Transcript Similarities and Differences between the African Nations

What does the World Think about
Africa
Week 4
Objectives
 To discuss what the world think about Africa
 To discuss the Structural Adjustment programs (SAPs) for
Africa
 Discuss the issues of agricultural production in:
 Ethiopia
 Somalia
 Malawi
 Zimbabwe
 To gauge student views on Africa
 The purpose of this topic today is to analyze the view of what
the world think about Africa.
Introduction
 Most people think Africa is land with lots of problems;
 Associated with political instabilities –leading to bad governance and corrupt practices
 Wars
 Economic and social Developmental challenges –poverty and hunger
 Low agricultural productivity
 Scourge of diseases, etc.,
 But they forget:
 Flourishing business environment
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Investing in the people - education
Mining,
Oil
Agriculture – cocoa, tea, coffee, sugarcane
tourism
 This lesson will look at the causes of Africa’s down fall
Overview of Food Production in Africa
 The eve of independence in the mid-fifties, 45 colonies and two
independent nations(Ethiopia and Liberia) in SSA
 Political independence was launched on grand scale in 1960
 About 17 colonies won their independence
 In 1995 all forty-seven nations in SSA were free of colonial rule
 In the 1960, Africa had a booming agricultural export sector
Overview of Food production in Africa…(2)
It was a modest net exporter of food
These favorable initial conditions and the removal of
colonial shackles made
 Most leaders of new nations to optimistic that Africa could
“catch-up” with industrial nation by the turn of the century
Today, in Africa, the atmosphere is filled with
disappointment
Africa is poorest part of the global economy
Hostage to a chronic food bottlenecks
Overview of Food production in Africa…(3)
 In the past 50 decades, much can be learned about
 the complexity and diversity of African Agriculture
 Motivation of farmers
 Weather patterns
 The use and misuse of foreign aid
 There literally thousands of evaluations of ill-fated
agricultural strategies and projects including many imported
models;
 State farm
 Communal farms
 Farm settlement
Overview of Food production in Africa…(4)
 Bad weather and alleged lack of economic motivation of African farmers are not
the causes of Africa’s food crisis.
 Studies have shown that when African farmers have access to
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Incentives
Technology
Support services
Markets
 They have proven to be as calculating money managers as farmers in Iowa,
Arkansas or the rice bowl of Asia (Jones 1960)
 Weather can be ruled out as a cause of Africa’s chronic food gap
 Because annual food production grew at only half the rate of population
 This proves that drought for a year or two was not the cause of long-term
agricultural stagnation
Sixties - seventies
 Failure of state farms, farm settlements, communal farms and integrated rural
development projects
 Attention turned to poor economic policies as the cause of poor agrarian
stagnation
 World Bank study led by Elliot Berg argued that the fundamental cause of
Africa’s economic stagnation was the following:
 Bad economic policies which includes
 Overvalued exchanged rates
 Heavy taxation
 Money losing state industries
 Internal factors
 Africa’s response to the report charged that external policies of industrial
nation were the cause of the development crisis
The First SAPs: IMF and World Bank Rationale
 The Berg report provided rationale for IMF and World Bank
loans and grants for African Countries
 To help African governments carryout Structural Adjustment
Programs (SAPs)
 Aims were to:
 Redesigning country policies
 Reducing the size of government bureaucracies and subsidies to
industries
 Correcting the bias against agriculture in price, tax and
exchange rate policies
The First SAPs: IMF and World Bank
Rationale…(2)
 History has also shown that redesigning economic policies
are long-term and unpredictable processes
 New policy regime are put in place, cannot quickly slay the
dragons of economic stagnation and poverty
 Africa’s structural adjustment experience humbled the World
Bank
Second Round of SAPs
 Broadened to include:
 Institutional reform
 Rebuilding of human capital
 Fiscal decentralization
 Broader participation of civil society in the economy
 Africa’s transition from a controlled to a more open and
market-oriented approach to managing economies requires
more investigation.
Today in Africa
 Food crisis is the most challenging problem
 Two-thirds of the people are dependent on agriculture and
the rural economy for their livelihood
 Getting agriculture moving is high on main platforms
 Africans are looking inwards for ideas on increasing
agricultural productivity
Mainstream news from Africa
 Today’s mainstream news outlet focuses on the following:
 High level of inequality and poverty
 Dangerous levels of unemployment
 record droughts and flooding,
 rise in food prices,
 biofuel production and
 land grabs by foreign investors
 with an added emphasis on the role of the Somali terrorist group
Al-Shabaab
 Political instabilities
 Policies that are backward oriented
 Yet these factors alone are not responsible for the famine or
turmoil in Africa
Putting thing in Perspective
 The factors mentioned on the previous slide, intensified an
already dire hunger crisis that has persisted in Sub-Saharan
Africa for decades,
 In Africa, lending policies pushed by the World Bank
and International Monetary Fund (IMF)
 That transformed a self-sufficient, food-producing Africa into
a continent dependent on imports and food aid,
 This has pinned the continent vulnerable to food emergencies
and famine.
The Great Transformation
 The experience of Mexico and the Philippines was paralleled in
one country after another subjected to the ministrations of the
IMF and the WTO.
 A study of fourteen countries by the UN's Food and Agricultural
Organization found that the levels of food imports in 1995-98
exceeded those in 1990-94.
 This was not surprising, since one of the main goals of the WTO's
Agreement on Agriculture was to open up markets in developing
countries so they could absorb surplus production in the North.
Great Transformation…(2)
In 1986, the then - Secretary John Block put it US
Agriculture,
"The idea that developing countries should feed themselves
is an anachronism from a bygone era.They could better ensure
their food security by relying on US agricultural products, which
are available in most cases at lower cost."
Great Transformation..…(3)
 The apostles of the free market and the defenders of
dumping may seem to be at different ends of the spectrum,
 but the policies they advocate are bringing about the same
result: a globalized capitalist industrial agriculture.
 Developing countries are being integrated into a system
where export-oriented production of meat and grain,
 These are dominated by large industrial farms like those run
by the multinational
Great Transformation…..(4)
 Where technology is continually upgraded by advances in
genetic engineering from firms like Monsanto.
 And the elimination of tariff and nontariff barriers is
facilitating a global agricultural supermarket of elite and
middle-class consumers
 Which are serviced by grain-trading corporations
Background on policy initiatives…
 There is little room for the hundreds of millions of rural and
urban poor in this integrated global market.
 They are confined to giant suburban, where they contend with
food prices that are often much higher than the supermarket
prices,
 or to rural reservations, where they are trapped in marginal
agricultural activities and increasingly vulnerable to hunger.
 Indeed, within the same country, famine in the marginalized
sector sometimes coexists with prosperity in the globalized sector
African Perspectives
 At the time of decolonization, in the 1960s, Africa was actually a net
food exporter.
 Today the continent imports 25 percent of its food;
 Almost every country is a net importer.
 Hunger and famine have become recurrent phenomena,
 The past three years have seen food emergencies break out in
 The Horn of Africa,
 The Sahel,
 Southern and Central Africa.
Snapshot on Africa
 Agriculture in Africa is in deep crisis,
 The causes range from wars to
 bad governance,
 lack of agricultural technology and
 the spread of HIV/AIDS.
 However, as in Mexico and the Philippines, an important part of the
explanation is
 The phasing out of government controls and support mechanisms under
the IMF and World Bank -Structural Adjustment Programs (SAPs)
imposed as the price for assistance in servicing external debt.
A scenario from Ethiopia
 Dr. Tewolde Behran, General Manager of the Environmental
Protection Authority in Ethiopia,
 Explains that drought is not the cause of famine in Africa.
 Storage and transport are the two big problems.
 Two years ago in Ethiopia, when there was a surplus of food,
 Farmers could not sell their produce (locally or on the foreign
market) and thus did not get the capital they needed for future
crops.
A scenario from Ethiopia….
 One hundred kilos (2,2046 pounds) of maize would sell for
as little as $4 and Saudi Arabia wanted to buy this cheap
maize.
 However, by the time the maize got to the port its price
would have tripled because transport costs are so high.
 It was marginally cheaper for Saudi Arabia to instead buy
maize that came all the way from the U.S.
 The U.S. is underselling starving nations and the food
shortages are actually exasperated by this practice.
A scenario from Ethiopia
 Instead of reducing the debt, since 1980, SAPs have
increased African debt by 500 percent,
 creating a domino effect of disasters:
 prolonged famine,
 conflict,
 abject poverty,
 environmental exploitation) linked to an estimated 21 million
deaths and,
 In the process, transferring hundreds of billion dollars to the
West.
A case for Somalia
 The Globalization of Poverty, explains that despite frequent droughts, Somalia’s
economy,
 Which is led by small-scale farmers and pastoralists or “nomadic herdsmen,”
was self-sufficient in food well into the 1970s.
 The pastoralists proved quite successful as livestock produced 80 percent of
Somalia’s export earnings through 1983.
 But under SAPs, veterinarian services for livestock were privatized,
 Making it difficult and unaffordable for herders in rural grazing areas to access
animal healthcare,
 This led to ultimately devastating pastoralists who made up half of the
population.
A case for Somalia
 As for agriculture, the cheap imports of rice and wheat
displaced small farmers, and resources were diverted to
grow export commodities.
 Exacerbating the problem, “Water points and boreholes dried
up due to lack of maintenance, or were privatized by local
merchants and rich farmers,” due to the privatization of
water resources.
A case of Malawi
 The role of structural adjustment on Malawi in the late
1990s, when subsistence farmers were provided with “starter
packs” of free fertilizers and seeds.
 The program yielded a surplus of maize
 But then the World Bank and IMF stepped in to dismantle the
program and compelled the government to sell the majority
of its grain reserves in order to service its debt.
A case of Zimbabwe
 Zimbabwe’s dualistic agricultural sectors has two subsectors:
 Large-scale commercial farming sector
 The smallholder sector
 Maize is the national food staple of Zimbabwe
 Smallholders have historically had the largest area of maize under
cultivation
 Zimbabwe generated two maize revolutions
 The first was spearheaded by large-scale commercial farmers in the 1960s
and 1970s
 The second was launched by smallholders after independence in 1980
Changing roles of the public and private
sectors
 Experiences in the four mentioned countries (Ethiopia,
Somalia, Malawi and Zimbabwe) illustrates that smallholders
can fulfill their productivity potential if they are supported
by
 Political leadership
 Macroeconomic stability
 Cost effective farmer support institutions
 A stream of new technology from home and abroad
 Access to domestic and international markets
Changing roles of the public and private
sectors….(2)
 Develop legal framework and incentive that will encourage
private investment in the entire food system, including
 R&D
 Farmer support organizations
 Production
 Marketing
 Processing
 Improvement in rural infrastructure – telecommunications,
roads and other infrastructural services in smallholder areas
These should have economic, social, and political benefits in a
long run.
SAPs and Famine in Africa
 What does this have to do with famine?
 Debt perpetual forces government to divert spending to debt repayments
 Rather than investing in basic infrastructure – like health care, education
 SAPs initiated the collapse of African food security by;
 Diverting land, water and labor away from small-scale farming towards the production of cash
crops
 Whose earning were used to pay debt
 These SAPs demanded the elimination of subsidies for small scale farmers
 Forced peasant farmers to compete with an influx of cheap subsidized commercial
staples
 Meanwhile U.S and Europe continues to prove their agricultural sector with billions if
dollars in subsidies.
In Summary
 Africa can rid itself from all the problems if proper policies are
suggested and implemented.
 Africa’s structural adjustment (suggested by the WB) experience
has humbled the World bank.
 The juxtaposition of the dream of the Berg report and the reality
of Africa’s development experience in the 80s and 90s
 helps explain why the World bank recently declared that effective
institution matter as much as sensible policies in development.
Top 5 Largest oil Reserves in Africa
 Proven Reserves of Oil (bbl)
Largest Economies in Africa
 Based on annual GDP
Reflection questions
1.
What are your perceptions on Africa?
2.
Which year/s was Africa a food exporter?
3.
What does SAPs stands for?
4.
Give two examples of SAP?
5.
What does the SAPs have to do with famine?
6.
Use the HDI Report to identify the top ten richest and top ten poorest countries in Africa. Use
GNI as an indicator.
7.
According to Dr. Tewolde Behran, what were the two major factors that caused famine in
Ethiopia? Do you agree to this claim?
8.
What are the major sectors of the Zimbabwean agriculture?
9.
What was the problem caused by SAPs in Somalia?
10.
How many countries produces oil in Africa?
11.
Which countries produce cocoa and coffee in Africa?
12.
Suggest any policies that can be helpful to increase agricultural productivity in smallholder
farming?