The vast majority of African countries, after gaining formal independence from colonial rule during the 1960s, have been confronted with a variety of economic problems in the building of durable and self-reliant nation states. The average annual rate of growth continent-wide has been just 4.8 percent in the past 20 years. The low economic growth rate of much of Africa has been perpetuated by the region’s constantly deteriorating terms of trade, a situation which was greatly aggravated by escalating oil prices in the 1970s. The coincidence of a slump in commodity prices with falling world demand for African raw materials has severely affected many countries, especially those whose economies are based on a single commodity.
This has resulted in both a deterioration in export earnings and imported inflation arising out of imports from the West. It has been estimated that between 1960 and 1969 alone, Africa lost the equivalent of US$6 billion as a result of unfavorable changes in its terms of trade with the developed countries. More seriously, the 1970s witnessed a growing crisis in African food production, the 1971–75 per capita production figure being 7 percent lower than the comparable figure for 1961-65 when food production was still able to keep pace with population increases.
In sum, the overall performance of the African economy over the past 20 years has been poor. Moreover, the future prospects for the continent are still quite dismal. The World Bank predicts Africa’s annual GNP growth rate for the 1980s will be between minus 1 percent and 0.1 percent; thus per capita income is expected to fall by 2 percent or more a year. Africa’s dependence on food imports, its cash flow crisis, and its debt burden are all expected to increase, while export earnings are expected to grow slowly, if at all.
This paper seeks to explore the origins and the impact on the continent as a whole of the current crisis by (1) analyzing the initial conditions for development facing post-colonial African countries, (2) outlining alternative development strategies followed by different groups of countries, and (3) assessing their consequences for growth and poverty alleviation. On the basis of this diagnosis, the paper outlines a number of policy priorities for the future including greater research, extension and infrastructure support for smallholder agriculture, improvement in the overall structure of incentives in favor of agriculture, reforms of land ownership, further development of a more internationally competitive manufacturing sector, and promotion of economic cooperation among African countries.
