the methodology are given in the technical Institute. notes following the data. Data in italics are for Differences between data given in this appen- years or periods other than those specified-up to dix and other World Bank publications may re- two years earlier for economic indicators and up flect updating, revisions to historical series, to three years on either side for social indicators. methodological changes, changes to aggregation All dollar figures are US dollars. The various procedures, and definitional differences. Most of methods used to convert from national currency the tables here are based on the 1989 World Devel- figures are described, where appropriate, in the opment Indicators, for which data were finalized technical notes. in April 1989. Data on debt, Tables 18 through 23, The methodology used to compute the sum- were updated in September 1989. mary measures is described in the technical notes. Every effort has been made to standardize the For these numbers, w indicates that the summary data. Full comparability cannot be ensured, how- measures are weighted averages; m, median val- ever, and care must be taken in interpreting the ues; and t, totals. The coverage of economies is not indicators. The statistics are drawn from sources uniform for all indicators, and the variation from thought to be most authoritative, but many of measures of central tendency can be large; there- them are subject to considerable margins of error. fore readers should exercise caution in comparing Variations in national statistical practices also re- the summary measures for different indicators, duce the comparability of data; thus the data groups, and years or periods. The summary mea- should be construed only as indicating trends and sures for most of the indicators are overall esti- characterizing significant differences among mates: countries for which individual estimates economies, rather than taken as being precise are not shown, because of nonreporting or insuf- quantitative indicators of those differences. ficient history, have been included by assuming Throughout this report, and especially the sec- they follow the trend of reporting countries dur- tion "Strengthening information systems and ing such periods. This gives a more consistent basic statistics in Sub-Saharan Africa," there are aggregate measure by standardizing country cov- references to gaps and weaknesses in the available erage for each period shown. Where missing in- statistics and how these gaps have adversely af- formation accounts for a significant share of the fected policy analysis and the decisionmaking ca- overall estimate, however, the group measure is pacity of governments. The indicators presented reported as not available. Footnotes to the tables here confirm many of the gaps and the timeliness indicate the procedure used for summary mea- and availability of the data. sures and the weights used to calculate weighted The data in this appendix should be useful for averages. analyzing past and current trends and for formu- The technical notes and footnotes to tables should be lating policy. The data should also provide infor- referred to in any use of the data. These notes outline mation for increased discussion about solutions to the methods, concepts, definitions, and data the problems of statistical sources and methods as sources used in compiling the maps and tables. well as about the critical need for strengthened The bibliography gives details of the data sources, information systems in Sub-Saharan Africa. which contain comprehensive definitions and de- Additional information on Sub-Saharan Africa scriptions of concepts used. and other economies may be found in other World 2 4 Bank publications, notably African Economic and Staff of the World Bank's International Econom- Financial Data, the Atlas, Social Indicators of Devel- ics Department and the Special Economic Office opmtent, World Debt Tables, World Tables, and the of the Africa Technical Department have made World Development Report. substantial contributions in the production of this appendix. IEBRD 21872 a5- K '1 /3i - Algri lie(Jiar amecn SCCI (Morocco Libya Z AabRep. Atlanztic . of Egypt \ Ocean S4ARA Z . '~~~~~ I '' - …h MauritanZia i. /' '0 u ~~~~~~~~/till I ' g. :. ~ ~ _ t.! - 4'!r 1X 't.d.%e j ure . .- - Ni -** C.~~~~~~~~~~~~. ^ ~ ~ ~ ~ ~ ~ ~ ~ ~ " : i . C,--' N . ! ; -. r - .St..'* EquatorialGuineaK I . rio Sao Tom and ePrincipe Gt. R - ~~~~~Ri5F,ur4 AflaZsh( - ] Tr- Jrt(. - """" Atlantic Z I . , OceanI scan ~Iindian e . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ..1* :, .q, Sub-Saharan Africa - r Per capita GNP, 1987 b Maudfius Dollars <300 300 - 500 S iland >500 South Data eta available Africa otho - tsationrAl b-undtaies OCTOBER 1989 IBRD 21871 V~~~~~~~~~~~ .~~~~~~~M I _ I , - - I . ~~~~~~- ..I~ -. . .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~17 IlIun ,.; - '-- - - rr,,. !!- ;- Ir- !-: -l - | lw -:. -- -! Lr . ('"IL - I- - _- i.- . | R |i. l _- -- r,.-r I. - i .i :1 iSr.r.l>: .TX." - ! le ~~~~~~~-i l, T.r ,n, -, hr.~~~~~~~~~~~~~~~~ x,, . ., . , n -, , .II. I * ..r*s 1,I Sub-Sahlaran .Afic , - -- :-- - - Popula:tion WOII ,r xtz ..J Ir 1965-87 -h ;:' \|citl- JJilnLai p'tkciIl| :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - - IrTtrr,.,Ii.r,I! .ui l'i, OCTOBER 1919 217. IBRD 21574 . ~ ~ ~- '- - C,~~~~~~~~U I~~~~~~~~~~~~~~~~~~~~~~~~~~~~ _. '~~~ ~ ' /)< Cape _ . Verde; ch */ C ;otho~~~~~~-'ibab Under nfivertiontality 1985Botswana budr <~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~COE 1989 218 100 - 150 ~ ~ ~ - -Maags Undr tiv mortavablit,18 Btw Pnernaiorial ~ bould. ies 2150 IPBRD 21873 I.~= I.-- , . 1.* *' - - I . -C = I C ~~ _- _. I r-'' *r[l ji _____, -' . . lJlLrilAn!S ~~~~ j S ui, Grwt of pe capitar o d roLI In j0 P. 0[ I ;.~~ ~ i, * ':,; L ..... = N,-. I *| f * Er';ii... - L. |- ' e' ~~~ ' ''ti ...... -- ,'' ll1 ' i,! -I- T .' I-.7JgI2 .. . ,, F-;.hl E--|] I! rTo' 1,.Ir-. s fi !- I-F hn ),, , 1- 1 I - Ie. T . 1. TI r,!-E ! r -I- r I'll'.i ., 'I Lk~ ~ ~ ~ ~~~~~~~~L Growth of per capita \ O 19-9 In.r~~~~'L.c_ -2! 14.l-. hre.A 'rt -'-- - 'I,ls..zc..+ [i, ~I e4 .j,I;jI'IC; . - - I,.r,..- .;.. ri-,.r,J..ne: In each table, economies are listed in Figures in the colored bands are sum- Figures in italics are for years or peri- their group in ascending order of mary measures for groups of econo- ods other than those specified. GNP per capita except those for mies in Sub-Saharan Africa. The which no GNP per capita can be calcu- letter w after a summary measure indi- .. = not available. lated. These are italicized, in alpha- cates that it is a weighted average; m, betical order, at the end of their a median value; and t, a total. 0 and 0.0 = zero or less than half the groups. The reference numbers unit shown (unless otherwise noted). below reflect the order in the tables. All growth rates are in real terms. Sub-Saharan Africa Angola 44 Gabon 42 Nigeria 27 Benin 21 Gambia, The I1 Rwanda 19 Botswana 40 Ghana 28 Sao Tome and Principe 16 Burkina Faso 8 Guinea 32 Senegal 34 Burundi 12 Guinea-Bissau 4 Seychelles 43 Cameroon 39 Kenya 23 Sierra Leone 20 Cape Verde 33 Lesotho 26 Somalia 17 Central African Republic 22 Liberia 30 Sudan 24 Chad 2 Madagascar 9 Swaziland 36 Comoros 25 Malawi 5 Tanzania 7 Congo, People's Republic 38 Mali 10 Togo 18 C6te d'lvoire 37 Mauritania 29 Uganda 15 Djibouti 45 Mauritius 41 Zaire 3 Equatorial Guinea 31 Mozambique 6 Zambia 13 Ethiopia I Niger 14 Zimbabwe 35 Six most populous economies Ethiopia Nigeria Tanzania Kenya Sudan Zaire Sahelian economies Burkina Faso Gambia Mauritania Cape Verde Guinea-Bissau Niger Chad Mali Senegal Oil exporters Angola Congo Nigeria Cameroon Gabon All low-income economies Afghanistan Haiti Pakistan Bangladesh India Rwanda Benin Indonesia Sao Tome and Principe Bhutan Kampuchea Sierra Leone Burkina Faso Kenya Solomon Islands Burma Kiribati Somalia Burundi Lao PDR Sri Lanka Central African Rep. Lesotho Sudan Chad Liberia Tanzania China Madagascar Togo Comoros Malawi Uganda Equatorial Guinea Maldives Vanuatu Ethiopia Mali Viet Nam Gambia, The Mauritania Yemen, PDR Ghana Mozambique Zaire Guinea Nepal Zambia Guinea-Bissau Niger Guyana Nigeria South Asia Bangladesh India Pakistan Bhutan Maldives Sri Lanka Burma Nepal Table 1. Basic indicators GNP per capitaa Area Average annual growth Average annual Life expectancy Population (thousands rate (percent) inflation rate a (percent) at birth (millions) of square Dollars (years) mid-1987 kilometers) 1987 1965-73 1973-80 7980-87 1965-73 1973-80 1980-87 1987 Sub-Saharan Africa Total 451 2 t 22.245 I 330 i% 2.0 1 II .1% i 2.9. ii 7.5 ii .S is 19.2 w 51 i E\Jcuding Nigeria -344.51t 21.3211 330 i I 2 is -0 7 is -1 2 rs 99 I 173 20 4 9;0 i LLow-inconme e5conomie ~ 307 3 t IS 3-7 t 270t is I ws 0.3 iv - 3.6'i 8 2w 17 4 17.0) iv 0 Excluding Nigeria 2%1.fui 17.45-3t 240 is 0 q w -06 %-2 2 w 6 7 19 3 iv27.5 is 50 i I Ethiopia 44.8 1,222 130 1.1 0.0 -1.6 2.0 5.7 2.6 47 2 Chad 5.3 1,284 150 -1.3 -3.5 2,4 4.6 8.3 5.3 46 3 Zaire 32.6 2,345 150 0.3 -4.7 -2.5 19.0 42.1 53.5 52 4 Guinea-Bissau 0.9 36 160 . . -4.2 0.8 . . 5.6 39.2 39 5 Malawi 7.9 118 . 160 4.3 1.4 0.0 3.7 8.5 12.4 46 6 Mozambique 14.6 802 170 . .. -8.2 . .. 26.9 48 7 Tanzania 23.9 945 180 2.0 -0.9 -1.7 3.4 15.4 24.9 53 8 Burkina Faso 8.3 274 190 1.2 2.5 2.5 1.9 11.2 4.4 47 9 Madagascar 10.9 587 210 1.1 -1.5 -3.7 4.6 10.2 17.4 54 10 Mali 7.8 1,240 210 .. 4.3 0.7 .. 10.8 4.2 47 11 Gambia, The 0.8 11 220 1.7 0.2 0.8 3.0 13.5 13.8 43 12 Burundi 5.0 28 250 3.2 1.9 -0.2 3.0 15.4 7.5 49 13 Zambia 7.2 753 250 -0.5 -2.2 -5.6 5.8 8.9 28.7 53 14 Niger 6.8 1,267 260 -3.7 2.6 -4.9 4.1 8.5 4.1 45 15 Uganda 15.7 236 260 0.7 -6.2 -2.4 5.6 45.4 95.2 48 16 SAo Tom6 and Principe 0.1 1 280 .. 7.2 -6.0 .. 2.1 4.9 65 17 Somalia 5.7 638 290 0.1 4.6 -2.5 4.5 17.6 37.8 47 18 Togo 3.2 57 290 2.0 1.5 -3.9 2.9 8.2 6.6 53 19 Rwanda 6.4 26 300 3.2 2.2 -1.0 7.2 17.1 4.5 49 20 Sierra Leone 3.8 72 300 2.3 -0.8 -2.0 2.1 14.5 50.0 41 21 Benin 4.3 113 310 0.0 -0.3 -0.6 2.9 11.6 8.2 50 22 Central African Republic 2.7 623 330 1.5 -0.5 -0.7 3.0 14.8 7.9 50 23 Kenya 22.1 583 330 4.7 1.3 -0.9 2.4 11.6 10.3 58 24 Sudan 23.1 2,506 330 -1.7 3.5 -4.3 7.2 15.3 31.7 50 25 Comoros 0.4 2 370 . . ... . . 56 26 Lesotho 1.6 30 370 4.2 6.6 -0.9 4.1 11.3 12.3 56 27 Nigeria 106.6 924 370 5.3 1.2 4.8 9.1 16.2 10.1 51 28 Ghana 13.6 239 390 1.0 -2.1 -2.0 8.1 45.4 48.3 54 29 Mauritania 1.9 1,031 440 1.2 -0.6 -1.6 4.1 8.5 9.8 46 30 Liberia 2.3 ill 450 2.4 -0.7 -5.2 1.6 9.1 1.5 54 31 Equatorial Guinea 0.4 28 .. . . . . . .46 32 Guinea 6.5 246 .. 1.2 1.3 -0.1 2.9 2.4 55.1 42 Middle-income ecconomie- t30 3.St,S t S70 i I 9 i - 2 iv 0 3 is 4 7 iv14.2 iw o 8w 53 i 33 Cape Verde 0.3 4 500 .. 7.3 1.2 .. 9.7 13.9 65 34 Senegal 7.0 196 520 -0.8 -0.5 0.1 3.0 8.8 9.1 48 35 Zimbabwe 9.0 391 580 2.6 -2.0 -1.3 2.3 10.6 12.4 58 36 Swaziland 0.7 17 700 5.8 0.3 1.2 4.3 13.3 10.2 55 37 C6te d'Ivoire 11.1 322 740 4.5 1.2 -3.0 2.7 16.0 4.4 52 38 Congo, People's Republic 2.0 342 870 4.2 1.1 1.7 4.4 9.2 1.8 59 39 Cameroon 10.9 475 970 -0.4 5.7 4.5 7.5 10.4 8.1 56 40 Botswana 1.1 582 1,050 9.3 7.3 8.0 4.4 11.6 8.4 59 41 Mauritius 1.0 2 1,490 0.8 3.9 4.4 5.5 12.5 8.1 67 42 Gabon 1.1 268 2,700 4.9 -1.2 -3.5 5.8 15.8 2.6 52 43 Seychelles 0.1 0 3,120 2.6 4.5 1.3 7.3 18.3 3.7 70 44 Angola 9.2 1,247 .. 1.1 -9.8 .. 6.9 22.4 ..44 45 Djibouti 0.4 2 .. . ... . ..47 ;1X MO-A pOpuILous eo:Lnornies 253 i t 8.525 t 270 is 31 L~Is i4 is 41 0% iv .0 is175 is 14.7 iw 51i' 'SJlhehian econorries 3Y.0 t 514-4 t 270 is -I.0 is 1.1I ii 4-1.4 is 3.4 is Q4 is mr is 41, W Oil exportet, 129.7 t 3.25t' t 4b0 i 4 4 isw 5w i'-36%is 8.7% iv 1( 0w 9.5 is 51 iw All low-income economiies Total 2,823.2 t 37,015St 290 w 3.3 w 2.6 w 4.0 w 9.7 w 8.9 w 8.6 w 61 w Excluding China and India 957.2 t 24,166 t 280 w 3.Ow 1.8w -1.1lw 22.1 w 17.1 w 13.3w 54 w South Asia 1,080.9 t 5,158 t 290 w 1.5 w 2.0 w 2.6 w 6.1 w 8.0 w 7.8 w 57 w Excluding India 283.3 t 1,870 t 250 w 0.6 w 2.8 w 2.4 w 5.3 w 12.4 w 8.2 w 55 w Note: Summary measures include estimates for missing country data. The sumnmary measures for GNP per capita and life expectancy are weighted by population. Those for average annual rates of inflation are weighted by the 1980 share of country GDP valued in current dollars. a. See the technical notes. Table 2. Growth of production (average annual percent) GDP Agriculture Industry 1965-73 1973 -80 1980-87 1965-73 1973 -80 1980-87 1965-73 1973 -80 1980-87 Sub-Saharan Africa To'tal 59.Q 2. 5 w 0.5 w 2 2I W J13 %% I 3 13. w 4 3 w -1 2 w% E\cIuding Nigeria 4.11% I 7" 2 3w 1 Qw% 0.7 1.8 k% 1.8 w 3 4 Lo%% -incomne economic-; tr Liw 2 .$ -L0 4 2.2 0t.0 1% 1.0 t ~ 14 3~' 4 4 n 27 E\cludlng, Nigeria 3 3w I Q 1 4 w .. 1.7w s.o w 1. *N I Ethiopia 3.9 1.6 0.9 2.1 0.6 -2.1 6A IA 3.8 2 Chad b 0.4 -1.5 5.1 .. 0.5 2.6 .. -6.0 10.0 3 Zaire b 3.6 -2.0 1.6 .. 0.9 3.2 .. -3.4 3.6 4 Guinea-Bissau' b. 1.2 3.7 .. -3A4 5.7 .. 3.6 3.6 5 Malawi 5.9 5.3 2.6 .. 4.8 2.5 .. 5.6 1.9 6 Mozambique . .. -2.6 . .. -11.1 ... -8.4 7 Tanzania 4.8 2.3 1.7 3.1l 0.2 3.8 7.0 1.8 -2.4 8 Burkina Faso .. 3.9 5.6 .. 1.3 6.1 .. 1.5 3.9 9 Madagascar b 3.0 1.0 0.3 .. -0.4 2.2 .. 1.6 -2.0 10 Mali b 2.7 6.3 3.4 0.9 7.1 0.3 1.1 1.6 9.8 1 1 Gambia, The 4.4 2.0 5.0 4.5 0.9 7.1 3.8 -2.1 5.8 12 Burundi 4.6 3.2 2.6 4.7 1.6 1.7 IOA4 9.8 4.9 13 Zambia b 2.4 0.3 -0.1 2.0 1.6 3.2 2.7 -0.3 -0.7 14 Nigerb -1.2 5.6 -1.9 -2.9 IA4 2.8 13.2 14.3 -4.3 15 Uganda 3.6 -2.7 OA4 3.6 -2.3 -0.5 3.0 -11.9 1.4 16 S5o Tom6 and Principe .. 6.3 -0.6 .. 7.2 -7.3 .. 2.3 1.8 1 7 Somalia 2.1 7.8 2.2 .. 10.9 2.8 .. 0.2 1.0 18 Togo b 5.5 4.1 -0.5 2.6 1.9 0.8 6.2 6.7 -1.6 1 9 Rwanda b 6.4 5.7 2.4 .. 8.7 1.1 ... 4.8 20 Sierra Leone 3.5 1.8 0.7 1.5 3.9 1.6 1.9 -4.6 -2.3 21 B3enin 1.9 2.3 2.8 .. 3.4 2.5 .. 0.7 8.3 22 Central African Republic 2.6 2.1 2.0 2.1 1.8 2.4 7.1 3.2 2.2 23 Kenya 7.9 4.8 3.8 6.2 3.7 3.4 12.4 5.7 3.0 24 Sudan 0.2 7.0 -0.1 0.3 3.4 0.8 1.0 6.0 2.1 25 Comoros.. . ... .. . 26 Lesotho 3.8 7.6 2.3 .. 1.1 0.4 .. 23.8 OA4 27 Nigeria 8.4 3.4 -1.7 2.8 -1.4 0.6 19.6 5.7 -4.4 28 Ghana b 3.4 -0.3 1.4 4.5 0.0 0.0 4.3 -3.4 0.1 29 Mauritania 2.6 2.6 1.4 -2.1 -0.3 1.5 4.3 1.2 5.1 30 Liberia 5.4 2.0 -2.3 6.5 4.0 1.2 6.2 -1.5 -6.0 31 Equatorial Guinea.. . ... .. . 32 Guinea b 3.2 4.1 2.1 .. 2.5 ... 9A %fidd le-income economies~ 5. ic 4 v 3 8 ~ 2 2 % -l 7 % 27~ II 3 % 3 2 w Si w 33 Cape Verde' .. 4.1 6.6 . . . 34 Senegal b 1.6 2.3 3.3 0.2 0.4 4.2 3.5 6.2 4.3 35 Zimbabwe 8.0 -0.1 2.4 .. -0.3 2.3 .. -1.5 IA4 36 Swaziland 7.6 3.5 3.3 8.0 3.5 3.9 3.1 3.5 1.9 37 COte d'Ivoire 8.6 4.7 2.2 4.9 3.3 1.6 12.5 11.7 -2.4 38 Congo, People's Republic b 7.0 4.7 5.5 4.1 2.1 1.5 9.3 8.5 10.9 39 Cameroonb' 2.4 8.9 7.0 4.6 4.5 2.4 4.7 16.0 11.0 40 Botswana b 14.7 10.5 13.0 12A4 0.6 -7.8 30.3 15.0 19.2 41 Mauritius 2.4 5.7 5.5 .. -6.0 5.2 .. 7.5 8.7 42 Gabonb 7A4 3.6 0.6 . . . 43 Seychelles 5.0 6.3 2.5 . .. -2.9 ... 1.5 44 Angola 3.7 -9A 4 0.2 -9.7 ..20.2 -7.5 45 Djibouti.. . ... .. . Si,, mod populciuseconomnies- 7.ii it 30) wt -. w 2 2 %% -On n 1% I I' w 1i.2 %% 4.8 % -3 2 w Sa hel ia n economIe 1.0wo 395w 2.5 w -0.8 %' 2.1 n 3 0 4.7 i 5.2 i~3.3 %% Oil exporters 7.5 n 2. wS -.0 w 2.5 kv *l1Q i 1.0 I 5 Sit 93 n -2.7w All low-income economies Total 6.0 w 4.6 w 6.1w 3.0 w 2.1 w 4.0 w 10.6 w 6.9 w 8.6 w Excluding China and India 5.9 w 4.3 w 1.7 w 2.7 w 1.4 w 1.9 w 13A4 w 5k6w 0.2 w South Asia 3.7 w 4.3 w 4.8 w 3.4 w 2.4 w 1.4 w 3.7 w 5SAw 7.2 w Excluding India 3.1 w 5.5 w 5.3 w 2.3 w 3.3 w 3.2 w 3.6 w 7.6 w 7.3 w Note: Sumrmary measures include estimates for m-issing country data. Summary measures are based on aggregate 1980 dollar values. a. Because manufacturing is generally the mostl1ynanmic part of the industrial sector, its growth rate is shown separately. b. GDP and its comnponents are at purchaser values. (Manufacturing)'a Services, etc. 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa 10.1 ~' .2 w O.tw 4 9w% 3.7 1.2 T otal * Il vk 3.4 w . 2 5 % 2.4 wE\dluding Nigeria I 0.7w 10:.2w -IlOwt 4 8 4 3 0)4 Lot% -incoime cconormio; * 1.5w 1 4 1v.. 2. 1 3 E\Jiuding Nige.ria 8.8 2.6 3.8 6.6 3.3 3.5 Ethiopia -5.5 8.5 .. -2.2 6.3 Chadpbi -5.7 0.6 .. -2.8 -1.2 Zaire b 11.9 1.0 Gui nea-Bissau b 5.5 3.0 Malawi 6.2 Mozambique 8.7 2.6 -3.5 6.9 5.5 0.8 Tanzania 9.5 5.8 Burkina Faso 1.9 -0.5 Madagascar b 8.5 6.4 5.9 Malib 4.6 4.0 3.7 Gambia, The 10.5 4.6" 6.6" 3.0 4.8 3.5 Burundi 9.8 0.5 0.8 2.3 0.4 -0.6 Zambia b -1.6 7.8 -8.0 Niger b 4.0 -12.4 -0.9 3.8 -1.1 3.0 Uganda 3.8 -0.8 .. 7.8 4.1 Soo Torn6 and Principe 2.5 -0.5 .. 3.3 0.9 Somalia 7.3 4.2 -0.7 Togo b 6.3 2.5 . .. 3.9 Rwanda b 3.3 3.9 0.6 7.1 4.2 1.3 Sierra Leone -2.6 4.6 .. 1.5 1.3 Benin 3.8 0.3 1.6 1.9 1.6 Central African Republic 12.4 6.9 4.3 7.6 5.2 4.4 Kenya 6.7 1.6 0.5 10.6 -1.3 Sudan Comoros 7.0 12.9 .. 7.6 4.0 Lesotho 15.0 17.2 -2.1 6.6 5.4 -0.3 Nigeria 6.5 -2.8 1.3 1.1 0.6 4.2 Ghanab 8.1 6.2 -1.3 Mauritania 13.2 4.4 -5.0 3.8 3.3 -0.8 Liberia Equatorial Guinea 2.5 tv o I w 5. ~ I q w 4.2 t% 1%fddle-incorneeconornie§ .. .. .. .. .. .. ~~~~~~~~Cape Verde b 4.0 1.5 4.3" 1.5S 1.6" 2.4A Senegalb 0.4 1.8 .. 1.1 3.3 Zimbabwe 4.7 3.8 12.2 3.6 4.0 Swaziland 10.9 8.3 8.2 11.2 3.6 4.2 C6te d'Ivoire 9.7 6.7 2.2 -1.9 Congo, People's Republic b 7.4 9.0 8.5 0.2 9.0 6.9 Cameroonb 6.3 12.7 4.5 9.5 10.9 9.5 Botswana b 5.0 10.9 .. 10.0 4.1 Mauritius Gabonb 2.3 . .. 2.6 Seychelles 11.5 -1.3 . 2.7" -10.7 . Angola _________ ___ __________________ ~~ ~~Djibouti 12.0 w 12.9 w -1 3 w 5.4 w 4 ni w 0.0 w SLX MO', populous econornies 1 8w% 4.1 w 1.9 wv Sahelian economnies 13 5 %w 15 0 -v 0 w% 5.5 w 4.9 w 0.5 0 il_ es,porters _____________ All low-income economies 9.1 w 8.1 w 10.3 w 6.2 w 5.1 w 5.1 w Total 8.3 w 10.7 w 3.9 w 4.7 w 6.0 w 2.9 w Excluding China and India 4.1 w 5.2 w 8.0 w 3.9 w 5.7 w 6.1 w South Asia 4.5w 7.0 w 6.9 w 3.7 w 6.4 w 6.1 w Excluding India Table 3. Structure of production Distribution of gross domestic product (percent) GDpa (millions of dollars) Agriculture Industry 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 27,758 t 202,323 t 134,483 t 43 w 30 w 34 w 18 w 33 w 28 w Excluding Nigeria 21,908 t 102,176 t 110,093 t 40 w 34 w 35 w 20 w 25 w 24 w Low-income economies 22,632 t 164,394 t 88,877 t 45 w 31 w 38 w 18 w 33 w 25 w Excluding Nigeria 16,782 t 64,247 t 64,487 t 42 w 40 w 42 w 19 w 20 w 19 w 1 Ethiopia 1,180 3,683 4,800 58 51 42 14 16 18 2 Chadc 290 727 980 42 53 43 15 12 18 3 Zaire c 3,140 10,281 5,770 21 29 32 26 29 33 4 Guinea-Bissau c 105 135 .. 52 61 20 6 5 Malawi 220 1,122 1,110 50 40 37 13 19 18 6 Mozambique 2,111 1,490 50 .. .. 12 7 Tanzania 790 4,565 3,080 46 44 61 14 17 8 8 Burkina Faso 260 1,199 1,650 53 45 38 20 22 25 9 Madagascar' 670 3,265 2,070 31 39 43 16 19 16 10 MaliC 260 1,629 1,960 65 58 54 9 9 12 11 Gambia, The 37 205 172 35 31 35 9 13 11 12 Burundi 150 851 1,150 .. 62 59 13 14 13 Zambia c 1,060 3,885 2,030 14 14 12 54 41 36 14 Niger c 670 2,538 2,160 68 43 34 3 23 24 15 Uganda 1,100 1,688 3,560 52 72 76 13 4 5 16 Sao Tome and Principe 37 31 45 30 20 19 17 Somalia 220 630 995 71 68 65 6 8 9 18 Togoc 190 1,136 1,230 45 27 29 21 25 18 19 Rwandac 150 1,163 2,100 75 46 37 7 22 23 20 Sierra Leone 320 1,013 900 34 33 45 28 22 19 21 Benin 220 1,041 1,570 59 48 46 8 12 14 22 Central African Republic 140 750 1,010 46 40 41 16 20 13 23 Kenya 920 6,018 6,930 35 32 31 18 22 19 24 Sudan 1,330 6,178 8,210 54 34 37 9 14 15 25 Comoros 199 36 14 26 Lesotho 50 339 270 65 26 21 5 25 28 27 Nigeria 5,850 100,147 24,390 54 26 30 13 42 43 28 Ghana ' 2,050 4,445 5,080 44 58 51 19 12 16 29 Mauritania 160 666 840 32 31 37 36 26 22 30 Liberia 270 1,001 990 27 36 37 40 28 28 31 Equatorial Guinea 65 32 Guinea c 520 1,764 2,166 42 30 23 32 Middle-income economies 5,131 t 37,913 t 50,898 t 33 w 25 w 27w 21 w 32 w 30 w 33 CapeVerde. 89 158 25 19 23 20 34 Senegalc 810 2,970 4,720 25 19 22 18 25 27 35 Zimbabwe 960 5,017 5,240 18 14 11 35 39 43 36 Swaziland 67 465 369 35 30 24 33 25 30 37 C6te d'lvoire 760 8,482 7,650 47 33 36 19 20 25 38 Congo, People's Republic' 200 1,706 2,150 19 12 12 19 47 33 39 Cameroone 810 7,499 12,660 33 28 24 20 26 32 40 Botswana c 50 913 1,520 34 12 3 19 41 57 41 Mauritius 190 962 1,480 16 12 15 23 26 32 42 Gabon c 230 4,281 3,500 26 7 11 34 60 41 43 Seychelles 16 147 256 .. 7 6 .. 16 17 44 Angola 989 5,069 7,740 50 43 46 7 30 23 45 Djibouti Six most populous economies 13,205 t 130,873 t 53,189 t 45 w 28 w 34 w 16 w 37 w 30 w Sahelian economies 2,576 t 10,128 t 12,772 t 46 w 38 w 34 w 14 w 20 w 20 w Oil exporters 8,063 t 118,701 t 45,924 t 49 w 26 w 27w 14 w 41 w 38 w All low-income economies Total 155,452 t 743,934 t 756,127 t 43 w 33 w 31 w 27 w 38 w 37 w Excluding China and India 42,884 t 302,684 t 239,389 t 45 w 31 w 33 w 17 w 34 w 27 w South Asia 60,263 t 200,536 t 288,264 t 46w 38w 31 w 21 w 25w 28w Excluding India 13,998 t 45,666 t 67,432 t 43 w 39 w 35 w 16 w 20 w 21 w Note: Summary measures include estimates for missing country data. The weighting process may result in discrepancies between summed subgroup figures and overall totals. Summary measures are based on aggregate current dollar values. a. See the technical notes. Distribution of gross domestic product (percent) (Manufacturing) b Services, etc. 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa 9 w 9 w l w 39 w 37 3w N w Total low 9w 12w 41 *V 41 w 43 % Excluding Nigeria 8 w 9 w 8 w 3-w 35 w 37 w Lov -income economie 9 w 8 w 9 w 3w w 40 w 42 w E\cluding Nigeria 7 11 12 28 34 40 Ethiopia 12 11 15 43 35 39 Chadc 16 3 7 53 42 35 Zairec 28 33 Guinea-Bissau 37 41 45 Malawi 38 Mozambique 8 11 5 40 39 31 Tanzania 15 27 32 38 Burkina Faso 11 .. .. 53 42 42 Madagascar' 5 4 6 25 32 35 Mali c 3 4 6 56 55 55 Gambia, The 7 9 25 27 Burundi 6 18 23 32 44 52 Zambia c 2 4 9 29 35 42 Nigerc 8 4 5 35 23 19 Uganda 9 35 51 Sao Tome and Principe 3 5 5 24 24 26 Somalia 10 7 7 34 48 54 Togoc 2 15 16 18 33 40 Rwandac 6 6 4 38 45 36 Sierra Leone 6 4 33 40 39 Benin 4 7 8 38 40 46 Central African Republic 11 13 11 47 45 50 Kenya 4 7 8 37 52 48 Sudan 4 50 Comoros 1 5 15 30 49 51 Lesotho 6 9 8 33 32 27 Nigeria 10 8 10 38 30 33 Ghanac 4 32 43 41 Mauritania 3 8 5 34 36 35 Liberia Equatorial Guinea 2 5 .. 35 38 Guinea c 12 w 11 w . 46 w 43iw 44 w Mliddle-income economies 4 52 60 Cape Verde c 14 15 17 56 56 52 Senegalc 20 25 31 47 47 46 Zimbabwe 9 20 32 45 46 Swaziland 11 11 16 33 47 39 Cote d'Ivoire 7 8 62 42 55 Congo, People's Republic c 10 8 13 47 46 45 Cameroonc 12 4 6 47 47 40 Botswanac 14 15 24 61 62 53 Mauritius 40 34 48 Gabon' 7 9 78 77 Seychelles 4 3 3 42 27 31 Angola Djibouti 9 w 9 w S h' 39 . 35 h 35 w Six mrtst populous eco'iomjeU 9 w 9 w 13 w 40w 42 *v 44 w Sahelian economies 6w 9w 9hw 37 w 33 w 35 w Oil e\porters All low-income economies 20 w 22 w 30 w 30 w 32 w Total 9 w 11 w 12 w 38 w 36 w 40 w Excluding China and India 14 w 17 w 18 w 34 w 37 w 41 w South Asia 11 w 13 w 13 w 41 w 41 w 44 w Excluding India b. Because manufacturing is generally the most dynamic part of the industrial sector, its share of GDP is shown separately. c. GDP and its components are shown at purchaser values. Table 4. Structure of demand (percentage of gross domestic product) General government Private Gross domestic consumption consumption, etc. investment 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan, Africa Total 10 w 13 w l w% 721 M.'t 7 14 w% 20I It, Excluding Nigt.ria 12 w 16 w 17 t 4 7l I 7 15 20 It,o Lo-,%-incorne conorait,, low 11 w 14 w 72 w 67 w 75 w 14 w 20 w 16 w Excluding Nigerii 12 w 15 w 15 w 69 w 76 w 77 w 14 w 19 w 16 w I Ethiopia 11 15 19 77 80 77 13 10 14 2 Chad 20 34 8 74 73 104 12 18 18 3 Zaire 9 9 17 61 77 73 14 15 13 4 Guinea-Bissau 29 9 77 86 30 19 5 Malawi 16 19 18 84 70 70 14 25 14 6 Mozambique 21 90 22 7 Tanzania 10 13 8 74 77 98 15 23 17 8 Burkina Faso 9 17 25 87 92 74 12 20 24 9 Madagascar 23 17 14 74 76 79 10 24 14 10 Mali 10 10 10 84 91 90 18 17 16 1 1 Gambia, The 19 21 20 78 73 74 8 27 19 12 Burundi 7 13 17 89 87 76 6 14 20 13 Zambia 15 26 25 45 55 55 25 23 15 14 Niger 6 10 12 90 67 84 8 37 9 15 Uganda 10 a 7 78 95 88 11 6 12 16 S5o Tomn6and Principe 24 40 91 66 34 44 17 Somalia 8 14 11 84 94 89 11 44 35 l8 Togo 8 15 21 76 70 74 22 30 17 19 Rwanda 14 12 12 81 83 83 10 16 17 20 Sierra Leone 8 8 7 83 91 83 12 16 9 21 Benin I11 11 10 87 96 86 1 1 19 14 22 Central African Republic 22 15 13 67 94 89 21 7 14 23 Kenya 15 20 19 70 61 61 14 30 25 24 Sudan 12 16 15 79 81 79 10 15 11 25 Comoros 27 84 12 26 Lesotho 18 33 16 109 133 158 11 34 25 27 Nigeria 5 9 11 83 62 69 14 20 16 28 Ghana 14 11 9 77 84 87 18 6 11 29 Mauritania 19 25 13 54 68 73 14 36 20 30 Liberia 12 16 17 61 56 65 17 27 10 31 Equatorial Guinea 13 59 19 32 Guinea 21 11 58 72 16 17 X IiddIe- incone economies 1I I 17w IQ 71) 5'i w 65w 15 w 22 w 16 w 33 Cape Verde 24 110 42 34 Senegal 17 22 17 75 78 77 12 16 13 35 Zimbabwe 12 20 20 65 64 59 15 19 18 36 Swaziland 16 25 46 68 26 41 37 C6te d'Ivoire 11 18 17 61 60 65 22 28 13 38 Congo, People's Republic 14 18 21 80 47 58 22 36 24 39 Cameroon 13 9 11 75 76 74 13 19 18 40 Botswana 24 20 89 52 6 41 41 Mauritius 13 14 11 74 75 60 17 21 26 42 Gabon 11 13 23 52 26 43 31 28 31 43 Seychelles 29 44 38 44 Angola 11 21 26 77 48 58 10O 9 9 45 Djibouti..__ Six most populous econornie.s 8 iw 10 14I 7b w 65 1% 72 w13 w 201 % 16 Sahelian econornes. 13w% II i,v 17 w SOw, 78w 80 w 12 % 24w 15 w OilI ex~porters w 10II 14 w8 1 t3 O 67 w 14 %v 21) IS 1 iv All low-income economies Total 12 w 13 w 13 w 69 w 63 w 61 w 20 w 25 w 28 w Excluding China andlIndia 9 w 11 w 12 w 76 w 66 w 73 w 14 w 21 w 19 w South Asia 9 w low 12 w 76 w 73 w 68 w 18 w 23 w 22 w Excluding India 9 w 11 w 80 w 83 w 80 w 16 w 19 w 16 w Nate: Summary measures include estimates for midssing country data. Summary measures are based on aggregate current dollar values. a. General government consumption figures are not available separately; they are included in private consumption, etc. 226 Gross domestic Exports of goods and savings nonfactor services Resource balance 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa 14 w 22 w 13 w 22 w 26 w 26 w 1 w 1 w Total 15 w 15 w 11 w 26 w 26 w 24 w -5 w -6 w -4 w Excluding Nigeria 13 kv 22 k% 10 21 24 w 22 I ~ ~ wLoi% -incomie eccnomie4 I-I w 24 w 21 w Iq 1 w -Il %% -1 E%cluding Nigeria 12 5 3 12 14 11 -1 -5 -11 Ethiopia 6 -6 -12 19 28 17 -6 -25 -31 Chad 30 14 10 36 24 33 15 -1 -3 Zaire -6 5 8 6 -36 -14 Guinea-Bissau 0 11 12 19 25 24 -14 -14 -2 Malawi -10 11 -32 Mozambique 16 10 -6 26 13 13 1 -13 -23 Tanzania 4 -9 1 9 16 17 -8 -29 -23 Burkina Faso 4 6 7 16 16 20 -6 -17 -7 Madagascar 5 -2 0 12 16 17 -13 -19 -17 Mali 3 5 6 43 57 63 -5 -22 -13 Gambia, The 4 0 8 10 9 9 -2 -14 -12 Burundi 40 19 20 49 41 47 15 -4 5 Zambia 3 23 5 9 24 19 -5 -14 -5 Niger 12 5 26 2 10 1 -1 -7 Uganda -15 -6 46 20 -49 -50 Sao Tom6 and Principe 8 -8 1 17 31 11 -3 -52 -34 Somalia 17 15 6 20 32 31 -6 -15 -12 Togo 5 4 5 12 14 8 -5 -12 -12 Rwanda 9 1 10 30 23 9 -3 -15 1 Sierra Leone 3 -6 4 13 28 15 -8 -25 -10 Benin 11 -10 -2 27 26 17 -11 -17 -16 Central African Republic 15 19 20 31 29 21 1 -11 -5 Kenya 9 3 6 15 12 8 -1 -12 -5 Sudan -11 11 -23 Comoros -26 -66 -73 16 21 10 -38 -100 -99 Lesotho 12 30 20 13 26 31 -2 9 4 Nigeria 8 5 4 17 8 20 -10 -1 -6 Ghana 27 7 14 42 37 50 13 -29 -7 Mauritania 27 27 18 50 55 43 10 0 9 Liberia 28 42 9 Equatorial Guinea 22 17 28 30 6 0 Guinea 17 %v 24 w 1h w 27 w 3,' 30) w 1 w 2 kv N1iddIe-inc.omie economie4 -34 22 -77 Cape Verde 8 0 624 29 28 -4 -16 -7Senegal 23 16 22 30 27 8 -3 3 Zimbabwe 38 7 59 77 12 -33 Swaziland 29 22 19 37 34 34 7 -6 6 C6te d'Ivoire 5 36 21 36 60 43 -17 0 -2 Congo, People's Republic 12 16 15 24 24 16 -1 -3 -4 Cameroon -13 29 32 50 -19 -12 Botswana 13 10 29 36 51 69 -4 -10 3 Mauritius 37 61 34 43 41 6 32 3 Gabon 27 68 -11 Seychelles 12 30 16 21 52 38 2 22 6 Angola _____________________________ ____________________________D jibou ti 1n w 25 w 14 w 20 w 25 23 w3 w 2wSi- morsct popuIlou, econorrmie4 6 w 4 w 5 18I w 25 w 24 w -5w -20 w -13wI Saheltan economtes 12 w 30) w 20 w 14 28 w 31 w - I w lo10' I wOil e-\porters All low-income economies 19 w 25 w 26 w 8 w 14 w 13 w -1 w O w -2 w Total 12 w 23 w 15 w 17 w 25 w 20 w -1 w 2w -4 w Excluding China and India 15w 18 w 19 w 6 w 8 w 8 w -3 w -5 w -3 w South Asia 11 w 7w 9w 13 w 12 w 11w -5 w -12 w -7 w ExcludinglIndia Table 5. Growth of consumption and investment (average annual percent) General government Gross domestic consumption Private consumption, etc. investment 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa Total 9.0 w 7.0 w -0.7 w 3.9 w 2.6 w 1.1 w 9.8 w 4.0 w -8.2 w Excluding Nigeria 6.1 w 5.5 w 0.8 w 2.5 w 2.3 w 2.2 w 6.9 w 1.9 w -3.4 w Low-income economies 9.7 w 6.5 w -2.4 w 4.2 w 2.8 w 0.7 w 10.3 w 4.5 w -9.9 w Excluding Nigeria 5.6 w 3.7 w -1.2 w 2.5 w 2.5 w 1.8 w 6.3 w 1.6 w -3.5 w 1 Ethiopia 3.7 8.3 5.6 4.0 3.0 1.3 1.5 -1.6 2.0 2 Chad 6.0 -1.6 ..1.6 -4.8 . 3 Zaire 5.8 -4.7 -10.9 4.4 -3.0 0.4 10.2 3.7 1.3 4 Guinea-Bissau .. -0.5 0.7 .. -4.9 6.3 .. 7.0 3.8 5 Malawi 3.0 10.8 4.5 5.5 3.8 2.6 16.0 3.0 -10.5 6 Mozambique .. .. 10.8 . .. 0.9 ... -23.1 7 Tanzania a .. -7.1 5.0 .. 5.0 9.6 3.8 -5.6 8 Burkina Faso 10.7 4.1 3.4 1.4 6.7 2.5 13.7 -2.1 2.0 9 Madagascar 3.3 4.3 -1.0 2.0 0.2 -0.1 4.2 3.2 -4.5 10 Mali 2.3 4.4 4.3 3.0 6.6 4.1 1.0 6.4 4.2 1 1 Gambia, The 2.8 12.3 ..4.3 2.7 ..-0.1 36.1 12 Burundi 12.3 5 2.9 4.4 3.6 2.1 -1.4 18.5 5.4 13 Zambia 10.4 -0.6 -2.5 -1.9 3.1 1.4 6.2 -16.5 -9.3 14 Niger 2.1 3.8 1.2 -5 5.8 2.3 4.6 5.2 -15 15 Uganda a a ..4 -3.1 ..2.1 -9.8 16 SAo Tom6 and Principe .. 6.9 1.5 .. 9.5 -1.4 .. 29.6 5.8 17 Somalia 16.9 0.0 1.1 -1.0 14.8 1.1 5.6 17.8 2.7 18 Togo 7.9 10.9 1.9 6.5 5.4 -0.3 3.3 12.2 -6.4 19 Rwanda 2.3 3.9 3.2 7.9 6.8 2.0 5.7 9.4 9.2 20 Sierra Leone a a a 2.0 4.3 -2.5 -2.6 1.7 -7.1 21 Benin 5.0 -3.1 3.0 3.1 3.2 1.4 9.1 9.0 -12.7 22 Central African Republic 1.7 -0.9 -3.1 3.4 6.0 1.6 2.3 -10.6 14.6 23 Kenya 13.1 9.7 0.8 5.2 4.8 3.1 15.9 4.4 -2.3 24 Sudan 1.4 3.9 -1.6 -1.1 9.7 -1.4 0.2 5.3 -4.0 25 Comoros . . .. ... 26 Lesotho 5.4 17.8 ..6.0 7.3 ..10.5 20.4 27 Nigeria 16.7 9.1 -3.6 5.8 2.9 0.0 15.2 6.6 -14.8 28 Ghana 1.1 8.4 -1.6 2.9 0.0 1.7 -3.5 -3.6 3.2 29 Mauritania 6.1 8.5 -6.2 2.8 0.7 4.7 12.5 12.1 -.5.5 30 Liberia 4.5 5.3 1.3 -0.5 3.4 0.8 5.6 10.5 -16.7 31 Equatorial Guinea . . . . . . 32 Guinea .. 7.5 ... 2.8 .... 2.3 Middle-income economides 7.0 w 8.4 w 3.5 w 2.5 w 1.8 w 3.1 w 8.1 w 2.4 w -3.4 w 33 Cape Verde .. 15.7 ... 7.0 ... 13.3 34 Senegal -1.2 8.1 1.5 0.2 3.7 2.2 8.1 -2.1 1.1 35 Zimnbabwe 8.3 13.7 7.1 . .. -2.7 7.6 -11.1 -1.4 36 Swaziland 10.6 5.5 ..5.6 10.6 ..7.4 9.9 37 C6te d'Ivoire 14.6 13.4 -5.7 8.6 5.4 3.5 7.8 15.5 -14.2 38 Congo, People's Republic 7.4 3.7 7.1 2.2 1.8 6.7 9.3 -4.9 -3.8 39 Cameroon 4.6 3.7 10 1.7 8.1 5.7 8.6 14.4 3.3 40 Botswana 5.5 14.3 13.8 7.4 10.4 4.4 48.1 2.6 -1.5 41 Mauritius 2.3 10.2 2.2 -4.1 10.3 3.2 5.2 -1.2 10.8 42 Gabon 10.2 8.4 4.7 . .. -2.2 7.3 -0.7 -3.0 43 Seychelles . . ... .. . 44 Angola 7.2 3.5 ..0.4 -10.2 ..7 -5.6 45 Djibouti . . .. .. . Iv mo~t populou-;economies 1.7 7.5 w -3.1)i 5 SO 2 7 14 13.1 ~ ~w -I1w S.ihelian econocinez 2 8w 5(1 2I w 0.1 I w 3.S 3.2w 5.1 w 3., -3.34 OiI exporters 13.4 w 8.1 w -1.0 w 4.8 w 2.3 w 0.6 w 13.4 w 5.6 w -1 1.5 w All low-income economies Total 7.5 w 7.2 w 4.4 w 4.6 w 4.1 w 4.4 w 9.2 w 7.3 w 10.2 w Excluding China and India 9.1 w 7.7 w 0.7 w 4.4 w 4.1 w 2.4 w 9.3 w 7.1 w -1.9 w South Asia 6.5 w 7.0 w 8.6 w 3.4 w 4.0 w 4,9 w 3.2 w 6.3 w 3.7 w Excluding India .. 5.3 w 7.8 w .. 6.2 w 5.1 w -0.3 w 9.5 w 3.5 w Nate: Summary measures include estimates for miissing country data. Summary measures are based on aggregate 1980 dollar values. a. Central government consumption figures are not available; they are included in private consumption, etc. Table 6. Growth of production of major crops (average annual percent) Maize Millet Rice 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa Total 3.3 -0.2 3.7 1.2 -1.2 2.5 3.7 2.6 2.7 Excluding Nigeria 3.6 0.5 3.1 -0.6 2.3 1.7 3.2 1.6 2.5 Low-income economies 2.7 0.1 4.8 1.6 -1.2 2.6 4.1 2.5 2.3 Excluding Nigeria 3.0 1.0 4.1 -0.9 4.1 1.6 3.7 1.4 2.0 Middle-income economies 5.2 -1.1 -0.6 -1.7 0.0 4.0 -0.4 3.1 6.2 Six most populous economies 3.0 0.3 6.0 4.3 -4.2 1.5 11.0 8.2 4.1 Sahelian economies -8.3 5.6 11.4 -2.5 3.5 4.3 -2.9 0.5 6.4 Oil exporters 1.1 -6.6 6.3 4.1 -6.2 3.6 7.7 9.3 4.0 Sorghum Wheat Total cereals 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa Total 0.2 2.3 1.3 3.9 1.1 1.0 2.0 0.9 2.3 Excluding Nigeria 2.3 4.3 0.1 4.0 1.0 0.4 2.3 2.0 1.7 Low-income economies 0.1 2.5 1.3 3.1 -0.1 0.8 1.9 1.0 2.4 Excluding Nigeria 2.3 4.7 0.1 3.2 -0.2 0.2 2.2 2.4 1.7 Middle-income economies 3.5 -6.8 1.8 20.1 10.8 1.8 2.9 -0.1 1.6 Six most populous economies -0.2 2.6 0.9 3.4 0.0 0.7 2.3 1.0 2.3 Sahelian economies -2.8 4.9 4.9 4.5 -1.7 6.7 -2.8 3.5 5.0 Oil exporters -2.8 -1.0 3.5 -5.5 1.4 15.1 0.9 -3.4 4.0 Coconuts Groundnuts Palm kernels 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa Total 2.4 0.3 1.3 -1.2 -4.0 0.2 -2.4 0.1 0.2 Excluding Nigeria 2.6 0.3 1.2 1.1 -2.6 -0.6 0.4 -2.2 -0.4 Low-income economies 2.4 -0.8 -0.6 -1.0 -3.1 -0.1 -2.5 0.1 0.3 Excluding Nigeria 2.6 -0.9 -0.8 2.8 -0.9 -1.4 0.9 -2.9 -0.3 Middle-income economies 1.7 11.5 10.5 -2.2 -6.4 1.5 -1.5 0.0 -0.6 Six most populous economies 1.0 0.7 0.9 -2.5 -3.2 -0.4 -4.3 2.0 0.7 Sahelian economies 0.0 2.8 0.1 -4.6 -4.8 0.6 -2.0 3.2 5.5 Oil exporters -0.7 0.2 2.0 -5.2 -8.9 4.4 -5.3 2.5 OA Pulses Roots and tubers Seed cotton 1965-73 1973-80 1980-87 2965-73 1973-80 1980-87 1965-73 1973-80 1980-87 Sub-Saharan Africa Total 2.1 1.2 3.4 2.7 1.8 3.1 5.2 -3.0 7.3 Excluding Nigeria 2.4 2.6 2.9 2.5 1.8 3.2 5.5 -3.0 7.7 Low-income economies 2.1 1.3 3.4 2.8 1.8 3.1 3.9 -4.6 7.0 Excluding Nigeria 2.4 2.7 2.9 2.6 1.7 3.2 4.1 -4.6 7.6 Middle-income economies 3.0 -0.1 2.8 2.1 1.8 3.1 15.8 3.0 8.1 Six most populous economies 1.7 0.8 4.0 2.5 2.2 2.4 4.1 -4.6 3.4 Sahelian economies 0.7 7.2 -0.8 -0.5 1.7 3.0 7.3 3.3 9.1 Oil exporters 1.1 -4.1 5.0 2.9 1.6 2.7 2.8 -2.0 1.6 Table 7. Production of major crops (thousand metric tons) Maize Millet Rice 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 9,895 12,871 1 5.58S 8,084 9,229 10,125 3,677 6,295 7,593 Excluding Nigeria 8,735 12,227 14.288 5,355 6,142 6,775 3,446 5,205 6,193 Low-income economies 8,013 10,013 13 138 6,850 7,963 8,440 3,245 5,736 6,718 Excluding Nigeria 6,853 9,369 I l83h 4,121 4,876 5,090 .3,014 4,646 5,318 1 Ethiopia 788 948 1,360 147 205 180 0- 0 0 2 Chad 14 25 34 614 450 500 25 47 20 3 Zaire 330 594 777 14 16 37 49 234 313 4 Guinea-Bissau 3 7 25 7 9 20 47 42 155 5 Malawi 890 1,165 1,228 0 0 0 5 60 34 6 Mozambique 390 380 300 10 5 5 93 70 55 7 Tanzania 751 1,726 2,337 117 380 297 73 363 571 8 Burkina Faso 109 105 131 315 351 632 25 40 40 9 Madagascar 123 128 153 0 0 0 1,589 2,109 2,286 10 Mali 88 45 143 720 708 1,130 162 132 190 11 Gambia, The 1 6 18 42 29 104 37 43 35 12 Burundi 108 140 160 21 40 50 2 11 20 13 Zambia 800 937 954 72 50 30 0 2 13 14 Niger 3 10 9 790 1,364 1,020 12 31 60 15 Uganda 270 286 357 511 458 490 5 17 38 16 Sao Tom6 and Principe 0 1 1 0 0 0 0 0 0 17 Somalia 105 111 355 0 0 0 0 17 5 18 Togo 78 138 145 136 43 82 16 15 19 19 Rwanda 44 85 120 2 2 2 0 4 5 20 Sierra Leone 10 12 10 10 14 23 399 513 508 21 Benin 219 271 278 6 7 22 1 10 9 22 Central African Republic 32 41 45 50 46 70 7 13 16 23 Kenya 1,301 1,620 2,170 130 90 50 14 40 40 24 Sudan 12 43 25 253 491 131 1 8 2 25 Comoros 3 5 7 0 0 0 12 14 17 26 Lesotho 110 106 90 0 0 0 0 0 0 27 Nigeria 1,160 644 1,300 2,729 3,087 3,350 231 1,090 1,400 28 Ghana 209 382 553 57 82 121 33 78 88 29 Mauritania 4 5 8 100 37 95 1 11 20 30 Liberia 0 0 0 0 0 0 135 243 280 31 Equatorial Guinea 0 0 0 0 0 0 0 0 0 32 Guinea 60 47 45 0 0 0 272 480 480 Middle-income economies 1,882 2,858 2,450 1,234 1,266 1,685 432 559 875 33 Cape Verde 13 9 20 0 0 0 0 0 0 34 Senegal 41 57 120 557 553 1,078 122 65 130 35 Zimbabwe 822 1,511 1,094 253 180 102 3 0 0 36 Swaziland 32 97 92 0 0 0 6 5 3 37 C6te d'lvoire 180 380 415 34 34 44 250 420 595 38 Congo, People's Republic 5 9 8 0 0 0 5 3 3 39 Cameroon 330 414 380 330 441 400 13 46 123 40 Botswana 2 12 2 1 2 1 0 0 0 41 Mauritius 0 1 9 0 0 0 0 0 0 42 Gabon 8 10 10 0 0 0 1 1 1 43 Seychelles 0 0 0 0 0 0 0 0 0 44 Angola 450 360 300 60 57 60 32 20 20 45 Djibouti 0 0 0 0 0 0 0 0 0 Sixmostpopulouseconomries 4,342 5,575 7.46q 3.389 4.268 4.045 3o8 1.735 2,325 Sahelianeconomies 273 269 508 3.144 3.500 4,57Q 43(1 409 650 Oilexporters 1.953 1.437 1.998 3.119 3,585 3.S1O) 2r.2 1,159 1,546 All low-income economies Total 38,726 81,422 98,402 20,745 23,477 23,228 178,999 284,215 323,189 Excluding China and India 14,937 18,722 22,097 14,545 18,032 17,428 88,779 142,835 145,989 South Asia 1,524 1,618 2,252 163 207 345 37,923 49,825 57,339 Excluding India 1,385 1,518 2,147 163 207 345 35,423 48,355 55,639 Sorghum Wheat Total cereals 2965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan AfTica 8, 3S 3 11,063 I0.o67 1.tf)o-I 2,7 4,S 47,740) Total 4,1485 6.76(1 o.3i7 9441 1,4 3u 1,4126 249951 341.472 37,1Is') ExJcuding Nigeria 8.3086 10.969 10.580 940 1.25S 1 322 20,3113 38.1,7k 42.4i.i Low% ircome econornie, 4,073 6,6htur 6.231.) 'l20 1.23-4 1 222 20900n 29).462 3 1 .Ms E\cluding Nigeria 740 1,411 1,000 580 614 700 4,010 5,612 5,160 Ethiopia 0 0 0 4 6 3 664 573 602 Chad 24 14 36 3 4 20 428 862 1,182 Zaire 3 18 35 0 0 0 76 80 240 Guinea-Bissau 55 120 154 1 1 1 951 1,346 1,417 Malawi 181 200 150 10 3 3 684 658 513 Mozambique 149 563 663 33 91 72 1,123 3,126 3,945 Tanzania 495 547 848 0 0 0 953 1,048 1,659 Burkina Faso 3 1 2 0 0 0 1,715 2,238 2,441 Madagascar 0 0 0 2 2 2 997 913 1,515 Mali 0 0 0 0 0 0 86 81 159 Gambia, The 122 161 220 8 6 15 261 358 465 Burundi 44 20 26 0 10 13 916 1,019 1,039 Zambia 266 368 360 1 1 8 1,071 1,776 1,460 Niger 272 299 330 0 17 10 1,058 1,077 1,225 Uganda 0 0 0 0 0 0 0 1 1 Sao Tom4 and Principe 110 141 203 0 1 1 215 269 564 Somalia 0 95 135 0 0 0 237 296 387 Togo 130 179 187 0 2 5 178 273 319 Rwanda 10 11 20 0 0 0 430 551 562 Sierra Leone 59 56 87 0 0 0 287 347 399 Benin 0 0 0 0 0 0 89 100 131 Central African Republic 163 200 130 172 216 195 1,794 2,233 2,612 Kenya 1,094 2,068 1,450 56 233 157 1,417 2,843 1,765 Sudan 0 0 0 0 0 0 15 19 23 Comoros 55 59 41 50 28 16 218 195 149 Lesotho 4,235 4,303 4,350 20 24 100 8,413 9,208 10,560 Nigeria 90 132 151 0 0 0 389 674 913 Ghana 0 0 0 0 0 1 105 53 124 Mauritania 0 0 0 0 0 0 135 243 280 Liberia 0 0 0 0 0 0 0 0 0 Equatorial Guinea 8 3 4 0 0 0 400 601 599 Guinea 75 94 8,7 24 202 20b 3b95o 9.010 5.341 NliddILe-incomt economries 0 0 0 0 0 0 13 9 20 Cape Verde 0 0 0 0 0 0 723 676 1,331 Senegal 52 42 52 4 191 200 1,135 1,949 1,479 Zimbabwe 3 2 2 0 1 1 40 105 98 Swaziland ¶1 21 25 0 0 0 482 860 1,084 C6te d'lvoire 0 0 0 0 0 0 10 12 1 1 Congo, People's Republic 0 0 0 0 2 1 673 901 904 Cameroon 9 29 8 0 1 1 1 2 44 1 2 Botswana 0 0 0 0 0 0 0 1 9 Mauritius 0 0 0 0 0 0 9 1 1 1 1 Gabon 0 0 0 0 0 0 0 0 0 Seychelles 0 0 0 20 7 2 562 444 382 Angola 0 0 0 0 0 0 0 0 0 Djibouti b, 40Lk 8,55-) 7,t29 864 1.181 1.24-4 1 7.1I%t. 23.88-4 25.224 Siix mnot populous economies 764 033 1.243 6 9 13 4.687 5.208 7 110L Sahelia-n economies 4.235 4.303 4.39;0 4-L0 33 103 '1.6bS lOSro- 1 1 .%-8 Oil exporter- All low-income economies 23,303 28,000 25,710 45,514 103,201 151,194 321,570 532,466 633,269 Total 16,203 21,225 19,710 20,294 47,991 64,194 159,841 253,706 274,164 Excluding China and India III 178 253 238 1,363 2,058 40,059 53,295 62,342 South Asia 111 178 253 238 1,363 2,058 37,420 51,725 60,537 Excluding India Table 7. Production of major crops (thousand metric tons) - continued Coconuts Groundnuts Palm kernels 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 1.2ne 1,545 1,675 5,500 4,083 4,306 844 706 702 Excluding Nigeria 1, 170 1,455 1,575 3,522 3,408 3,566 382 361 342 Low-income economies 1,181 1 346 1 2Q3 4,087 3,231 3,072 749 602 607 Excluding Nigeria 1,082 1,258 1,1 Y3 2,109 2,556 2,332 287 257 247 I Ethiopia 0 0 0 18 26 50 0 0 0 2 Chad 0 0 0 150 100 90 0 0 0 3 Zaire 0 0 0 180 340 411 82 69 70 4 Guinea-Bissau 25 25 25 42 30 30 9 9 14 5 Malawi 0 0 0 157 177 190 0 0 0 6 Mozambique 275 450 415 120 90 65 0 0 0 7 Tanzania 274 310 340 49 54 60 1 5 6 8 Burkina Faso 0 0 0 73 54 100 0 0 0 9 Madagascar 16 68 81 35 39 33 0 4 6 10 Mali 0 0 0 153 135 60 0 0 0 11 Gambia, The 0 0 0 128 60 120 2 1 2 12 Burundi 0 0 0 4 56 80 1 2 3 13 Zambia 0 0 0 44 16 14 0 0 0 14 Niger 0 0 0 277 126 42 0 0 0 15 Uganda 0 0 0 130 70 120 0 0 0 16 SAo Tome and Principe 55 35 35 0 0 0 4 0 1 17 Somalia 1 1 1 4 3 5 0 0 0 18 Togo 20 14 14 21 24 37 22 19 15 19 Rwanda 0 0 0 5 16 18 0 0 0 20 Sierra Leone 2 3 3 23 10 19 52 30 30 21 Benin 40 20 20 33 63 67 50 36 20 22 Central African Republic 0 0 0 61 123 146 1 1 1 23 Kenya 65 90 72 4 8 9 0 0 0 24 Sudan 0 0 0 305 707 360 0 0 0 25 Comoros 55 53 47 0 0 0 0 0 0 26 Lesotho 0 0 0 0 0 0 0 0 0 27 Nigeria 99 90 100 1,978 675 740 462 345 360 28 Ghana 229 160 110 27 142 128 22 30 30 29 Mauritania 0 0 0 1 1 2 0 0 0 30 Liberia 5 7 7 2 3 3 12 7 8 31 Equatorial Guinea 6 7 8 0 0 0 2 3 3 32 Guinea 15 15 15 65 84 75 27 40 40 Middle-income economies 88 197 382 1,413 852 1,234 95 103 95 33 Cape Verde 10 10 10 1 0 0 0 0 0 34 Senegal 3 4 5 1,121 523 876 5 5 6 35 Zimbabwe 0 0 0 61 78 79 0 0 0 36 Swaziland 0 0 0 3 1 1 0 0 0 37 COte d'Ivoire 18 153 340 32 81 90 17 41 41 38 Congo, People's Republic 0 0 0 18 14 16 6 0 1 39 Cameroon 6 3 4 141 126 140 48 44 35 40 Botswana 0 0 0 0 1 1 0 0 0 41 Mauritius 18 5 3 1 1 2 0 0 0 42 Gabon 0 0 0 3 7 9 0 0 0 43 Seychelles 34 22 21 0 0 0 0 0 0 44 Angola 0 0 0 32 20 20 19 12 12 45 Djibouti 0 0 0 0 0 0 0 0 0 Six most populous economies 438 490 512 2,533 1,809 1,629 545 420 436 Sahelian economies 38 39 40 1,945 1,028 1,320 16 15 22 Oil exporters 105 9 3 104 2,172 842 925 536 402 408 All low-income economies Total 7,453 7,939 9,227 11,848 12,882 15,935 763 645 662 Excluding China and India 7,372 7,850 9,103 9,896 9,279 9,922 753 605 612 South Asia 361 558 956 466 471 904 4 0 1 Excluding India 330 528 912 442 468 891 4 0 1 Pulses Roots and tubers Seed cotton Sugar 1965 1980 1987 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan AfTica 39533 4,541 3,871 50.010 R55t,51 b4.514 1.4'07 1.747 2,hq8 1.777 3.208s 4.020' Tot,i 2.Q1.1'I' 3878 3,144 31.')ti,2 54 ~S I 40,7-01 I.5 ~15 2 5$ I 7 3.17.2 3970) E\.iuding Nigeria 3.347 4.315 3 b7- 5,2.n 213 7h.709 57 hSI 1.379 1.273 1,938 f~O- 1 7.1k4 19)44 L.:.%% -incornE iconomier, 2.720 36&47 2.950t 30._71 45.,3-4 33 958 1 24 0 18 3 I S2)8, 60t, L.68 I.Aq4 ECkluding Nigeria 679 918 723 822 1,468 880 10 89 67 77 166 198 Ethiopia 73 58 60 234 456 278 87 86 110 .. 30 20 Chad 118 163 124 9,907 13,793 10,597 19 29 77 .. 56 76 Zaire 2 2 1 40 35 38 0 3 5 .. . . Guinea-Bissau 146 207 163 208 563 231 20 23 42 .. 158 184 Malawi 65 60 65 2,206 3,315 2,427 85 52 52 167 173 25 Mozambique 145 316 171 3,561 6,748 3,740 201 175 147 68 124 117 Tanzania 128 175 144 89 88 96 7 63 142 .. 28 25 Burkina Faso 52 48 60 1,559 2,307 1,694 6 23 52 110 118 109 Madagascar 30 47 31 72 122 74 34 151 220 .. 19 18 Mali 3 3 3 8 6 8 0 1 3 .. . . Gambia, The 317 327 328 1,135 1,071 1,088 6 6 7 .. . . Burundi 14 4 16 162 213 173 2 15 57 .. 112 132 Zambia 103 283 117 155 205 174 7 3 4 .. . . Niger 177 293 254 1,550 4,475 2,746 256 13 36 119 15 20 Uganda 0 0 0 10 15 11 0 0 0 .. . . Sao Torn6and Principe 2 13 5 22 37 26 3 3 3 17 36 36 Somalia 22 26 21 776 922 826 8 20 60 .. . . Togo 190 228 185 524 1,786 763 0 0 0 .. 2 4 Rwanda 21 32 25 12 130 116 0 0 0 . . 6 Sierra Leone 20 31 26 1,059 1,273 1,117 8 17 145 . . 5 Benin 4 6 4 774 1,147 961 24 28 37 .. . . Central African Republic 235 200 260 864 1,386 930 14 38 36 29 406 371 Kenya 101 99 84 387 298 327 442 338 525 18 198 533 Sudan 1 2 1 74 103 81 0 0 0 .. . . Comoros 8 9 9 4 6 4 0 0 0 .. . . Lesotho 627 668 727 21,948 30,775 23,723 139 90 110 .. 36 51 Nigeria 10 17 12 3,390 2,874 3,537 0 7 3 .. 20 .. Ghana 20 32 19 6 6 6 0 0 0 .. . . Mauritania 2 3 2 292 361 297 0 0 0 . . 3 Liberia 0 0 0 66 87 69 0 0 0 .. . . Equatorial Guinea 33 45 37 599 642 641 0 0 0 .. 20 10 Guinea IS 231 10'4 b,387 8'J 4 r-.833 119c 474 76,0 1.171 IA489 2 071, NliddIe-income econornie, 7 1 3 26 17 21 0 0 0 .. . . Cape Verde 18 26 20 255 50 195 2 21 60 .. 46 72 Senegal 24 21 24 64 71 68 17 158 300 235 364 467 Zimbabwe 3 3 3 10 8 11 6 33 32 121 333 468 Swaziland 6 8 7 2,016 3,486 2,202 10 143 217 .. 91 168 C6te d'lvoire 5 4 6 547 699 550 0 0 0 71 20 36 Congo, People's Republic 48 109 53 1,417 2,099 1,659 58 84 115 .. 59 71 Cameroon 10 18 12 5 7 5 6 3 3 .. . . Botswana 1 1 1 10 16 9 0 0 0 675 512 745 Mauritius 0 0 0 382 373 376 0 0 0 .. 12 19 Gabon 0 0 0 0 0 0 0 0 0 .. . . Seychelles 64 40 67 1,655 2,120 1,736 20 33 33 68 51 30 Angola 0 0 0 0 0 0 0 0 0 .. . . Djibouti 1.405 2,364 2,088 37.4S9 5-4.4o,8 40 18 825 759 9h2 19C43 1."42 1 402 Six rnost populou~ c.onornies 384 .,32 397 885 985 .889 13 2 5,43 .. 123 1 3t Sahelian econorniv. 7441 821 S53 25.949 3h.0oti 2S.044 21 L 207 258 1 3Q 178 2017 Oil e\.porter'~ All low-income economies 26,401 21,356 25,028 162,583 243,067 251,383 11,912 15,416 22,815 . . . Total 16,947 14,639 19,338 61,328 94,747 111,719 5,612 7,294 9,679 . . . Excluding China and India 716 856 1,193 3,546 9,017 8,102 95 62 95 .. . . South Asia 697 839 1,153 3,491 8,847 7,938 89 62 94 .. . . Excluding India Table 8. Agriculture and food Value added in agriculture Cereal imports Food aid in cereals (millions of current dollars) (thousands of metric tons) (thousands of metric tons) 1970 1980 1987 1974 1986 1974/75 1985/86 Sub-Saharan Africa Total 15,676 t 60,937 t 45,197 t 4,108 t 8,084 t 910 t 3,107 t Excluding Nigeria 10,596 t 34,751 t 37,818 t 3,719 t 7,408 t 903 t 3,107 t Low-income economies 13,523 t 51,576 t 34,189 t 2,977 t 5,704 t 846 t 2,858 t Excluding Nigeria 8,443 t 25,391 t 26,810 t 2,587 t 5,028 t 839 t 2,858 t 1 Ethiopia 931 1,870 2,031 118 609 54 570 2 ChadY 142 388 418 37 71 20 29 3 Zaire b 585 2,961 1,857 343 415 1 56 4 Guinea-Bissau b 37 47 83 33 32 5 Malawi 119 393 411 17 11 0 10 6 Mozambique 1,129 747 62 406 34 344 7 Tanzania 473 2,030 1,882 431 188 148 55 8 Burkina Faso 126 496 626 99 164 28 22 9 Madagascarb 266 1,179 879 114 140 7 115 10 Malib 207 951 1,051 281 86 107 77 11 Gambia, The 16 64 60 13 70 12 Burundi 159 532 681 7 13 6 2 13 Zambiab 191 552 222 93 150 5 116 14 Nigerb 420 1,080 729 155 83 73 11 15 Uganda 929 1,216 2,710 36 26 16 SaoTom6andPrincipe 6 17 9 3 7 17 Somalia 167 415 632 42 343 111 156 18 Togob 85 312 354 6 86 11 6 19 Rwandab 136 533 784 3 11 19 16 20 Sierra Leone 108 334 402 72 152 10 43 21 Benin 121 498 726 7 77 9 8 22 Central African Republic 60 300 415 7 37 1 6 23 Kenya 484 1,951 2,139 15 274 2 107 24 Sudan 757 2,097 3,044 125 707 46 890 25 Comoros 71 19 19 26 Lesotho 23 90 57 48 94 14 32 27 Nigeria 5,080 26,186 7,379 389 677 7 0 28 Ghana b 1,030 2,575 2,568 177 223 33 64 29 Mauritania 58 202 310 115 206 48 30 30 Liberia 91 359 368 42 117 3 2 31 Equatorial Guinea .. 2 8 32 Guinea 748 659 63 203 49 92 Middle-income economies 2,159 t 9,342 t 13,996 t 1,131 t 2,380 t 64 t 249t 33 Cape Verde b 28 45 54 34 Senegalb 208 568 1,024 341 431 27 80 35 Zimbabwe 214 702 570 56 71 0 38 36 Swaziland 34 116 89 14 44 .. .. 37 Cote d'lvoire 462 2,830 2,728 172 675 4 0 38 Congo, People's Republic b 49 199 262 34 97 2 0 39 Cameroon 364 2,089 3,009 81 290 4 6 40 Botswanab 28 107 48 21 137 5 44 41 Mauritius 30 119 220 160 197 22 15 42 Gabonb 60 310 379 24 56 43 Seychelles .. 10 13 9 7 44 Angola 685 2,187 .. 149 280 0 67 45 Djibouti .. .. .. 25 40 Six most populous economies 8,311 t 37,094 t 18,332 t 1,421 t 2,870 t 258 t 1,678 t Sahelian economies 1,221 t 3,824 t 4,338 t 1,119 t 1,198 t 303 t 249 t Oil exporters 6,238 t 30,970 t 12,222 t 678 t 1,399 t 13 t 73 t All low-income economies Total 83,666 t 243,599 t 236,213 t 22,767 t 27,750 t 6,002 t 6,662 t Excluding China and India 28,413 t 92,719 t 80,006 t 11,472 t 11,807 t 4,420 t 5,871 t South Asia 32,198 t 76,544 t 88,877 t 9,404 t 2,833 t 4,522 t 2,562 t Excluding India 8,977 t 17,652 t 23,629 t 4,142 t 2,737 t 2,940 t 2,354 t Note: Summary measures for value added in agriculture include estimates for missing country data. The weighting process may result in discrepancies between sunmmed subgroup figures and overall totals. Summnary measures for the other indicators do not include estimates for missing country data. The summary measures for fertilizer consumption are weighted by total arable land area; the summary measures for food production per capita are weighted by population. Fertilizer consumption Irrigated land as Average index of food (hundreds of grams of plant a percentage of arable production per capita nutrient per hectare of arable land) and permanent cropland (1979-81=100) 1970 a 1986 1974-76 1984-86 1985-87 5ub-Saharan Africa 3-3 w85 I . 10( Total 42 ~s83 w . Excluding Nigeria 20 77w I. 100 Lo%%-income ecoriorrie~ 27w 7.0w 9sExcluding Nigri ____ ______ 4 66 1 1 89 Ethiogia 7 13 0 0 104 Chad 8 15 0 0 99 Zaire' 129 Guinea-Bissau b 52 131 1 1 87 Malawi 22 1 9 1 3 84 Mozambique 31 77 1 2 90 Tanzania 3 61 0 0 118 Burkina Faso 61 23 17 27 97 Madagascarb 31 166 6 9 101 Mali b 23 ..6 7 126 Gambia, The 5 23 4 5 100 Burundi 73 148 0 0 97 Zambia b 1 7 1 1 87 Niger b 14 ..0 0 123 Uganda .. .. .. .. ~~~ ~~~~~~~~~~68 S8o Tom4 and Principe 25 1'6 11i 17" 102 Somalia 3 78 0 0 89 Trogo b 3 20 0 0 86 Rwanda b 1 7 22 1 2 98 Sierra Leone 36 63 0 0 114 Benin 12 1 . .94 Central African Republic 238 518 2 2 93 Kenya 28 67 14 15 100 Sudan 0 0 95 Comoros 10 130 . 83 Lesotho 2 94 3 3 105 Nigeria 13 27 0 0 106 Ghana b 11 50 6 6 90 Mauritania 63 46 1 1 96 Liberia 84 . . .. Equatorial Guinea 19 4 4 4 93 Guinea 95w 123 ii . . 97 k" NI,dde-incorne ec:onomijes 5 5 99 Cape Verde b 17 40 3 3 105 Senegalb 446 571 3 6 91 Zimbabwe 396 ..34 34 104 Swaziland 74 83 1 1 105 C6te d'Ivoire 114 59 0 1 92 Congo, PeopesRpbi 34 75 0 0 94 CameroonUbl' epbi 15 5 0 0 75 Botswana b 2,095 2,364 14 16 103 Mauritius 22 . . 97 Gabon b Seychelles 33 34 . . 88" Angola ____ ___ ___ __ _ __ ___ ____ ___ ___ ___ ___ _- - D jibouti 17 % 89w 1,I00 w% Six most populous econouret? II w ~~47 w . 107 L% Sa,helian economies 11 w ~~~85 w . 103 Oil eXpoTtars All Low-income economies 161 w 706 w ..115 w Total 72 w 318 w ...106 w Excluding China and India 114 w 586 w . . 109 w South Asia 131 w 644 w . .104 w Excluding India a. Average for 1969-71. b. Value added in agriculture data are at purchaser values. Table 9. Stiructure of manufacturing Value added in ~ ~~Distribution of manufacturing value added (percent) mianufacturing (millions Food and Textiles of current dollars) agriculture and clothing 1970 1980 1986 1970 1980 1986 1970 1980 1986 Sub-Saharan Africa Total 3,349 t 18,729 t 1 6.2S8t Excluding Nigeria 2,806 t 9,515 t ILO.021 Low-income economnies 2,417 t 14,575 t 10,461 t Excluding Nigeria 1,874 t 5,361 t 5,265 t I Ethiopia 149 401 518 46 49 51 31 29 23 2Chad b 51 81 132 45 45 .. 40 40 3 Zar ~286 310 96 38 40 40 16 16 16 4 Guinea-Bissau b 17 .. 5 Malawi 51 58 17 12 6 Mozambique .. 242 51 13 7 Tanizania 116 500 227 36 23 28 28 33 26 8 Burkina Faso ..174 69 59 62 9 19 18 9 Madagascar~ 11 36 27 35 28 44 47 lOMalib 25 70 100 36 29 40 51 11 Gambia, The 2 8 8 35 46 2 2 12 Burundi 16 63 102 53 78 25 11 13 Zambiab 181 718 461 49 44 44 9 13 13 14 Niger b 30 94 142 .. 30 ..25 15 Uganda 158 72 152 40 ..20 16 SAo Tom6 and Principe 1 3 4 . 17 Somalia 26 29 48 88 46 46 6 21 21 l8 Togob 25 78 49 .. 47 13 19 Rwanda b 8 178 310 86 93 77 0 2 1 20 Sierra Leone 22 56 47 65 1 21 Benin 19 61 48 59 58 14 16 22 Central African Republic 12 54 59 .. 49 .. 22 23 Kenya 174 796 709 31 39 35 9 10 12 24 Sudan 140 424 537 39 22 22 34 25 25 25 Comoros . . 6.. . 26 Lesotho 3 18 26 11 12. 12 26 20 20 27 Nigeria 543 9,214 5,196 36 21 . 26 1 1 28 Ghanab 252 347 639 34 36 ..16 10 29 Mauritania 10 . ... . 30 Liberia 15 77 47 . . 31 Equatorial Guinea . . . . . 32 Guinea .. 38 105.. . Middle-income economies 957 t 4,178 t 6,061 t 33 Cape Verde b *. 4. . 34 Senegalb' 141 456 626 51 48 48 19 19 15 35 Zimbabwe 293 1,248 1,444 24 23 28 16& 17 16 36 Swaziland .. 102 73 3 41. 2 3 37 C6te d'Ivoire 149 926 1,191 27 35 ..16 15 38 Congo, People's Republic b 128 177 65 .. 47 4 .. 13 39 Cameroonb' 119 593 1,321 47 50 5o 16 13 13 40 Botswana b 5 38 67 .. 45 52 .. 17 12 41 Mauritius 26 147 284 75 36 35 6 30 39 42 Gabonb .. . .37 24 ..7 4 43 Seychelles .. 11 19 .. 71 79 ..2 2 44 Angola 80 131 226 . . 45 Djiibouti . . . . . Six most populous economies 1 .4071 11.6459 t 7.23 Sahelian economies 324 t 923 t 1,273 t Oil exporters 779 t 10,412 t 7,0)74t All low-income economies Total 42,814 t 163,452 t 163,354 t Excluding China and India 6,244 t 32,561 t 31,119t South Asia 9,398 t 33,414 t 46,406t Excluding India 2,439 t 5,981 t 8,094t Note. Summary measures include estimates for miissing country data. The weighting process may result in discrepancies between sunmmed subgroup figures and overall totals. Distribution of manufacturing value added (percent) Machinery and transport equipmnent Chemicals Other'a 1970 1980 1986 1970 1980 1986 1970 1980 1986 Sub-Saharan Africa Total Excluding Nigeria Lo%%-inicome economies Ex~cluding Nigeria 0 0 0 2 3 3 21 19 22 Ethiopia 0 0 15 15 C2hadpbl 7 8 ~ ~ ~~8 10 8 8 29" 29 29 Zaire b Guinea-Bissau b 3 4 10 5 20 20 Malawi 5 ..3 .28 Mozambique 5 8 8 4 6 726 30 3'1 Tanzania 2 3 2 1 1 1 19 17 17 Burkina Faso 6 5 3 7 5 23 20 15 Madagascar b 4 8 5 3 14 8 Mali b 0 0 .. 3 2 .. 60 49 Gambia, The 0 0 ..6 3 ..16 8 Burundi 5 9 910 9 9 27 25 25 ZaMbia b 2 16 ..28 ..Niger b 2 ..4 . ..34 Uganda Sao Tomn6 And Principe 0 0 0 1 2 2 6 31' 3'1 Somalia 8 32 ..Togo b 3 0 02 3 12 8 2 9 Rwanda b 4 .. 30 Sierra Leone 0 0 .. 6 5 21 21 Benin 11 18 Central African Republic 18 12 14 7 8 935 30 29 Kenya 3 1 1 5 21 21 19 31 31 Sudan Comoros 63 68 68 Lesotho 1 25 ..6 12 31 31 ..Nigeria 4 2 4 4 ..41 47 Ghana b Mauritania Liberia Equatorial Guinea Guinea MlidJle-income economies Cape Verde b 2 4 6 6 8 722 2'1 24 Senegalb 9 9 10 11 9 9 40 42 36 Zimbabwe 2 . . 11 ..60 43 ..Swaziland 10 10 ..5 6 ..42 34 ..C6te d'Ivoire 1 .. 3 7 .. 9 23 .. 29 Congo, People's Republic b 5 7 7 4 6 6 28 23 23 Cameroonb 2 4 .. 36 32 Botswana b 5 6 3 3 6 4 12" 23 19 Mauritius 6 9 ..6 4 ..44 58 ..Gabonb 0 0 .. 2 2 .. 25 16 Seychelles Angola ____ ~~~~~~~~~~~~~~~~~~~~~~~~~Djibouti Six most populous economies 5ahelian economies Oil ex~porters All low-income economies Total Excluding China and India South Asia Excluding India a. Includes unmalocable data; see the technical notes. b. Value added in manufacturing data are at purchaser values. Table 10. Manufacturing earnings and output Earnings per employee Gross output Total earnings as per employee Growth rates Index (1980=100) percentage of value added (I1980=1 00) 1973-80 1980-86 1973 1986 1973 1980 1986 1973 1986 Sub-Saharan Africa Total Excluding Nigeria Low-income economies Excluding Nigeria ¶ Ethiopia -7.3 -3.1 156 87 24 18 19 75 111 2 Chad .. . . 14 3 Zaire.. .... . 4 Guinea-Bissau.. * 5 Malawi . ..100 40 33 . 1 26" 6 Mozambique . ...4 1 7 Tanzania .. -11.5 180 47 37 33 34 136 90 8 Burkina Faso 11.7 2.6 .. 118 .. 23 20 .. 120 9 Madagascar -0.9 -12.9 113 ..42 38 ..83 10 Mali . ..160 ..49 28 ..78 11 Gambia, The 19.2 4.4 .. . . 25 ... 12 Burundi -9.0 ..186 ..25 14 ..91 13 Zambia -5.3 0.2 139 114 30 25 26 126 78 14 Niger .. . . . . 44 15 Uganda.. . 16 Soo Tom6 and Principe.. ... ... . 17 Somalia -6.1 -8.6 194 61 27 30 30 163 61 18 Togo 4.2 . . . . . 19 Rwanda . .. ..44 . 20 Sierra Leone.. ... . . 21 Benin .. . . . . 25 25 22 Central African Republic . .57 ..30 47 ..69 23 Kenya -2.5 -3.7 105 81 45 43 46 57 96 24 Sudan . ... .. . 25 Comoros . ... ... . 26 Lesotho -16.1 ..66 ..48 48 48 55 27 Nigeria -0.4 ..94 .22 22 ..99 28 Ghana -20.0 ..383 ..20 19 ..190 29 Mauritania . ... ... . 30 Liberia .. 1.6 .. 99 . . 31 Equatorial Guinea . ... .. . 32 Guinea .. . ... . Middle-income economiies 33 Cape Verde . ... .. . 34 Senegal -4.9 -0.2 .. 93 .. 43 44 .. 103 35 Zimbabwe 0.6 6.1 90 145 42 42 44 98 120 36 Swaziland 3.3 ..94 ..34 41 37 C6te d'Ivoire -1.3 ..107 ..28 30 ..63 38 Congo, People's Republic . .. . 44 . 39 Cameroon 5.6 12.6 .. . . 37 37 40 Botswana 2.6 -4.2 48 ... 51 41 Mauritius 2.9 -3.1 97 84 26 52 48 179 74 42 Gabon . ... .40 50 43 Seychelles 9.2 5.3 .. . . 29 44 Angola . . . ... . 45 Djibouti . . . ... . Six most populous economies Sahelian economies Oil exporters All low-income economies Total Excluding China and India South Asia Excluding India Table 11. Commercial energy Average annual growth rate (percent) Energy consumption Energy imports per capita (kilograms as a percentage of Energy production Energy consumption of oil equiivalent) merchandise exports 1965-73 1973-80 1980-86 1965-73 1973-80 1980-86 1965 1980 1986 1965 1980 1987 Sub-Saharan Africa Total 2Sq I', 1) 0 7 0 4 4 2 2 72~ I 10 lI", 7w lW Ill Excluding Nigeria 1IS S 4.5;w 5'; c) 7 iw I .Q 11 fl6 q- Iii f Ut 7 20 13 L ow - income economnies 31.8 I .F, %v -2 '4 7.9 4 8 w 2.4 w 5ii ~ nw 63. 7 w I 12 %% Excluding Nigeria 15.0w I4 4 w -3 8 8. 2 w % ) 0 -0.3 w 5I'6 , I5 t i'31% 7 2t 5 2, 0 w 1 Ethiopia 11.1 5.5 5.3 11.4 2.5 2.1 10 20 21 8 42 55 2 Chad .. . . . . . . . . 22 3 Zaire 4.8 14.7 2.7 6.0 1.4 0.'8 74 83 73 6 4 2 4 Guinea-Bissau .. . . 2.0 0.0 1.5 40 38 37 5 Malawi 31.1 9.9 5.0 8.3 7.5 -0.7 25 55 41 7 24 10 6 Mozambique 4.6 46.8 -50.1 9.3 -1.8 1.8 81 95 86 13 7 Tanzania 6.8 9.3 2.5 10.5 -3.8 2.0 37 39 35 10 48 56 8 Burkina Faso .. . . 8.0 14.8 0.2 7 21 18 11 37 7 9 Madagascar 8.6 -3.9 11.0 13.6 -4.8 1.2 34 45 40 8 25 36 10 Mali 80.5 11.2 9.4 4.6 8.4 2.3 14 25 23 16 36 32 11 Gambia, The .. . . 10.6 16.4 0.9 23 83 68 3 29 12 12 Burundi . 23.3 1 5.7" 5.6 9.5 10.4 5 14 21 1 1 41 8 13 Zambia 41.1 8.7 1.0 -0.1 2.5 -0.4 464 462 380 6 14 1 1 14 Niger . .. 17.6 14.7 11.8 3.3 8 38 42 9 27 9 15 Uganda 3.7 -4.5 2.7 8.4 -7.4 4.4 36 25 26 1 1 9 1 7 1 6 S5o Tom6 and Principe 12.0 15.6 -2.5 4.8 13.5 -0.3 48 140 113 17 Somalia .. . . 9.3 23.1 1.8 14 83 82 8 3 9 1 8 Togo -6.1 8.6 11.4 12.9 9.4 -3.2 27 76 52 4 26 8 1 9 Rwanda 15.7 0.4 8.2 11.4 18.5 4.9 8 37 42 1 0 1 7 53 20 Sierra Leone .. . . 4.6 6.4 -1.8 109 95 77 1 1 29 10 21 Benin . .. 11.4 19.7 1.1 5.4 21 45 46 10 5 97 22 Central African Republic 10.6 5.3 1.0 9.8 2.0 4.6 22 26 30 9 3 1 23 Kenya 9.9 16.5 10.4 7.1 1.7 -0.8 110 131 100 13 63 39 24 Sudan 14.7 13.9 0.6 12.1 -6.9 0.3 67 68 59 5 32 38 25 Comoros .. . . 8.1 1.6 1.1 21 46 40 26 Lesotho .. . . . . . . . . 10 52 1 27 Nigeria 33.4 0.8 -2.8 7.1 16.2 6.5 34 115 134 7 1 3 28 Ghana 43.4 4.3 -10.7 15.0 1.5 -4.9 76 187 132 6 24 14 29 Mauritania 1. . . 6.0 4.7 -0.2 48 138 114 2 16 8 30 Liberia 37.0 1.6 -3.2 16.1 2.5 -12.4 182 427 167 6 25 11 31 Equatorial Guinea 7.8 -0.2 0.0 13.8 2.3 5.6 28 56 72 32 Guinea 17.1 9.6 1.8 2.3 3.3 0.6 56 65 59 Middle- income econon-ies 19 8 w I 9 w 8=.7w% 5.3 w 3 4 w 1 9w 2tn 205 ~' b w 14 - 33 Cape Verde .. . . -5.3 -18.6 0.1 .. 355 304 34 Senegal .. . . 6.0 6.8 -2.3 79 150 116 8 55 24 35 Zimbabwe 1.1 -2.3 -0.9 10.7 0.8 0.4 441 626 516 7 17 6 36 Swaziland 13.2 4.0 0.5 7.5 5.9 0.9 198 339 292 37 C6te d'Ivoire 0.5 33.0 17.0 10.9 5.9 2.7 101 189 174 5 16 11, 38 Congo, People's Republic 39.5 5.7 10.1 10.9 5.7 5.0 90 208 225 10 7 5 39 Cameroon 1.2 43.4 20.2 6.5 8.0 6.8 67 114 143 6 12 1 40 Botswana 8.4 9.6 2.7 7.8 10.9 2.2 191 426 432 16 18 6 41 Mauritius 3.1 3.1 6.6 11.9 2.5 3.0 160 351 378 6 20 7 42 Gabon 23.9 1.4 0.2 23.0 8.3 3.0 153 1,174 1,125 3 0 1 43 Seychelles .. . . 47.8 17.5 9.3 43 1,118 1,451 19 114 90 44 Angola 47.1 -2.3 12.1 10.6 2.8 2.7 114 208 203 45 Djibouti .. . . -16.3 4.0 -0.4 .. 1,723 1,383 Six most populou5 econornies 32.4 w 1.0 w' .2.6 L% S. I w 6.5 t% 4.2 %s 4.4 5 83 S 7 w Sis t%i II i Sahelian economiesq 80 5 is16.0w% 13.2 w 2:5 ws 3.5 w -0.3w %v I w 63w r4 ~ w 3b w 17w Oil exporter., 32.5w1% 1.0 w 0 3 w~ 84 w~ 12.4 is 5 8 w 45 t 131 w 140 i% W i 2 it 2 i All low-income economies Total 12.9 w 6.3 w 4.8 w 9.3 w 7.1 w 5.5 w 128 w 250 w 301 w 6 w 17 w lOw Excluding China andlIndia 20.3 w 3.4 w -0.3 w 5.0 w 5.7 w 4.0 w 81 w 107 w 116 w 8 w 14 w 16 w South Asia 4.0 w 7.9 w 8.9 w 5.0 w 7.0 w 6.5 w 99 w 143 w 183 w 7 w 65 w 20 w Excluding India 7.2 w 8.6 w 8.4 w 4.2 w 6.3 w 6.9 w 95 w 89 w 112 w 6 w 51 w 25 w Note: Summary measures include estimates for missing country data. The summnary measures for energy production, energy consumption, and energy imnports as a percentage of merchandise exports are based on aggregate values in current dollars. The summary measures for energy consumption per capita are weighted by population. Table 12. Growth of merchandise trade Merchandise trade (millions of dollars) Exports Imports 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 4,891 t 51,729 t 30,258 t 5,182 t 46,147 t 33,596 t Excluding Nigeria 4,154 t 25.,761 t 22,893 t 4,411 t 29,505 t 25,780t Low-income economie. 3.55' t 3Q,462 t 16,802 t 3,887 t 34,340 t 21,998 t Excluding Nigeria 2,814 t 13,(94 t 9,437 t 3,117 t 17,698 t 14,182t 1 Ethiopia 113 425 396 150 721 1,150 2 Chad 27 72 .. 31 74 3 Zaire 336 2,507 1,594 321 1,117 1,149 4 Guinea-Bissau 11 .. 53 72 5 Malawi 38 285 264 57 440 281 6 Mozambique 108 281 89 173 800 486 7 Tanzania 175 537 347 197 1,227 1,150 8 Burkina Faso 18 161 198 46 446 540 9 Madagascar 92 402 310 138 676 386 10 Mali 16 205 216 43 439 447 11 Gambia, The 13 31 45 16 132 109 12 Burundi 16 65 84 32 167 206 13 Zambia 525 1,360 869 295 1,111 745 14 Niger 25 580 361 38 608 417 15 Uganda 176 345 320 161 293 477 16 Sao Tome and Principe .. 18 9 5 19 17 Somalia 34 133 94 56 461 452 18 Togo 35 476 297 47 638 417 19 Rwanda 89 134 121 108 277 352 20 Sierra Leone 18 207 129 34 425 132 21 Benin 12 223 168 18 331 418 22 Central African Republic 33 147 130 41 221 186 23 Kenya 228 1,389 961 282 2,590 1,755 24 Sudan 196 594 482 208 1,499 694 25 Comoros .. 11 18 .. 55 71 26 Lesotho 7 58 47 25 490 456 27 Nigeria 737 25,968 7,365 770 16,642 7,816 28 Ghana 292 1,257 1,056 447 1,129 836 29 Mauritania 58 196 428 44 363 474 30 Liberia 135 597 382 105 534 208 31 Equatorial Guinea 15 20 .. 63 115 32 Guinea .. 374 .. .. 299 Middle-income economies 1,339 t 12,667 t 13,456 t 1,294 t 11,807 t 11,598t 33 Cape Verde 9 3 .. 68 34 Senegal 129 477 645 164 1,038 1,174 35 Zimbabwe 399 1,423 1,358 335 1,448 1,055 36 Swaziland .. 368 311 .. 538 365 37 C6te d'Ivoire 277 3,142 2,982 236 3,015 2,168 38 Congo, People's Republic 38 980 884 65 500 570 39 Cameroon 119 1,447 1,714 135 1,538 2,168 40 Botswana 14 503 1,521 23 691 849 41 Mauritius 62 431 918 77 619 1,010 42 Gabon 100 2,173 1,286 62 686 836 43 Seychelles 2 21 22 2 99 114 44 Angola 200 1,682 1,787 195 1,353 1,080 45 Djibouti .. 12 25 .. 213 210 Six most populous economies 1,785 t 31,419 t 11,144 t 1,929 t 23,796 t 13,714 t Sahelian econornies 286 t 1,741 t 1,897 t 382 t 3,220 t 3,233 t Oil exporters 1,194 t 32,249 t 13,036 t 1,226 t 20,719 t 12,470 t All low-income economies Total 9,948 t 95,457 t 95,802 t 12,032 t 97,820 t 116,254 t Excluding China and India 6,027 t 68,860 t 43,712 t 7,200 t 64,180 t 53,877 t South Asia 2,910 t 13,368 t 19,616 t 4,521 t 25,039 t 30,871 t Excluding India 1,219 t 5,036 t 7,068 t 1,708 t 10,949 t 11,886 t Note: Summary measures do not include estimates for missing country data. The summary measures are calculated from aggregated 1980 constant dollar values. These values do not indude trade in services. Average annual growth rate a (percent) Terms of trade Exports Imports (1980=100) 1965-73 1973 -80 1980-87 1965-73 1973-80 1980-87 1985 1987 Sub-Saharan Africa 151w 0 2 w -1.3 w' 3,7 * .b -58 zl m - n i Thtal 57w 2Ow 1.7 w 3.4w 2.94 v -1 S w 92 m n 84 m Excluding Nigena 16.9w -0.6 w - 3.b w 3.4 w 8 1 w -bS w ul m 84 m Low-income economies 4.8 w O.b w -1 1 w 2 9w 1.4 w -2.5 w 0l m 814 m Excluding Nigeria 3.4 -5.2 -0.7 -0.5 4.1 7.6 99 83 Ethiopia Chad 10.6 5.9 -3.4 7.8 -9.1 -0.4 82 74 Zaire Guinea-Bissau 6.3 5.0 3.4 7.6 3.0 -6.1 73 67 Malawi Mozambique 4.2 -5.6 -7.4 4.6 -0.2 -0.5 90 89 Tanzania 2.0 10.9 5.6 8.7 5.6 2.0 80 74 Burkina Faso 6.2 -3.1 -3.1 1.5 4.5 -2.7 104 105 Madagascar 12.5 15.8 6.6 8.0 6.3 3.4 82 86 Mali 4.0 1.8 12.5 0.8 12.7 -2.4 97 83 Gambia, The 6.9 0.9 8.3 -2.3 14.1 2.4 100 75 Burundi 5.5 -0.3 -3.3 0.8 -7.5 -6.2 72 79 Zambia 4.7 31.0 4.8 3.8 20.0 -6.2 109 86 Niger 3.0 -9.5 2.7 -4.1 -2.9 3.0 96 67 Uganda Sao Tome and Principe 0.1 2.2 -7.7 2.3 9.7 -1.3 91 84 Somalia 6.2 14.5 -3.0 5.3 18.1 -4.6 90 86 Togo 11.4 5.9 2.5 5.2 13.2 5.4 102 87 Rwanda 0.5 -3.7 -2.1 -2.5 1.6 -15.1 100 93 Sierra Leone 16.3 1.4 -0.1 10.1 2.6 0.4 90 87 Benin -0.6 3.5 1.0 -4.8 5.5 -1.8 88 84 Central African Republic 4.4 -0.1 -0.6 4.0 3.5 -3.0 92 80 Kenya 3.9 -0.5 4.2 6.3 0.3 -8.7 90 84 Sudan Comoros 0.4 15.2 -8.4 9.1 12.7 -7.6 100 77 Lesotho 27.0 -1.0 -5.1 5.9 21.2 -14.0 90 54 Nigeria 1.0 -4.1 -1.6 -2.5 -2.8 -2.9 91 85 Ghana 12.5 -7.5 11.2 7.2 1.8 1.7 112 98 Mauritania 8.8 0.7 -2.7 1A 1.8 -10.2 91 93 Liberia Equatorial Guinea Guinea 7.2 w 3.8 w 4.5 w 4.7w 6.0 w -t! 1 w 94 m .84 m Mliddle-income economies Cape Verde 2.1 1.4 6.7 4.6 3.7 2.7 10O 96 Senegal 3.3 0.5 0.9 1.3 -3.3 -6.8 84 84 Zimbabwe Swaziland 7.4 3.3 3.4 6.4 9.6 -3.1 96 85 C6te d'Ivoire 5.3 7.9 3.9 -3.0 7.2 -0.7 94 65 Congo, People's Republic 6.8 6.2 9.7 6.9 10.0 3.4 92 66 Cameroon 20.4 18.7 16.2 20.6 8.3 0.5 98 106 Botswana 3.1 3.4 11.1 3.7 5.6 6.7 90 108 Mauritius 13.4 2.4 -2.1 4.0 6.5 3.0 90 64 Gabon 11.6 9.4 13.4 20.9 9.0 3.9 103 64 Seychelles Angola Djibouti 21.2 w -08 w 4.4 w 5.2 w 10.8 h -9.9 w 90 m 82 m SLX most populous econom,e- 48 w 6.6 w 4.5 w 5.6 w b.5 wv 0.8 w 99 m 8h m Sahelian economies 24.5w 0.4 w -3.2 w 5.3 w 18 5 w -10.7 w Q1 m 64 m Oil exporters All low-income economies 9.6 w 2.3 w 3.5 w 1.1 w 8.0 w 2.3 w 92 m 84 m Total 12.3 w 0.8 w -0.1 w 1.5 w 8.2 w -3.9 w 91 m 84 m Excluding China and India -0.7 w 5.8 w 4.8 w -2.8 w 6.0 w 3.7 w 95 m 97m South Asia 4.2 w 6.0 w 6.5 w -5.3 w 7.5 w 2.4 w 91 m 96 m Excluding India a. See the technical notes. Table 13. Structure of merchandise imports (percentage share) Other Food Fuels primary commodities 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 14w 16w 12w 6w 12w lOw 4w 3w 4w Excluding Nigeria 15 w 15 w 13w 6w 18w 12w 4w 4w 4w Low-income econornies 13w 16w lOw 6w lOw lOw 4w 3w 3w Excluding Nigeria 14w 14w llw 6w 19w 14w 4w 4w 4w 1 Ethiopia 6 7 4 6 25 18 6 4 3 2 Chad 13 19 3 3 Zaire 18 19 13 7 8 3 5 5 5 4 Guinea-Bissau 5 Malawi 15 7 5 5 15 9 3 3 3 6 Mozambique 17 8 .. 7 7 Tanzania 10 13 6 9 21 17 2 3 2 8 Burkina Faso 23 19 16 4 13 3 14 4 5 9 Madagascar 19 8 9 5 15 29 2 4 2 10 Mali 20 16 12 6 17 16 5 2 2 11 Gambia, The 19 11 43 3 7 4 7 3 14 12 Burundi 16 14 12 6 16 5 9 4 5 13 Zambia 9 8 7 10 18 12 3 2 1 14 Niger 12 13 18 6 26 6 6 4 11 15 Uganda 7 5 5 1 23 9 3 2 2 16 Sao Tom6 and Principe 17 Somalia 31 31 13 5 1 3 8 6 6 18 Togo 15 19 20 3 20 6 5 3 6 19 Rwanda 12 9 12 7 8 15 5 8 7 20 Sierra Leone 17 19 17 9 14 9 3 5 4 21 Benin 18 19 11 6 4 34 7 8 2 22 Central African Republic 13 20 13 7 2 1 2 4 4 23 Kenya 10 8 9 11 34 21 3 3 4 24 Sudan 23 26 17 5 13 22 4 2 3 25 Comoros 26 Lesotho 49 17 -7 3 6 -1 7 14 -8 27 Nigeria 9 17 8 6 2 3 3 3 3 28 Ghana 12 9 6 4 27 17 3 4 3 29 Mauritania 9 29 26 4 9 10 1 3 2 30 Liberia 16 18 19 8 28 21 3 3 3 31 Equatorial Guinea 32 Guinea .. Middle-income econornies 19w 16w 18w 6w 15w 9w 3w 4w 5w 33 Cape Verde .. 34 Senegal 36 24 32 6 25 16 4 2 2 35 Zimbabwe 13 15 10 8 17 8 3 3 3 36 Swaziland .. .. 37 C6te d'Ivoire 18 17 19 6 17 15 3 3 4 38 Congo, People's Republic 15 18 16 6 14 7 1 3 3 39 Cameroon 11 8 13 5 12 1 4 2 3 40 Botswana 9 8 9 10 13 7 18 17 16 41 Mauritius 34 26 19 5 14 7 3 5 5 42 Gabon 16 19 18 5 1 1 2 2 3 43 Seychelles 36 20 14 13 24 18 3 3 1 44 Angola .. .. 45 Djibouti .. .. .. .. Six most populous economies 12w 16w 9w 7w 8w lO w 4w 3w 3w Sahelian economies 25w 20w 23w 5w 20w lOw 5w 3w 4w Oilexporters low 16w lOw 6w 3w 3w 3w 3w 3w All low-income economies Total 22w 14w 7w 5w 17w 9w lOw 8w 7w Excluding China and India 17w 15w 9w 7w 16w 14w 4w 4w 4w SouthAsia 29w 12w lOw 4w 35w 13w 11w 7w 7w Excluding India 28w 16w 15w 4w 23w 15w 6w 6w 6w Note: Summary measures include estimates for missing country data. Summary measures are weighted by total merchandise imports of individual countries in current dollars. Machinery and transport equipment Other manufactures 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa 30 h 31 32 4; w 9 h 41 \ Total 29 w .0 %w 32 zv 44 3 5 * 3Q w E\wluding Nigena 30 tv 31 l' 34 w 434 w 39 iv 41 * Lo% -income economie, 30 30 h 34 %V 4V4 %% 33"' 37 * E%cluding Nigeria 37 28 37 44 36 39 Ethiopia 23 42 .. .. Chad 33 32 37 37 36 42 Zaire Guinea-Bissau 21 34 33 57 41 49 Malawi 24 45 .. Mozambique 34 35 44 45 28 31 Tanzania 19 29 34 40 34 42 Burkina Faso 25 34 30 48 39 30 Madagascar 23 39 44 47 26 27 Mali 19 19 10 52 60 30 Gambia, The 15 20 23 55 47 55 Burundi 33 35 39 45 37 41 Zambia 21 27 31 55 29 20 Niger 38 39 46 51 32 38 Uganda Sao Tom6 and Principe 24 35 47 33 27 32 Somalia 31 20 28 45 38 40 Togo 28 30 30 50 45 35 Rwanda 30 18 20 41 44 49 Sierra Leone 17 21 16 53 49 37 Benin 29 34 39 49 41 43 Central African Republic 34 28 34 42 28 33 Kenya 21 29 26 47 31 32 Sudan Comoros 6 14 26 35 49 90 Lesotho 34 33 36 48 45 50 Nigeria 33 30 36 48 31 37 Ghana 56 36 35 30 25 27 Mauritania 34 28 29 39 23 29 Liberia Equatorial Guinea Guinea 27 w 28 30 45 w 37 w 43w Mliddle-jncome economie4 Cape Verde 15 23 16 38 25 33 Senegal 31 30 36 46 35 43 Zimbabwe Swaziland 28 28 28 46 35 35 C6te d'Ivoire 34 23 27 44 42 46 Congo, People's Republic 28 34 36 51 44 46 Cameroon 18 17 20 46 45 48 Botswana 16 16 20 43 39 48 Mauritius 38 37 38 40 41 39 Gabon 16 29 25 33 24 41 Seychelles Angola Djibouti 33 %v 32 w 36 h 45 ' 41 w 42 w Six most populous economies IQ iv 28 tv 27 w 39 i^ 29 %% 31 %v Sahelian economres 33 w 33 w 34 v 47w w 45 w 46w Oil exportern All low-income economies 28 w 27 w 34 w 34 w 34 w 43 w Total 29 w 30 w 33 w 40 w 35 w 37w Excluding China and India 32 w 19 w 26 w 26 w 28 w 43 w South Asia 26 w 26 w 30 w 33 w 30 w 35 w Excluding India Table 14. Structure of merchandise exports (percentage share) Fuels, minerals, Other prinary Machinery and and metals commodities transport equipment 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 34w 71 w 47w 58w 25w 39w 1 w 1 w 2 w ExcludingNigeria 36w 43w 33w 60 w 49 w 52w 1 w 1 w 2w Low-income economies 37 w 80 w 61 w 55 w 18 w 33 w 0 w 0 w 1 w ExcludingNigeria 39 w 44w 38w 54w 50w 54w Ow 1 w 1 w 1 Ethiopia 1 7 3 98 92 96 1 0 0 2 Chad 4 93 0 3 Zaire 72 59 63 20 35 31 0 1 1 4 Guinea-Bissau 5 Malawi 0 0 0 99 89 84 0 4 5 6 Mozambique 14 83 0 7 Tanzania 4 10 7 83 74 75 0 1 3 8 Burkina Faso 1 0 0 94 89 98 1 2 1 9 Madagascar 4 9 11 90 85 78 1 2 2 10 Mali 1 0 0 96 83 71 1 0 1 11 Gambia, The 0 1 1 100 96 92 0 0 0 12 Burundi 1 1 1 94 92 85 0 0 0 13 Zambia 97 98 93 3 1 4 0 0 1 14 Niger 0 86 86 95 12 13 1 1 0 15 Uganda 14 3 4 86 97 96 0 0 0 16 Sao Tome and Principe 17 Somalia 6 5 1 80 94 98 4 0 0 18 Togo 49 76 66 48 16 26 1 1 1 19 Rwanda 40 36 9 60 63 90 0 0 0 20 Sierra Leone 25 13 22 14 31 19 0 0 1 21 Benin 1 51 42 94 45 38 2 1 6 22 Central African Republic 1 0 0 45 74 66 0 0 0 23 Kenya 13 34 21 81 50 62 0 3 2 24 Sudan 1 1 14 98 96 79 1 2 3 25 Comoros 26 Lesotho 0 0 0 91 76 64 0 0 0 27 Nigeria 32 96 91 65 3 8 0 0 0 28 Ghana 13 31 37 85 67 60 1 0 0 29 Mauritania 94 76 31 5 23 66 1 0 0 30 Liberia 72 59 57 25 38 41 1 1 0 31 Equatorial Guinea 32 Guinea NMiddle-income economies 25 w 41 w 29 w 0 .w 48 %, 51 z. 1 w 2 w 3 w 33 Cape Verde 34 Senegal 9 39 25 88 46 60 1 3 4 35 Zimbabwe 45 22 17 40 49 43 1 2 3 36 Swaziland 37 C6te d'lvoire 2 6 4 93 84 86 1 2 2 38 Congo, People's Republic 5 88 67 32 6 17 2 0 1 39 Cameroon 17 37 51 77 60 40 3 1 5 40 Botswana 18 21 20 78 9 17 2 2 3 41 Mauritius 0 0 0 100 71 59 0 4 2 42 Gabon 50 91 63 39 7 26 1 0 2 43 Seychelles 12 74 80 85 23 16 0 1 5 44 Angola 45 Djibouti Six mosl populous economies 29 w 86 w 72 w n 6n 12 24 w 0h O Vw I w Sahelian economies 24 w 50 w 31 w i's 41 * 5. *v I h I * 2w Oil exporters 28 w 93 w 73 w 57w 7w 14 w 0 w 0 w 1 w All low-income economies Total 22 w 58 w 29 w 53 w 23 w 22 w 1 w 2 w 4 w Excluding China and India 30 w 73 w 48 w 58 w 22 w 27w 1 w 1 w 3 w South Asia 6 w 7 w 8 w 57 w 38 w 28 w 1 w 5 w 8 w ExcludingIndia 2w 8w 5w 74w 51 w 37w 0w 2w 5w Note: Summnary measures indude estimates for missing country data. The summary measures are weighted by total merchandise exports of individual countries in current dollars. (Textiles Other manufactures and clothing)'a 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa o iW 4 iw 1t, wv 11 v I iv Total * ii it ~1 4 it(itI% E\clud ing Nigeria 5 iv 2 7v 5 i 0 i~0 it Low-income economies C b C Lt iv II I Lt' Excluding Nigeria o i 0 0 0 Ethiopia 4 . ..0 . ..Chad 8 6 5 0 0 Zaire Guinea-Bissau 1 7. 11 0 5 ..Malawi 2 ..I .. . Mozambique 13 14 15 0 8 ..Tanzania 4 8 1 2 1 Burkina Faso 4 4 9 1 2 3 Madagascar 2 16 28 1 1 ..Mali 0 4 7 1. I . Gambia, The 6 7 15 0 0 Burundi o i 2 0 0 ..Zambia 4 2 1 1 1 Niger 1 0 0 0 0 ..Uganda SSo Tomr6 and Principe 10 1 1 0 0 ..Somalia 3 6 7 0 ¶ . Togo 1 1 1 0 0 ..Rwanda 60 56 58 0 0 ..Sierra Leone 3 3 15 0 0 ..Benin 54 26 33 0 . ..Central African Republic 6 12 15 0 1 ..Kenya 0 1 4 0 1 ..Sudan -. .. .. ~~~~~~~~Comoros 9 24 36 ...Lesotho 2 0 1 0 .Nigeria 2 2 2 0 0 -.Ghana 0 2 2 0 0 ..Mauritania 3 2 1 0 0 Liberia Equatorial Guinea Guinea lOwk 12 iv IQ ti Nliddle-inconime economies Cape Verde 2 12 11 1 1 .. ~~~~~~~~~Senegal 15 26 37 6 0 Zimbabwe Swaziland 4 7 71 1 2 C6te d'Ivoire 61 6 15 0 U 0 Congo, People's Republic 2 3 4 0 1 1 Cameroon 2 68 61 . - Botswana 0 25 38 0 19 Mauritius 10 1 8 0 ..G abon 3 3 0 .. 0 0 Seychelles Angola Djibouti 5 iv 2 w 4 wi 0t .St\ most populou4 economies 2 i 7 iv iv%. i Sahelian economies 5i' I i' 3 it0 w 0 w Ohi e\vporters All low-income economies 23 w 17 45 11 w 5 w 7 w Total 8 w 5 21 4 w 3 w 9 w Excluding China and India 36 w 49 56 27 w 24 w 23 w South Asia 20 w 39 52 15w 31 w 37 w Excluding India a. Textiles and dlothing is a subgroup of other manufactutres. Table 15. Major agricultural exports Volume Volume growth Percentage of total (thousands of metric tons) (percent) merchandise exports value 1965 1980 1987 1965-73 1973-80 1980-87 1965 1980 1987 Ethiopia Coffee 82 76 73 0.2 2.9 1.2 66.5 64.1 50.5 Sesame seed 22 8 7 17.3 -37.8 -8.7 3.6 1.6 1.2 Sugar (.) 11 11 173.3 -30.5 11.5 0.0 0.5 0.5 Chad Cotton 38 35 30 0.1 0.9 2.2 78.1 54.2 Oilseed cake and meal 1 2 0 -8.5 19.4 4.6 0.2 0.4 Zaire Cocoa 5 4 5 3.4 -3.8 3.5 0.5 0.3 0.5 Coffee 23 74 99 13.8 -0.1 6.7 4.3 6.6 10.9 Palm kernel oil 33 19 10 1.8 -10.7 -5.8 2.7 0.4 0.2 Guinea-Bissau Cotton 0 0 (.) 0.0 0.0 0.0 Groundnuts (shelled) 15 7 5 -3.0 -2.0 -7.5 .. 25.7 Palm kernels 9 6 5 -10.2 7.7 -6.5 .. 17.6 Malawi Tea 13 31 33 5.7 4.5 2.3 27.8 12.9 10.5 Tobacco 17 61 61 5.5 13.7 3.9 37.6 44.2 64.2 Sugar (.) 92 66 89.4 24.0 -4.0 .. 16.3 8.4 Mozambique Cotton 31 6 20 4.0 -21.5 5.8 17.8 2.9 Groundnut oil 9 0 3 -3.5 0.0 0.0 3.1 Sugar 95 64 25 8.5 -12.7 -15.8 9.4 8.8 Tanzania Coffee 28 43 47 4.5 -2.6 -1.0 13.7 26.8 39.1 Cotton 56 31 41 -1.3 -6.5 -1.6 19.5 9.1 12.4 Tobacco 3 8 7 11.2 -1.5 -5.3 1.8 2.4 4.6 Burkina Faso Cotton 2 28 49 21.7 14.9 10.6 5.8 24.6 21.3 Groundnuts (shelled) 4 1 4 8.3 -46.0 -47.4 3.6 0.3 0.5 Sesame seed 3 4 4 8.5 0.9 5.3 2.0 1.3 0.5 Madagascar Coffee 50 69 46 11.0 6.0 7.4 31.4 53.3 31.2 Cotton (.) 1 6 0.0 0.0 12.7 0.2 0.4 1.8 Sugar 36 26 52 -6.4 -3.4 0.0 5.1 2.9 6.0 Mali Cotton 9 53 41 16.5 16.5 2.2 16.6 38.5 21.3 Groundnut oil 0 5 1 141.6 22.7 -25.7 .. 1.7 0.3 Oilseed cake and meal 3 15 12 26.0 2.5 -3.8 3.6 1.0 0.8 Gambia Groundnut oil 16 10 10 -1.7 -9.4 -3.3 14.6 23.2 20.6 Groundnuts (shelled) 34 44 23 -0.3 -0.6 -6.8 51.8 57.7 40.0 Oilseed cake and meal 16 13 13 -4.1 -7.5 0.5 14.6 8.2 2.3 Burundi Coffee 13 19 27 7.0 -1.0 5.7 62.7 89.5 41.8 Cotton 3 1 3 -0.4 -5.2 -7.5 14.1 2.0 7.0 Tea 0 1 4 58.6 11.2 16.6 .. 2.3 3.6 Zambia Coffee 0 0 1 0.0 0.0 0.0 .. .. 0.3 Tobacco 10 3 6 -6.2 -15.3 13.4 1.3 0.3 1.4 Sugar 2 0 24 0.0 0.0 145.3 0.1 .. 0.8 Niger Cotton 2 (.) 2 -7.8 13.9 0.0 4.2 0.1 0.6 Oilseed cake and meal 7 1 1 14.1 -27.5 -1.1 1.5 0.0 0.0 Uganda Coffee 158 110 150 4.3 -9.6 2.6 48.4 98.2 136.8 Cotton 69 2 4 -0.4 -36.3 16.7 26.7 1.2 2.0 Tea 7 1 3 13.9 -37.3 28.2 3.9 0.1 1.3 Note: (.) indicates amount less than 500 metric tons. Volume Volume growth Percentage of total (thousands of metric tons) (percent) merchandise exports value 1965 1980 1987 1965-73 1973-80 1980-87 1965 1980 1987 Sao Tome and Principe Cocoa 9 7 3 2.3 -4.2 -14.4 .. 97.2 Coffee (.) (. (.) -12.9 -11.1 -4.1 .. 0.3 Palm kernels 4 (.) 0 -8.3 -18.2 0.0 .. 0.8 Somalia Bananas 99 50 55 3.5 -12.4 3.3 44.5 8.2 13.6 Togo Cocoa 17 15 12 5.4 -2.5 -4.1 19.5 8.1 8.8 Coffee 11 9 9 2.3 -3.2 -2.1 15.8 5.0 8.1 Cotton 2 5 30 -6.6 15.5 27.4 3.3 1.7 12.5 Rwanda Coffee 10 22 46 7.1 1.5 9.4 61.3 32.8 69.2 Tea (.l 7 9 34.8 12.5 7.1 1.9 9.6 9.2 Sierra Leone Cocoa 3 9 9 9.9 3.5 0.8 1.4 11.0 18.8 Coffee 4 10 6 16.8 6.6 -6.3 2.1 13.5 9.2 Tobacco 0 0 (.) 0.0 0.0 46.3 .. .. 1.9 Benin Cocoa 0 5 6 0.0 -6.9 0.0 .. 6.4 9.0 Cotton 1 8 42 39.5 -15.1 34.2 3.5 5.2 40.5 Palm oil 13 13 12 -4.0 6.3 7.7 16.7 2.9 2.7 Central African Republic Coffee 8 11 12 -3.9 4.7 -0.1 12.3 21.5 11.2 Cotton 9 14 10 5.3 -2.2 1.8 15.2 12.3 6.5 Tobacco (.) 1 1 8.1 3.6 -12.5 0.6 0.7 1.0 Kenya Coffee 39 80 100 6.3 2.6 4.4 17.4 20.9 24.1 Maize (.) (.) 280 22.3 -56.3 244.4 0.0 0.0 2.6 Tea 23 84 150 11.4 10.1 9.5 10.0 12.3 22.0 Sudan Cotton 106 132 174 9.7 -1.3 10.8 45.7 39.7 38.4 Oilseed cake and meal 166 212 106 0.3 8.3 -17.0 5.5 5.1 3.2 Sesame seed 71 57 60 3.9 -13.9 -4.6 7.0 8.4 9.3 Comoros Lesotho Wheat 3 0 0 1.5 .. .. 0.9 Nigeria Cocoa 306 154 97 0.3 -7.5 -6.3 16.2 1.2 2.2 Palm kernels 422 96 84 -8.7 -10.5 -0.6 10.1 0.1 0.1 Rubber 69 15 48 4.6 -15.6 13.2 4.2 0.1 0.5 Ghana Bananas I (.) (.) -47.0 .. .. 0.0 0.0 0.0 Cocoa 554 223 224 -1.6 -9.4 -1.0 70.4 58.9 46.4 Coffee 2 (.) 1 2.8 -32.2 7.8 0.3 0.0 0.1 Mauritania Liberia Cocoa 1 4 3 14.2 4.5 -4.2 0.2 1.8 1.6 Coffee 1 4 3 3.8 14.9 -8.0 1.3 5.5 2.5 Rubber 53 77 84 6.9 -2.2 2.7 20.7 17.1 22.1 Equatorial Guinea Cocoa 28 7 6 -13.6 -4.0 -2.8 .. 74.7 Coffee 7 (.) 1 -2.3 -41.7 21.0 .. 4.7 Guinea Cocoa 2 4 4 0.0 11.5 0.0 .. 1.9 Coffee 11 3 5 -5.7 -8.5 -3.1 .. 2.5 Oilseed cake and meal 0 0 10 0.0 0.0 114.9 .. .. Cape Verde Bananas 3 1 1 -6.2 5.4 1.9 .. 5.5 Table 15. Major agricultural exports -continued Volume Volume growth Percentage of total (thousands of metric tons) (percent) merchandise exports value 1965 1980 1987 1965-73 1973-80 1980-87 1965 1980 1987 Senegal Cotton 0 6 5 73.5 6.2 5.7 .. 2.1 0.9 Groundnut oil 143 74 105 -4.9 -2.8 5.4 41.6 12.8 7.1 Oilseed cake and meal 197 104 158 -0.6 -4.6 4.5 8.1 4.6 2.8 Zimbabwe Cotton 1 54 66 55.9 5.2 5.5 0.1 6.3 5.9 Tobacco 123 93 100 1.9 1.6 -0.4 33.5 12.8 21.3 Sugar 254 169 283 2.5 3.2 6.6 5.0 5.2 4.1 Swaziland Cotton 1 4 5 10.4 11.0 -3.9 .. 1.9 1.5 Tobacco 0 (.) (.) 14.8 -0.5 -18.5 .. 0.1 0.0 Sugar 100 300 436 6.8 7.6 5.8 .. 44.9 35.1 C6te d' Ivoire Cocoa 140 338 543 4.6 6.1 6.2 17.6 29.9 36.6 Coffee 186 210 163 1.7 -1.1 -2.9 36.6 22.0 13.7 Cotton 2 39 68 26.3 14.1 10.7 0.2 2.2 2.5 Congo Cocoa 1 2 1 7.6 2.0 -7.2 0.7 0.6 0.3 Coffee (.) 2 1 2.9 21.0 -11.3 0.8 0.6 0.2 Sugar 7 (.) 24 7.3 -58.9 85.6 1.2 0.0 1.0 Cameroon Cocoa 94 106 133 1.7 -1.7 3.1 31.1 20.1 13.9 Coffee 48 92 50 3.3 -0.2 -6.4 26.7 21.0 7.5 Cotton 16 26 21 -1.9 11.5 -4.4 7.6 2.9 1.6 Botswana Cotton 2 1 0 0.0 0.0 0.0 2.2 0.1 Groundnuts (shelled) (.) (.) (-) 0.0 0.0 0.0 0.0 0.0 0.0 Mauritius Maize (.) (.) 5 0.0 0.0 0.0 0.0 0.0 0.1 Tea 1 4 7 18.0 2.8 10.6 2.0 1.3 0.8 Sugar 569 618 657 1.9 -0.6 2.1 96.0 65.4 36.6 Gabon Cocoa 3 4 2 1.5 2.9 -12.4 1.0 0.5 0.3 Coffee 1 1 1 -15.2 15.9 2.5 0.4 0.1 0.1 Palm oil 1 0 2 -15.3 0.0 0.0 0.3 .. 0.0 Seychelles Angola Coffee 159 47 11 2.4 -21.9 -19.0 46.7 9.7 Cotton 5 0 1 25.0 -11.9 0.0 1.5 .. Tobacco 2 2 0 3.0 -15.5 5.9 0.7 0.2 Djibouti Note: (.) indicates amount less than 500 metric tons. Table 16. Origin and destination of merchandise exports Destination of merchandise exports (percentage of total) Merchandise exports High-income Middle- and low- Nonreporting (millions of dollars) economies i.ncome economi es nonmemnber economies 1965 1980 1987 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 4.91'.t 5L.729 t31''.4k3 t SI wv 83 w . 18 w 16 Excluding Nigeria 4 173 t 259761 t 22.%8 79" 71 w . 21 w 27 wv Lowv-income economies 3,595 t 39.Ob2 t 17.3321 81) 89 I . 9 14 Excluding Nigeria 2.858 t 13.094 t 9.8571 I bti w . . 31 wv . I Ethiopia 113 425 402 84 64 74 13 25 17 3 11 8 2 Chad 27 72 .. 65 57 .. 35 43 . 3 Zaire 336 2,507 1,594 93 45 .. 7 55 .. 0 4 Guinea-Bissau .. 11 . .. 51 . .. 49 . 5 Malawi 38 285 264 7'1 75 .. 29 25 .. 0 6 Mozambique 108 281 .. 25 62 .. 71 38 .. 4 7 Tanzania 175 537 348 76 60 .. 24 37 .. 0 3 8 Burkina Faso 18 161 202 17 45 .. 83 55 . 9 Madagascar 92 402 310 85 78 84 15 21 13 0 1 3 lO Mali 16 205 216 7 68 .. 89 32 .. 4 11 Gambia, The 13 31 35 90 92 .. 10 8 .. 5 12 Burundi 16 65 139 24 74 .. 76 26 . 13 Zamnbia 525 1,360 869 .. . .. . .. . 14 Niger 25 580 361 61 80 .. 39 20 .. 0 IS Uganda 176 345 221 74 89 .. 26 11 .. 0 16 Sgo Tom6 and Principe .. 18 . .. 90 . .. 10 . 17 Somalia 34 133 118 43 92 .. 57 8 .. 0 0 l8 Togo 35 476 272 92 60 .. 6 40 .. 2 0 19 Rwanda 12 134 133 96 86 .. 4 14 . 20 Sierra Leone 88 207 120 92 95 .. 8 5 .. 0 21lBenin 18 223 121 88 74 1. 2 26 .. 0 22 Central African Republic 33 147 154 94 93 .. 6 7 .. 0 23 Kenya 228 1,389 985 71 51 .. 28 49 .. 1 0 24 Sudan 196 594 482 61 66 .. 31 31 .. 9 2 25 Comoros .. 11 .. 87 91 .. 13 9 . 26 Lesotho 7 58 28 .. . .. . .. . 27 Nigeria 737 25,968 7,475 91 93 .. 7 7 .. 28 Ghana 292 1,257 1,056 75 76 .. 11 7 .. 14 18 29 Mauritania 58 196 428 96 86 .. 4 14 .. 0 30 Liberia 135 597 385 98 93 92 2 7 8 .. 0 0 31 Equatorial Guinea is15 .. . 74 . .. 26 . 32 Guinea .. 374 . .. 91 . .. 9 . hliddle-incorrit? conorru~ 1.314 I 12.,67 1 13.086 1 64w 77w . 23w . .. 1Iw 33 Cape Verde .. 9 .. 4 19 2 95 79 98 0 2 0 34Senegal 128 477 723 92 50 .. 7 49 .. 0 0 35 Zimbabwe 399 1,423 1,358 51 79 .. 47 21 .. 36 Swaziland .. 368 311 .. . .. . .. . 37 C6te d'lvoire 277 3,142 2,961 85 79 72 14 2'1 24 1 0 38 Congo, People's Republic 38 980 884 90 80 94 9 20 4 1 0 39 Camneroon 119 1,447 1,714 93 94 77 7 5 22 0 0 2 40 Botswana 14 503 1,010 .. . . . .. . 41 Mauritius 62 431 918 95 96 .. 5 4 . .. 0 42 Gabon . 100 2,173 1,285 91 65 .. 8 35 .. 0 0 43 Seychelles 2 21 24 43 19 15 57 81 85 . .. 0 44 Angola 200 1,682 .. 55 75 .. 45 21 .. 0 3 45 Djibouti .. 12 . .. 28 . .. 72 . Si'. most populous economiec 1.7835 t 31.419 t 11.285t 82 w 8,6 w IQ9 14 . Sahelian economies 2h9 r 1,741 t 2.123 t 68 wv . 32w OI ex~porters 1,1bo t 32 2491t 13.272 t 87 % 90w 9 9w 10 % All low-income economies Total 10,202 t 95,465 t 97,357 t 68 w 81 . . 16 w Excluding China and India 6,263 t 68,868 t 45,029 t 71 w 84 .. 27 w 15 w South Asia 3,171 t 13,368 t 19,621 t 57 w 56 . 32 w 31 w 11 w 13 w Excluding India 1,549 t 5,036 t 7,073 t 53 w 53 71 41 w 44w 26w . 4w 4w Note: Sununary measures include estimates for miissing country data. The weighting process may result in discrepancies between summed subgroup figures and overall totals. Summaary measure percentages are weighted by merchandise exports of individual countries in current dollars. Table 17. Origin and destination of manufactured exports Destination of manufactured exports (percentage of total) Manufactured exports High-income Middle- and low- Nonre porting (millions of dollars) economies income economies nonmember economies 1965 1980 1987 1965 1980 1987 1965 1980 1987 1965 1980 1987 Sub-Saharan Africa Total 332 t 2,556 t 3,629 t 48 w% 52 w Excluding Nigeria 315 t 2,426 t 3,509 t 46 w 54 w Low-income economies 194 t 1,027 t '41231 33 w67 w Excluding Nigeria 177 t 897 t Is I), t 2 71 w IlEthiopia 1 1 4 87 52 67 13 40 13 0 8 21 2 Chad 1 ..6 21 .. 94 79 . 3 Zaire 28 158 94 93 15 7 85 0 4 Guinea-Bissau ..47 ..53 5 Malawi 0 31 42 3 19 97 81 I 6 Mozambique 3 27 31 68 69 5 7 Tanzania 23 83 63 93 59 .. 7 41 0 0 8 Burkina Faso 1 17 4 2 27 98 73 9 Madagascar 5 24 34 81 93 79 19 7 21 0 0 lO Mali 0 34 61 14 9 78 91 8 1 1 Gambia, The 0 1 3 98 51 2 49 12 Burundi 1 4 20 0 5 100 95 . 13 Zambia 1 13 23 14 Niger 1 12 6 43 31 57 69 15 Uganda 1 1 1 7 53 93 47 0 16 SAo Tome and Principe . ..80 20 17 Somalia 5 1 1 23 72 .. 77 26 .. 0 3 l8 Togo 1 35 22 37 12 62 88 0 19 Rwanda 0 1 2 95 70 5 30 20 Sierra Leone 53 116 70 99 89 .. 1 11 .. 0 21 Benin 1 10 25 15 12 .. 85 88 .. 0 22 Central African Republic 18 39 52 99 99 I. 1 23 Kenya 14 210 164 26 13 .. 74 87 0 0 24 Sudan 2 15 35 80 52 20 48 0 0 25 Comoros 100 99 .. 0 1 26 Lesotho 1 14 11 .. 27 Nigeria 17 130 120 85 101 .. 14 -1 0 28 Ghana 7 25 28 61 82 29 18 10 0 29 Mauritania 1 4 10 61 69 .. 39 31 30 Liberia 4 20 5 78 51 61 22 49 390 31 Equatorial Guinea 84 .. 16 . 32 Guinea .. 39 61 Middle-income economies 149 t 1,703 t 3,056 t 77 w ..23 w . 33 Cape Verde ..4 1 95 65 99 0 35 34 SenegaI 4 72 108 48 31 .. 52 69 0 0 35 Zimbabwe 61 404 550 12 81 .. 86 19 2 36 Swaziland . .. 37 C6te d'Ivoire 15 295 283 50 5'1 32 50 49 68 0 0 0 38 Congo, People's Republic 24 64 137 93 88 52 6 12 17 1 0 31 39 Cameroon 6 50 152 46 77 28 54 23 72 0 0 0 40 Botswana 1 353 641 .. . 41lMauritius 0 125 486 16 89 84 110 42 Gabon 10 26 135 73 ..27 0 43 Seychelles 0 1 1 43 71 69 57 29 31 .. 0 44 Angola 3 98 .. 97 2 0 0 45 Djibouti ..53 47 Six most populous economies 86 t 597 t 480 t 25 w . 75 w Sahelian economiies St 148t 203 t 26 w 74 w Ojilexporters 61 t 287 t 579 t 95 w .. 5w All low-income economies Total 2,478 t 18,257 t 47,468 t 59 w 59 w 32 w Excluding China and India 572 t 3,978 t 10,371 t 61 w 57w 41 w South Asia 1,156 t 7,256 t 12,714 t 55 w 62 w 35 w 25 w low 14 Excluding India 308 t 2,079 t 4,053 t 44 w 65 w 80 w . 31 w 17 w 8 w 5 4 Note: Summary measures include estimates for miissing country data. The weighting process may result in discrepancies between summned subgroup figures and overall totals. Summnary measure percentages are weighted by manufactured exports of individual countries in current dollars. Table 18. Official development assistance Grants as percentage of net ODA Bilateral (percentage Per capita Total Technical Millions of dollars of total) (dollars) grants assistance 1975 1980 1985 1986 1987 1980 1987 1980 1987 1980 1987 1980 1987 Sub-Saharan Africa Total 3 237 7.12t 8.222 10010 1 I.0b 6h8 r 21) 25 71 hn 3t 2lb E-iI Exporteri l7- 2.Sw 34w 5.0 L 5.4w IJ1 1 7w 2Iw I5 5.1w 2 t I I All low-income economies Total 17 w 21 w 30 w 3.3 w 3.9 w 8.8 w 11 w 13 w 30 w 43 w 59 t 165 t Excluding China andlndia 14 w 20w 24 w 4.8 w 4.8 w 5.6 w 24 w 29 w 17 w 43 w 10 t Si t South Asia 18 w 22 w 25 w 3.8 w 4.0 w 4.1 w 11 w 11 w 25 w 40 w 15 t 49 t Excluding India 15 w 19 w 21 w 4.5 w 4.1 w 4.3 w 22 w 25w 22 w 41 w 4 t 13 t Note: Surmmary measures for urban population as a percentage of total population are weighted by each country's share in the aggregate population. Summary measures for the other indicators are weighted by each country's share in the urban population. Sumnmary measures dontinctude estimates for missing country data. 278 Table 36. Land use Land use as a percentage of total land area Total land area Cropland Pasture Forest Other (thousand- hectares) 1965 1980 1987 1965 1980 1987 1965 2980 1987 2965 2980 1987 Lot%-income S~ub-Saharan Al ica 1 Ethiopia 110,100 11 13 13 42 41 41 27 26 25 20 21 22 2 Chad 125,920 2 3 3 36 36 36 12 11 10 50 51 51 3 Zaire 226,760 3 3 3 4 4 4 80 78 77 13 15 16 4 Guinea-Bissau 2,812 9 10 12 38 38 38 39 38 38 13 13 12 5 Malawi 9,408 21 25 25 20 20 20 54 54 46 5 2 9 6 Mozambique 78,409 3 4 4 56 56 56 22 20 19 18 20 21 7 Tanzania 88,604 4 6 6 40 40 40 51 49 48 5 6 7 8 Burkina Faso 27,380 8 10 11 37 37 37 30 26 25 26 27 27 9 Madagascar 58,154 4 5 5 58 58 58 31 27 25 7 9 11 10 Mali 122,019 1 2 2 25 25 25 8 7 7 66 67 67 11 Gambia, The 1,000 13 16 17 9 9 9 30 22 17 48 54 57 1 2 Burundi 2,565 39 51 52 24 35 36 2 2 3 35 11 10 13 Zambia 74,072 7 7 7 47 47 47 42 40 39 4 6 6 14 Niger 126,670 2 3 3 8 8 7 3 2 2 87 87 88 15 Uganda 19,955 24 28 34 25 25 25 32 30 29 19 16 13 16 S6oTom6 and Principe 96 35 38 39 1 1 2 64 61 60 17 Somnalia 62,734 1 1 1 46 46 46 16 15 14 37 38 38 l8 Togo 5,439 20 26 26 4 4 4 45 31 25 31 39 45 19 Rwanda 2,495 26 41 45 34 19 16 23 21 20 17 20 19 20 Sierra Leone 7,162 20 25 25 31 31 31 30 30 29 19 15 15 21lBenin 11,062 13 16 17 4 4 4 44 36 33 39 44 47 22 Central African Republic 62,298 3 3 3 5 5 5 58 58 58 34 34 34 23 Kenya 56,697 3 4 4 7 7 7 8 7 6 82 83 83 24 Sudan 237,600 5 5 5 24 24 24 24 21 20 47 51 51 25 Comoros 223 38 41 44 7 7 7 16 16 16 39 37 34 26 Lesotho 3,035 12 10 11 73 66 66 15 24 24 27 Nigeria 91,077 32 33 34 21 23 23 23 18 16 24 26 27 28 Ghana 23,002 11 12 12 16 15 15 43 38 36 31 35 37 29 Mauritania 102,522 0 0 0 38 38 38 15 15 15 47 47 47 30 Liberia 9,632 4 4 4 2 2 2 22 22 22 72 72 72 31 Equatorial Guinea 2,805 8 8 8 4 4 4 46 46 46 42 42 42 32 Guinea 24,586 6 6 6 12 12- 12 49 43 -41 33 -38- 41 Mliddle- income Sub-Saharan Africa~ 33 Cape Verde 403 10 10 10 6 6 6 0 0 0 84 84 84 34 Senegal 19,253 23 27 27 30 30 30 35 31 31 12 12 12 35 Zimbabwe 38,667 5 7 7 13 13 13 52 52 52 30 29 29 36 Swaziland 1,720 8 11 10 78 64 68 8 6 6 6 19 16 37 C85te d'Ivoire 31,800 8 10 11 9 9 9 60 31 20 22 50 59 38 Congo, People's Republic 34,150 2 2 2 29 29 29 64 63 62 5 6 7 39 Cameroon 46,540 12 15 15 19 18 18 59 55 53 10 12 14 40 Botswana 56,673 2 2 2 74 78 78 2 2 2 23 18 18 41lMauritius 185 51 58 58 4 4 4 34 31 31 12 7 7 42 Gabon 25,767 1 2 2 20 18 18 78 78 78 2 2 2 43 Seychelles 27 19 19 22 19 19 19 63 63 59 44 Angola 124,670 3 3 3 23 23 23 44 43 43 30 31 31 45 Djibouti 2,318 9 9 9 0 0 0 91 91 91 2 79 Table 37. Environmental indicators Average annual production of roundwood (thousand cubic meters) Fuelwood and charcoal Forest and Deforestation, 1980s Reforestation woodland, 1980s Percentage 1980s Thousand (thousand change (thousand Percent hectares hectares since hectares) per year per Year peryear) 1984-86 1974-76 Low% -income Sub-S.iharani Atrica 1 Ethiopia 27,150 0.3 88 6 36,132 27 2 Chad 13,500 0.6 80 0 3,063 25 3 Zaire 177,590 0.2 347 0 27,989 34 4 Guinea-Bissau 2,105 2.7 57 0 422 7 5 Malawi 4,271 3.5 150 6 6,211 34 6 Mozambique 15,435 0.8 120 1 14,203 54 7 Tanzania 42,040 0.3 130 7 21,604 41 8 Burkina Faso 4,735 1.7 80 2 6,452 25 9 Madagascar 13,200 1.2 156 12 6,083 32 10 Mali 7,250 0.5 36 0 4,599 29 11 Gambia, The 215 2.4 5 0 829 9 12 Burundi 41 2.7 1 1 3,593 26 13 Zambia 29,510 0.3 80 3 9,418 29 14 Niger 2,550 2.6 67 2 3,680 31 15 Uganda 6,015 0.8 50 0 10,868 38 16 Sao Tom6 and Principe .. .. .. 17 Somalia 9,050 0.1 13 1 4,358 43 18 Togo 1,684 0.7 12 0 603 31 19 Rwanda 230 2.3 5 2 5,535 12 20 Sierra Leone 2,055 0.3 6 0 7,635 18 21 Benin 3,867 1.7 67 0 4,181 33 22 Central African Republic 35,890 0.2 55 .. 2,925 32 23 Kenya 2,360 1.7 39 0 30,874 50 24 Sudan 47,650 0.2 104 11 17,690 35 25 Comoros .. .. 0 0 26 Lesotho .. .. .. 0 525 28 27 Nigeria 14,750 2.7 400 14 87,656 41 28 Ghana 8,693 0.8 72 3 8,219 38 29 Mauritania 554 2.4 13 0 7 40 30 Liberia 2,040 2.3 46 1 3,913 43 31 Equatorial Guinea .. 0.2 3 .. 447 16 32 Guinea 10,650 0.8 86 0 3,647 25 Nfiddle-income Sub-Saharan Ainca 33 Cape Verde .. .. .. 0 34 Senegal 11,045 0.5 50 2 3,505 33 35 Zimbabwe 19,820 0.4 80 5 5,867 41 36 Swaziland 74 .. 0 5 560 20 37 Cote d'lvoire 9,834 5,2 510 3 7,970 45 38 Congo, People's Republic .. 0.1 22 2 1,585 29 39 Cameroon 25,620 0.4 110 1 9,134 30 40 Botswana 32,560 0.1 20 .. 1,107 46 41 Mauritius .. .. 0 1 14 -36 42 Gabon 20,575 0.1 15 .. 2,525 15 43 Seychelles .. .. .. 44 Angola 53,600 0.2 84 0 3,903 34 45 Djibouti 106 .. .. Note: NM indicates not meaningful. a. Refers only to areas larger than 4,000 square kilometers. 280 Average annual production of roundwood (thousand cubic meters) Coastline areas and resources Industrial roundwood Wilderness Average annual area a as a Length marine catch Percentage percentage of marine change of total coastline 1983-85 Percentage since land area 1987 (thousand change 1984-86 1974-76 1985 (kilometers) metric tons) since 1974-76 Low,-income Sub-Shahran Africa 1,813 38 22 1,094 1 -76 Ethiopia 505 25 52 Chad 2,501 29 6 37 1 -91 Zaire 137 26 0 350 3 30 Guinea-Bissau 302 8 10 .,Malawi 966 4 9 2,470 34 39 Mozambique 1,454 51 10 1,424 38 -10 Tanzania 306 24 3 Burkina Faso 807 139 2 4,828 13 -22 Madagascar 309 26 49 Mali 21 110 0 80 9 -13 Gambia, The 45 41 0 ,.Burundi 515 34 24 Zambia 242 32 53 Niger 1,633 31 4 Uganda -. ~~~~~~~~~~~~~~~~Sao Tom6 and Principe 67 29 24 3,025 16 92 Somalia 163 27 0 56 14 47 Togo 237 295 0 Rwanda 140 2 0 402 36 -42" Sierra Leone 223 29 15 121 4 -38 Benin 466 -7 39 Central African Republic 1,555 59 25 536 6 60 Kenya 1,841 32 40 853 2 165 Sudan NM 340 5 38 Comoros 80 Lesotho 7,765 106 2 853 214" -10O Nigeria 1,111 -40 0 539 212 8 Ghana 5 25 74 754 44 97 Mauritania 557 -6 17 579 10 61 Liberia 140 218 0 296 3 -24 Equatorial Guinea 604 17 0 320 26 143 Guinea M%iddle-incc*me Sub-Saharan Africa 0 965 11 248 Cape Verde 546 37 111 531 235 -30 Senegal 1,347 55 0 Zimbabwe 1,663 -10 0 Swaziland 4,030 -19 16 515 6'7 -2 C6te d'Ivoire 849 49 42 169 20 22 Congo, People's Republic 2,702 71 3 402 32 -14 Cameroon 73 49 63 Botswana 5 -72 NM 177 i 55" Mauritius 1,484 -6 35 885 49 838 Gabon 491 4 1 1 Seychelles 997 -8 26 1,600 78 -2Agl 0 314 0 32 Djibouti 281 Technical notes The Statistical appendix provides economic and which moves the year in which current and con- social indicators for selected periods or years in a stant price versions of the same time series have form suitable for comparing economies and the same value, without altering the trend of ei- groups of economies. Economies are classified by ther. Components of GDP are individually re- GNP per capita levels. There are several group- scaled and are summed to provide GDP and its ings of Sub-Saharan Africa countries and two subaggregates. In this process a rescaling devia- main comparator country groups. The tables in- tion may occur between constant price GDP by clude data on 45 economies in Sub-Saharan Africa. industrial origin and GDP by expenditure. Such The introduction to the data and key provide de- rescaling deviations are absorbed under the head- tails of country composition of the groups and ing private consumption, etc., on the assumption other related information. that GDP by industrial origin is a more reliable In addition to 37 tables there are 4 maps, which estimate than GDP by expenditure. illustrate key statistics and measures. The indica- This approach takes into account the effects of tors give a broad perspective on development in changes in intersectoral relative prices between countries of Sub-Saharan Africa during the past the original and the new base period. Because two decades. private consumption is calculated as a residual, Considerable effort has been made to standard- the national accounting identities are maintained. ize the data; nevertheless statistical methods, cov- It does, however, involve incorporating in private erage, practices, and definitions differ widely. In consumption whatever statistical discrepancies addition the statistical systems in many Sub- arise for expenditure in the rebasing process. The Saharan Africa economies are still weak, and this value added in the services sector also includes a affects the availability and reliability of the data. statistical discrepancy as reported by the original Moreover intercountry and intertemporal com- source. parisons always involve complex technical prob- The summary measures are calculated by sim- lems, which cannot be fully and unequivocally ple addition when a variable is expressed in rea- resolved. The data are drawn from sources sonably comparable units of account. Indicators thought to be most authoritative, but many of that do not seem naturally additive are usually them are subject to considerable margins of error. combined by a price weighting scheme. However, Readers are urged to take these limitations into the use of a single base year raises problems over account in interpreting the indicators, particularly a period encompassing profound structural when making comparisons across economies. changes and significant changes in relative prices, To facilitate international comparisons, na- such as have occurred from 1965 to 1987. tional accounts constant price data series based on The Statistical appendix does not present time years other than 1980 have been partially rebased series; growth rates and ratios are shown. For to the 1980 base. This is accomplished by rescaling, summary measures that cover many years, it is important that the calculation is based on the same FAO index of food production which is based in country composition over time and across topics. international dollars. This is done by permitting group measures to be compiled only if the country data available for a Table 1. Basic indicators given year account for at least two-thirds of the full group, as defined by the 1980 benchmarks. So Population estimates for mid-1987 are based on long as that criterion is met, uncurrent reporters data from the Population Division of the United (and those not providing ample history) are, for Nations or from World Bank sources. These are years with missing data, assumed to behave like normally estimates, usually based on data from the sample of the group that does provide esti- the most recent population censuses or surveys, mates. Readers should keep in mind that the pur- which, in some cases, are neither recent nor very pose is to maintain an appropriate relationship accurate. Refugees not permanently settled in the across indicators, despite myriad problems with country of asylum are generally considered to be country data and that nothing meaningful can be part of the population of their country of origin. deduced about behavior at the country level by The data on area are from the Food and Agricul- working back from group indicators. In addition ture Organization (FAO). the weighting process may result in discrepancies Gross national product (GNP) measures the total between summed subgroup figures and overall domestic and foreign value added claimed by totals. residents and is calculated without making de- All growth rates shown are calculated from ductions for depreciation. It comprises GDP (de- constant price series and, unless otherwise noted, fined in the note for Table 2) plus net factor income have been computed using the least-squares from abroad, which is the income residents re- method. The least-squares growth rate, r, is esti- ceive from abroad for factor services (labor and mated by fitting a least-squares linear regression capital) less similar payments made to nonresi- trend line to the logarithmic annual values of the dents who contributed to the domestic economy. variable in the relevant period. More specifically, GNP per capita figures in dollars are calculated the regression equation takes the form: according to the World Bank Atlas method. The log X, = a + bt + et, where this is equivalent to the Atlas conversion factor for any year is the average logarithmic transformation of the compound of the exchange rate for that year and the exchange growth rate equation, X, = X0(l + r)'. In these equa- rates for the two preceding years, after adjusting tions, X is the variable, t is time, and a = logXo and them for differences in relative inflation between b = log(l + r) are the parameters to be estimated; e the country and the United States. This three-year is the error term. If b* is the least-squares estimate average smooths fluctuations in prices and ex- of b, then the annual average growth rate, r, is change rates for each country. The resulting GNP obtained as [antilog (b*)]-l, and multiplied by 100 in dollars is divided by the midyear population for to express it in percentage terms. the latest year to derive GNP per capita. The fol- lowing formulas describe the procedures for com- The maps puting the conversion factor for year t: The data source for the first three maps is the 1 A_ $ ) World Bank. For the first map, per capita GNP, (e*t-2,,) = [et-2 / $ 1987, GNP per capita figures in current dollars are calculated according to the World Bank Atlas p p$ method. See Table 1 and the technical notes for et, + et further explanation. For the second map, popula- V- t-1 tion growth, 1965-87, the least-squares growth rate is applied to total population figures. For the and for ca third map, under five mortality per 1,000 live foryeart: births, 1985, data for Cape Verde, Comoros, Equa- torial Guinea, Gabon, The Gambia, Guinea- (Y) = (YIN,] / et2,t) Bissau, and Swaziland are for 1982. For the fourth map, growth of per capita food production, 1980- 87, the least-squares growth rate is applied to the where agencies but more often collected by World Bank Y, = current GNP (local currency) for year t staff during missions. P, = GNP deflator for year t World Bank staff review the quality of national et = annual average exchange rate (local accounts data and in some instances, through mis- currency/dollar) for year t sion work or technical assistance, help adjust na- N, = midyear population for year t tional series. Because of the limited capabilities of Pt' = US GNP deflator for year t. statistical offices in some countries, strict interna- tional comparability cannot be achieved, espe- Through its regular review of member cially in economic activities that are difficult to countries' national accounts, the Bank systemati- measure, such as the informal sector and subsis- cally evaluates the GNP estimates, focusing on the tence agriculture. coverage and concepts employed and, where ap- GDP measures the total value of output of propriate, making adjustments to improve com- goods and services produced by an economy, by parability. As part of the review Bank staff residents and nonresidents, regardless of the allo- estimates of GNP (and sometimes of population) cation to domestic and foreign claims. It is calcu- may be developed for the most recent period. The lated without making deductions for Bank also systematically assesses the appropriate- depreciation. While the SNA envisages estimates ness of official exchange rates as conversion fac- of GDP by industrial origin to be at producer tors. An alternative conversion factor is used prices, many countries still report such details at when the official exchange rate is judged to di- factor cost, which differs from producer prices verge by an exceptionally large margin from the because of the treatment of certain commodity rate effectively applied to foreign transactions. taxes at the sector level. Overall, GDP at producer This applies to only a small number of countries. prices is equal to GDP at purchaser values, less The average annual inflation rate is measured by import duties. For individual sectors, say agricul- the growth rate of the implicit GDP deflator for ture, values at producer prices differ from pur- each of the periods shown. The GDP deflator is chaser values because of indirect taxes less first calculated by dividing, for each year of the subsidies and, at least in theory, because pur- period, the value of GDP at current values by the chaser prices include retail and wholesale margins value of GDP at constant values, both in national and transport costs. International comparability currency. The least-squares method is then used of the estimates is affected by the use of differing to calculate the growth rate of the GDP deflator for country practices in valuation systems for report- the period. ing value added by production sectors. As a par- Life expectancy at birth indicates the number of tial solution GDP estimates are shown at years a newborn infant would live if patterns of purchaser values if the components are on this mortality prevailing for all people at the time of basis, and such instances are footnoted. However, the birth were to stay the same throughout the for a few countries in Tables 2 and 3, GDP at lifetime of the infant. Data are from the UN Pop- purchaser values has been replaced by GDP at ulation Division, supplemented by World Bank factor cost. estimates. The figures for GDP are dollar values converted The summary measures for GNP per capita and from domestic currencies using single-year offi- life expectancy in this table are weighted by pop- cial exchange rates. For a few countries where the ulation. Those for average annual inflation rate are official exchange rate does not reflect the rate ef- weighted by the 1980 share of country GDP val- fectively applied to actual foreign exchange trans- ued in current dollars. actions, an alternative conversion factor is used. This table does not use the three-year averaging Tables 2 and 3. Growth of production; technique applied for GNP per capita in Table 1. Structure of production Agriculture covers forestry, hunting, and fish- ing, as well as agriculture. In developing countries Most of the definitions used are those of the UN with high levels of subsistence farming, much of System of National Accounts(SNA). Estimates are agricultural production is not marketed. This in- obtained from national sources, sometimes reach- creases the difficulty of measuring the contribu- ing the World Bank through other international tion of agriculture to GDP and reduces the 284 reliability and comparability of such numbers. such as investment income, interest, and labor Industry comprises value added in mining; manu- income, is excluded from the measure of GDP. facturing (also reported as a sub-group); construc- The resource balance is the difference between tion; and electricity, water, and gas. Value added exports of goods and nonfactor services and im- in all other branches of economic activity, includ- ports of goods and nonfactor services. ing imputed bank service charges, import duties, The national accounts series in current domes- and any statistical discrepancies noted by national tic currency units are used to calculate the shares compilers, are included in the services, etc. of GDP in Table 4. The growth rates in Table 5 are category. calculated from the partially rebased 1980 series Partially rebased 1980 series in domestic curren- in constant domestic currency units (see the intro- cies, as explained in the introduction to the tech- duction to the technical notes). nical notes, are used to compute growth rates in The summary measures are calculated by the Table 2. The sectoral shares of GDP in Table 3 are method explained in the note for Tables 2 and 3. based on current price series. In calculating the summary measures for each Table 6. Growth of production of major crops indicator in Table 2, partially rebased constant 1980 dollar values for each economy are calcu- Growth rates are calculated for the volume of lated for each of the years of the periods covered, production of major crops for total Sub-Saharan the values are aggregated across countries for Africa. Data on agricultural production, except for each year, and the least-squares procedure is used sugar production, are from the FAO, based on to compute the growth rates. The average sectoral country reports of output. These estimates should percentage shares in Table 3 are computed from be used with caution, because for several coun- group aggregates of sectoral GDP in current tries the data are weak. Production data for sugar dollars. are from the International Sugar Organization. See the commodity notes for Table 7. Data for Tables 4 and 5. Structure of demand; Growth individual countries are added to obtain the ag- of consumption and investment gregates for Sub-Saharan Africa. Growth rates are calculated using the least-squares method. Generalgovernment consumption includes all cur- rent expenditures for purchases of goods and ser- Table 7. Production of major crops vices by all levels of government. Capital expenditure on national defense and security is Data on agricultural production are from the regarded as consumption expenditure. FAO except for production data for sugar, which Private consumption, etc. is the market value of is from the International Sugar Organization. Data all goods and services purchased or received as are in thousands of metric tons for the years indi- income in kind and the value of own account cated. The data for any particular crop refer to the production consumed by households and non- calendar year in which the entire harvest or the profit institutions. It excludes purchases of dwell- bulk of it took place. Data are probably underesti- ings but includes imputed rent for matedbecauseitisdifficulttoestimateproduction owner-occupied dwellings. In practice it includes levels of staple food crops, especially roots and any statistical discrepancy in the use of resources. tubers, when much of the output is consumed At constant prices this means it also includes the directly by farmers, rather than marketed. rescaling deviation from partial rebasing. Production data on cereals relate to crops har- Gross domestic investment consists of outlays on vested for dry grain only. Cereal crops harvested additions to the fixed assets of the economy, plus for hay or harvested green for food, feed, or silage net changes in the level of inventories. or used for grazing are, therefore, excluded. Many Gross domestic savings are calculated by deduct- countries, especially in Africa, make no distinc- ing total consumption from gross domestic tion between millet and sorghum in their reports; in product. such cases combined figures are given in the table Exports of goods and nonfactor services represent on millet. Rice refers to paddy paddy rice. Total the value of all goods and nonfactor services pro- cereals includes maize, millet, rice, sorghum, vided to the rest of the world; they include mer- wheat, barley, oats, corn, and rye, expressed as chandise, freight, insurance, travel, and other bulk adding of tonnage. Coconuts refers to total nonfactor services. The value of factor services, production of coconuts, whether ripe or unripe, 285 whether consumed fresh or processed into copra quantity of food production by the total popula- or desiccated coconut. Production is expressed in tion. For this index food is defined as comprising terms of weight of the whole nut, excluding only nuts, pulses, fruits, cereals, vegetables, sugarcane, the fibrous outer husk. Groundnuts are in the shell. sugar beet, starchy roots, edible oils, livestock, and Pulses refers to total pulses and shows production livestock products. Quantities of food production of crops harvested for dry grain only, whether are measured net of animal feed, seeds for use in used for food or feed. Roots and tubers does not agriculture, and food lost in processing and include root crops grown principally for feed. distribution. Sugar is sugar cane and sugar beets. The summary measures for fertilizer consump- tion are weighted by total arable land area; the Table 8. Agriculture and food summary measures for food production per capita are weighted by population. The basic data for value added in agriculture are from the World Bank's national accounts series at Table 9. Structure of manufacturing current prices in national currencies, which are then converted into dollar values by using single- The basic data for value added in manufacturing year official exchange rates. The figures for the are from the World Bank's national accounts se- remainder of this table are from the FAO. ries at current prices in national currencies, which Cereal imports are measured in grain equivalents are then converted into dollar values by using and defined as comprising all cereals in the Stan- single-year official exchange rates. For a few coun- dard International Trade Classification (SITC), revi- tries where the official exchange rate does not sion 2, groups 041-046. Food aid in cereals covers reflect the rate effectively applied to actual foreign wheat and flour, bulgur, rice, coarse grains, and exchange transactions, an alternative conversion the cereal component of blended foods. The fig- factor is used. ures are not directly comparable since cereal im- The data for distribution of value added among ports are based on calendar-year data, whereas manufacturing industries are provided by the food aid in cereals is based on data for crop years United Nations Industrial Development Organi- reported by donor countries and international or- zation (UNIDO), and the calculations are based on ganizations, including the International Wheat national currencies in current prices. Council and the World Food Programme. Fur- The classification of manufacturing industries thermore food aid information by donors may not is in accord with the UN International Standard correspond to actual receipts by beneficiaries dur- Industrial Classification of All Economic Activities ing a given period because of delays in transpor- (ISIC). Food and agriculture comprise ISIC division tation and recording or because it is sometimes 31; textiles and clothing, division 32; machinery and not reported to the FAO or other relevant interna- transport equipment, major groups 382-84; and tional organizations. The earliest available food chemicals, major groups 351 and 352. Other com- aid data are for 1974. The time reference for food prises wood and related products (division 33), aid is the crop year, July to June. paper and related products (division 34), petro- Fertilizer consumption measures the plant nutri- leum and related products (major groups 353-56), ents used in relation to arable land. Fertilizer prod- basic metals and mineral products (divisions 36 ucts cover nitrogenous phosphate, which includes and 37), fabricated metal products and profes- ground rock phosphate and potash fertilizers. Ar- sional goods (major groups 381 and 385), and able land is defined as land under temporary other industries (major group 390). When data for crops (double-cropped areas are counted once), textiles, machinery, or chemicals are shown as not temporary meadows for mowing or pastures, and available, they are also included in other. land under market or kitchen gardens and land Summary measures given for value added in temporarily fallow or lying idle, as well as land manufacturing are totals calculated by the aggre- under permanent crops. The time reference for gation method noted in the beginning of the tech- fertilizer consumption is the crop year, July to nical notes. June. The index of food production per capita shows the Table 10. Manufacturing earnings and output average annual quantity of food produced per capita in 1985-87 in relation to that produced in Four indicators are shown-two relate to real 1979-81. The estimates are derived by dividing the earnings per employee, one to labor's share in total value added generated, and one to labor done by others; and goods shipped in the same productivity in the manufacturing sector. The in- condition as received. dicators are based on data from UNIDO, although The term employees in this table combines two the deflators are from other sources, as explained categories defined by the United Nations, regular below. employees and persons engaged. Together these Earnings per employee are in constant prices and groups comprise regular employees, working are derived by deflating nominal earnings per proprietors, active business partners, and unpaid employee, by the country's consumer price index family workers; they exclude homeworkers. The as reported in the IMF's International Financial Sta- data refer to the average number of employees tistics (IFS). Total earnings as percentage of value working during the year. added are derived by dividing total earnings of employees by value added in current prices, to Table 11. Commercial energy show labor's share in income generated in the manufacturing sector. Gross output per employee is The data on energy are primarily from UN in constant prices and is presented as an index of sources. They refer to commercial forms of pri- overall labor productivity in manufacturing with mary energy-petroleum and natural gas liquids, 1980 as the base year. To derive this indicator, natural gas, solid fuels (coal, lignite, and so on), UNIDO data ongross output peremployee in current and primary electricity (nuclear, geothermal, and prices are adjusted using the implicit deflators for hydroelectric power)-all converted into oil value added in manufacturing or in industry equivalents. Figures on liquid fuel consumption taken from the World Bank's national accounts include petroleum derivatives that have been con- data files. To improve cross-country comparabil- sumed in nonenergy uses. For converting primary ity, UNIDO has, where possible, standardized the electricity into oil equivalents, a notional thermal coverage of establishments to those with five or efficiency of 34 percent has been assumed. The use more employees. of firewood, dried animal excrement, and other The concepts and definitions are in accordance traditional fuels, although substantial in some de- with the International Recommendations for Indus- veloping countries, is not taken into account be- trial Statistics published by the United Nations. cause reliable and comprehensive data are not Earnings (wages and salaries) cover all remunera- available. tion to employees paid by the employer during Energy imports refer to the dollar value of energy the year. The payments include all regular and imports-section 3 in the SITC, revision 1-and overtime cash payments and bonuses and cost of are expressed as a percentage of earnings from living allowances; wages and salaries paid during merchandise exports. vacation and sick leave; taxes and social insurance Because data on energy imports do not permit contributions and the like, payable by the employ- a distinction between petroleum imports for fuel ees and deducted by the employer; and payments and for use in the petrochemicals industry, these in kind. percentages may overestimate the dependence on The value of gross output is estimated on the imported energy. basis of either production or shipments. On the The summary measures of energy production and production basis it consists of the value of all consumption are computed by aggregating the re- products of the establishment, the value of indus- spective volumes for each of the years covered by trial services rendered to others, the value of the periods and then applying the least-squares goods shipped in the same condition as received, growth rate procedure. For energy consumption per the value of electricity sold, and the net change in capita, population weights are used to compute the value of work-in-progress between the begin- summary measures for the specified years. ning and the end of the reference period. In the The summary measures of energy imports as a per- case of estimates compiled on a shipment basis, centage of merchandise exports are computed from the net change between the beginning and the end group aggregates for energy imports and mer- of the reference period in the value of stocks of chandise exports in current dollars. finished goods is also included. Value added is defined as the current value of gross output less Table 12. Growth of merchandise trade the current cost of materials, fuels, and other sup- plies consumed; contract and commission work The statistics on merchandise trade, Tables 12 done by others; repair and maintenance work through 14, are primarily from the UN trade data system, which accords with the UN, Yearbook of Tables 13 and 14. Structure of merchandise International Trade Statistics-that is, the data are imports; Structure of merchandise exports based on countries' customs returns. However, more recent statistics are often from secondary The shares in these tables are derived from trade sources, notably the IMF. World Bank estimates values in current dollars reported in the UN trade are also reported. Secondary sources and World data system, supplemented by other secondary Bank estimates are based on preliminary esti- sources and World Bank estimates as explained in mates of aggregate imports and exports. In some the note to Table 12. cases these permit coverage adjstments for signif- Merchandise exports and imports are defined in icant components of a country's foreign trade not the note to Table 12. The categorization of exports subject to regular customs reports. Values in these and imports follows the SITC. Estimates from sec- tables are in current dollars. ondary sources also broadly follow this definition. Merchandise exports and imports, with some ex- In Table 13 food commodities are those in SITC ceptions, cover international movements of goods sections 0, 1, and 4 and division 22 (food and live across customs borders. Exports are valued f.o.b. animals, beverages, oils and fats, and oilseeds and (free on board) and imports, c.i.f. (cost, insurance, nuts), less division 12 (tobacco). Fuels are the com- and freight), unless otherwise specified in the modities in SITC section 3 (mineral fuels, lubri- foregoing sources. These values are in current cants, and related materials). Other primary dollars; that they do not include trade in services. commodities comprise SITC section 2 (crude mate- The growth rates of merchandise exports and im- rials, excluding fuels), less division 22 (oilseeds ports are in constant terms and are calculated from and nuts) plus divisions 12 (tobacco) and 68 (non- quantum indexes of exports and imports. Quan- ferrous metals). Machinery and transport equipment tum indexes are obtained from the export or im- are the commodities in SITC section 7. Other man- port value indexes as deflated by the ufactures, calculated residually from the total corresponding price index. To calculate these value of manufactured imports, represent SITC quantum indexes, the World Bank uses its own sections 5 through 9, less section 7 and division 68. price indexes, which are based on international In Table 14, fuels, minerals, and metals are the prices for primary commodities and unit value commodities in SITC section 3 (mineral fuels and indexes for manufactures. These price indexes are lubricants and related material) divisions 27 and country-specific and disaggregarted by broad 28 (minerals and crude fertilizers, and metallifer- commodity groups. This ensures consistency be- ous ores) and division 68 (nonferrous metals). tween data for a group of countries and those for Other primary commodities comprise SITC sections individual countries. These growth rates can dif- 0,1,2, and 4 (food and live animals, beverages and fer from those published by national statistical tobacco, inedible crude materials, oils, fats, and offices because national price indexes may use waxes) less divisions 27 and 28. Machinery and different base years and weighting procedures transport equipment are the commodities in SITC from those used by the World Bank. section 7. Other manufactures represent SITC sec- The terms of trade, or the net barter terms of tions 5 through 9 less section 7 and division 68. trade, measure the relative movement of export Textiles and clothing, representing SITC divisions prices against that of import prices. Calculated as 65 and 84 (textiles, yarns, fabrics, and clothing), the ratio of a country's index of average export are shown as a subgroup of other manufactures. prices to its average import price index, this indi- The summary measures in Table 13 are weighted cator shows changes over a base year in the level by total merchandise imports of individual coun- of export prices as a percentage of import prices. tries in current dollars; those in Table 14, by total The terms of trade index numbers are shown for merchandise exports of individual countries in 1985 and 1987, where 1980 = 100. The price indexes current dollars. are from the source cited above for the growth rates of exports and imports. Table 15. Major agricultural exports The summary measures for the growth rates are calculated by aggregating the 1980 constant dollar For each country the three major agricultural price series for each year and then applying the exports are determined by share in merchandise least-squares growth rate procedure for the peri- exports in current dollars. For several countries ods shown. Again, these values do not include fewer than three agricultural export crops are trade in services. 288 listed because their exports of major crops are not elsewhere classified) excluding division 68 insignificant. (nonferrous metals). Volume of exports is expressed in thousands of In the destination columns, high-income econo- metric tons. Data are for calendar years. Export mies also include Gibraltar, Iceland, and Luxem- volumegrowth is expressed in average annual rates bourg. See the World Development Report 1989 for and is calculated using the least-squares proce- lists of countries included in high-incomeeconomies, dure. Share of total merchandise exports percentages middle- and low-income economies, and nonreporting are calculated on the basis of current dollar values. nonmembr economies. The summary measures are Volume and value data for agricultural exports weighted by manufactured exports of individual are from the FAO. Export data are probably un- countries in current dollars. derestimated because parallel market activity, in- cluding trade, may not be fully accounted for. See Table 18. Official development assistance the notes to Table 12 for information on value of merchandise exports. Official development assistance (ODA) consists of net disbursements of loans and grants made on Table 16. Origin and destination of concessional financial terms by all donors to pro- merchandise exports mote economic development and welfare. They include the value of technical cooperation and Merchandise exports are defined in the note for assistance. Net disbursements equal gross dis- Table 12. Trade shares in this table are based on bursements less payments to the originators of aid statistics from the United Nations and the IMF on for amortization of past receipts. Although this the value of trade in current dollars. High-income definition aims at excluding purely military assis- economies also include Gibraltar, Iceland, and Lux- tance, the borderline is sometimes blurred; the embourg. See the World Development Report 1989 definition used by the country of origin usually for lists of countries included in high-income econ- prevails. All data shown are supplied by the Or- omies, middle- and low-income economies, and non- ganisation for Economic Co-operation and Devel- reporting nonmembr economies. opment (OECD), and all dollar values are The summary measures are weighted by the converted at official exchange rates. value ot total merchandise exports of individual Amounts shown are net disbursements to devel- countries in current dollars. oping countries and multilateral institutions. Bilateral net disbursements of ODA are shown Table 17. Origin and destination of as a percentage of the total, net disbursements of manufactured exports ODA are shown per capita, and total grants and technicalassistance are shown as a percentage of net The value of manufactured exports, reported by ODA. Percentages are calculated based on current country of origin, conforms to Table 14, where dollar values. separate shares in total merchandise exports are The summary measures of per capita ODA are given for machinery and transport equipment and computed from group aggregates. Summary mea- for other manufactures. The destination ofmanufac- sures for bilateral ODA as a percentage of net tured exports is based on the UN's Commodity ODA, and grants and technical assistance as a Trade files. Although the two are conceptually the percentage of net ODA are computed from group same, differences may arise because aggregate es- totals in current dollar values. timates by country of origin (included in Table 14) tend to be more current and comprehensive. Table 19. Total external debt When data on values of manufactured exports are not available from the United Nations, supple- The data on debt in Tables 19 through 23 are mentary sources, including IMF and World Bank from national sources and as reported through the data files, are used. World Bank Debtor Reporting System, supple- Manufactured goods are the commodities in mented by World Bank estimates. That system is SITC, revision 1, sections 5 through 9 (chemicals concerned solely with developing economies and and related products, basic manufactures, manu- does not collect data on external debt for other factured articles, machinery and transport equip- groups of borrowers, nor from economies that are ment, and other manufactured articles and goods not members of the World Bank. The dollar fig- 289 ures on debt shown in Tables 19 through 23 are in is available. Total long-term debt service as a percent- dollars converted at official exchange rates. age of GNP and as a percentage of exports of goods and Public loans are external obligations of public services are calculated based on current dollar val- debtors, including the national government, its ues. (See the notes to Table 22.) agencies, and autonomous public bodies. Publicly guaranteed loans are external obligations of private Table 22. External public debt and debt debtors that are guaranteed for repayment by a service ratios public entity. These two categories are aggregated in the tables. Private nonguaranteed loans are exter- External public debt outstanding and disbursed nal obligations of private debtors that are not represents public and publicly guaranteed loans guaranteed for repayment by a public entity. drawn at year-end, net of repayments of principal Use of IMF credit denotes repurchase obligations and write-offs. For estimating external public debt to the IMF for all uses of IMF resources, excluding as a percentage of GNP, the debt figures are con- those resulting from drawings in the reserve verted into dollars from currencies of repayment tranche and on the IMF Trust Fund and the Struc- at end-of-year official exchange rates. GNP is con- tural Adjustment Facility. It is shown for the end verted from national currencies to dollars by using of the year specified. It comprises purchases out- single-year official exchange rates. For a few coun- standing under the credit tranches, including en- tries where the official exchange rate does not larged access resources, and all of the special reflect the rate effectively applied to actual foreign facilities (the buffer stock, compensatory financ- transactions, an alternative conversion factor is ing, and Extended Fund Facility). Trust Fund and used. Structural Adjustment Facility loans are included Interest payments are actual payments made on individually in the Debtor Reporting System and the outstanding and disbursed public and pub- are thus shown within the total of public long- licly guaranteed debt in foreign currencies, goods, term debt. Use of IMF credit outstanding at year or services; they include commitment charges on end (a stock) is converted to dollars at the dollar- undisbursed debt if information on those charges SDR exchange rate in effect at year end. is available. Short-term external debt is debt with an original Debt service is the sum of actual repayments of maturity of one year or less. Available data permit principal (amortization) and actual payments of no distinctions between public and private non- interest made in foreign currencies, goods, or ser- guaranteed short-term debt. vices on external public and publicly guaranteed Total external debt is defined for the purpose of debt. Debt service as a percentage of GNP and this report as the sum of public, publicly guaran- debt service as a percentage of exports of goods teed, and private nonguranteed long-term debt, and services are the same as those for estimating use of IMF credit, and short-term debt. extemal public debt as a percentage of GNP, which is described above. Table 20. Flow of public and private external The summary measures are computed from capital group aggregates of external public debt, debt service, and GNP in current dollars. Data on disbursements and repayment of principal (amortization) are for public, publicly guaranteed, Table 23. Terms of external public borrowing and private nonguaranteed long-term loans. The net flow estimates are disbursements less the re- Commitments refer to the public and publicly payments of principal. guaranteed loans for which contracts were signed in the year specified. They are reported in curren- Table 21. Total external public and private cies of repayment and converted into dollars at debt and debt service ratios average annual official exchange rates. Figures for interest rates, maturities, and grace Total long-term debt data in this table cover pub- periods are averages weighted by the amounts of lic and publicly guaranteed debt and private non- the loans. Interest is the major charge levied on a guaranteed debt. Interest payments are actual loan and is usually computed on the amount of payments on outstanding and disbursed long- principal drawn and outstanding. The maturity of tern debt; they include commitment charges on a loan is the interval between the agreement date, undisbursed debt if information on those charges when a loan agreement is signed or bonds are issued, and the date of final repayment of princi- Net direct private investment is the net amount pal. The grace period is the interval between the invested or reinvested by nonresidents in enter- agreement date and the date of the first repayment prises in which they or other nonresidents exercise of principal. significant managerial control, including equity Public loans with variable interest rates, as a per- capital, reinvested earnings, and other capital. The centageofpublicdebt, refer to interest rates that float net figures are obtained by subtracting the value with movements in a key market rate; for exam- of direct investment abroad by residents of the ple, the London interbank offered rate (LIBOR) or reporting country. the US prime rate. This column shows the Gross international reserves comprise holdings of borrower's exposure to changes in international monetary gold, special drawing rights (SDRs), the interest rates. reserve position of members in the IMF, and hold- The summary measures in this table are weighted ings of foreign exchange under the control of mon- by the amounts of the loans. etary authorities. The data on holdings of international reserves are from IMF data files. The Table 24. Balance of payments and reserves gold component of these reserves is valued throughout at year-end (December 31) London The statistics for this table are mostly as re- prices: that is, $37.37 an ounce in 1970, $589.50 an ported by the IMF but do include estimates by ounce in 1980, and $484.10 an ounce in 1987. The World Bank staff for the recent past and, in rare reserve levels for 1970, 1980, and 1987 refer to the instances, the Bank's own coverage or classifica- end of the year indicated and are in current dollars tion adjustments to enhance international compa- at prevailing exchange rates. Because of differ- rability. Values in this table are in current dollars. ences in the definition of international reserves, in The current account balance after official transfers the valuation of gold, and in reserve management is the difference between exports of goods and practices, the levels of reserve holdings published services (factor and nonfactor) as well as inflows in national sources do not have strict comparabil- of unrequited transfers (private and official), and ity. Reserve holdings at the end of 1987 are also imports of goods and services as well as unre- expressed in terms of the number of months of quited transfers to the rest of the world. imports of goods and services they could pay for, The current account balance before official transfers with total imports level for 1987. is the current account balance that treats net offi- The summary measures are computed from cial unrequited transfers as akin to official capital group aggregates for gross international reserves movements. The difference between the two bal- and total imports of goods and services, in current ance of payment measures is essentially foreign dollars. aid in the form of grants, technical assistance, and food aid, which, for most developing countries, Table 25. Central government expenditure tends to make current account deficits smaller than the financing requirement. The data on central government finance in Ta- Net workers' remittances cover payments and re- bles 25 and 26 are from the IMF, Government Fi- ceipts of income by migrants who are employed nance Statistics Yearbook, 1988 and IMF data files. or expect to be employed for more than a year in The accounts of each country are reported using a foreign economy, where they are considered the system of common definitions and classifica- residents. These remittances are classified as pri- tions found in the IMF, Manual on Government vate unrequited transfers and are included in the Finance Statistics (1986). balance of payments current account balance, The shares of total expenditure and revenue by while those derived from shorter-term stays are category are calculated from series in national included in services, as labor income. The distinc- currencies. Because of differences in coverage of tion accords with internationally agreed guide- available data, the individual components of cen- lines, but many developing countries classify tral government expenditure and current revenue workers' remittances as a factor income receipt shown in these tables may not be strictly compa- (and hence a component of GNP). The World rable across all economies. Bank adheres to international guidelines in defin- Moreover inadequate statistical coverage of ing GNP and, therefore, may differ from national state, provincial, and local governments dictates practices. the use of central government data; this may seri- ously understate or distort the statistical portrayal Housing and community amenities and social secu- of the allocation of resources for various purposes, rity and welfare cover expenditures on housing, on especially in countries where lower levels of gov- the provision and support of housing and slum ernment have considerable autonomy and are re- clearance activities, on community development, sponsible for many economic and social services. and on sanitary services. They also cover compen- In addition, central government can mean either of sation for loss of income to the sick and temporar- two accounting concepts: consolidated or budgetary. ily disabled; payments to the elderly, the For most countries central government finance permanently disabled, and the unemployed; fam- data have been consolidated into one overall ac- ily, maternity, and child allowances; and the cost count, but for others only the budgetary central of welfare services, such as care of the aged, the government accounts are available. Since all cen- disabled, and children. Many expenditures rele- tral government units are not included in the vant to environmental defense, such as pollution budgetary accounts, the overall picture of central abatement, water supply, sanitary affairs, and re- government activities is incomplete. Countries re- fuse collection, are included indistinguishably in porting budgetary data are footnoted. this category. For these and other reasons the data presented, Economic services comprise expenditure associ- especially those for education and health, are not ated with the regulation, support, and more effi- comparable across countries. In many economies cient operation of business, economic private health and education services provided by development, redress of regional imbalances, and central governments are substantial; in some oth- creation of employment opportunities. Research, ers these services may be financed by lower levels trade promotion, geological surveys, and inspec- of government. In a small number of countries tion and regulation of particular industry groups education and health services are privately fi- are among the activities included. nanced. Caution should therefore be exercised in Other covers items not included elsewhere; for using the data for cross-country comparisons. a few economies it also includes amounts that Centralgovernmentexpenditure comprises the ex- could not be allocated to other components (or penditure by all government offices, departments, adjustments from accrual to cash accounts). establishments, and other bodies that are agencies Total expenditure (as a percentage of GNP) is or instruments of the central authority of a coun- more narrowly defined than the measure of gen- try. It includes both current and capital (develop- eral government consumption (percentage of ment) expenditure. GDP) given in Table 4, because it excludes con- Defense comprises all expenditure, whether by sumption expenditure by state and local govern- defense or other departments, on the maintenance ments. At the same time central government of military forces, including the purchase of mili- expenditure is more broadly defined because it tary supplies and equipment, construction, re- includes government's gross domestic investment cruiting, and training. Also in this category are and transfer payments. closely related items such as military aid pro- Overall surplus/deficit is defined as current and grams. capital revenue and grants received, less total ex- Education comprises expenditure on the provi- penditure and lending minus repayments. sion, management, inspection, and support of preprimary, primary, and secondary schools; of Table 26. Central government current revenue universities and colleges; and of vocational, tech- nical, and other training institutions. Also in- Information on data sources and comparability cluded is expenditure on the general is given in the note to Table 25. Current revenue administration and regulation of the education by source is expressed as a percentage of total system; on research into its objectives, organiza- current revenue, which is the sum of tax and tion, administration, and methods; and on such nontax revenue. subsidiary services as transport, school meals, and The first five indicators of tax revenue comprise school medical and dental services. compulsory, unrequited, and nonrepayable re- Health covers public expenditure on hospitals, ceipts for public purposes. They include interest health, maternity and dental centers, and clinics collected on tax arrears and penalties collected on with a major medical component; on national nonpayment or late payment of taxes and are health and medical insurance schemes; and on shown net of refunds and other corrective trans- family planning and preventive care. actions. Taxes on income, profit, and capital gain are taxes levied on the actual or presumptive net in- age of the year-end figures for the specified year come of individuals, on the profits of enterprises, and the previous year is used for the ratio of and on capital gains, whether realized on land monetary holdings to GDP. sales, securities, or other assets. Social security con- Since interest rates (and growth rates for mon- tributions include employers' and employees' so- etary holdings) are expressed in nominal terms, cial security contributions, as well as those of much of the variation between countries stems self-employed and unemployed persons. Domes- from differences in inflation. For easy reference tic taxes on goods and services include general sales, the Table I indicator average inflation is repeated turnover or value added taxes, selective excises on in this table. goods, selective taxes on services, taxes on the use The nominal interest rates of banks, also from IFS, of goods or property, and profits of fiscal monop- represent the rates paid by commercial or similar olies. Taxes on international trade and transactions banks to holders of their quasi-monetary liabilities include import duties, export duties, profits of (deposit rates) and charged by the banks on loans export or import monopolies, exchange profits, to prime customers (lending rates). They are, how- and exchange taxes. Other taxes include ever, of limited international comparability partly employers' payroll or labor taxes, taxes on prop- because coverage and definitions vary and partly erty, and taxes not allocable to other categories. because countries differ in the scope available to They may include negative values that are adjust- banks for adjusting interest rates to reflect market ments, for instance, for taxes collected on behalf of conditions. state and local governments and not allocable to individual tax categories. Table 28. Population growth and projections Non tax revenue comprises receipts that are not a compulsory nonrepayable payment for public Population growth rates are period averages cal- purposes, such as administrative fees or entrepre- culated from midyear estimates of population. neurial income from government ownership of Population estimates for mid-1987 are based on property. Proceeds of grants and borrowing, official estimates made by country statistical of- funds arising from the repayment of previous fices, the UN Population Division, and the World lending by governments, incurrence of liabilities, Bank. They take into account the results of popu- and proceeds from the sale of capital assets are not lation censuses, which, in some cases, are neither included. recent nor accurate. Refugees not permanently Total current revenue (as a percentage of GNP) is settled in the country of asylum are generally based on total current revenue and GNP in current considered to be part of the population of their dollar values. country of origin. The projections of population for 2000, 2025, and Table 27. Money and interest rates the year in which the population will eventually become stationary (see definition below) are made The data on monetary holdings are drawn from for each economy separately. Information on total the IMF's International Financial Statistics (IFS). population by age and sex, fertility, mortality, and Monetary holdings, broadly defined, comprise the international migration is projected on the basis of monetary and quasi-monetary liabilities of a generalized assumptions until the population be- country's financial institutions to residents other comes stationary. The base-year estimates are than the central government. For most countries from updated printouts of the UN World Popula- monetary holdings are the sum of money (IFS line tion Prospects: 1988; recent issues of the UN, Popu- 34) and quasi-money (IFS line 35). Money com- lation and Vital Statistics Report; World Bank prises the economy's means of payment: currency estimates; and national censuses and surveys. outside banks and demand deposits. Quasi- Thenetreproductionrate(NRR),whichmeasures money comprises time and savings deposits and the number of daughters a newborn girl will bear similar bank accounts that the issuer will readily during her lifetime, assuming fixed age-specific exchange for money. Where nonmonetary finan- fertility and mortality rates, reflects the extent to cial institutions are important issuers of quasi- which a cohort of newborn girls will reproduce monetary liabilities, these are also included in the themselves. A NRR of 1 indicates that fertility is at measure of monetary holdings. replacement level: at this rate women will bear, on The growth rates for monetary holdings are average, only enough daughters to replace them- calculated from year-end figures, while the aver- selves in the population. A stationary population is one in which age- and future migration trends, it is assumed in the pro- sex-specific mortality rates have not changed over jections that net migration rates will reach zero by a long period, while age-specific fertility rates 2025. have simultaneously remained at replacement The estimates of the size of the stationary pop- level (NRR=I). In such a population the birth rate ulation and the assumed year of reaching replace- is constant and equal to the death rate, the age ment-level fertility are speculative. They should not structure is constant, and the growth rate is zero. be regarded as predictions. They are included to Population momentum is the tendency for popu- show the implications of recent fertility and mor- lation growth to continue beyond the time that tality trends on the basis of generalized assump- replacement-level fertility has been achieved; that tions. A fuller description of the methods and is, even after the NRR has reached 1. The momen- assumptions used to calculate the estimates will tum of a population in any given year is measured be available from the World Bank's forthcoming as a ratio of the ultimate stationary population to World Population Projections, 1989-90 Edition. the population of that year, given the assumption that fertility drops to replacement level by that Table 29. Demography and fertility year and remains there. A population tends to grow even after fertility The crude birth and death rates indicate, respec- has declined to replacement level because past tively, the number of live births and deaths occur- high growth rates will have produced an age dis- ing per thousand population in a year. They come tribution with a relatively high proportion of from the sources mentioned in the note to Table women in, or still to enter, the reproductive ages. 28. Consequently, the birth rate will remain higher The percentage of women of childbearing age pro- than the death rate, and the growth rate will re- vides a more complete picture of fertility patterns. main positive for several decades. Childbearing age is generally defined as 15 to 49. Population projections are made component by The total fertility rate represents the number of component. Mortality, fertility, and migration are children that would be born to a woman if she projected separately, and the results are applied were to live to the end of her childbearing years iteratively to the 1985 base year age structure. For and bear children at each age in accordance with the projection period 1985 to 2005, the changes in prevailing age-specific fertility rates. The rates mortality are country specific: increments in life given are from the sources mentioned in Table 28. expectancy and decrements in infant mortality are The percentage of married women of childbearing based on previous trends for each country. When age using contraception refers to women who are female secondary school enrollment is high, mor- practicing, or whose husbands are practicing, any tality is assumed to decline more quickly. Infant form of contraception. Contraceptive usage is mortality is projected separately from adult generally measured for women age 15-49. A few mortality. countries use measures relating to other age Projected fertility rates are also based on previ- groups such as 15 to 44, 18 to 44, and 19 to 49. ous trends. For countries in which fertility has Data are mainly derived from the World Fertil- started to decline (fertility transition), this trend is ity Surveys, the Contraceptive Prevalence Sur- assumed to continue. It has been observed that no veys, the Demographic and Health Surveys, country with a life expectancy of less than 50 years World Bank country data, and the UN Recent Lev- experienced a fertility decline; for these countries els and Trends of Contraceptive Use as Assessed in the average decline of the group of countries in 1983. For several African countries for which no fertility transition is applied. Countries with survey data are available, program statistics are below-replacement fertility are assumed to have used. Program statistics may understate contra- constant total fertility rates until 1995-2000 and ceptive prevalence because they do not measure then to regain replacement levels by 2030. use of methods such as rhythm, withdrawal, or International migration rates are based on past abstinence, or contraceptives not obtained and present trends in migration flows and migra- through the official family planning program. The tion policy. Among the sources consulted are es- data refer to rates prevailing in a variety of years, timates and projections made by national generally not more than three years before the statistical offices, international agencies, and re- year specified in the tables. search institutions. Because of the uncertainty of 294 All summary measures are country data Table 31. Status of children weighted by each country's share in the aggregate population. For information on the source for children as a percentage of the total population see the notes to Table 30. Women in development Table 28. The infant mortality rate is the number of infants For information on the source for female percent- who die before reaching 1 year of age per thou- age of total population, see the notes to Table 28. sand live births in a given year. The data are from Information on source and definition for life UN, Mortality of Children under Age 5: Projections, expectancy at birth is given in the notes to Table 1. 1950-2025, as well as from the World Bank's data Average age at first marriage is from the United files. Nations Women's Indicators and Statistics Data Data for the remaining indicators in the table Base, 1988. Data are for years between 1975 and are from UNICEF 1989. Much of the data cover 1983, somewhat different age groups. Projected economically active population data are Percentage of age group affected by wasting indi- given as female and male percentages of the labor cates the extent of accute malnutrition; data are force. Data are for all ages and are projections for given for children age 12 to 23 months. Percentage 1985 from the United Nations Women's Indicators of age group affected by stunting indicates extent of and Statistics Data Base, 1988. chronic malnutrition; data are given for children Women in government data refer to the percent of age 24 to 59 months. Data refer to the percentage women in the total membership of the national of children with greater than minus two standard legislature. Data are from Sivard 1985. deviations from the 50th percentile of the weight- Maternal mortality refers to the number of female for-height reference population (wasting) or the deaths that occur during childbirth per 100,000 height-for-age reference population (stunting). live births. Because "childbirth" is defined more Wasting/stunting therefore means less than 77 widely in some countries, to include complica- percent of the median weight-for-height (wasting) tions of pregnancy or of abortion, and since many or height-for-age (stunting) of the reference pop- pregnant women die because of lack of suitable ulation of the United States National Center for health care, maternal mortality is difficult to mea- Health Statistics. sure consistently and reliably across countries. Percentage of children under agefive suffering from The data are drawn from diverse national sources malnutrition is the total for mild and moderate and collected by the WHO. Many national admin- malnutrition (between 60 and 80 percent of the istrative systems are weak and do not record vital desirable weight-for-age) and severe malnutrition events systematically. The data are derived (less than 60 percent desirable weight-for-age). mostly from official community reports and hos- Data for percentage of one-year-old children fully pital records, and some reflect only deaths in hos- immunized is given for immunization against tu- pitals and other medical institutions. Sometimes berculosis, DPT, poliomyelitis, and measles. smaller private and rural hospitals are excluded, and sometimes even relatively primitive local Table 32. Education facilitites are included. The coverage is therefore not always comprehensive, and the figures should The data in this table refer to a variety of years, be treated with extreme caution. generally not more than two years distant from Clearly, many maternal deaths go unrecorded, those specified, and are mostly from Unesco. particularly for remote rural populations; this ac- However, disaggregated figures for males and counts for some of the very low numbers shown females sometimes refer to a year earlier than that in the table. The WHO warns that there are "inev- for overall totals. itably gaps" in the series, and it has invited coun- The data on primary school enrollments are esti- tries to provide more comprehensive figures. mates of children of all ages enrolled in primary They are reproduced here from WHO, Maternal school. Figures are expressed as the ratio of pupils Mortality Rates (1986), supplemented by UNICEF, to the population of school-age children. While The State of the World's Children 1989, as part of the many countries consider primary school age to be international effort to highlight data in this field. 6 to 11 years, others do not. The differences in The data refer to years between 1977 and 1984. country practices in the ages and duration of schooling are reflected in the ratios given. For 293 some countries with universal primary education, shown are for a variety of years-these two indi- the gross enrollment raios may exceed 100 percent cators are not strictly comparable across countries. because some pupils are younger or older than the The daily calorie supply per capita is calculated by country's standard primary school age. The data dividing the calorie equivalent of the food sup- on secondary school enrollments are calculated in the plies in an economy by the population. Food sup- same manner, but again the definition of second- plies comprise domestic production, imports less ary school age differs among countries. It is most exports, and changes in stocks; they exclude ani- commonly considered 12 to 17 years. Late entry of mal feed, seeds for use in agricultrure, and food more mature students, as well as repetition and lost in processing and distribution. These esti- the phenomenon of bunching in the final grades, mates are from the FAO. can influence these ratios. The percentage of babies with low birth weights The tertiary enrollment ratio is calculated by di- relates to children born weighing less than 2,500 viding the number of pupils enrolled in all grams. Low birth weight is frequently associated postsecondary schools and universities by the with maternal malnutrition and tends to raise the population in the 20-24 age group. Pupils attend- risk of infant mortality and to lead to poor growth ing vocational schools, adult education programs, in infancy and childhood, thus increasing the in- two-year community colleges, and distance edu- cidence of other forms of retarded development. cation centers (primarily correspondence courses) The figures are derived from WHO and UNICEF are included. The distribution of pupils across sources and are based on national data. The data these different types of institutions varies among are not strictly comparable across countries, as countries. The youth population, that is 20 to 24 they are compiled from a combination of surveys years, is used as the denominator since it repre- and administrative records and other such sents an average tertiary level cohort. Although in sources. higher-income countries youths age 18 to 19 may The summary measures in this table are country be enrolled in a tertiary institution (and are in- figures weighted by each country's share in the cluded in the numerator), in both low- and mid- aggregate population. dle-income economies, many people older than 25 years are also enrolled in such institutions. Table 34. Labor force The summary measures in this table are country enrollment rates weighted by each country's share The population of working age refers to the popu- in the aggregate population. lation aged 15 to 64. The estimates are from the International Labour Organisation (ILO), based Table 33. Health and nutrition on UN population estimates. The labor force comprises economically active The estimates of population per physician and persons aged 10 years and over, including the nursing person are derived from World Health Or- armed forces and the unemployed, but excluding ganization (WHO) data. The data refer to a variety economically inactive groups. The concept of eco- of years, generally no more than two years before nomically active is restrictive and does not, for ex- the year specified. The figure for physicians, in ample, include activities of homemakers and addition to the total number of registered practi- other care-givers. Agriculture, industry, and ser- tioners in the country, includes medical assistants vices are defined as in Table 2. The estimates of the whose medical training is less than that of quali- sectoral distribution of the labor force are from the fied physicians, but who nevertheless dispense ILO, Labour Force Estimates and Projections, 1950- similar medical services, including simple opera- 2000 (1986) and, in a few instances, fromthe World tions. The numbers include "barefoot doctors." Bank. Labor force numbers in several developing Nursing persons include graduate, practical, assis- countries appear to reflect a significant underesti- tant, and auxilliary nurses, as well as paraprofes- mate of female participation rates and are there- sional personnel such as health workers, first aid fore themselves underestimates. workers, and traditional birth attendants. The in- The laborforcegrowth rates are from ILO data and clusion of auxilliary and paraprofessional person- are based on age-specific activity rates reported in nel provides more realistic estimates of available the source cited above. nursing care. Because definitions of doctors and The application of ILO activity rates to the nursing personnel vary-and because the data Bank's latest population estimates may be inap- propriate for some economies in which there have Land under permanent crops includes land culti- been significant changes in unemployment and vated with crops that occupy the land for long underemployment, as well as in international and periods and need not be replanted after each har- internal migration. vest, such as cocoa, coffee, and rubber; it includes Summary measures for population of working land under shrubs, fruit trees, nut trees and vines, age are weighted by each country's share in aggre- but excludes land under trees grown for wood or gate population. Summary measures for the sectoral timber. distribution of the labor force are weighted by Pasture refers to permanent meadows and pas- each country's share in the aggregate labor force. tures, land used permanently (five years or more) Summary measures for labor force growth rates are for herbaceous forage crops, either cultivated or weighted by each country's share in the aggregate growing wild (wild prairie or grazing land). labor force in 1980. Forest refers to forests and woodland. It includes land under natural or planted stands of trees, Table 35. Urbanization whether productive or not, and includes land from which forests have been cleared but that will The data on urban population as a percentage of be reforested in the foreseeable future. total population are from the forthcoming UN pub- Other refers to unused but potentially produc- lication, The Prospects of World Urbanization, sup- tive land, built-on areas, wasteland, parks, orna- plemented by data from the World Bank. mental gardens, roads, lanes, barren land, and any The growth rates of urban population are calcu- other land not specifically listed under the other lated from the World Bank's population esti- three categories. mates; the estimates of urban population shares are calculated from the sources cited above. Data Table 37. Environmental indicators on urban agglomeration in large cities are from the UN, Patterns of Urban and Rural Population Growth, Data are from the World Resources Institute, 1980. 1988-89. Because the estimates in this table are based on Most data on forest and woodland, deforesta- different national definitions of what is urban, tion, and reforestation refer to the period around cross-country comparisons should be interpreted 1980, but no attempt has been made to adjust the with caution. Data on urban agglomeration in data to a baseline year. Forest and woodland refers large cities are from population censuses, which to natural stands of woody vegetation in which are conducted at 10-year intervals in most trees predominate. This includes all stands except countries. plantations and includes stands that have been The summary measures for urban population, as degraded to some degree by catastrophic fire, log- a percentage of total population are weighted by ging, or agriculture. Deforestation refers to the each country's share in the aggregate population; clearing of forest lands for use in shifting cultiva- the other summary measures in this table are tion, permanent agriculture, or settlements. As weighted by each country's share in aggregate defined here, deforestation does not include other urban population. alterations, such as selective logging, which can substantially affect forests, forest soil, wildlife and Table 36. Land use its habitat, and the global carbon cycle. Reforesta- tion refers to the establishment of plantations for Data for land area and land use as a percentage of industrial and nonindustrial uses. Reforestation total land area are from the FAO. does not include regeneration of old tree crops Total land area refers to the total area of the (through either natural regeneration or forest country, including area under inland water management), although some countries may re- bodies. port regeneration as reforestation. Many trees are Cropland refers to arable land and land under also planted for nonindustiral uses, such as village permanent crops. Arable land includes land wood lots. Reforestation data often exclude this under temporary crops (double-cropped areas are component. counted only once), temporary meadows for Production of roundwood refers to all wood in the mowing or pasture, land under market and rough, whether destined for industrial uses or for kitchen gardens (including cultivation under use as fuelwood. Fuelwood and charcoal production glass), and land temporarily fallow or lying idle. includes all rough wood used for cooking, heat- ing, and power production. Wood intended for Wilderness areas include areas classified as forest charcoal production, pit kilns, and portable ovens and woodlands or other lands by FAO. is included. Industrial roundwood production refers The average annual marine catch data are for cal- to all roundwood products other than fuelwood endar years. Figures are national totals averaged and charcoal: sawlogs, veneer logs, sleepers, over a three-year period; they include fish caught pitprops, pulpwood, and other industrial prod- by a country's fleet anywhere in the world. Catch ucts. refer to marine fish killed, caught, trapped, col- Wilderness area refers to land showing no evi- lected, bred, or cultivated for commercial, indus- dence of development, such as settlements, roads, trial, and subsistence use. Crustaceans, molluscs, buildings, airports, railroads, pipelines, and miscellaneous aquatic animals are included. powerlines, and reservoirs. The minimum unit of Quantities taken in recreational activities are wilderness surveyed was 4,000 square kilometers. excluded. Bibliography FAO, IMF, OECD, UN, UNIDO, and World Bank 1984. Recent Levels and Trends of Contracep- data; the World Bank Debtor Reporting System; tive Use as Assessed in 1983. New York. and national sources. . 1988. 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Yearbook of International Environment Programme. John and Kathy Trade Statistics. New York. MacKinnon, consultants. Cambridge, UK. . Forthcoming. The Prospects of World Urban- International Monetary Fund, 1988. Government ization. New York. Finance Statistics Yearbook. Vol. 12. Washington, United Nations Conference on Trade and Devel- D.C. opment (UNCTAD). Various years. Handbook of .Various years. International Finance Statis- International Trade and Development Statistics. tics. Washington, D.C. Geneva. Organisation for Economic Co-operation and De- United Nations Development Programme velopment (OECD). 1987. Geographical Distribu- (UNDP) and the World Bank. 1989. African Eco- tion of Financial Flows to Developing Countries. nomic and Financial Data. Washington, D.C. Paris. United Nations Educational, Scientific, and Cul- . Various years. Development Co-operation. tural Organization (Unesco). Various years. Sta- Paris. tistical Yearbook. Paris. Sivard, Ruth. 1985. Women-A World Survey. United Nations International Childrens' Emer- Washington, D.C.: World Priorities. gency Fund (UNICEF). 1989. The State of the United Nations. Department of International Eco- World's Children 1989. Oxford: Oxford Univer- nomic and Social Affairs. 1980. Patterns of Urban sity Press. and Rural Population Growth. New York. World Health Organization (WHO). 1986. Mater- World Resources Institute and the International nal Mortality Rates: A Tabulation of Available In- Institute for Environment and Development, in formation, 2nd edition. Geneva. collaboration with the United Nations Environ- . Various years. World Health Statistics An- ment Programme. 1988. World Resources 1988-89. nual. Geneva. New York: Basic Books. . Various years. World Health Statistics Re- port. Geneva. a. a~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ THE WORLD BANK Alrica's continuing economic crisis presents an extraordinary challenge to the development conmmunity. Policvmakers have become so preoccupied with the immediate difficulties that they have had little opportunitv to take a longer view. How have the economies of Stub-Saharan Africa evolved during the first three decades of independence? What lessons can be learned? What are the prospects for the next generation of Africans? Sub-Saharan Africa: From Crisis to Sustairtable Growth attenmpts to provide such a long-term perspective by looking back 30 years and forward 30 years. 'I'his report is the product of a prolonged inquiry that has involved many African researclhers, private businessmen, and public officials. as well as representatives of the donor community. It also builds on many recent studies undertaken by the United Nations and by African and bilateral donor agencies. The report is offered as a contribution to an ongoing debate on how Africa can best achieve its long-term goals. To achieve food security. create some 350 million new jobs. and register a modest improvement in living standards for their 1. 1 billion inhabitants by 2020. the Sub-Saharan economies must grow by at least 4 percent annually. For this growth to be possible, fundamental structural change is needed to transform the economies of Africa and make them competitive in an increasingly competitive world. While sound incentives and efficient infrastructure are essential to provide an enabling environment for the productive use of resources, great efforts are also needed to build African capacities. In particular. expenditure on human resource development should be doubled. EvTen with transformed policies, higher savings, and better investments, Africa will still require, at least for another decade, exceptional external assistance. But an increased flow of' foreign resources cannot be expected without profound political reforms that establish governance for development. To build a consensus for joint action among all the partners in Africa's development, the report calls for a global coalition for Africa. The welfare of Africans will improve only if there is a new resolve on the part of all those concerned to work together for a better future. Among the publications of the World Bank on Sub-Saharan Africa African Economic and Financial Data (also in French) Africa's Adjustment and Growth in the 1980s (also in French) Africa's Pubtic Enterprise Sector and Evidence o,fReforms Agricultutral Mechanization and the Evolution of Farming Systems in Sub-Saharan Africa (also in French) The Challenge of Hunger in Africa: A Call to Action (also in French) Cost Recouery in the Health Care Sector: Selected Country StLudies in West Africa Eduicat ioI in Sub-Saharani Africa: Policies forAdjusiment, Reuitalization, and Expansion (also in French) Population Growth and Policies in Sub-Saharan Africa (also in French) Poverty. Adjustment. and Growth in Africa (also in French) Tax Policy in Sub-Saharan Africa: A FrameworkJfor Analysis Couer cls(iqn bh[/ Bill Fraset ISBN 0-8213-1349-5