Special Documents


An Economic Strategy For The Second Liberation Of Africa
A. M. BABU (The late former minister of Economic Planning in Tanzania)

The real meaning of the African crisis is that our countries, collectively and individually, are at a dead-end, thanks entirely to the economic and “development” policies pursued since independence.

The situation is so bad that no “reforms”, whether inspired by the World Bank or IMF, or whether initiated locally, can get us out of the mess. For what is needed is not reform but a different outlook which calls for a decisive change of direction, a change from the primitive colonial structure of the economy to a national economy; above all, a change in the structure of production. This entails a change from an outward-motivated to an inward-motivated development strategy, whose guiding principle must be one based on the recognition that external causes are only a condition of change, and internal causes the basis of change.

This African crisis is reflected in, among other phenomena, the total destruction of our national currencies, thanks to the IMF and the Bank. In practically all-African countries there are no national currencies, only fluctuating tokens of the dollar or of the French franc. All real business is conducted in terms of these two foreign currencies. And the reason is that, except for the franc zone whose currencies are tied to and backed by the French treasury, the destruction of the national currencies is at once the cause and effect of the “disunity” between the economy and the financial sector, which it is supposed to service.

The disunity of these two most important sectors in the national economy has led to a killing-fields situation for speculative capital and foreign-exchange dealers. And as long as this disunity remains there can be no reform, because the two sectors remain in perpetual state of disharmony, of one negating the other.

It is the US dollar, which takes advantage of the resultant chronic disparity between the official and the so-called parallel exchange rates. All that the IMF and the World Bank can do in order to correct this disparity is to call for a better management of the monetary and financial sectors. It is the monetarists’ prescription for all kinds of economic ailments. But the results have always been disastrous to the well-being of the people, without doing much reform to the economies. This is true in Poland and no less in Ghana; it is true in Russia as in Zambia – no matter how developed or underdeveloped a country may be, the prescription is the same, and the result is the same – economic chaos and social instability.

Is there a conspiracy here? Not necessarily. The disastrous consequences are only the natural response to the laws of economic development. If you are at an economic cul-de-sac and if you try to save the situation by going for financial rather than economic solutions then you are bound to fail. Money, after all, is only the outcome of the economy, and not the other way round. A viable solution can only come out of the real economy: production, exchange, distribution and consumption. (The reason why
Anglo-Saxon economies are in a mess is that since 1980 and the advent of Reaganomics, they have consistently ignored this basic economic rule. Their monetarist fanatism led them to emphasize on making money through speculation, while the more realistic Germany and Japan continued to make goods!)

And so are the monetarist solutions of the IMF and the Bank; they are not for reactivating the basic sectors of our economies, but for pushing us deeper into the world market and continue to operate according to its predetermined order of priorities. And in that order we are to remain producers of primary commodities, and our finances are to be adjusted accordingly to facilitate that function, no matter what harm this does to the “rest of the economy”

The “second liberation of Africa”, therefore, requires first of all, to ask ourselves: Do we want to continue in that prescribed role? It is clear that Africa’s leadership is reconciled to this status, while at the same time calling for a “New International Economic Order”. This position is also echoed by UN Economic Commission for Africa, by the African Development Bank (which, by the way, has now turned itself into a mini-IMF and a spokesman for international financiers) and even by the OAU itself. But the elusive new world order does not seem to be anywhere near the horizon and the reason for this delay is simply this: The existing world economic order is the only possible one under the conditions of the “free” world market economy. To wish for something else is to indulge in metaphysics.

But if we want a “second liberation” in the real world we must change our outlook, the direction of our economies and the order of our priorities. The starting point must be the satisfaction of the people’s basic needs – food, housing, and clothing. We must abandon, as a precondition, the old notion of looking outwards for our survival and orientate the economies to look inwards for solutions. External factors – trade, aid, foreign investments and loans – must only complement internal activity, but not the other way round.

In order to embark on this new path we need to have general principles to guide us which are broadly applicable, but which at the same time could be modified to suit local conditions. In an unevenly developed continent like Africa, each region, if not each country, has its own specific characteristics, which have to be taken into account before any strategy is formulated. That is why the following will remain essentially, general principles to guide concrete study and/or research in each specific case and region.


The key problem in most of the mangled African Economies, as noted above, is the division between the financial and the economic sectors.

So on taking over power the new democratic governments must strive as a precondition to bring about the unity of the two sectors. This is primarily a struggle against speculative capital whose strategy and tactics can be worked out in accordance with a given concrete situation.


To move as rapidly as possible from the primitive mode of production inherited from colonialism and enter the realm of “expanded reproduction”. This is the most critical and decisive threshold essential for moving from a dependent to an independent national economy. Economic expansion needs: a Domestic Producer goods sector, Capital goods and technology producing sector which is also fully integrated with Agriculture. Modernisation of Agriculture requires changes in social organisation of agricultural production and equitable distribution of land.


Europe and North America have developed on the basis of industrialization. They achieved this, thanks mostly to specific historical circumstances obtained at the time. These include excessively cheap (almost free) labour: slavery and colonialism. This led to rapid capital accumulation and a ready “captured” market abroad and an unprecedented population expansion at home. Japanese bourgeoisie too entered the fray at about the same time and helped themselves to some colonial exploitation – Korea and later China.

A combination of several of the above factors, including Anglo-Saxon settler economies in America, Australia, Canada and New Zealand, created ideal conditions for industrialization and development.

• Agriculture expanded in order to feed the growing populations;
• Influx of labour from the rural to the urban industrial areas created labour scarcity in agriculture and created conditions for innovations and capital intensive farming, labour saving techniques and raised productivity.
• The growing demand for labour-saving technique in agriculture induced industries to go for the production of producer goods and created conditions for capital goods production.
• Population growth created demand not only for more food, but also for more clothing and housing, which promoted textile industrialization and housing and construction industry, which constituted the foundation of national economies by creating massive employment opportunities and rising living standards. Expanding industrial capacity needed wider markets beyond the home market for the finished products. Expanded industrial activity in turn demanded more raw materials from abroad.
• The ensuing competition for external markets and for sources of raw materials stepped up colonisation, “settlerisation” abroad, further technological expansion and naval superiority, which facilitated further colonisation. All this gave Europe, America and Japan the power to dominate the world economy, which they exploit to this day.

• The above were exceptional historical circumstances which no longer exist for the developing third world.
• There is no going back to the “birth throes” of capitalism (slavery and colonialism) although not for want of trying in Africa by the IMF and the international bankers it serves. People are everywhere resisting any attempt to reintroduce the humiliating conditions of subjugation familiar under slavery and colonialism.
• In other words “primitive accumulation of capital” (PAC) in our case can not take place in the same fashion as was the case in Europe.
• But the fact still remains that there must be PAC if we are to develop the productive forces and move on to extended reproduction without which there can be no development. But at whose expense?

THE SOVIET EXPERIENCE: When the Soviet Union was faced with the dilemma of seeking resources for their PAC in the early phases of their reconstruction, they resorted to a policy of transferring massive surplus from agriculture in order to invest in heavy industry. And they dubbed this “the law of Primitive Socialist Accumulation”. Serious socialist economists strongly opposed this strategy of exploiting the peasantry in favour of industry but in the end Stalin won the day by liquidating the opposition by the firing squad.
• The soviet strategy turned out to be a disaster; it led to an everlasting imbalance between agriculture and industry; it led to mass poverty in the rural areas; and seventy years later it has helped to reduce the mighty Soviet Union from a superpower to a humble follower of the US.
• Again, in Africa, unlike the experience in Europe, our currently massive expansion of urban centres does not indicate the existence of the necessary conditions for industrial development; rather it reflects the condition of rural stagnation and underdevelopment.
• Nor can the mass poverty in towns and cities that we are now experiencing ever be a stimulant to modern agricultural farming nor can it be a source for accumulation; on the contrary, it hampers development and worsens rural impoverishment.


What can an African country do in order to develop a self-sustaining, independent national economy? We cannot re-create the above “favourable” historical circumstances that have helped advanced countries to develop; nor will the latter help us develop and become their competitors. On the contrary, ever since the beginning of the 1980s Europe and America have been doing everything to destabilise our economies through the IMF and the World Bank. The Bretton Woods system itself, since its inception in 1945, has been the main source of Western prosperity by ensuring a steady flow of wealth from poor countries to the rich (the net outflow, which includes the effects of debts servicing, brain-drain, resource transfer, is currently estimated to be around $200 billion a year, or about $23 million per hour!). We have, therefore, no alternative except to find our own way of starting the capital accumulation process, which includes putting a stop to this massive outflow of wealth.

• Which means that, first, we must be realistic and discard any illusion that anybody else can help us develop except ourselves.
• Secondly, if we cannot re-create historical circumstances, it is within our means to at least create “artificial” conditions which can and will induce development.
• If the PAC in the West was achieved at the expense of Africa and other colonies, and that of the Soviet Union at the expenses of its peasantry and its Asiatic colonies, who will Africa exploit to achieve her PAC?
• Our experience since independence has shown that we cannot hope to start our accumulation via the export of primary commodities to the world market. The world market, on the contrary, has been and is the main contributing factor to our poverty and underdevelopment, because:

(a) We waste almost all our socially necessary labour time in the production of useless agricultural commodities primarily for export, yet we earn hardly anything to set our PAC in motion; and thus,

(b) We put more into the world market than we get out of it, which means a net loss. Any waste of the socially necessary labour time has its penalty, and in our case we pay the penalty by being condemned to absolute poverty and mass starvation.


i. It is essential to first of all adopt a different world outlook in our approach to development. In other words, we must start with a different “frame of mind”.

ii. We must learn to utilise our socially necessary labour time more efficiently, concentrating more on the production of what we actually need for our own development rather than in what we hope to gain from exports. Gains from export can begin to come only when the economy is soundly based internally and the needs of the people are regularly met.

iii. To start the accumulation process we must rely entirely on our own labour, on our own resources and skills. To achieve this we must have a people’s own leadership at the helm instead of the corrupt ones we have so far experienced.

iv.We must learn to be frugal and to be collectively a nation of savers and not of the waste-makers that we are. This requires exceptional discipline because we cannot afford to be anything less at the start of our long journey to national prosperity.

v. As we are so heavily indebted, thanks to the sins of the previous governments, we must start by negotiating with our creditors for a twenty-year moratorium on debt-servicing and immediate freeze on interest, both of which are a major source of capital outflow.

vi. The meagre foreign exchange that we are currently earning from our exports must be spent most frugally by carefully choosing between absolutely essential consumer goods, i.e., on social consumption like health service, education and transport, on the one hand, and on producer goods, especially machine-tool industries, that is, machines that build machines, on the other.

vii. Gradually (a ten-year project) divert resources away from the export sector in favour of expanding the internal base. That is to say, gradually minimise production of cash crops for export in order to be able to utilise our socially necessary labour time more efficiently and productively for people’s needs, i.e., food, clothing and housing, a large portion of which can be locally financed without squandering our foreign exchange earnings.

viii. As 90% of our populations are engaged in agriculture, then initially agriculture, i.e., production of food grains and industrial crops, must constitute the foundation and motive force of our economies.

ix. Our industrial development, therefore, must initially be geared towards serving agriculture, and agriculture in turn must serve industry. The strategy will help set in motion the process to self-sustaining, independent national economy, gradually put a stop to capital outflow, and will usher in the epoch of PAC.

x. Identify areas where savings can be affected: to start with: Drastically reduce spending on the military; cut down official foreign travels, now widely abused and a big drain on our foreign exchange. Reduce overseas embassies to absolute minimum; limit to four or five essential areas of significance to promoting real “national interest”, e.g., the UN, Washington (IMF and the Bank), London (Br. Commonwealth), or Paris (for the Francophones), Brussels (EEC), and at the OAU. Embassies are notorious for squandering foreign exchange resources, legally and illegally.

Learn to utilise every potential internal resource first before resorting to imports. This is most essential in the early stages of capital formation. e.g., use of natural manure instead of (imported) chemical fertilisers. For example, one cow produces one ton of manure annually. Tame and train some of the wild-life for production work. Wild-life is potentially a great source of energy which in many cases can be used to replace (imported) oil-driven machines: (In Burma, the entire timber industry is based on elephants; in Zanzibar the entire clove and coconut transport was based on animal driven-carts which brought much prosperity to the nation; and oil milling was based on camel energy; and so on.) We can resort to modern machinery only when we have a sound and prosperous basis at home. Japan utilises most ancient and most modern technologies side-by-side, and as a result they have achieved what we now call the “Japanese miracle”.

Strive to establish a most efficient public transport system which will make large scale importation of private cars unnecessary and the foreign exchange thus saved could be diverted to importing productive inputs. There are several other areas of saving our limited foreign exchange resources, which can be investigated. For instance, Cuba, after being abandoned by the Soviet Union and embargoed by the US, has embarked on ingenious methods of saving their meagre foreign exchange earnings. There is a lot that can be learnt from this Cuban experience, both as a warning and as an economic necessity.

There are in the main three ways of approaching economic development:

(a) ideological, i.e., either capitalist or socialist or “mixed”;
(b) economism, i.e., responding only to the “economic imperative”, for better or worse, and
(c) serving the people, i.e., a common-sense approach to development, giving priority to what are the long and short-term needs of the people and organise the economy accordingly for the attainment of that objective.

Experience has shown that approach (a) has many dangers because going exclusively by the dictates of one’s ideology, unchecked by the scientific method of verification, very often tends to lose sight of the concrete realities of a given situation. Ideology must remain only a guide to action, but never turned into a dogma. Serious mistakes have been made by both capitalist and socialist “fundamentalists” who have refused to alter their course even when red-danger signals indicated disaster ahead. This shortcoming has become obvious by the catastrophic results of the ideology of “monetarism” in the Anglo-Saxon countries in the 1980s and by the rigid Soviet model which distorted the very essence of “socialism” and “socialist planning”.
Approach (b) too has many shortcomings. For one thing, economics on its own has no foresight; it can forecast, by means of figures, but it cannot predict their outcome. It can probably work for “good economic results” but these are not always in conformity with the social or people’s needs. It is rather like the proverbial doctor who performs a technically “successful surgical operation” although the patient dies. That is why it is said that “national economy is too important to be left to the economists”.
Approach (c) is more pertinent because it is guided constantly by what society or the people want. That is why we should call it a “common-sense” approach. Of course, if you are dealing with developing a national economy you must have economists, but only as “tools” and not as initiators of policy. The common-sense approach uses economics to justify or to subject to critical analysis what has been ordained by the “authority of the people”, to give “indicative figures” of what might happen if action A or B were taken, but not to decide whether to take A or B. That is a political decision.

The key factor contributing to the current African crisis is that ever since independence African countries have been run on the principles of the (b) approach. Where you had “five-year plans” it was the economists, mostly foreign, and not the political representatives of the people who laid down “national objectives”. This has been the root cause which has led Africa to blind alleys and virtual economic ruin. The crisis is made worse by once again following the dictates of the same foreign economists in the hope of bailing us out! In every case these economists tend to be steeped in capitalist ideologies, which have no relevance to our conditions. And they always “get it Wrong”.

On the other hand their radical opponents, mostly with socialist orientation, often tend to challenge them on the same grounds, but from a different direction. The result is a “dialogue of the deaf” whose message does not reach the people because they cannot follow what the fuss is all about.

Where national economies were not planned, no specific economic objectives were set; it was only hoped economic prosperity would be achieved by encouraging full play of individual greed operating in the “market place”. Countries like Kenya or Ivory Coast operated on this basis and they were hailed as “success” stories, but actually only a handful, again mostly foreigners, benefited at the expense of the majority of the impoverished masses. There has indeed been a lot of “economic activity”, impressive office tower blocks and so on, which gave the impression of “growth”, but in real terms the people at large have become worse off. In both these “success” models there are currently intense political and economic upheavals.

But Africa is not committing these blunders outside the political economy of the world. We are part and parcel of that world, although we are in it from the receiving end. Consequently, we cannot hope to find solutions to our problems without first having a thorough grasp of how the “world economy” operates, our role in it, and what are the forces behind it.

As part of the world economy Africa must, therefore, seek solutions to its problems from within that context. But there is an important distinction. The new African elites, the decision-makers, are inordinately influenced by the multilateral agencies, like the old elites before them who were brainwashed by the colonialists. They don’t seem to be able to take the initiative on any major issue affecting their countries. They simply sing the tune of the prevailing refrain orchestrated by the imperialist powers. They are propagating the notion of the “global management of an interdependent world”, which really means managing the status quo for the benefit of the imperial powers and at the expense of the poor countries. This is not the way of looking for solutions to our problems within the context of the world economy. This is a futile pretext of seeking solution to the status quo from within the status quo!

It is an attempt at seeking adjustments within the same old economic world order without attempting to change our own role in it, beginning with changing our own economies as a precondition to a new order. It is a negative way of seeking to establish the “new international economic order” while we remain in the same economic status of commodity producers. That kind of “globalism” is meaningless; it is only a way of intoxicating the poor with hope.

The real world economy, in fact, is not interdependent; it is an exploitative arrangement whereby one section of the world benefits from the weakness and backwardness of the other. And it is in the interest of the former to maintain the situation as it is. Africa has no power to change it, shout as we may. We can only change what is in our power to change, and that is our own economies – their structure and direction.

We made a fatal mistake right at independence. We had a choice then between siding with the emerging world socialist movement and mercifully get cut off from the capitalist “world economy”, or remain junior partners in an economy dominated by the US and the ex-colonial powers from whom we had just emerged from colonialism. In Asia, only China, North Korea, Laos and Vietnam chose to join the world socialist movement, which sought to bring about a completely new world order; a socialist world. In Africa none went that way, although we invented various forms of “socialisms” to fool the masses while we were putting them more firmly under the grip of Western domination.

In comparatively short time, China and North Korea became medium industrial powers, largely self-sustaining, while the rest of us became more and more mal-developed, with millions of new social problems emerging by the day. But in the case of China, with extraordinary foresight, by mid-1956 she abandoned the Soviet
planning model which had the fatal weakness of emphasising on the development of heavy industry at the expense of light industry and agriculture. Instead, China decided to put in practice the Maoist strategy which came to be known as the ten major relationships.

Among these relationships the key one was that between heavy-industry, on the one hand, and light industry and agriculture, on the other. In rejecting the Soviet and East European model, the Maoist thesis pointed out that: “Their lop-sided stress on heavy industry to the neglect of agriculture and light industry results in a shortage of goods on the market and an unstable currency.” Thirty-five years later, this observation has proved to be remarkably correct with the tragic collapse of the Soviet system in Europe, while China continues to make great strides in her economic performance and modernisation.

In spite of the inherent weakness in the Soviet model, however, the West could see in it the potential for becoming a serious challenge to the West’s strategy of world domination, or hegemony. The West, therefore, decided to fight it to the finish, with all its enormous advantage over the young emerging Socialist system.
When Africa began to gain its independence this war against socialism was at its peak. Africa, consciously or unconsciously, decided to side with the West against socialism, and at the same time declaring ourselves to be non-aligned between East and West! It was never explained how anyone can honestly be non-aligned between a just and an unjust system?

In any case, we decided on our own free will to place our countries under the sphere of influence of the West as junior partners and, in effect, signed our own death warrant: we were to be condemned never to see any serious development of the continent, collectively or individually. As long as we remained in this demonstrably unjust world economic system from a position of weakness, with circumstances so heavily weighted against us, there was no way we could attain any form of development beneficial to ourselves.

What, therefore, are the causes, both external and internal, of the African crisis?


The “modern” world economic order was created soon after the anti-fascist war in 1945. It was designed to continue with the war by other means; this time against the socialist order which was then emerging as a system that could provide an alternative to the status quo, especially to the poor countries. Thus, the first conference to re-establish the old system in a new guise was held at Bretton Woods, USA, and the system became known as the Bretton Woods System. Its declared objective was to stabilise international monetary and financial regimes which were disrupted in the pre-war period of the 1930s, and also to help the Western world’s economic recovery and combat socialism in the post-war era.
The main institutions created for the job were the World Bank, IMF and GATT (the General Agreement of Tariff and Trade), all of which were at the same time designed, in addition to recovery, to strengthen Western grip on the world economy. We became members of all of these institutions soon after independence. Thirty years on now, we have already been demoted from the status of independent and honourable members of these institutions to that of their “obedient servants”.

It will be useful for those who urge us to deepen our involvement in this economic arrangement in the spirit of “interdependence” to remember that at no time has the system ever worked in our interest and there is no evidence to show that it might do so in the future. The alleged “interdependence” can only be of the kind in which we are permanently dependent on the West’s scheme of things – to feed us, house us and even cloth us, while we can be depended upon to continue to facilitate the West’s massive exploitation of our human and material resources.

The system itself, by the way, has a long history starting from the dark epoch of the slave trade, to colonialism and imperialism, and in all of these phases Africa has remained its constant victim. An interdependent world indeed! But we need not go too far into the past. Our immediate purpose is to have a full grasp of the current international economic order in order to find the way out of our problems.

And to come to the nitty-gritty of this modern world economy it is of primary importance to first of all understand the role of international finance as a major force that lubricates it. Very briefly, there have been three significant eras of international finance. The first was between 1870 to 1914 which was dominated by Britain. The second was between 1920 to 1939 when the centre of international finance shifted from London to New York, but it collapsed in 1930 with the Great Depression followed by WW2. The third era, the era of the US hegemony, the Bretton Woods era, started in 1947 until 1985 when the US itself was reduced from a creditor to debtor country as Japan replaced it as the world foremost creditor nation.

The decline of the US hegemony, which inevitably cost Africa a lot owing to her dependence on the dollar (e.g. for every 1% rise in interest rate the debtor countries have to pay $4 to $5 billion in interest!), was brought about by excessive US policies: the over-printing of the paper dollar (more than $600 billion!), mismanagement of the international monetary and financial systems, adventurist wars of aggression (Korea, Vietnam, etc), the advent of Reaganomics and its monetarist orthodoxies and so on. In other words, the US used the system to its own advantage and became the root cause of the global economic problems of the 1980s, the Debt Problem being the most significant one for Africa.

The debt burden made debtor countries even weaker while correspondingly creditor countries, under the IMF leadership, gained strength through its insistence on conditionality and reliance on the old imperial policy of divide and rule over debtor countries, so as not to form a united front of debtor countries and negotiate from that position.

Although the debt crisis, like the crisis in the monetary and financial systems, was brought about by the actions of creditor countries themselves, the responsibility is placed on the debtor countries: the developed countries dumped loans and capital into the third world, seeking large return in interest. Unequal trade terms cut into third world export income, weakening their ability to service their debts. And as the Anglo-Saxon countries got into their most serious recession since the Great Depression, they raised interest rates and forcing debtor countries to repay their debts on time. And of course, the rise in interest rates has compounded the African crisis.

Furthermore, the failure of the misdirected struggle launched by the third world for the so-called New International Economic Order which had sought to bring the multilateral financial agencies, the IMF and World Bank, under the jurisdiction of the UN General Assembly, has helped to absolve creditor countries from any responsibility for the debt crisis.

That failure has actually strengthened the position of the IMF vis-a-vis third world countries. From then on it has continued to impose its own “conditionality” on African countries with impunity, resulting in massive unemployment, a steady decline in the living standards of the people and spreading domestic political instability, with all its devastating consequences. (Ironically, one of the original purposes for which the IMF was created, in addition to facilitating world trade, was to promote employment and general well-being!).

Under the existing conditions of this “interdependent” world there is no way that Africa can repay the debt, estimated conservatively at $300 billion, while the net outflow of wealth from Africa to the West continues to mount, leaving nothing for domestic capital formation and investments. Conservative estimate puts that outflow at nearly $200 million PER DAY, and mounting!

The declared principles of the multilateral agencies and their role to the new countries as they were emerging from colonialism and joining the institutions were defined as providing aid to assist developing countries to reach a point where they could “participate fully in an open, market-oriented international economy” and that aid policies were to be subordinate to the norms of the market system. But even in those early days it was clear that, as far as the emerging countries were concerned, this objective contradicted the principle of national sovereignty because it frustrated the right to development of these young countries by forcing them into a world market system which was itself not open, not free and extremely imperfect, favouring only the strong against the weak.


For their part, the dominant nations always insist that “all is fair in trade and war”. But this is acceptable only as long as you are in a dominant position! Their interpretation of “fairness” was elevated long ago to a principle known as the “comparative advantage” principle. Its history, as we know, goes far back to the philosophy of the British philosopher David Hume, and later expounded in the economic theories of Adam Smith and David Ricardo in the post-industrial-revolution-Britain when she dominated the world trade. To this day this “law” has remained the basis of liberal “free trade” theory. Our elites who are now blindly advocating the notion of an interdependent world base their rationale on the theories based on this “law”, ignoring the fact that it was conceived and applied by Britain at a time when it has all the advantages over all other nations.

But even then the weaker nations had a different approach and were very critical of the comparative advantage thesis. They saw in it a serious threat to their own national security, domestic welfare and industrial development. This must be even more so today for countries whose economies and foreign trade are largely based on primary commodities.

Can there really be any comparative advantage between the peasant producer of, say, coffee or tea, and the industrial producer of the tractor from whom the former has to buy his inputs, or only ABSOLUTE advantage to the industrial producer? As a matter of fact, our present experience proves to us, again and again, that the industrial producer countries find this system of “free trade” so advantageous to them that they are prepared to use what amount to force, via the IMF and the World Bank, (or even in a bilateral form as in the case of Cuba vs. USA), against any poor country that tries to embark on an independent route to development or which dares to resist their dictation or challenge their hegemony.

Historically, even the mighty Germany of the last century found it necessary to protect their economy, their dignity and sovereignty against what they dubbed the “imperialism of free trade”. This was at a time when Germany was already becoming an industrial power in her own right, but they still realised that it would be to their disadvantage to abide by the thesis of comparative advantage and free trade when they were still weak compared to Britain, which then had only a decade or so head-start over Germany.

Similarly, for the poor and weak countries of Africa today, like the then poor and the weak countries of the last century, the primary preoccupation must be, not a blind adherence to the international trade norms, or belief in the “law” of comparative advantage which is really the law of the strong over the weak, but to produce for their own needs, i.e. the need to strengthen their state systems so that they do not become vulnerable to the dictates of other interests; secondly, to struggle for the attainment of unity of state and nation in a continent so mangled and fragmented by slavery and colonialism; thirdly, to reorientate the economy so as to achieve a unity between industry and agriculture, a precondition for integrating the economy internally and evolve an independent national economy in place of the present colonial economy.

You may call this “economic nationalism”, but all countries that started late on the road to development (Germany, USA, Japan, Soviet Union, China, etc) had to resort to this development strategy, and history has proved them right. Why should Africa be an exception?


In the wake of the economic crisis and the debt problem which have put Africa in its most serious socio-political plight, various “alternative” strategies are being offered from different perspectives. As noted above, there are three main approaches to development, the ideological, the economistic and the common-sense approach. So far the alternatives that have been outlined for Africa are either of the first or second type, but none from the point of view of the “common-sense” approach.

There is the Lagos Plan of Action designed to be operative from 1980 to the end of the century. Its objectives are the achievement of :

a) Regional food self-sufficiency;
b) The provision of shelter, health care, housing;
c) Sustained growth and development; and,
d) National and collective self-reliance, by the OAU Heads of State.

Then there is the African Priority Programme for Economic Recovery during 1986-90, adopted by the United Nations. This was followed by the African Alternative Framework to Structural Adjustment Programme, by the UN Economic Commission for Africa. All these ambitious programmes were motivated by honourable intentions, no doubt, but so far none of them has produced any hopeful signals. On the contrary, we are more than half way through Lagos Plan of Action, and indications are that Africa is worse off now than it was in 1980 when the programme was launched.

We have already gone beyond the target of the UN Priority Programme for Economic Recovery and we have seen no recovery at all, anywhere. And the African Alternative Framework sounds more like a theoretical debate between ECA and the World Bank rather than a serious strategy for Africa’s alternative policy. That is why it has failed to be anywhere near achieving its stated objectives. The reason why all of these so-called alternative programmes have failed is because they all start from the same premise, namely that Africa has no alternative except to go for an export-led development strategy. That is to say, Africa must rely on the export of her primary commodities to earn foreign exchange to enable her import her domestic needs. That is why, on the basis of this rationale, we see Africa’s cities and towns jammed with all types of foreign cars when we can’t even produce spare parts locally to service them!

The concrete reality is that this strategy is inapplicable to Africa’s current level of development based on its present production structure. Its acceptance as the linchpin of policy goes counter to basic laws of development which, as we saw, asserts that INTERNAL causes are the basis of change, while external cause remain only as conditions of change, and not the other way round. And any country that tries to alter this reality is doomed to failure.

Thus the internal causes of the crisis aggravated by the debt burden may be summarised as follows: In addition to the topsy-turvy structure of our economies which gravitated outwards rather than inwards, a new phenomenon entered the world economy. The oil crisis of 1973, the transfer of massive surplus “unwanted” dollars to the oil producing countries and their recycling them back to the Western banks created a crisis of surplus of unusable funds (unusable because no developed country wanted to take responsibility for the over-printed 600 billion US dollars). As foreign banks were thus eager to dump their “petrol-dollars” and other surplus funds in the mid-1970s African countries recklessly borrowed and fell into the “debt trap”.

They failed to draw up comprehensive repayment timetable, taking into account the total amount of the debt incurred, the investments absorbed, interest due for payment, their foreign exchange reserves, development of the productive forces, exports, the foreign exchange to be earned, the growth rate and target of their national economies. The resultant imbalance between the debt incurred and income forced them to incur new debts to pay for the old ones.

Secondly, inappropriate use of foreign loans resulted in poor economic performance and low foreign exchange earning. Loans largely went into financing consumption (e.g. building brand new capital cities, ultra-modern airports, etc.) and hardly any went into the development of the productive forces, which in turn weakened economic efficiency and earning no surplus for productive investment and construction.


Economic Nationalism: Africa won its independence on the strength of its “political” nationalism. Unlike European nationalism, which has come to be known as jingoism, African nationalism is anti-imperialist, anti-predatory and anti-jingoism – it is a nationalism of resistance, and therefore, progressive in essence. But we must not limit it only to political aspiration; it must extend to the economic struggle. While we remain internationalist in outlook, we must base our internationalism firmly on our nationalism - this time it is the nationalism of survival!

The strategy for this objective can then be summarised as follows:

First, discard any illusion about export-led development for economies with extremely backward agriculture and no industry to speak of. We must, as a cardinal principle, look internal for our progress.

Second, recognise that neither the Western model of relying on the “invisible hand” of the market, nor the Soviet model of lopsided development of heavy industry and indiscriminate nationalisation, is any good for us. What we need is to make use of both the “invisible hand” of the market and the visible hand of central planning and long-term programme.

Third, move as quickly as possible, as a matter of top priority, from the primitive mode of production inherited from colonialism and enter the realm of expanded reproduction. It is the most decisive threshold on the way to an independent national economy.

Four, develop the production base in agriculture and industry, initially for the purpose of development of food, clothing and shelter, the basic human needs, and in the course of producing these basics the rest will follow: employment, expansion of the domestic market, increase output and surplus funds for investment, social welfare, etc. This will arouse mass enthusiasm for production and social harmony.

Five, raise standards of living of the people by improving the quality of life.

Six, understand fully the laws of economic development and seriously study our own national conditions. On the basis of this knowledge, devise a sound policy (in addition to agriculture and industry) on energy, environment, communications and transport; promote small and medium enterprises to serve the growing home market, with emphasis on labour-intensive industries to raise employment, skilled labour and the cash economy; raise educational and modern technological standards and culture; constantly improve medical care; develop a sound policy on foreign investment in order to make effective use of foreign capital without losing national economic independence.

Finally, develop a sound foreign trade policy in order to put foreign exchange earnings to full and productive usage. All these objectives must be guided by a policy of prudence and frugality in both the public and private sectors.
Seven, on the debt question: Negotiate urgently for a twenty-year moratorium on debt-servicing and interest-freeze to allow the national economy to pick up reconstruction momentum.

Eight, all this requires a dedicated leadership, honest and incorruptible. It can be done!

(This undated paper was produced around 1992)

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