On the occasion of his trip, the president should reflect on decades of failure in Africa and draw appropriate lessons. With the exception of Botswana and South Africa, most African countries today have a dubious distinction of being poorer than they were 30 or even 40 years ago. For example, in 1967 the inflation adjusted per capita income in Ghana was $800. By 1997 that figure fell to $370.
African failures do not reflect a lack of initiative. In fact, Africa may hold a record for having the highest number of regional organizations and agreements that have been launched with great pomp and circumstance and that have failed to achieve anything even remotely tangible. Who, after all, has ever heard anything encouraging about CSSDCA, CEPGL, ECCAS, CEMAC, EAC, IGAD, IOC, AMU, SACU, SADC, ECOWAS, UEMOA and MRU?
Multi‐lateral agreements are only as effective as their constituent units, the African states. Thus, no matter how detailed various initiatives may be, they are bound to fail as long as they are reliant on the good will of African dictators. Unfortunately, improvement of governance in African countries is hindered by a number of well‐intended Western policies. If President Bush really wants to help the people of Africa, he should do the following.
One, the United States should withdraw from the International Monetary Fund. The IMF often serves as a benefactor to corrupt and inept regimes, which engage in gross macroeconomic mismanagement. Were it not for the IMF and other official lenders, economically incompetent governments would be forced to seek loans under normal free market conditions. Lenders would lend to governments at rates reflecting the risk involved. In other words, the more incompetent governments would be forced to borrow at higher interest and vice‐versa. Higher interest rates would thus stimulate governmental circumspection in borrowing and expenditure.
Two, the United States should withdraw from the World Bank. The World Bank’s “aid” to Africa has had disastrous consequences for the continent. Far from being used for infrastructure and health care, the World Bank’s money enriched Africa’s dictators and provided them with the means to oppress their people. The money that was not embezzled was misspent. According to the Meltzer Commission, the failure rate of the Bank’s African programs in 2000 was 73 percent.
Three, the United States should make the sovereign credit system more efficient by expressing its support for the concept of “odious debt.” Cancellation of debt acquired by corrupt dictatorships will both decrease the overall level of African debt and rationalize future lending. More circumspection on the part of the creditors in the future will help keep funds from African dictators.
Four, the United States should emphasize the benefits of free trade. According to the Cato Institute’s recently released 2003 Economic Freedom of the World report, Africa possesses some of the world’s most economically unfree nations. Not surprisingly, the per capita GDP of sub‐Saharan Africa is only $564. On the other hand, Botswana, which has for a long time had a significantly higher level of economic freedom than other nations in Africa, today enjoys a per capita GDP of US$3,950.
Five, the United States should live up to its words and embrace free trade by enabling African farmers to enjoy unrestricted access to American markets. The United States should end its farm subsidies and leave the European Union as the only major agricultural protectionist in the world. Considering that even the long‐term opponents of free markets in Europe, such as the British Oxfam, now favor “trade” as an effective way for Africa to escape poverty, it should be possible to shame the EU into ending the disastrous Common Agricultural Policy.
No doubt, the above actions will require a dramatic change of thinking on the part of the American foreign policy establishment. Our policy makers are wedded to the status quo exemplified by the Bretton Woods institutions. To wake them from their slumber, President Bush will need to exercise considerable vision and leadership. Ironically, by interfering less in African economic affairs, the United States could do more to stimulate African growth.