Underdevelopment in sub-Saharan Africa

Development in sub-Saharan Africa requires a new type of democracy that empowers not just the political elite but sub-Saharan Africa’s private-sector producers as well, according to Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs.

Currently, entrepreneurs in Africa are prevented from creating wealth by predatory political elites who control the state. The elites use marketing boards and taxation to divert agricultural savings to finance their own consumption and to strengthen the repressive apparatus of the state, says Moeletsi Mbeki.

In order for Africa to prosper, Mbeki recommends the following:

Peasants, who constitute the core of the private sector in sub-Saharan Africa, need to become the real owners of their primary asset – land – over which they currently have no property rights.

Peasants must be given direct access to world markets.

The producers must be able to auction their own cash crops, including coffee, tea, cotton, sugar, cocoa and rubber, rather than being forced to sell them to state-controlled marketing boards.

Sub-Saharan Africa needs new financial institutions, too. They must be independent of the political elite and capable of addressing the financial needs of not only peasants, but of other small- to medium-scale producers, as well.

In 2001, most African governments adopted the New Partnership for Africa’s Development (NEPAD), which provides a framework for Africa’s development and emphasises the role of good governance in stimulating economic growth. While NEPAD may address some of the worst excesses of the political elites, it does not address the fundamental problem, says Mbeki.

If NEPAD is to contribute to Africa’s economic development, it must help redesign Africa’s political economy so it protects the rights of private-sector actors instead of rent-seeking political elites, says Mbeki.

Source: Moeletsi Mbeki, Underdevelopment in Sub-Saharan Africa: The Role of the Private Sector and Political Elites, Cato Institute, Foreign Policy Briefing No. 85, April 15, 2005.

For text: http://www.cato.org/pub_display.php?pub_id=3728

For more on International: Institutions and Growth: http://www.ncpa.org/iss/int/

FMF Policy Bulletin/ 10 May 2005