Foreign Policy Briefing No. 85

Underdevelopment in Sub-Saharan Africa: The Role of the Private Sector and Political Elites

By Moeletsi Mbeki
April 15, 2005

Executive Summary

Economic growth in Africa, as in the rest of the world, depends on a vibrant private sector. Entrepreneurs in Africa, however, face daunting constraints. They are prevented from creating wealth by predatory political elites that control the state. African political elites use marketing boards and taxation to divert agricultural savings to finance their own consumption and to strengthen the repressive apparatus of the state. Peasants, who constitute the core of the private sector in sub-Saharan Africa, are the biggest losers.In order for Africa to prosper, peasants need to become the real owners of their primary asset — land — over which they currently have no property rights.

Peasants must also be given direct access to world markets. They must be able to auction their cash crops, including coffee, tea, cotton, sugar, cocoa, and rubber, freely rather than being forced to sell them to state-controlled marketing boards at discounted prices. In that respect, South Africa is unique in the region. The country does not have a large disenfranchised peasantry.Most of South Africa’s private sector belongs to South Africans, who also have a say in the political process. The future will show whether those factors will constrain the power of the South African political elite in a manner that is sufficient to safeguardSouth Africa’s growth potential.

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Moeletsi Mbeki is deputy chairman of the South African Institute of International Affairs, an independent think tank based at the University of the Witwatersrand.