African Affairs Advance Access originally published online on September 23, 2005
African Affairs 2005 104(417):665-678; doi:10.1093/afraf/adi084
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commentary |
Reasons for sub-Saharan Africa’s development deficit that the commission for Africa did not consider
Percy Mistry (oxfordintluk{at}aol.com) is chairman of Oxford International, which has private equity investments in emerging markets.
Despite a substantial amount of aid (much larger in per capita terms than provided to any other region), sub-Saharan African countries, with very few exceptions, have regressed since independence. The general history of Africa since achieving independence has been one of development failure. Some protagonists point to signs of change that argue for more aid. This article suggests that aid to Africa has not worked because human, social and institutional capital — not financial capital — poses the binding constraint. In that context, doubling aid to Africa from $23 billion in 2004 to $50 billion annually by 2015 seems a questionable proposition. This commentary suggests unconventional ways of dealing with the problems involved in importing the essential ingredients that Africa needs. It concludes with the observation that the aid community’s current obsession with poverty reduction and the Millennium Development Goals (MDGs) may be harming rather than helping the cause of development in Africa and argues that the focus on growth and development should be restored.
He is an investment banker who has worked in the private and public sector in developing countries, particularly in Asia and Africa. He was with the World Bank in the 1970s and 1980s.
1. Report of The Commission for Africa (Department for International Development, UK Government, London, 2005).
2. This is deduced by the international financial institutions from the ‘errors and omissions’ line item that reconciles current account imbalances and by a number of econometric studies on capital flight.
3. This aggregate is derived from annual reports of the Development Assistance Committee of the Organisation for Economic Cooperation & Development (OECD) reporting on the amounts of aid provided to Africa and converting the nominal dollar amounts into 2005 dollar equivalents.
4. The debt service figures have been derived from the World Bank’s annual Global Development Finance reports and converted into 2005 equivalents.
5. See, for example, the several studies done on aid effectiveness by the World Bank; e.g. S. Devarajan, D. Dollar and T. Holmgrem (eds), Aid and Reform in Africa (World Bank, Washington, DC, 2001); R. Cassen and associates, Does Aid Work? (Clarendon Press, Oxford, 1986). Several other such studies have been undertaken over the years by the operations evaluation departments of the World Bank and African Development Bank as well as by the UN Economic Commission on Africa and UNDP as well as by independent (but aid funded) institutions such as the Overseas Development Institute, the Institute for Development Studies at the University of Sussex, and the John F. Kennedy School for Public Administration at Harvard University to mention but a few. Many similar studies have been done in African countries and institutions as well. These studies are far too numerous to be individually attributed.
6. Such reports were produced by similar task forces and commissions set up, among others, by the World Bank, the African Development Bank, the UN Economic Commission for Africa as well as donors such as the Nordic, Dutch, United Kingdom, Canadian and French governments.
7. The two options, of course, are not mutually exclusive. Importing the human, social and institutional capital that it is short of would enable Africa to develop indigenous capital of this type faster than by relying on its own resources and on the inefficient mechanism of aid.
8. History is now being repeated as Africa is turning increasingly to China as an alternative source to the West for investment and aid.
9. Uganda, under President Museveni, has also attracted back some of the Asian residents formerly expelled by Idi Amin. Their return has had a positive impact on Uganda’s economy and development. Unfortunately, the process simply has not gone far enough, although many indigenous Ugandans might feel that it has perhaps gone too far.
10. In reality global markets for high-level (managerial, academic, sporting and cultural) labour are quite open. Senior executives in transnational corporations, high net-worth individuals, opera singers, ballerinas, film stars, senior academics and researchers and football players have few problems moving around the world. The market for skilled specialist labour (such as information technology specialists or healthcare workers) is also more open than is realized. It is the market for low-level labour (unskilled and semiskilled) that is more tightly shut officially, although it is at that level that the labour market is also most vulnerable and porous to illegal immigration.
CiteULike 
Connotea 
Del.icio.us What's this?
This article has been cited by other articles:
|
|
 |
|
  J. F. E. Ohiorhenuan and Z. Keeler International Political Economy and African Economic Development: A Survey of Issues and Research Agenda J. Afr. Econ., January 1, 2008; 17(suppl_1): 140 - 239. [Abstract] [Full Text] [PDF]
|
|