The policy prescriptions of the World Bank and International Monetary Fund (IMF) have failed to change the fundamentals of the economies of African countries and must be re-examined for the continent to develop, says a Professor of Law.
"The fundamentals remain unchanged. That the structure of African economies remains unchanged means that there will be no meaningful development," Prof. Akilagpa Sawyerr, a member of the Council of State, said at the launch of "The Oxford Companion to the Economics of Africa" in Accra.
Giving the closing remarks as chairman of the event, Prof. Sawyerr argued that despite the recent much-touted growth of African economies, there were inequalities and poverty which indicate that the policies of the Bretton Woods institutions have not achieved the desired real gross domestic product growth.
He slammed one of the economists who contributed to the book as "naive" for writing that the World Bank and IMF policies have succeeded in engendering economic growth in Africa. Lauding another contributor for his critical analysis of the Washington Consensus, he said "the Washington Consensus cannot be the answer."
He said the World Bank and IMF prescribed policies for African countries that withdrew the role of the state in the management of the economies because they perceived the state as the problem but that was a fallacy. He argued that, the market alone did not promote growth because the market was a social construct.
Prof. Sawyerr, who is a former Vice Chancellor of University of Ghana, Legon, and happened to have chaired the Steering Committee of Ghana's Structural Adjustment Participatory Review Initiative (SAPRI), said the country needs to address economic issues as a matter of policy, urging Ghanaians to put pressure on their leaders to implement important policies that generate growth.
In contrast to Prof. Sawyerr's assessment of the policies of the Washington Consensus, Prof. Ernest Aryeetey, Vice Chancellor of that same university, contended that the policies of the World Bank and IMF have contributed to economic growth in Africa.
"That is what the figures say. We have a lot more data. The way policy is made in Africa has changed. There has been growth. There have been changes in African countries. You find that in every country there is growth but with increasing poverty," Prof. Aryeetey admitted.
He said African countries have been experiencing economic growth ranging between 7% and 10%, citing Mozambique's 10% as typical of the success stories currently being chalked on the continent. "But there is a lot more that you don't see. There are increasing disparities. Reforms can lead to growth but you need to do more than reform."
He said 25 years ago African countries started to reform and build institutions that make economic management easier. Stating that he hoped African governments would understand that reforms are continuous process, Prof. Aryeetey noted: "May be it takes more than a decade to feel the results of structural adjustment. Reforms never end and you will have new visions and dreams."
He pointed out that Ghana has done much better in terms of institutional reforms than other African countries, adding "Ghana has seen the largest drop in poverty in Africa."
Answering a question on the role of China in Africa, he said the incursion of China is a reflection of the fact that the global economy has changed, and the change means China would import more from Africa. "I believe high prices of gold and cocoa will remain so for the next five years," he underscored.
He said with China's growing economy, incomes have risen and Chinese are importing more foreign goods. China, in his opinion, provides an opportunity which Africa has to devise innovative ways to take advantage of. 'Can Africa use this to enter the Chinese market? Should African countries have a Chinese policy? I believe the answer is yes."
On regional integration, Prof. Aryeetey, a former director of the Institute of Social Statistical and Economic Research (ISSER) at Legon, noted that integration is important but the main obstacle to it is lack of the required infrastructure. He said about 6% of Africa's trade is intra-regional, and called for the restructuring of the African Development Bank to focus on the provision of infrastructure such as roads, rail and dams. "No African country can invest meaningfully as a nation. If you can't do it as a country, you do it regionally."
Sharing her contribution on gender and economic growth to "The Oxford Companion to the Economics of Africa," one of the contributors, Ms Abena Oduro, a lecturer at the Department of Economics, Legon, said empirical evidence indicates that gender equality does matter as there is inequality in education and other sectors.
Ms Oduro said inequalities exist in the agricultural sector and in the operation of businesses, and though a higher proportion of women own businesses, men tend to own larger businesses whose value is higher than that of women. She said asset ownership matters since it improves decision-making in the household.
"The process of transformation is gendered. Some progress has been made in education but asset ownership needs to be improved. Education is important because it can change world-views, policies and legislation. So there is a need to have a commitment to change. Advocacy is important for us to realise that gender inequalities can hold us back," she said.
Ms Oduro, Vice Dean of the Faculty of Social Science at Legon, said the implications of gender inequalities for productivity called for a link between education, policies, advocacy and economic growth. "Economics can be a force for growth but not sufficient to reduce gender inequality."
In her view, one of the drivers of socio-economic change is holding Ghana?s leaders responsible while education is a tool that makes the citizenry critical of policies and the leadership.
A senior research fellow at ISSER who contributed on migration to the book, Prof. Peter Quartey, disagreed with persons who argue that migration leads to brain drain because it actually brings about poverty reduction.
Prof. Quartey said in the wake of the global financial crisis, the benefits from migration were minimal as some migrants have returned to their countries and can no longer remit their relatives. He said there are negative push factors of migration such as poor working conditions, lack of quality education and other opportunities as well as positive factors like better working environment and higher wages.
He said what African governments could do was to put in place a policy that would allow some of the citizens to stay at home but they cannot stop them from migrating to seek greener pastures, stressing "Individual remittances have a ripple effect but the state does not directly gain."
"Migration has become very important in our lives. Migration affects poverty and the global financial crisis have affected how migration affects poverty," he stated.
A lecturer at University of Togo, Dr Kako Nubukpo, said African countries must change their mentality since they could not continue to export raw material as that perpetuated the dependency syndrome currently bedevilling the continent. Dr Nubukpo called on African countries to improve the management of public finance.
He stressed the importance of facilitating access to credit. He said solutions should be found for structural problems like weakness of internal markets. Dr Nubukpo, who also works at the West African Economic and Monetary Union, lauded Ghana, saying the country is a role model for Togo and it has no choice but to remain a viable economy.