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SELF-RELIANCE, AND
ECONOMIC DEVELOPMENT
IN WEST AFRICA
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FOREIGN AID,
SELF-RELIANCE,
AND
ECONOMIC DEVELOPMENT
IN WEST AFRICA
R. Omotayo Olaniyan
Olaniyan, R. Omotayo.
Foreign aid, self-reliance, and economic development in West
Africa / R. Omotayo Olaniyan.
p. cm.
Includes bibliographical references and index.
ISBN 0-275-95501-X (alk. paper)
1. Economic assistance—Africa, West. 2. Sustainable development—
Africa, West. 3. Africa, West—Economic policy. I. Title.
HC1000.O43 1996
338.966—dc20 96-10425
British Library Cataloguing in Publication Data is available.
10 9 8 7 6 5 4 3 2
In order to keep this title in print and available to the academic community, this edition
was produced using digital reprint technology in a relatively short print run. This would
not have been attainable using traditional methods. Although the cover has been changed
from its original appearance, the text remains the same and all materials and methods
used still conform to the highest book-making standards.
To My Wife,
Grace Olufunke Olaniyan
and Children,
Oluwatoyin, Olayemisi, Oluwadamilola,
and Oyebola Olaniyan.
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Contents
Abbreviations ix
Acknowledgments xiii
1. Introduction 1
African States
DAC Development Assistance Committee
DANIDA Danish International Development Agency
EC European Community
ECOMOG Economic Community of West African States
Ceasefire Monitoring Group
ECOWAS Economic Community of West African States,
or Communaute Economique des Etats de
P Afrique de POuest (CEDEAO)
EDF European Development Fund
EIB European Investment Bank
ESAF Expanded Structural Adjustment Facility
EU European Union
FUR Federal Institute of Industrial Research
GDP Gross Domestic Product
GEF Global Environmental Facility
GNP Gross National Product
GTZ German Agency for Technical Cooperation
IBRD International Bank for Reconstruction and
Development
ICA International Commodity Agreement
IDA International Development Association
IDC Industrial Development Centre
IFAD International Fund for Agricultural
Development
IFC International Financial Corporation
ILO International Labour Organization
IMF International Monetary Fund
JICA Japan International Cooperation Agency
JAIDO Japan International Development Organization
MRU Mano River Union
NAFTA North American Free Trade Agreement
NGOs Nongovernmental Organizations
NISER Nigerian Institute for Social and Economic
Abbreviations XI
Research
NLC National Liberation Council
NRC National Redemption Council
NTF Nigerian Trust Fund
OAU Organization of African Unity
ODA Official Development Assistance
ODF Overseas Development Fund
OECD Organization for Economic Cooperation and
Development
OFN Operation Feed the Nation
OIC Organization for Islamic Conference
OMUS Organization de Mise en Valeur du Fleuve
Senegal
ONAHA Organisation Nigerien de PAmenagement
Hydro Agricole
OPEC Organization of Petroleum Exporting Countries
OPVN Office des Products Vivriers du Niger
PRODA Project Development Institute
SADC Southern African Development Community
SAP Structural Adjustment Program
SONARA Societe National de Commercialisation de
PArachide
UN United Nations
UNCC Union Nigerienne de Credit et de Cooperation
UNCED United Nations Conference on Environment
and Development
UNCTAD United Nations Conference on Trade and
Development
UNDP United Nations Development Programme
UNECA United Nations Economic Commission for
Africa
UNECLA United Nations Economic Commission for
Latin America and the Caribbean
UNEP United Nations Environment Programme
XII Abbreviations
The idea of this book emerged in the mid-1980s when most African countries
embarked on economic reforms in the attempt to arrest economic recession and
promote economic growth and development. The West African subregion was
of particular interest to me, as it embraces a variety of countries at different
levels of economic development. The subregion is made up of countries with
varying colonial experience—British, French, and Portuguese. The main mo-
tive was to inquire into what went wrong with development policies and
development in the West African subregion, which is endowed with consider-
able natural resources and which in the early 1960s experienced economic
growth.
The book represents a major research study that I initiated as Head of the
Division of International Economic Relations at the prestigious Nigerian Insti-
tute of International Affairs, Lagos, Nigeria. I would like to acknowledge the
constructive criticisms of the research colleagues at the institute, which were
useful in shaping well the conceptual aspect and the scope of the book at the
initial stage. Also, I would like to acknowledge the vital financial support of the
institute, without which the field trips to West African countries, France, and
Britain would not have been possible. The field study enhanced the quality of
the book as it led to greater exposure to the practical development problems of
a number of West African countries, in particular, in the collection of informa-
tion and access to up-to-date data. In this connection, I would like to thank the
Librarians of the British Museum and Library, London and OECD, Paris, for
their invaluable assistance. In the same vein, the author also wishes to express
his profound gratitude to the librarians of the UN Library, New York, for their
XIV Acknowiedgments
Introduction
countries in West Africa are classified among the least developed countries in
the world according to the UN categorization. These countries include: Benin,
Burkina Faso, Cape Verde, Gambia, Guinea, Mali, and Niger. Three of the seven
countries are landlocked (Burkina Faso, Mali, and Niger). The problems of
these countries were aggravated by their remoteness from the world and the
attendant transport and transit costs.3
The depressing economic situation in West Africa has been aptly illustrated
by the basic economic indicators. Over the period 1970-1982, the average
annual growth of the Gross Domestic Product (GDP) was 3.5 percent. Within
this, Cote dTvoire and Mali had an average annual growth rate of 5.7 and 4.3
percent, respectively, as against -0.5 and 0.9 percent for Ghana and Liberia.4
The average Gross National Product (GNP) per capita of West Africa, in 1984,
was US$410.5; that is, one-fourth that of Brazil or one-twenty-fifth that of
Japan.5
The annual average rate of inflation for West Africa over the period 1970-
1982 has been a disappointing 15 percent. This suggests that the standard of
living of West Africans, during this period, has been unduly depressed. For some
countries, the impact has been more severe; this is especially well illustrated in
the cases of Ghana and Nigeria, for which annual average rate of inflation was
calculated to be approximately 40 percent.6
West Africa's export performance since 1970 has been generally disappoint-
ing. The volume of exports has fallen by 1 percent per year. In this respect, the
poor performances of Benin, Ghana, and Sierra Leone have been remarkable,
both recorded an annual decline of 4.4, 4.7, and 6.6 percent, respectively. In
Benin and Ghana, the reluctance of the marketing boards to pay prices closer
to the world level discouraged production for export. In Sierra Leone, the
volume of diamond exports decreased as a result of the increases in the number
of illegal diggings. But a few exceptions to this trend were highlighted in
Burkina Faso, Cote dTvoire, Mali, and Niger, whose annual growth rates were
9.1, 2.2, 6.6, and 20.8 percent, respectively.7 Both Burkina Faso and Mali
benefited from the expansion of the cotton industry and a steadily rising trend
in the world prices of cotton. The performance of Cote dTvoire was good
because of its export diversification. The government made substantial progress
in the implementation of import substitution industrialization policies that
enabled the export of industrial products to increase significantly. But Niger's
exports growth was largely due to the expansion of its uranium industry. Thus,
for most West African countries, the period 1970-1982 has been very traumatic;
the process of economic development was severely constrained with the dimi-
nution of exports and foreign exchange earnings. Under this circumstance, it
became imperative that more external financial assistance would be required in
order to arrest further deterioration and avoid the collapse of the economies of
the seriously handicapped West African countries.
Introduction 3
It has however, not been very difficult to understand why export trend
assumed this pattern. In thefirstplace, all West African countries are principally
primary producers, essentially exporting few agricultural and mineral products.
Secondly, the difficulties of some of the countries were due to circumstances
beyond their control. For example, the Sahelian countries suffered from the
bouts of drought. The decreases in the international prices of crops accounted,
in most cases, for reduced'export revenue earnings. Thirdly, the actions of
monopsonist marketing boards through the payment of a small proportion of
the global price to farmers contributed to the attractiveness of subsistence
agriculture rather than export production.8
The development in imports was remarkably different. Between 1970 and
1980, import volumes in West Africa grew at a rate of 7.5 percent per annum.
However, after 1981, following the rise in the global price of oil, there was a
substantial reduction in import volumes. This new level of import was largely
sustained through external borrowings.9
The massive incursion of West African countries into external borrowing for
the import of capital and consumption goods has, however, not been devoid of
its own problems. It resulted in the rapid growth of external debt and rising debt
burden. This was, for example, estimated at 37 percent in 1982. The rising debt
burden has been a major cog in the wheel of economic development in the
subregion, since a smaller and smaller proportion of foreign exchange earnings
became available for development purposes within each West African state.
What is more, the recent global developments have indicated that West
African countries, like other African countries, are geared toward harder times
in the 1990s. Perestroika and glasnost initiated in the former Soviet Union in
1986, have been well embraced in other Eastern European countries that
hitherto have been itching for political and economic reforms. In the view of
the former president of the Soviet Union, Mikhail Gorbachev, perestroika
implies the opening up of the Soviet Union's economy to allow in more foreign
investments. Foreign investments, especially on a joint venture basis, should be
considered the corner stone for the promotion of economic growth in a trans-
formed Soviet Union. Along with this, glasnost, the decentralization of author-
ity and greater freedom of the press, was designed to ensure the effective
implementation of the economic reforms.10 As a result of these developments,
foreign investments were increasingly diverted to the Soviet Union and to the
other more profitable Eastern European countries.] [ This was inevitable because
foreign capital would naturally flow to arears of maximum returns on capital.
Furthermore, the consolidation of the European Community (EC) through
the Single European Act effective from 1992 raises problems about the potential
growth of West African exports to the community, which absorbs over 60
percent of the subregion's exports. The prospects for increases in financial
support to the subregion are not attractive. A possible economic growth in the
EC after 1992 may not lead to corresponding increase in its imports from West
4 Foreign Aid and Self-Reliance in West Africa
Africa because the demand for primary products is not highly responsive to
increases in economic growth. In addition, the EC's financial assistance to West
Africa would be undermined not just because of its diversion to Eastern Europe,
but because available capital would be directed to more productive and profit-
able areas within the EC itself.12
In the effort to solve these problems, the imaginative approach adopted by
most governments has increasingly indicated the crucial role of increased
foreign aid if the economic crisis in West Africa is to be reversed. By 1985, the
various forms of austerity measures and economic stabilization arrangements
that prevailed in the early 1980s have been effectively transformed into struc-
tural adjustment programs (SAP). SAP was largely inspired by the World Bank
and the International Monetary Fund (IMF). Across the board, West Africa's
SAP essentially aims at the restoration of the balance of payments equilibrium
while ensuring sustained balanced economic growth. However, the success of
SAP in the subregion over the years could at best be described as modest. The
program, in a number of countries, has effected negligible growth in both the
industrial and agricultural sectors. This is particularly so while it is observed
that most countries in West Africa continue to be confronted by an increasing
menace of high rates of inflation and rising unemployment. It has become clear
that the success of the monetary-based program would largely depend on greater
increases in concessional inflows from the multilateral international financial
institutions.
This demand, however, raises considerable questions since the record of
foreign aid flows to the developing countries has not been impressive in the
past. Also, there were divergent views on the contribution of foreign aid to
economic development in the developing countries. As early as 1968, the United
Nations, actively interested in the promotion of equitable global development
had resolved on the objective of 1 percent of the GNP for the net transfer of
resources to LDCs including private flows, and with 0.7 percent as a target for
Official Development Assistance (ODA).13 The ratio between these two figures
reflects the relative flows at that time, and the ODA target was largely a political
goal. When this target was discussed, most of the developed countries accepted
it, some with a time frame. For example, this was the case for Belgium, the
Netherlands, and Sweden. The former Federal Republic of Germany accepted
it in principle. Whereas others, including the United States did not commit
themselves.14
While the 1 percent norm for overall net flows (including private investment
and commercial lending) has been reached, the hopes aroused for the ODA
target have been dashed. The average performance, for example, of the Organi-
zation for Economic Cooperation and Development (OECD) countries was
only 0.36 percent of the GNP in 1984. The contribution of the United States
had fallen from 0.5 percent in 1960 to 0.24 percent in 1983. The Federal
Republic of Germany at 0.49 percent in 1983 remains at a low level. In the same
Introduction 5
vein, the performance of the former Soviet Union and other members of the
Council for Mutual Economic Assistance (CMEA) has been disappointing. This
was only in the order of 0.18 percent in the early 1980s.15 The exception to this
pattern of performance has been that of the Organization of Petroleum Export-
ing Countries (OPEC), whose increased oil revenues have resulted in 3 percent
of GNP contributions.
The relative performance of different countries in meeting this target may,
however, not even be absolutely easy to compare. This is particularly the case
because certain donors have argued that while their aid performance has been
low their trade policies have been liberal. Some that have shown better perform-
ance include expenditure on overseas commitments that in proper evaluation
should not qualify as aid. Quite a number of donors allocate their aid on
need-based criteria, while others prefer to aid those countries with which they
have special historical, commercial, or other ties. Foreign aid from the Eastern
European countries was essentially directed at the public sector, the area that
received less aid from other donors. Beyond this, the Eastern European coun-
tries also take goods in repayment for debt.
As to the relevance of foreign aid to economic development, K. B. Griffin
and J. L. Enos have argued that it may not necessarily lead to increases in growth
rate, since it is primarily used to supplant domestic savings.16 Foreign aid they
added, is associated with the decline in domestic savings. This occurs because
foreign aid permits a government to relax efforts in savings and to increase its
consumption expenditure, or because private foreign investment usurps domes-
tic investment opportunities that would reduce savings to the extent that savings
becomes dependent on investment opportunities.17
The disillusionment with the inflow of and role of foreign aid in the 1960s
led to the consideration of "self-reliance" as part of the strategy to overcome
underdevelopment in developing countries in the early 1970s. Generally, most
West African governments have identified with this concept since it was
proclaimed at the nonaligned movement's conference convened in Lusaka,
Zambia, in 1971. The idea was further accorded a central position in the
celebrated 1980 Lagos Plan of Action and Final Act of Lagos for accelerated
economic development in Africa. Both the Organization of African Unity
(OAU) and the United Nations Economic Commission for Africa (UNECA),
the principal architects of the plan felt that the path of self-reliance was the most
realistic toward meaningful economic development in the continent. The expe-
rience of African countries following the world oil price shock of 1973 and the
subsequent global inflation have influenced thinking in the OAU and UNECA
that the prospects of economic development in Africa would be better enhanced
through a greater inward-looking policy and reduced dependence on the indus-
trially developed countries. The importance that most West African govern-
ments attached to the idea is well illustrated in their reference to it in their several
development plans and annual budgets over the past fifteen years.
6 Foreign Aid and Self-Reliance in West Africa
has been synonymous with self-reliance. For most countries, this would, among
other things, include agriculture, industry, foreign trade, and regional integra-
tion. What has been the extent of the success of self-reliance in these areas?
Also, what have been the critical limitations and how can these be resolved?
In Chapter 5, the critical issues in foreign aid and self-reliance are put in
sharper perspective. Foreign aid and self-reliance are not necessarily mutually
exclusive factors in the process of economic development. The increases in
foreign aid and the successful implementation of a self-reliance scheme in the
future may hinge on clearer perception and the provision of solutions to certain
fundamental problems. For example, in the context of foreign aid, it would be
desirable to critically examine donors' interests and foreign aid management in
West Africa. Also, under self-reliance, the relevance of the structural adjustment
program should be accorded a more careful analysis. Furthermore, the problems
of commodity prices, drought, and regional integration schemes should be more
rigorously examined in order to arrive at possible solutions that could assist in
the process of West African development.
In Chapter 6, conclusions are drawn and recommendations made on the basic
issues raised in the study. The high priority issues in West African development
are identified and action-oriented policies suggested as initial steps toward the
promotion of economic development in West Africa.
NOTES
1. G. M. Meier, The International Economics of Development, Theory and Policy (London:
Harper and Row, 1968), pp. 97-8.
2. R. Nurkse, Problems of Capital Formation in Underdeveloped Countries (New York:
Oxford University Press, 1953), p. 57.
3. Other important impediments to development include inadequate water management and
the survey of natural resources, the menace of diseases and epidemics. For example, the limited
water in the arid and semi-arid areas undermines efforts in the improvement of agricultural
production. Many of the least developed countries hold considerable deposits of economic and
strategic minerals but lack the technological know-how and financial resources to carry out
adequate surveys to determine the extent and quantity of their reserves or even export what is
known to be available. The solution to the water problem may involve adequate drainage or an
irrigation system. The effective tackling of the exploitation of natural resources may be a
function of the establishment of a proper permanent mineral resources center to carry out
research and exploration. For further readings, see Independent Commission in International
Development Issues, The Prospects of the Least Developed Countries in Africa, August 7,1978,
WG-LDC2.
4. World Bank, World Development Report 1983 (Washington, D.C.: World Bank, 1983),
Statistical Appendix.
5. World Bank, World Development Report 1986 (Washington, D.C.: Word Bank, 1986),
Statistical Appendix.
6. World Bank, World Development Report 1983 (Washington, D.C.: World Bank, 1983),
Statistical Appendix.
7. Ibid.
Introduction 11
INTRODUCTION
For the purpose of this study, "foreign aid" will be defined as cooperation with
a foreign state or autonomous political unit with the objective of assisting that
state or autonomous political unit in furthering economic growth development
and social progress or that part of capital inflow that is not based on normal
market incentives but is instead made on concessionary terms.1 Thus, grants of
freely convertible currency constitute aid in the full sense; loans contain only
an element of aid (the aid component being greater the longer the grace and
maturity periods and the lower the interest rate); and private foreign investment
and short-term capital movements are excluded.2
The term "self-reliance," a national strategy for economic development,
would be defined as a process of selective disengagement from international
transactions, restructuring of the fundamental economic and political relation-
ships, values, and institutions, and of partial reestablishment of hitherto eco-
nomic and political links with the industrially developed countries.3 It assumes
disengagement in the international system in the areas of trade, aid, investment,
technology, information, and manpower exchanges and these are to be supple-
mented by reliance on internal capabilities. Restructuring is not only at the
international level but at the national level. And at the time of reassociation, the
nature of the national and international economic systems will be transformed
to place the country adopting the self-reliance strategy in an advantageous
position.4
14 Foreign Aid and Self-Reliance in West Africa
SUPPLEMENTAL THEORIES
long period when the preconditions for growth are evolved; (3) the relatively
short period of take-off into self-sustaining growth; (4) the rapid drive to
maturity; and (5) the era of high mass consumption. The role of donors is
expected to be very significant in the third stage, covering a period of about
twenty years.9
However, this assumption has been refuted by R. F. Mikesell, who empha-
sized that it is impossible in the history of both the developed and developing
countries to identify any unique and relatively short historical phase as the
period of take-off.10 The theory of the stages of growth, he added, is highly
aggregative and can be misleading when used to identify a crucial area of
activity within the national economy. Thus, it has led to foreign aid being viewed
as part of a short, sharp effort to overcome just one crucial hurdle.
DONOR-ORIENTED THEORIES
The main thrust of donor-oriented or international relations theory is that
donors have other objectives apart from the promotion of economic develop-
ment in the recipient countries. The long-term interest in the welfare of the
developing countries might be both political and economic.11
In political terms, the developed countries might be interested in the stability
of the developing countries. The basic assumption here is that hunger breads
discontent, and discontent breeds instability. However, this is not totally con-
vincing for most West African countries or other developing countries. The
causes of instability in most countries in the West African subregion since the
late 1960s are to be found more in tribal division within countries, the inordinate
ambition of military leaders, and irredentism among the countries.
In economic terms, the developing countries might be interested in a world
economy organized on principles of comparative advantage and the interna-
tional division of labor, hoping the developed countries will specialize in what
they do best. In principle, the economic case is stronger than the political case.
The developed countries do not perceive their own interests in these terms. In
the 1960s, the process to which foreign aid contributed tended to be one of
import substitution rather than export promotion, especially in Africa and Latin
America. Subsequently, partly influenced by the work done under the auspices
of the OECD Development Center, some aid agencies put more emphasis on
promoting the developing countries' export industries. But in general, they were
unwilling to adopt the logical corollary of opening up their markets for the
industrial products of developing countries.
The nature of the interest of developed countries in the general welfare of the
developing countries is seldom specified; it is difficult to see how such interest
would be sustained, except on a very high plane of moral argument, which is
not what foreign policy is usually about. Moreover, as Mikesell partially further
admits, international relations have derided the notion that the development of
Foreign Aid and Economic Development Theories 17
underdeveloped countries in any general sense serves the interest of the United
States.12
International relation theories, therefore, are likely to fall back on the more
conventional and much more convincing identification of specific foreign
policy objectives that the donors pursue, such as the maintenance of military
alliances or trading and investment relationships.
DEVELOPMENTALISM
In 1950 Raiil Prebisch, leading the UNECLA technocrats, argued that
unfavorable terms of trade resulted in less capacity for capital accumulation in
the "periphery," since saving is primarily dependent on productivity. Progress
in capital accumulation could be possible only if there is an alteration in the
terms of trade permanently loaded in favor or the "center." Industrialization
through import substitution and protectionism in his view represented the best
strategy for the accumulation of capital.13
The assumption that the terms of trade lead inevitably to low capital accu-
mulation has been criticized by Professor G. Haberler, who maintains that a
deterioration in a country's terms of trade in the international market within a
given period does not necessarily mean that the country's accumulation of
capital and economic development will be adversely affected by the end of the
period. There may also be unequal distribution of gains in favor of the center
via foreign trade and, at the same time, as a result of increases in productivity.
Furthermore, there may be capital accumulation and economic development in
the periphery.14
Rapid industrialization may not be promoted in developing countries even
through a policy of import substitution and protectionism because of the
limitations of the market and inefficiency. The UNECLA technocrats them-
selves were not slow to appreciate the limitations of narrow markets in such
countries as Argentina, Brazil, and Mexico, where import substitution and
industrialization progressed rapidly in the 1950s and early 1960s. Thereafter, it
became increasingly difficult to substitute domestic production for imports once
the stage of light manufacturing was passed.15 Markets for capital equipment
and major consumer durables are too small in any Latin American economy for
the production of those goods. A reasonably large market was clearly required
to ensure rapid industrial development.16
The case for most West African countries that have since the early 1960s,
embarked on import substitution industrialization as a strategy for promoting
economic development is not substantially different. Apart from Nigeria and
Ghana, the markets of West African countries are small and the acknowledgment
of this impediment has resulted in the establishment of a number of economic
cooperation arrangements. One of the most important of these is the ECOWAS,
which was established on May 28, 1975 to integrate the disparate subregional
18 Foreign Aid and Self-Reliance in West Africa
economies. The main objectives of the ECOWAS, among other things, include
the promotion of industrial development, trade expansion, agricultural devel-
opment, and cooperation in scientific and cultural issues.17 Also, the progress
in import substitution industrialization has been significantly undermined as a
result of poor management of industries. For example, most industries in
Nigeria produce under full capacity and rely to a great extent on imported raw
materials. The rectification of these lapses has been part of the main objectives
of the federal military government's structural adjustment program.18
Protectionism, as W. Baer further postulated, inevitably leads to the devel-
opment of inefficient and costly industries in developing countries, as illustrated
in his study of the automobile industry in Latin America, where the existence
of numerous firms had ruled out the possibility of economies of large-scale
production.19 Thus, in the late 1960s, the annual output of cars and trucks by
ninety firms in eight Latin American countries was 600,000 or an average of
6,700 per firm. Hence, protectionism per se is not a single important factor in
the process of industrialization; effective entrepreneurship is also required, as
well as capital and skilled labor.
Apart from these, the nature of economic development was, in the late 1950s,
given a new dimension as the Transnational Enterprises made massive incur-
sions into the economies of developing countries. Prebisch himself, however,
argued that foreign investment was beneficial and had to admit to its considera-
tion as a vehicle of dependence on the industrially developed countries.20 This
view was widely held by prominent Latin American economists within the
UNECLA and became crystallized in the celebrated theory of dependence.
DEPENDENCE THEORY
Two principal traditions emerged within the theory of dependence or "de-
pendencia" in Latin America. The first, and more influential, stems from the
UNECLA structuralist perspectives associated with F. Cardoso, E. Faletto, and
C. Furtado. The second stems from the marxist perspectives with which T. dos
Santos and A. G. Frank are associated.21
According to both Professors F. Cardoso and E. Faletto, there was depend-
ence on the industrially developed countries through the mechanism of direct
foreign investment and its institution, the Transnational Enterprises. The plac-
ing of foreign investment in the sector producing consumer durables results in
the accumulation cycle being completed at world level. Keeping up the pace of
economic growth implies increases in the importation of capital goods.22
Subsequently, this formed an important part of the general theory of economic
development in Africa and other developing countries.
Thus, the late Kwame Nkrumah, the President of Ghana, postulated that the
underdeveloped countries, even when fully independent politically, continue to
be a source of capital accumulation for the imperialist states.23 The enterprises
Foreign Aid and Economic Development Theories 19
sion "indicated the existence of basic weaknesses in the mechanisms which link
the economies of the two groups of countries. The weakness of this structure,
the inadequacy of the mechanisms by which growth in the developed countries
is transmitted to the third world, are manifested in each of the major areas of
economic relations between developed and developing countries—in the trade
in commodities and in manufactures, in the transfer of technology, and in the
provision of financial resources through the international monetary and finan-
cial system."28 Thus, in their search for solutions to these problems, the
developing countries embraced the concept of "self-reliance" enunciated at the
1971 summit of the Heads of State and Government, and subsequently elabo-
rated at the 1972 conference of Foreign Ministers in Georgetown, Guyana.29
SELF-RELIANCE
Generally, self-reliance as an analytical concept has been treated in various
ways. This notwithstanding however, there is a consensus that it should be
perceived both as a strategy and the description of an objective.30 The main
objectives of a strategy of national self-reliance are the elimination of undue
external dependence and the promotion of rapid economic development.
Broadly, the strategy of self-reliance is categorized into three phases. The first
phase involves the partial disengagement of a country from the existing global
political and economic relations.31 Disengagement from the present global
political relations would involve severing relations with global political insti-
tutions. For example, it would involve the rejection of multilateral-aid offers or
International Monetary Fund (IMF) financial transfers that eliminate the possi-
bility of political leverage. Also, disengagement from the global institutions
would involve a refusal to participate in UN peace-keeping forces to avoid
potentially costly international involvements.
But disengagement from the present international economic system would
imply the erection of trade barriers to restrict the magnitude and influence of
foreign goods. Comprehensive limitations on the amount of foreign investment
and expatriate manpower are also an important component of disengagement,
as is deliberate rejection of aid offers from the industrially developed countries.
The development of new technologies, or the adaptation of existing methods,
is also an important aspect of the process of disengagement. In this respect,
foreign expertise is rejected, and emphasis is placed on the local design of
equipment and methods of production. The technological modifications essen-
tially suggested by the workers would lead to more appropriate methods of
production that are better suited to local supplies of raw materials.32
Disengagement is a call for a partial reduction in the magnitude of interna-
tional economic transactions with the industrially developed countries and for
the achievement of self-sufficiency only in particular sectors. For example,
self-sufficiency in basic needs such as food, energy, or national defense.
Foreign Aid and Economic Development Theories 21
The second phase is restructuring both at the international and national levels.
This itself is partly induced by the disengagement process or is brought about
by a deliberate governmental policy. The structuring of basic international
relationships of underdeveloped countries away from their traditional ties to
industrially developed countries is generally described as "collective self-reli-
ance," and this refers to increased cooperation and exchanges of commodities
and skills among developing countries. Cooperation could be within the context
of regional economic integration arrangements.
Some restructuring effects at the global level could also be political and
institutional. A typical case could be joint action in the UN negotiations,
particularly on trade and investment issues. Similarly, another dimension is in
the context of the coordination of negotiating positions vis-a-vis multinational
corporations.
However, at the national level, restructuring would, among other things,
involve the modification of consumption values, the development of new and
"appropriate" technologies and institutions that support the basic principle of
relying on local efforts and initiatives, the decentralization of decision making,
and the increase of political participation. This is generally referred to as
"individual self-reliance." Individual self-reliance therefore reinforces collec-
tive self-reliance.33
The third phase describes the process of reassociation. This implies partial
reestablishment of previous relations with the industrially developed countries
on a new basis. The previous basis of dependency has been altered. Disengage-
ment and restructuring have transformed countries pursuing self-reliance to
such an extent that they can afford to reestablish political and economic relations
with the industrially developed countries without fear of dependence.34
Albeit, there are still considerable questions unanswered about the assump-
tions of self-reliance, especially how this could be relevant to rapid economic
growth and development in West Africa. One of the fundamental assumptions
of the disengagement process, for example is that foreign aid should be rejected
in order to keep in abeyance the political influence of donors of even multilateral
international financial institutions. It is hard to see how this could be signifi-
cantly justified in the context of West African countries, where the paucity of
capital has been a critical limiting factor in the process of capital formation and
economic growth. The general low level of income in the subregion has not
permitted adequate savings for the required level of investment for economic
growth. The case for external financial assistance has further been reinforced
by economic recession and decline in foreign exchange earnings. The OAU and
UNECA were themselves very quick to realize this; thus, it was explicitly
stipulated in the Lagos Plan of Action of 1980, a blueprint for an accelerated
economic growth and development in Africa, that outside contributions are
"supplements to own efforts and cannot be substitutes."35 Also, it stipulates that
external contributions "must be supplements genuinely relevant and substan-
22 Foreign Aid and Self-Reliance in West Africa
tially meaningful in terms of the purpose and programs the member states have
collectively resolved to pursue."36 Thus, external financial assistance will
inevitably play a critical role in the efforts of West African countries at
effectively using external resources for the promotion of sustained economic
growth and development.
In the disengagement phase, it is assumed that the erection of trade barriers
should facilitate the acceleration of industrial development, especially of the
establishment of new industries. While the case for the protection of new
industries is incontrovertible because of the undue competition from similar
products produced in the industrially developed countries, there are, neverthe-
less, increasing doubts as to whether this has assisted import substitution
industrialization in West African countries or other developing countries. Over-
protection of infant industries has generally resulted in inefficient industries
largely characterized by poor quality in output. This has been an important
factor that has dogged the success in industrial take-off, especially in Nigeria.
The restructuring phase, among other things, assumes that regional economic
integration would proceed satisfactorily in order to effect judicious utilization
of resources and the meaningful promotion of sustained economic growth and
development. The role of economic integration arrangements cannot be under-
estimated in the process of economic growth and development of developing
countries as they could procure trade expansion and industrial development.
Nevertheless, one should be cautious of their timely positive contributions to
economic growth and development during the restructuring phase. This is
particularly so because economic integration arrangements among developing
countries are fraught with several difficulties. These, to a large extent, explain
the stagnation of the ECOWAS, Southern African Development Community
(SADC), Economic Community of Eastern and South African States
(COMESA) and the Caribbean Community (CARICOM) to mention a few.
Rapid progress in the ECOWAS for example, has been hindered by the fact that
the Community has to undertake the provision of the basic infrastructures such
as telecommunications systems, and the network of roads and railways—things
normally taken for granted in the integration arrangements among developed
countries, such as the EC or the Council for Mutual Economic Assistance
(CMEA).37 Moreover, integration has stagnated in the ECOWAS because of the
lack of commitment of the member states to the ideals of the community.
Integration inevitably involves the erosion of national sovereignty, where the
basic mechanisms include trade liberalization and the establishment of common
external tariffs. These two issues imply the surrender of the basic instruments
of economic policies by the component states. Most states substantially depend
on customs duties as a source of revenue. Thus, there has been considerable
reluctance in the implementation of the relevant protocols adopted at the
summits of the heads of state and governments.38 Under this circumstance
therefore, the catalyst role of regional economic integration schemes in the
Foreign Aid and Economic Development Theories 23
CONCLUSION
The general theories of foreign aid and development clearly has limited
applications in contemporary economic situations in developing countries,
including those in West Africa. A number of critical variables peculiar to some
countries do not wholly justify the conclusions and inferences drawn from these
theories. Besides, the universality of the theories are constantly challenged as
a result of the emerging new patterns of international cooperation in recent years
due to rapid advancements in science and technology. The world has become a
"global village," characterized by high interdependence, increasing division of
labor, high movement of capital, and intense competition among countries.
As far as supplemental theories are concerned, foreign aid may not necessar-
ily be the critical factor for the attainment of the desirable level of investment
for sustainable economic growth. In the modern-day global economy, techno-
logical know-how and the availability of basic skills are some of the fundamen-
tal prerequisites. The donor-oriented theories may fit well into the basic
conceptions in international division of labor, but this is hardly sufficiently
justifiable when the objectives of the donors and recipients do not often
24 Foreign Aid and Self-Reliance in West Africa
NOTES
1. W. G. Zeylstra, Aid or Development: The Relevance of Development Aid to Problems of
Developing Countries (Leyden, The Netherlands: A. W. Sijthoff, 1977), p. 16.
2. G. M. Meier, The International Economics of Development, Theory and Policy (London:
Harper and Row, 1968), p. 95.
3. T. J. Biersteker, "Self-Reliance in Theory and Practice in Tanzanian Trade Relations,"
International Organization, 34(2), Spring 1980, pp. 235-236.
4. For details, see J. Galtung et al., Self-Reliance: A New Development Strategy (London:
Bogle-L'Ouverture, 1980).
5. J. A. Schumpeter, The Theory of Economic Development: An Inquiry into Profits, Capital,
Credit, Interest and Business Cycle (Cambridge: Harvard University Press, 1934), pp. 15-66.
Foreign Aid and Economic Development Theories 25
INTRODUCTION
Many West African countries entered the second half of the 1970s with
considerable handicap as a result of the oil price shock of 1973. The steep rise
in the price of oil precipitated economic recession in the subregion. This became
aggravated by the early 1980s as a result of the adverse impact of several other
factors, such as the decline in the global price of primary commodities, the
increased burden of foreign debt, inadequate internal economic policies, and
drought, to mention a few. This development implied that West African coun-
tries had to mobilize both their internal and external resources in order to bring
their economies back on course for economic growth and development.
The need for an increase in financial assistance was also recognized by the
developed countries, which felt that the international community should assist
in the arrest and alleviation of the growing poverty in Africa. This naturally led
to some renewed cooperative efforts at both bilateral and multilateral levels:
direct assistance from governments and from international financial institutions.
In addition to this, several nongovernmental international organizations have
also shown tremendous interest in the ways to eradicate poverty in West Africa.
However, while the need for external financial assistance has been recognized
as urgent in the subregion, it remains highly doubtful if these responses have
been commensurate with the demands of West African countries. Also, there is
considerable skepticism over whether the available inflows in recent years have
been efficiently utilized by the recipient West African countries for economic
growth and development. The critical underlying factors on the impact of
28 Foreign Aid and Self-Reliance in West Africa
foreign aid in West African economic growth and development remain the
foreign aid policies of the industrially developed countries and the management
of foreign aid by West African countries. Thus, for example, the general
tendency for the metropolitan powers, especially Great Britain and France, to
maintain their influence in their former colonies continue to prevail, yet this
must be linked to their economic interests. Special considerations are accorded
to the benefits of the private sector in aid flows to developing countries: it is
essentially deemed imperative to be linked to domestic industrial output and
growth. This was necessary while the metropolitan countries were themselves
confronted with unemployment and inflationary problems. Besides, the types
of political and economic policies that West African countries pursue are strong
determinants of the size of financial aid that they receive from the developed
countries. The tendency has generally been to assist those countries with overt
commitment to democratic political arrangements and liberal economic poli-
cies. (See Table 3.1.)
In other words, while the developed countries have shown interest in the
predicament of West African countries, they have at the same time indicated
that foreign aid would make positive impact on their economies in the right
political environment—essentially, in the framework of democratic systems
that permit peaceful changes and provide full guarantees for human rights. In
the same vein, the developed countries have seen a relationship in aid flow and
economic policies. The West African countries would need to put in place
adequate economic policies such as structural adjustment programs that could
correct imbalances in their economic structures and provide the basis for
durable economic growth. The importance of such programs has been linked
with laying the foundations of economic growth and therefore of the effective
utility of foreign aid. Structural adjustment programs would enable the govern-
ments to establish more market-oriented economies, better infrastructures, and
institutions that would enhance the absorptive capacity of these countries.
However, the position of the developed countries on these issues, in the view
of some observers, remains highly contentious as they raise controversial
questions of interference in the internal development processes of the develop-
ing countries.
Furthermore, the issue of foreign aid in West Africa relates to the question
of coordination. How has this been coordinated to ensure maximum utilization?
Foreign aid is, generally, from diverse sources for different purposes. It must
be properly coordinated and directed to national development priority areas in
order to have maximum positive impact on economic development. Let us now
look first into the pattern of bilateral aid flows into some West African countries.
The analysis will treat the volume of flows, the types and end use of flows. But
the full appraisal of the impact of the flows on economic development is outside
the scope of this study.
Table 3.1
Net ODA from DAC Donors to West Africa, 1980-1989
USSMills., Current Prices and Exchange Rates
COUNTRY 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
BENIN 36 45 41 41 40 48 73 77 93 138
BURKINA FASO 151 158 147 128 122 122 175 196 219 208
CAPE VERDE 39 36 43 45 39 41 76 63 59 49
COTE DIVOIRE 152 91 102 141 114 110 138 221 226 260
GAMBIA 16 19 24 21 32 31 59 51 54 56
GHANA 107 87 65 61 95 96 120 131 236 350
GUINEA 32 31 27 27 42 60 98 120 160 192
GUINEA-BISSAU 34 42 34 32 30 24 41 48 48 54
LIBERIA 60 86 85 88 108 64 69 51 48 39
MALI 131 133 96 97 224 251 204 222 260 301
MAURITANIA 54 67 62 72 69 100 105 98 111 160
NIGER 105 123 123 107 102 206 184 215 242 200
NIGERIA 17 17 17 29 15 16 39 51 97 310
SENEGAL 182 214 189 212 246 196 316 359 368 536
SIERRA LEONE 57 34 56 36 22 30 51 44 52 72
TOGO 52 37 50 49 53 53 92 86 128 108
TOTAL WEST 1,225 1,220 1,161 1,186 1,353 1,448 1,840 2,033 2,401 3,033
AFRICA
TOTAL AFRICA 6.007 5,960 6,177 6,047 6.818 7,543 8,738 9.872 11.131 10.978 1
Source: UNDP/World Bank, African Development Indicators (Washington. D C : UNDPAVorld Bank. 1992), p. 295.
30 Foreign Aid and Self-Reliance in West Africa
BILATERAL AID
Benin
Traditionally, bilateral foreign aid has been an important aspect of foreign
aid to West African countries. The continued interest of the metropolitan powers
in the economic development of the former colonies has engendered assistance
to them. Also, other developed countries have shown interests in bilateral
assistance in the subregion when this would enhance their national objectives,
such as political influence, economic growth, and strategic considerations.
Benin is one of the economically weak West African countries. It has a high
degree of dependence on agriculture, which accounts for over 40 percent of its
GDP and about two-thirds of all employment. The country has been highly
susceptible to vagaries in the international economy. As a result of these
features, there has been substantial dependence on foreign financial aid for
economic growth. The global economic crisis of the early 1970s further
accentuated this problem by the mid-1970s, and heightened the need for
increased foreign aid to meet the gap created by decreasing foreign exchange
earnings. In this respect, however, the role of bilateral assistance could at best
be described as modest. This was essentially the case as far as the rural and
infrastructural objectives of the country went by the late 1970s. The major
bilateral donors include France, Germany (former West Germany), Denmark,
Canada, Norway, and the United States. These countries have shown continuous
interest in the development problems of Benin with a view to alleviating the
deterioration of poverty. From 1979 to 1988, total foreign aid flow into Benin
increased from US$87.5 million in 1979 to US$98.1 million in 1985 and
US$103.5 million in 1988 (see Table 3.2). As a proportion of total flows,
bilateral aid had declined substantially during this period. In 1979, it accounted
for 55.4 percent of total foreign aid receipts. By 1982, it declined to 50.1 percent
and further to 31.5 percent in 1986, but rising slightly to 35.7 percent in 1988.
The decline in total bilateral flows was, essentially, accounted for by the
negative flows from Norway and the United Kingdom. In the case of the former,
it was US$-3.5 million in 1985, but it rose steadily in the following three years,
rising to US$46.7 million in 1988. In the case of the United Kingdom, it was
US$-1.8 million in 1985, rising to US$-11.4 million in 1987, but subsequently
declining to US$-4.2 million in 1988. During this decade, Germany emerged
as the leading bilateral donor to Benin, displacing France. Its aid to Benin
multiplied threefold between 1979 and 1988. Whereas France has, on the whole,
only managed to maintain an average annual disbursement of about US$19
million. However, there were aberrations of two major low disbursements of
US$6.1 million and US$6.8 million during this period.
If the grant elements are considered, it could be further observed that the total
flows from the Federal Republic of Germany from 1985 to 1988 were 100
Foreign Aid in West Africa 31
Table 3.2
Benin: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
FINLAND . . 0.0 . . . . .
FRANCE 18.4 16.7 19.2 14.2 6.1 23.8 6.8 22.8
GERMANY (FED. 10.4 10.4 11.4 13.2 17.5 26.8 30.5 29.0
REP.)
IRELAND . . . . . . . _
ITALY 0.1 . 0.2 0.3 0.5 2.6 2.7 14.7
NEW ZEALAND . . . . . . .
NORWAY 4.1 2.3 0.2 2.7 -3.5 14.7 16.3 46.7
SWEDEN . . . . . . . .
SWITZERLAND 0.8 0.6 1.1 1.2 2.3 6.2 2.0 2.2
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1984 and
1985/88), pp. 36 and 60.
percent grants. Whereas, in the case of France during the same period, this rose
from 65.5 percent in 1985 to 89.3 percent in 1987, but falling to 73.2 percent
in 1988.1 This, to some extent, implies that the flows from Germany may have
been more advantageous for economic development purposes. With the signifi-
cant part of flows from France being tied and involving repayments, they may
not necessarily facilitate economic development. And as a corollary, this
32 Foreign Aid and Self-Reliance in West Africa
development could enhance the building of Germany's influence and its eco-
nomic interests in Benin. But this trend has, in part, been seen in the context of
the development within the country itself.
By 1977, the government of President Matthew Kerekou had, through the
document Loifondamentale, confirmed Marxist-Leninism as the official ideol-
ogy, and socialism as the strategy for economic development. The government
instituted a regime that was calculated to lead to "popular democratic dictator-
ship." Major powers were vested in the Parti de la Revolution Populaire du
Benin (PRPB). The government's essential tool of developing the agricultural
sector was collectivization that was also extended to the commercial sector. This
development inevitably elicited different reactions in Europe. The reservations
of France under Valery Giscard d'Estaing to the socialist path in Benin was
made manifest in the cool relations between the two countries. Partly because
of this, the Kerekou government in 1979 linked the French government with
the presence of mercenaries in Benin. While this persisted, foreign aid to Benin
was put in question. Although the Mitterand administration, which replaced it
in 1980, shared a similar ideological orientation, this did not do much to raise
the level of bilateral aid flow to Benin. Hence, the stagnation in the flow of
foreign aid to Benin.
Apart from this, one observation about the flow of bilateral assistance to
Benin after 1985 has been its general decline. This development has undoubt-
edly been disappointing since this was the period of acute economic decline
when foreign aid was needed most in order to rejuvenate the economy. Thus,
there appears to be a conviction on the part of bilateral donors that more of this
form of aid would not be beneficial to economic recovery. To Benin, this
represented a great blow to economic recovery and the alternative to this would
inevitably be multilateral aid. But it remains to be seen how Benin can benefit
from this source in the face of increasing global competition.
Burkina Faso
In contrast with Benin, Burkina Faso has been more favored in the disburse-
ment of foreign aid. But like Benin, Burkina Faso in the late 1970s sought
foreign aid essentially to solve the problems of rural development, agricultural
transformation, and drought.
Four major bilateral donors may be identified vis-a-vis Burkina Faso; namely,
France, Germany, the United States, and the Netherlands (see Table 3.3). The
United States had a steady rise in the first five years by doubling its bilateral
aid to Burkina Faso, reaching US$44.0 million in 1985, but thereafter declined
to US$17.0 million in 1988. The Netherlands, during this period, maintained
an average bilateral flow of about US$22.0 million. On the whole, total bilateral
aid to Burkina Faso increased significantly during the decade of the 1980s.
Foreign Aid in West Africa 33
Table 3.3
Burkina Faso: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC 1979 1980 1981 1982 1985 1986 1987 1988
COUNTRIES
IRELAND . . . . . . . .
ITALY 0.1 0.0 0.1 7.4 5.4 35.2 20.6 40.0
JAPAN 0.1 1.9 0.2 0.2 5.3 4.3 7.7 7.9
NETHERLANDS 24.8 18.1 19.2 26.5 13.7 17.7 26.9 25.9
NEW ZEALAND . . . . . . . .
NORWAY 1.4 0.2 2.0 . 0.0 3.6 . 1.4
SWEDEN . . 0.2 0.1 0.0 . . 0.5
SWITZERLAND 1.7 2.0 2.2 1.7 1.9 2.7 3.1 4.1
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 218.
Furthermore, it is significant to note that the aid flows from Germany, the
United States, the Netherlands, and Italy were, from 1985 to 1988, full grants.
This been a result of the full recognition of the economic handicap of the
country. However, on the contrary, the French flows have been about 80 percent
grant in content.2 Thus, the French government has again underscored the need
that its external aid should be anchored to domestic economic benefits.
34 Foreign Aid and Self-Reliance in West Africa
Cape Verde
The geographical location and low level of economic development in Cape
Verde in West Africa strongly suggest that it should be a significant recipient of
foreign aid. It has been noted that bilateral aid accounted for over 50 percent of
total aid flows to Cape Verde from 1985 to 1988 as may be observed in Table
3.4. Cape Verde largely depends on the goodwill of bilateral donors for its
economic development. Within this period, all foreign bilateral aid has 100
percent grant content apart from France, whose grant elements were estimated
at 61.4 and 95.8 percent in 1985 and 1986, respectively.4
Cote d'lvoire
The position of Cote dTvoire is unique among francophone West African
countries. It is one of the more economically advanced francophone countries
in the West African subregion, with close links to France. However, like many
other West African countries, it began to experience economic difficulties
beginning in the late 1970s. The windfall earnings from coffee and cocoa in
1976 and 1977 encouraged heavy borrowing by the government from abroad.
Partly as a result of this, its external debt rose to US$8.5 billion in 1988, from
a low level of US$1.7 billion in 1975. At the same time, the country's debt
service ratio rose from 9 percent in 1976 to an uncomfortable level of 40.8
percent in 1987.
In view of the rapid economic growth in the 1960s, Cote dTvoire has been
an important recipient of foreign capital. However, this became reduced as the
recession set in the 1980s. The major bilateral donors include France, Germany,
Canada, Belgium, the United Kingdom, and the United States. And in recent
times, the Japanese and the Italians have also increased the volume of their
Foreign Aid in West Africa 35
Table 3.4
Cape Verde: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1985-1988
USSMills., Current Prices and Exchange Rates
AUSTRALIA . . . .
AUSTRIA 1.5 1.7 2.3 1.6
IRELAND . . . .
ITALY 7.5 37.9 8.6 8.3
NEW ZEALAND . . . .
NORWAY 0.5 0.6 1.4 0.9
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 218.
bilateral aid to Cote d'lvoire, making them important donors to the country.
Bilateral assistance constitutes the major part of total flows to Cote d'lvoire. In
1979, it accounted for about 68 percent of total flows. Bilateral assistance has
ironically diminished with increasing economic difficulties at the close of the
1980s, as illustrated in Table 3.5.
Foreign aid was essentially directed to the social and administrative infra-
structures, economic infrastructures, production, technical cooperation, pro-
gram assistance, and debt reorganization. In 1985, for example, 50 percent of
total inflow went to economic infrastructures. This declined to 10 and 11 percent
36 Foreign Aid and Self-Reliance in West Africa
Table 3.5
Cote d'lvoire: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 118.
in 1986 and 1987, respectively, but rising to 58 percent in 1988. Production has
been second in importance. It accounted for 29 percent of total flows in 1985,
but falling to 16 and 21 percent in 1986 and 1987, respectively. It rose again to
27 percent in 1988. Furthermore, technical cooperation has been the third in
the order of priorities to bilateral donors. It was 9 percent in 1985, rising to 15
and 17 percent in 1986 and 1987, but falling to 11 percent in 1988.5 Thus, a
Foreign Aid in West Africa 37
significant part of foreign aid has been directed to the critical sectors of the
economy that are vital to economic growth. The costs of economic infrastruc-
tures, such as roads, railways, and telecommunications, are very high and the
government could not have entirely financed them under the current economic
situation. At the same time, they are indispensable to successful industrializa-
tion. Also, increased aid in the production sector should be important in times
of recession when increased production in the industrial and agricultural sectors
would be fundamental to economic recovery. Additionally, technological coop-
eration would also go a long way in the creation of the basis for sustained
industrialization in Cote d'lvoire. However, it could be observed that the decline
in the proportion of production had been a major setback to the government in
1986 and 1987. More aid in this sector could have assisted in the rejuvenation
of the industrial sector, which was deep in crisis.
Cote d'lvoire, like many other francophone West African countries, also had
the benefit of almost 100 percent grant element in bilateral flows from ODA
countries. The only exceptions, from 1985 to 1988, being France and Germany.
For example, in the case of France, the grant element decreased substantially.
This was 80.6 percent in 1985, 67.8 percent in 1986, and 52.9 percent in 1987,
but rising slightly to 55 percent in the following year.6 Thus, in the views of the
French and German governments, Cote d'lvoire may not necessarily be treated
as one of the economically weak West African countries that seriously lag
behind in economic development because of their structural limitations. But it
would seem that Cote d'lvoire may benefit well by seeking improved relations
with Canada, Japan, and the United States, which have shown interest in its
economic development through somewhat increased bilateral flow. The more
the content of grant elements, the better would be the prospects for economic
growth and development.
Gambia
Gambia represents one of the feeble anglophone West African countries. It
emerged from colonial partition as an independent anglophone state on the
banks of the river Gambia intruding deeply into francophone Senegal.7 The
economy has, since independence in 1965, experienced a somewhat modest
growth. These gains in growth were, essentially, utilized for the expansion of
the public sector; in particular, of government industries, education, health,
public works, and agriculture.
However, there continues to be several limitations to rapid economic growth
and development. The first limitation emerges from its small size and undiver-
sified productive base. The Gambian economy is open and highly sensitive to
shortfalls in agricultural production and to changes in the external terms of
trade. The country is dependent on trade for up to one-half of its food require-
ments, and it imports most manufactured goods and all fertilizers, fuel, and
38 Foreign Aid and Self-Reliance in West Africa
Table 3.6
Gambia: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0
AUSTRIA 0.0 0.0 0.0 0.0 -0.3 0.0 0.0 0.0
BELGUIM 0.0 . . 0.1 0.0 -0.1 0.1 0.1
CANADA 0.0 0.1 0.2 0.6 0.9 0.2 1.2 0.3
DENMARK 0.1 0.6 2.4 0.0 0.3 0.1 0.1 4.0
FINLAND . 0.0
- - - .
0.0 0.0
FRANCE . 3.2 0.6 0.9 3.6 11.3 5.6 0.9
GERMANY 4.7 5.0 5.0 7.1 5.2 6.0 8.5 6.3
(FED. REP.)
IRELAND . . - . 0.0 0.2 0.1 0.0
ITALY . 0.1 „ . 1.7 15.3 9.2 8.2
JAPAN . 0.0 0.6 3.8 1.2 1.6 4.5 3.8
NETHERLANDS 2.1 0.6 1.3 1.0 3.0 6.0 1.9 9.0
NEW ZEALAND . . . . - . . .
NORWAY
- 0.2 . . 0.1 -1.6 1.4 4.4
SWEDEN . . 0.1 0.2 0.2 0.0 0.1 0.2
SWITZERLAND 0.1 0.0 0.0 0.0 0.1 0.1 . -
UNITED KINGDOM 5.2 4.5 4.0 3.7 2.5 9.5 10.7 -12.4
UNITED STATES 2.0 4.0 5.0 6.0 10.0 9.0 10.0 11.0
TOTAL 14.2 18.4 19.2 23.5 28.5 57.6 53.3 36.0
MULTILATERAL 19.9 36.6 35.9 21.8 19.7 42.8 47.6 28.0
OPEC COUNTRIES 4.2 7.0 21.0 3.5 . . . .
EEC + MEMBERS 18.1 23.5 27.0 19.4 18.5 58.7 43.7 24.5
TOTAL 38.3 62.0 76.1 48.8 48.9 99.5 100.9 62.0
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 88.
food aid decreased to 4 percent in 1986 but rose sharply to 9 percent in the
following year. Albeit, food aid somewhat diminished with the reduction in the
adverse impact of drought in 1984.
Ghana
The serious decline in Ghana's economy in the 1970s and early 1980s in no
doubt elicited concern and diverse support from a number of DAC countries.
40 Foreign Aid and Self-Reliance in West Africa
Ghana's economy, throughout the 1970s and early 1980s, declined in all major
sectors. The acute shortages of basic food, goods, and services that followed
aided political instability and the poor management that frightened the interna-
tional community from investing in the country. The drought problem that
affected the country in the 1980s did not only create problems in the agricultural
sector but also prevented the Volta dam from attaining the required water level
needed for power production for both internal consumption and exports. It
therefore followed that at the beginning in the 1980s, the economy was in a
state where it required substantial foreign financial assistance in order to return
to the course of growth.
The volume of foreign aid flow to the country increased significantly in
the 1980s. Table 3.7 shows that bilateral aid generally constituted a substan-
tial part of total aid flow to Ghana. Thus, in comparison with Burkina Faso
or Cote d'lvoire, the proportion of bilateral aid to total aid flow has been
lower in Ghana. However, unlike these two countries, more DAC countries
have shown greater interests in bilateral assistance. The key countries in the
bilateral cooperation with Ghana are the United Kingdom, Germany, Can-
ada, the Netherlands, Japan, the United States, and France. Switzerland
began to increase its bilateral assistance to the country during the second half
of the 1980s.
Since 1985, assistance from the DAC countries has been concentrated in the
areas of economic infrastructure, production, social and administrative infra-
structure, and technical cooperation. From 1985 to 1988, the proportion of
economic infrastructure has essentially been about 33 percent. Program assis-
tance rose from 25 percent in 1985 to 33 percent in 1987, but fell to 13 percent
in the following year. For many of the small bilateral donors, the grant element
has been total in their flows to Ghana in the second half of the 1980s. But in
the cases of France, the United States, and Germany during this period, the grant
elements were clearly defined. In the case of France, for example, only 38
percent of its bilateral aid to Ghana was in the form of grant in 1985; 62 percent
was tied to purchases. But the grant element rose to 49.4 percent in 1987 and
to 92.4 percent in 1988.10
Thus, it could be observed that the bilateral financial flows from the DAC
countries have been very valuable to Ghana's economic growth and devel-
opment. In this context, the United Kingdom, Germany, Japan, and the
Netherlands are reliable partners the country could count on for support in
the future with the continuation of good relations and better prospects for
growth. However, the country will need to encourage the United States and
France, major sources of substantial bilateral aid, to increase their flows to
it in the future.
Foreign Aid in West Africa 41
Table 3.7
Ghana: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA 1.9 0.7 0.7 0.5 0.3 0.4 0.3 0,
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 90.
Guinea
Notwithstanding its potential resources in minerals and agriculture, Guinea
is classified among the twenty-five countries with the lowest per capita incomes
in the world.l {The erratic global prices of minerals has generally made earnings
from them highly undependable for sustainable economic growth and develop-
ment. Also, in the past decade, the export of agricultural products has stagnated
42 Foreign Aid and Self-Reliance in West Africa
Table 3.8
Guinea: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
IRELAND . . . . . . . .
ITALY 0.4 0.2 1.9 -0.2 3.2 7.0 7.6 31.4
' TOTAL 10.0 26.0 32.9 25.1 52.5 95.2 142.4 184.5
MULTI- 47.5 63.6 57.8 35.6 57.5 67.1 70.6 80.0
LATERAL
OPEC 9.3 0.1 -0.3 3.6 - - - -
COUNTRIES
EEC + MEMBERS 12.5 38.9 39.4 30.4 44.1 83.5 103.5 145.7
TOTAL 66.8 89.6 90.4 64.3 112.1 166.6 225.0 278.1
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 96.
it. At independence in 1958, Guinean President Sekou Toure took the country
out of the French colonial empire. The Guinean government nationalized many
French investments and the French government retaliated by suspending finan-
cial aid and technical assistance to Guinea. By 1977, however, the Guinean
government agreed to compensate the French firms whose assets were nation-
44 Foreign Aid and Self-Reliance in West Africa
Guinea-Bissau
Guinea-Bissau is one of the economically weak least-developed countries in
Africa. Its main exports are groundnuts and palm kernel, which account for
about 70 percent of total exports. The country lacks substantial industries, apart
from few small plants for brick-making, groundnut-shelling, baking, rice-mill-
ing, and the production of groundnut oil, foam mattresses, fabricated housing,
fruit juices, jams, and soft drinks. The implementation of budgets in Guinea-
Bissau requires continuous injection of foreign aid. However, foreign aid
inflows have been very modest. In comparison with Guinea, Guinea-Bissau has
been less favorably considered by donors in the 1980s as illustrated in Table
3.9. Generally, bilateral aid represents significant part of the foreign aid inflow
to Guinea-Bissau. In 1979, it accounted for 64 percent of total inflow.
Unlike Guinea, the major bilateral donors to Guinea-Bissau are the Scandi-
navian countries, notably Sweden and the Netherlands. Italy has increased its
aid to Guinea-Bissau since 1986, making it the most prominent donor by 1988.
However, the United States, United Kingdom, France, and Japan, have yet to
Foreign Aid in West Africa 45
Table 3.9
Guinea-Bissau: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1979-1988
USSMilI s., Current Prices ami Exchanj»e Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . . . . .
•
AUSTRIA 0.0 0.0 0.1 0.1 0.0 0.1 0.2 0.2
IRELAND . . . . . . . -
ITALY 0.1 0.1 0.6 1.2 2.1 10.5 10.6 35.7
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 98.
inevitable in view of the fact that Guinea-Bissau has continued, since 1979, to
experience severe food shortages because the state-operated agricultural coop-
erative arrangements have been far from effective. Also, the bouts of drought
in 1979-80 and 1983 seriously undermined food production. Debt reorganiza-
tion and social and administrative infrastructures were other important targets
in 1985.15
The level of technical cooperation was somewhat maintained till 1988, apart
from 1987, when it fell to 15 percent. Food aid declined with improved food
production. It occupied only 2 and 1 percent in 1987 and 1988, respectively.
However, the contrary has been the case in social and administrative infrastruc-
ture, which rose steadily. It rose by 16 percent in 1986 as against the previous
year and to 46 percent in 1988. Thus, there seems to be an increasing concern
on the building of a genuine basis for meaningful economic development.
Guinea-Bissau has not benefited significantly in the foreign aid of the United
States and the United Kingdom, partly because of its political instability. During
this period, it was one of the most unstable countries in the West African
subregion. The government did not grant a wide degree of political freedom to
its citizens. No opposition parties were allowed to exist. The government had
monopoly over the media and the expression of dissent is not tolerated. On
November 14, 1980, Mr. Joan Bernard Vary became the president after a
successful coup d'etat. On February 16, 1981, the government announced a
sixteen-member provisional government. However, members of this cabinet
have been changed at a very rapid rate as a result of the highly fluid political
situation. Some were expelled for the embezzlement of money.16 But then this
had not prevented further coup attempts. On November 7,1985, the government
identified one of such coups with the first vice president and minister of justice
who ranked second in the party. Thus, there has been considerable uncertainties
about political development in Guinea-Bissau. The United States and the United
Kingdom have further felt uneasy on the commitment of aid when the human
rights and professed socialist philosophy of Guinea-Bissau remain problematic.
Liberia
The 1980s was essentially one of remarkable assistance to Liberia. There was
lack of enthusiasm in the Liberian economy while it was emersed in a political
crisis of large proportions. By April 1980 when Sergeant Samuel Doe came to
power after a bloody coup d'etat, the Liberian economy was already in very
serious difficulties. At the end of the 1970s, there was a slump in the global
price of rubber, one of the principal cash crops. l7 As a result of this, production
became uneconomic and an estimated 5,000 Liberian planters were put out of
business. By 1981, rubber prices dropped by a third and exports reached a low
level of about US$51.6 million in 1982 compared with US$102.2 million in
1980. In other words, an injection of foreign financial assistance was desirable
Foreign Aid in West Africa 47
Table 3.10
Liberia: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . 0.0 . . .
AUSTRIA 0.0 . . . . 0.0 . .
BELGIUM 0.1 0.1 0.1 0.1 40.0 -93.7 -98.8 -98.6
CANADA -3.2 -9.7 -7.2 -2.9 -0.8 -0.8 5.6 2.3
DENMARK 0.0 0.0 . . 0.2 0.2 4.3 5.1
FINLAND . 0.0 1.2 0.6 -6.5 0.0 . 33.5
FRANCE . 0.8 0.8 1.1 -32.8 -73.6 76 -0.6
GERMANY (FED. -5.0 3.8 13.3 14.5 -3.0 -17.5 -49.7 51.5
REP.)
IRELAND . . . . 0.0 0.1 0.1 0.0
ITALY -0.9 -0.9 0.0 2.5 0.9 0.9 0.7 22.1
JAPAN 1.7 13.9 2.5 7.1 -234 12.1 -267 354
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 138.
social and administrative infrastructures and production, 6 percent for food aid,
5 percent for economic infrastructure, and 4 percent to debt reorganization.
Thereafter, however, the commitment to program assistance declined, falling to
24 percent and 7 percent in 1987 and 1988, respectively. While on the contrary,
the commitment to technical cooperation increased appreciably to 48 percent
in 1987 and 55 percent in 1988. Similarly, commitment to economic infrastruc-
ture was on the increase to 6 percent and 14 percent in 1987 and 1988,
respectively. Hence, there seems to be a modest response to some of the priority
areas of the Liberian economy.
Mali
Mali is one of the poorest countries in West Africa. It was badly affected by
persistent drought since 1971. Its GNP per capita of US$140 makes it one of
the least developed countries on the African continent. In the 1970s, the
government focused primarily on the agricultural sector to promote economic
growth and development. Albeit, the drought of the late 1970s and 1983/84
severely affected government's program of agricultural output. As a result the
country was compelled to be dependent on food importation.
An important aspect in Mali's economy is that there is a persistent budgetary
deficit due to its poor revenue earning capacity and its heavy expenditure on a
disproportionately large bureaucracy. About 70 percent of its current spending
is on manpower. From 1968 to 1981, the budget deficits were made good by
the French public treasury. The government was unable to prune spending or
generate more revenue during the drought years.
In addition, Mali has a persistent deficit on its balance of payments and trade.
This situation was aggravated shortly after independence when it left the franc
zone to establish its own currency. Consequently, foreign aid continues to
constitute a major factor in the development process of the country.
At the bilateral level, the dominant donors include France, Germany, the
United States, the Netherlands, and Canada. But Italy, in the second half of the
1980s, increased its flow to Mali to enhance the development process as may
be observed from Table 3.11. This in itself may not be unconnected with the
1981 coup attempt, which was an indication that the Traore government was
under pressure and that political stability may not necessarily be taken for
granted in Mali.
Bilateral aid from Arab countries played important roles in the second half
of the 1980s. It rose from US$26.8 million in 1985 to US$40.9 million in 1986,
but thereafter declined to US$8.6 million and US$5.4 million in 1987 and 1988,
respectively.18
The commitments of the ODF were essentially directed at social and admin-
istrative infrastructures, economic infrastructures, production, technical coop-
eration, and program assistance. For example, the flows from France in 1980
Foreign Aid in West Africa 49
Table 3.11
Mali: Official Net Receipts from DAC Countries, Multilateral Organizations, and
OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . . 0.0 . .
AUSTRIA 0.0 0.0 [ 0.2 0.0 0.0 0.0 0.3 0.2
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 146.
for 26 percent in 1985; this declined to 22 and 14 percent in 1986 and 1987,
but rose to 28 percent in 1988. But commitments to economic infrastructures
declined precipitously from 23 percent in 1985 to 10,4, and 5 percent in 1986,
1987, and 1988, respectively. This represented a setback in the drive toward
self-reliance, since the country hitherto lacks the basic infrastructures for
development. The costs of these structures, such as roads and telecommunica-
tions networks, are huge given the vastness of the country and the manner in
which towns are distantly located. The flow to production on the other hand
increased from 19 percent in 1985 to 30 percent in 1986, but thereafter slightly
declined to 29 and 27 percent in 1987 and 1988. Also, the flows to technical
cooperation rose from 20 percent in 1985 to 38 percent in 1987, but declined
to 13 percent in 1988. Program assistance rose from 4 percent in 1985 to 8
percent in 1987 and to 24 percent in 1988. In other words there was a good
response to projects under economic reforms in 1988 only.
The bilateral aid from the DAC countries from 1985 to 1988 was essentially
untied. The only exception was the case of France whose bilateral aid, in 1985,
had 89 percent grant element. It rose to 99.2 percent in 1987 but declined to
78.8 percent in the following year.
Mauritania
Like Mali, drought has been another major factor in Mauritania's economic
development. It was essentially severe in the early and late 1970s and again
from 1982 to 1984. Mauritania's chronic trade deficits in the years up to 1965
were transformed with the arrival of the mining industry, but the huge invest-
ment required in this sector, the rising cost of oil imports and manufactures, and
the cost of the war against Polisario put the budget and the balance of trade back
into deficit. The deficit persisted throughout the late 1970s until the first trade
surplus was established in 1983. Thus, the need for foreign financial assistance
has always manifested itself in Mauritania's economy. At the same time,
however, the inflow of foreign financial assistance to the country has generally
been very modest.
The principal sources of bilateral foreign aid are France, Germany, the United
States, and Italy. Table 3.12 shows the trend in the pattern of foreign aid flows
into Mauritania in the 1980s. A substantial part of French aids in 1982 were for
the projects on hydroelectric irrigation and pasture development in Lake R'Kiz
region near Senegal Valley, improvement of the Nouackchott city water supply,
oceanographic resources research, the establishment of an orthopedic medical
center, and various administrative needs. The United States contributed 20,000
tons of grain, increased its project aid from US$2.7 million in 1980 to US$8
million and US$9.7 million in 1981 and 1982, respectively. Furthermore, the
United States contributed to the Senegal River agricultural development pro-
jects.20 The Arab countries have also been major sources of bilateral foreign aid
Foreign Aid in West Africa 51
Table 3.12
Mauritania: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1979-1988
USSMil Is., Currer t Prices arid Exchan ?e Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . 0.0 . .
AUSTRIA 0.1 0.1 0.1 0.0 0.7 0.2 0.2 0.2
SWEDEN . . . . . . . .
SWITZERLAND 0.6 0.5 0.4 0.3 0.8 0.0 0.1 0.3
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 148.
However, thereafter the volume of flows declined, falling to US$ 10.7 million
in 1987.
Since 1985, a major part of ODF flows have been directed at technical
cooperation. This accounted for 26 percent of ODF commitments to Mauritania.
It rose 30 percent in 1988. ODF commitment to food aid has, on the other hand,
declined since 1985 as the drought abated and some solutions were found to
problems of food shortage. It declined to 3 percent in 1988 from 22 percent in
1985. Social and administrative infrastructure, which received much attention,
accounting for 19 percent in 1985, ebbed in the following two years but rose
significantly to 28 percent in 1988. Production has had increasing support since
1985. It accounted for 16 percent of total ODF flows to Mauritania in 1985,
rising significantly to 37 percent in the following year but declining in the
following two years to 23 percent and 19 percent, respectively. But program
assistance was not significant until 1987, when the government embarked on
more fundamental economic reforms. Since 1985, a substantial part of the flows
from the DAC countries have had almost 100 percent grant element and
therefore are of considerable benefit to Mauritania's economic development.
Niger
Like Mauritania, Niger is one of the typical Sahelian economies in the West
African subregion. It has probably been more affected by the drought of the
early 1970s and 1980s than any other country in West Africa. It is poor in spite
of the discovery and exploitation of uranium. Niger's economy is highly
dualistic. The modern sector, which operates within an established legal frame-
work, exists next to an informal sector composed of a multitude of small
establishments that often have no legal accountability. In 1988, the modern
sector supplied 27 percent of GDP, yet it employs just 3 percent of the labor
force.22 The modern sector is composed primarily of governmental administra-
tion, mining, transport, and commerce, which contributed 45, 22, 13, and 12
percent of modern-sector activity, respectively, in 1988.
Niger's economic policies have been biased in favor of primary activities
(agriculture, livestock rearing, and mining) and in favor of import-substitution
rather than export-promotion activities.23 A five-year development plan estab-
lished in 1979 had the following major goals: (1) self-sufficiency in food
production; (2) the development of a basic infrastructure; (3) the improvement
of social services; and (4) the expansion of the mining operation. Niger's
1987-91 five-year plan essentially continues the same goals but places more
emphasis on agriculture and the extension of irrigation and less on mining to
reflect the downturn in the world prospects for uranium.
Uranium brought hefty budget surpluses at end of the 1970s but these gave
way to deficits as uranium sales fell away at the very time the economy was
geared to investing more and trying to cope with the droughts of the early 1980s.
Foreign Aid in West Africa 53
A drop in uranium revenues from 1980 onward caused the budgets to move
progressively from surplus to deficit. At the same time, the trade gap soared
from less than US$17.6 million in the late 1970s to nearly US$1.1 billion in
1983 as a result of the rapid increase in the imports of investment goods and
petroleum as well as declining uranium revenues. Thus, under these circum-
stances, the need for foreign financial assistance in Niger cannot be over
emphasized. However, compared with Mauritania, Niger has not been a large
recipient of foreign aid.
The dominant sources of bilateral aid are France, Germany, Japan, the United
States, Canada, and Itqjy. From 1979 to 1981, French aid to Niger increased
substantially, rising to a record level of US$88.1 million in 1981 from US$40.4
million in 1979. The aid flow more than doubled during those three years. The
country has in no doubt been viewed with considerable interest by France
because of its large deposits of uranium. Also, Niger's strategic position has
further enhanced its position in the competition for aid from France. It is
strategically placed, astride the frontier between Arabo-Berber and Black West
Africa. Furthermore, Niger, unlike many other West African francophone states
had hitherto enjoyed a measure of political stability.
Although Germany has been an important donor, it is evident that its flows
to Niger has decreased since the end of the 1980s as illustrated in Table 3.13,
suggesting the disillusionment of the German government on the relevance of
aid flow to the country's development. But this view could hardly be sustained
in light of the harsh economic conditions in Niger, especially during the second
half of the 1980s.
In 1985, the flow from the United States attained an all-time high of US$84
million. This appeared to be a prompt response to the emergency needs of Niger
as a result of the drought of 1981/82, which again reemerged in 1984/85. The
droughts devastated substantial food and cash crops and therefore threatened
the economic survival of Niger. A substantial part of the windfall was directed
at solving the problems generated by the droughts. However, thereafter the flow
from the United States declined precipitously, amounting to only US$19 million
in 1988.
In 1987, the flow from Japan reached a record level of US$84.6 million. The
Japanese massive inflow was in no doubt a reaction to the persistent economic
deterioration of Niger and the acknowledgment of the suitability of the meas-
ures adopted by the government to solve the economic problems. Such magni-
tude of aid was what Niger essentially needed at this time, since tied aid would
have been less useful. However, this turned out not to be the case. In the
following year, the flow from Japan declined to US$41.8 million, thus putting
many of the initial projects in jeopardy.
Since the mid-1980s, the flows of the ODF to social and administrative
infrastructures has increased significantly. It rose from 13 percent in 1985 to 25
percent in 1986, but fell to 19 percent in 1988. At the height of the economic
54 Foreign Aid and Self-Reliance in West Africa
Table 3.13
Niger: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills.. Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . . . . .
AUSTRIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
BELGUIM 6.6 10.1 12.2 3.5 5.9 4.9 4.9 5.7
CANADA 2.5 3.7 3.6 6.0 16.2 17.2 28.4 14.5
GERMANY (FED. 29.2 20.7 32.2 37.5 21.6 20.5 20.8 24.5
REP.)
IRELAND . . . . . . . .
ITALY 0.1 0.2 0.0 0.0 9.8 26.4 15.2 33.6
NEW ZEALAND . . . . . . . .
NORWAY 1.0 0.4 1.4 0.9 2.6 3.2 1.7 2.4
SWEDEN 0.1 _ . -0.3 . -0.4 -0.2 -0.2
SWITZERLAND 1.2 1.5 2.0 2.8 3.5 5.4 5.2 7.3
UNITED 2.0 0.1 0.1 0.1 -1.2 -1.7 -1.6 -2.2
KINGDOM
UNITED STATES 16.0 9.0 10.0 21.0 84.0 33.0 41.0 19.0
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 162.
However, there was no doubt that this was one of the principal areas where
foreign aid should be directed in order to ensure the rejuvenation of the
economy. Agricultural production was adversely affected by drought. The
government at the time needed to increase the few processing industries and
embark more aggressively on import-substitution industrialization in order to
reduce the import of consumption goods and save foreign exchange. Thus, while
welcoming the assistance of»France, the government could benefit significantly
from strengthening cordial relations with Canada and Japan.
Nigeria
Nigeria, unlike Niger, is one of the more developed countries in the West
African subregion. The economy was buoyant in the 1970s as a result of the oil
boom. But beginning from 1980, the economy began to run into crisis. The
principal factor that set this in motion was the decline in the price of petroleum.
In 1979, the price of petroleum was US$40 per barrel, this fell to US$30 per
barrel in 1980. This, in effect, reduced the foreign exchange earning of the
government and therefore reduced its capacity to support internal development
efforts, especially in the industrial and agricultural sectors. It led to the reduction
of output in both sectors. Unemployment increased with the underutilization of
industrial capacity. Also, the rate of inflation increased with the reduction in
industrial output and limitations on the import of consumption goods. Further-
more, by the mid-1980s, external debt rose to a record level of US$19 billion
with a higher level of debt burden. All of these events demonstrated that the
country requires additional external financial support in order to reverse the
trend in the recession and promote sustainable growth.
Traditionally, the federal government has not emphasized or encouraged the
inflow of foreign aid as a basic requirement for the economic growth and
development of the country. This derived fundamentally from the ideological
orientation of the federal government and the assumed well-being of the country
as perceived in the oil boom. Thus, up to the 1970s, as far as foreign assistance
concerned, the government emphasized technical assistance that was deemed
necessary to provide skilled manpower in several special areas where there were
shortages in the economy. It was for this reason that the flow of aid, even at the
bilateral level, was very sporadic in the 1980s.
During this period, the Japanese were more consistent in their aid disburse-
ments to Nigeria as indicated in Table 3.14. Thus, Japanese aid increased almost
in response to national economic needs as from 1982. It became more signifi-
cant as the federal government embarked on structural adjustment programs to
arrest economic recession and promote economic growth. The attitude of the
French government was very positive to the Nigerian federal government during
this period, with two remarkable flows of US$119.6 million and US$527
million in 1985 and 1987, respectively. But these were subsequently followed
56 Foreign Aid and Self-Reliance in West Africa
Table 3.14
Nigeria: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUTRALIA 0.3 0.3 0.2 0.2 0.4 0.3 0.3 0.7
AUSTRIA 0.8 0.5 6.8 0.3 -12.8 -22.0 -32.6 -32.6
BELGIUM 0.5 0.5 0.3 0.3 -20.1 -18.7 2.1 2.2
CANADA 0.7 0.3 0.8 1.3 1.4 0.6 1.2 2.6
DENMARK 0.1 0.4 21.9 5.8 11.3 -8.9 -13.2 -11.2
GERMANY (FED. 7.6 20.8 12.3 60.3 -60.5 -84.6 190.6 285.9
REP.)
UNITED STATES -3.0 -3.0 7.0 -3.0 -116.0 552.0 628.0 295.0
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 164.
by outflows from Nigeria to it: US$84.6 million in 1986 and US$374.6 million
in 1988, which could have been invested in Nigeria to facilitate the process of
recovery.
Germany also substantially increased its aid flows to Nigeria during this
decade: from US$7.6 million in 1979 to US$60.3 million in 1982, and to
US$190.6 million in 1987 and US$ 285.9 million in 1988. The major aid flow
Foreign Aid in West Africa 57
Senegal
In Senegal, the basis for foreign aid in the 1980s was reinforced as a result
of the drought that occurred in the subregion during this period. The drought
led to a substantial reduction in the output of agricultural products, both of food
and cash crops. In 1983 the government had to cope with a budgetary deficit of
US$ 1.6 billion. At the same time, its external debt at the end of 1983 amounted
to a huge sum of US$1.2 billion. Like Cote dTvoire, Senegal represents a major
recipient of foreign aid among the francophone West African countries.
Table 3.15 illustrates the pattern of bilateral aid flows to Senegal in the 1980s.
The preeminence of France is very obvious. France provided bilateral assistance
amounting to US$85.3 million or 55 percent and 62 percent of total bilateral
and in 1979 and 1982, respectively. Senegal enjoys special relations with France
which enables it to secure substantial part of its aid to Africa. Senegal's link
with France economically and culturally remains one of the strongest among
the francophone West African countries. The financial support that Senegal
receives from France goes a long way in facilitating its economic development
process. Canadian aid to Senegal increased significantly during the decade:
from US$13.7 million in 1979 to US$23.9 million in 1988. Similarly, aid from
Italy increased substantially during this period. The flows from Italy rose from
US$4.6 million in 1982 to a record level of US$50.2 million in 1988.
58 Foreign Aid and Self-Reliance in West Africa
Table 3.15
Senegal: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchange Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA _ . . 0.0 . . . _
AUSTRIA 0.1 0.2 0.4 0.5 0.3 0.6 0.7 1.4
BELGIUM 7.7 6.4 5.5 8.7 8.1 3.4 5.0 5.0
CANADA 13.7 6.4 13.3 15.2 13.8 17.1 25.5 23.9
DENMARK 0.0 . 0.4 6.4 0.1 12.7 9.6 3.0
FINLAND . 0.1 0.2 0.3 0.1 0.2 0.7 2.1
FRANCE 85.3 194.0 127.4 160.5 82.4 225.9 175.7 77.8
GERMANY (FED. 9.7 11.1 10.8 16.9 14.3 19.5 14.3 21.3
REP.)
IRELAND . _ . . . . .
ITALY -0.9 -1.2 1.2 4.6 18.6 31.2 48.5 50.2
JAPAN 3.4 4.6 8.2 5.9 9.9 12.7 23.8 35.0
NETHERLANDS 2.3 5.0 5.6 3.4 3.3 14.7 16.1 22.8
NEW ZEALAND . . . . . . . .
NORWAY 1.5 0.2 0.3 0.4 1.9 -10.7 -0.8 -2.3
SWEDEN . . . 0.2 . . . 0.7
SWITZERLAND 2.3 2.5 3.1 2.8 3.8 11.5 12.7 4.5
UNITED 2.1 0.5 0.6 0.9 1.1 4.9 1.7 1.7
KINGDOM
UNITED STATES 29.0 34.0 35.0 33.0 44.0 39.0 49.0 35.0
TOTAL 156.1 263.6 212.1 259.5 201.6 382.5 382.4 281.9
MULTILATERAL 168.1 105.2 152.6 90.2 63.9 222.7 242.1 168.9
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 182.
While the cold war prevailed, Senegal was one of the half-dozen African
countries with which the United States tried to ensure a special relationship for
political and strategic reasons. Its flow of bilateral assistance to Senegal rose
from US$29 million in 1979 to US$44 million in 1985, and to US$49 million
in 1987. But the flow of aid declined in 1988 to US$35 million. The Reagan
administration in effect ensured that the level of aid was sufficient to guarantee
Foreign Aid in West Africa 59
Sierra Leone
Sierra Leone has not been a highly favored recipient of foreign financial
assistance in spite of its weak economic position and the impact of economic
recession. Sierra Leone's economy has been in serious crisis since the mid-
1970s. The closure of iron ore mines, a major foreign exchange earner, caused
severe strain on the poor economy. The high food import bill that followed only
worsened the situation. The economy did not get better because of excessive
public spending, and it became aggravated in 1980 when the government hosted
the Summit of the Heads of State and Government of the Organization of
African Unity. Thus, the necessity for foreign financial assistance was accen-
tuated by the combination of these factors.
However, as may be observed from Table 3.16, total bilateral flows from the
DAC countries rose from US$27.5 million in 1979 to US$57.2 million in 1982,
but fell to US$22.1 million in 1985. It rose to US$73.2 million in 1987 but fell
again to US$64.1 million in 1988. The principal bilateral donors were Germany
and the United States. The decline after 1986 may be partly attributed to the
ascendancy of the military regime of Major General Joseph Momoh on January
26, 1986, as military regimes have already proved incapable of dealing with the
economic development problems in other countries of the subregion, particu-
larly as illustrated in the case of Nigeria. The aid flows from the United
Kingdom, Japan, and Canada have not been substantial when viewed against
their flows to other West African countries. Nevertheless, the OPEC countries
have been very valuable as far as bilateral aid was concerned during this period,
with a disbursement of US$0.2 million in 1985, US$5.8 million in 1986 and
US$10.1 million in 1988, respectively.
Between 1977 and 1979, a significant part of the aid from Germany went to
a wide range of projects, notably, the rural section of the Freetown to Waterloo
road, rice production, the timber industry, and the Freetown-Monrovia road.
The US$2.1 million that it provided in 1982 was directed at the expansion of
the Forest Industries Corporation located at Kenema. In the same year, the
United Kingdom's assistance was essentially utilized for the building of accom-
modation for 100 students at the Njala University College. In the same vein,
Foreign Aid in West Africa 61
Table 3.16
Sierra Leone: Official Net Receipts from DAC Countries, Multilateral
Organizations, and OPEC, 1979-1988
USSMills., Current Prices and Exchanj?e Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA 0.0 0.0 0.0 0.7 0.0 4.1 5.0 -2.7
AUSTRIA 0.1 0.0 . 0.0 0.0 0.0 0.0 0.0
GERMANY (FED. 5.2 16.2 12.4 16.3 8.5 8.2 20.5 20.4
REP.)
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 186.
the United States provided US$1 million, which was used for research into
agricultural extension work at the university.
Since 1985, a major part of the ODF commitments to Sierra Leone has been
to technical cooperation. This accounted for 10 percent of its total flow in that
year. It rose to 65 percent in the following year, but declined to 55 percent in
1988. The commitments to social and administrative infrastructures also in-
62 Foreign Aid and Self-Reliance in West Africa
Togo
The flow of foreign aid to Togo has on the whole been modest like many
other West African countries, although the need for it was heightened by the
downward trend in its economy in the 1980s. Traditionally, Togo's economy
has thrived on the smuggling of manufactured goods into neighboring countries.
About half of all export earnings are provided by phosphates. Its foreign debts
grew rapidly from the mid-1970s and reached US$1.51 billion in January 1989.
Agricultural output, which rose fast in the 1960s, stagnated in the 1970s and
declined in the early 1980s partly because of drought. In particular, cocoa output
dropped to 9,000 tons in 1982/83 in a drought year compared with a peak
production of 28,000 tons in 1971. Coffee production also suffered the same
fate in 1984, an output of US$5.9 million as against US$11.8 million in 1979.
Foreign Aid in West Africa 63
Table 3.17
Togo: Official Net Receipts from DAC Countries, Multilateral Organizations,
and OPEC, 1979-1988
USSMills., Current Prices and Exchanges Rates
DAC COUNTRIES 1979 1980 1981 1982 1985 1986 1987 1988
AUSTRALIA . . . . . . . .
AUSTRIA 0.0 0.0 0.0 0.0 -1.1 -1.5 0.0 0.0
BELGIUM 1.1 4.3 3.5 8.3 1.8 -9.4 -2.7 -3.3
CANADA 8.0 - 0.6 0.3 0.3 8.6 5.2 1.3 2.0
DENMARK 8.9 8.3 0.4 0.2 0.9 1.6 8.4 5.2
FINLAND . 0.0 . . . .
FRANCE 31.3 78.1 29.4 43.9 4.6 9.9 17.0 90.1
GERMANY (FED. 32.6 19.9 12.3 23.2 11.7 13.7 24.7 24.6
REP.)
IRELAND . . . . . . . _
ITALY 0.1 0.0 0.1 1.1 0.9 2.3 2.4 i.O
JAPAN 0.0 1.3 1.2 0.9 1.7 19.2 3.8 9.7
NETHERLANDS 0.9 0.5 0.5 0.7 0.8 1.3 2.0 0.7
NEW ZEALAND . . . . . . . _
NORWAY . . . 0.2 0.2 1.4 0.2 .
SWEDEN . . 0.1 0.1 . 0.3 . .
SWITZERLAND 7.3 2.3 0.2 0.3 0.3 0.3 0.5 0.4
Source: OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris: OECD, 1985/88),
p. 208.
The collapse of the world demand for phosphates in 1981 also significantly
reduced the foreign exchange earnings of Togo. In other words, with these
developments the economic recovery of the country may well hinge on the
inflow or the availability of foreign financial assistance.
However, as may be observed from Table 3.17, the trend in the inflow of
bilateral assistance was not particularly encouraging. Generally, the flows from
64 Foreign Aid and Self-Reliance in West Africa
the DAC countries have declined in 1980s. The pattern of decline in bilateral
aid has been a major reflection of reduced inflow from the two major donors,
France and Germany. In the case of France, there was a decline to US$4.6
million in 1985 from a height of US$78.1 million in 1980. It rose slightly to
US$ 17 million in 1987. But the massive rise to US$90 million gave a significant
boost to the overall bilateral aid flow from the DAC countries in 1988. As far
as the United States is concerned, its aid flows to the country rose significantly
during this period: from US$3 million in 1980 to US$12 million in 1987, but
declined to US$7 million in the following year. The bilateral assistance from
the Arab countries was significant in 1985, amounting to US$9.1 million. But
this declined substantially thereafter, falling to a low level of US$2.6 million in
1987.
Since 1985, ODF commitments have essentially concentrated on production.
In that year, that sector alone received 16 percent of total inflow in Togo.
Although this declined slightly in the following year, nevertheless, in 1987 it
rose to 56 percent. Another area of attraction was technical cooperation. This
consumed 9 percent of total ODF flows in 1985, rising to 40 percent in 1986,
but falling to 25 percent and 18 percent in 1987 and 1988, respectively.
Economic infrastructures also enjoyed a rising trend in receipts. From 1 percent
in 1985 to 10 percent in 1986 and 19 percent in 1988. Beyond this, however,
the DAC countries have also demonstrated remarkable interest in the economic
programs of Togo as is well illustrated in the program assistance. This rose from
1 percent in 1985 to 20 percent in 1986. Although it suffered a major decline
to 2 percent in 1987, it recovered to 49 percent in the following year.
Thus, Togo, unlike many other West African countries, experienced appre-
ciable decline in the inflow of foreign financial bilateral assistance in the 1980s.
This may have more to do with the political stability in the country. There was
an increase in the opposition to the rule of President Eyadema who has governed
the country autocratically since 1967. For example, in August 1985, a series of
bomb explosions rocked various key buildings in Lome in violent protest to his
continuity in power.26
MULTILATERAL AID
The contributions of multilateral organizations to economic development in
West Africa vary from one country to the other. These, to a large extent, depend
on several factors, such as the objectives of the organizations, the financial
capacity of the organizations, the economic policies and needs of West African
countries, as well as the political climate of each country at any given time.
From the mid-1970s to the early 1990s, all of these have been strong determi-
nants in the pattern of disbursements to West African countries by the World
Bank, the International Monetary Fund (IMF), and the International Develop-
ment Association (IDA), and the African Development Bank. In addition to
Foreign Aid in West Africa 65
three principal objectives are to provide risk capital for private enterprises,
encourage the development of local capital markets, and to stimulate the
international movement of private capital. The IFC attempts to achieve these in
two ways: by bringing together investment opportunities, private capital, and
experienced management, and more importantly, by itself investing in produc-
tive private enterprise when sufficient private capital is not available on reason-
able terms. It does this in association with private investors and without any
guarantee of repayment. The activities of the IFC are therefore, in many
respects, similar to those of an investment banker.
The IDA, established four years later, in 1960, aims at assisting in the
development of the poorest of the developing countries by providing investment
funds on easier terms than are generally available with the World Bank or the
IMF. IDA's assistance imposes far less burden on the balance of payments of
the recipient countries than conventional loans. Thus, the IDA was established
as a "soft" lending agency to meet the special needs of developing countries
with acute balance of payments problems.
In the 1960s, the IDA mainly financed infrastructure projects.28 However, the
poverty reduction strategy introduced in the 1970s expanded the range of
investments by placing more emphasis on programs that more directly benefit
the poor. During this decade, IDA greatly increased its support for agriculture,
rural development, and human resource development. Currently, about a quarter
of IDA lending supports structural adjustment reform programs. Successful
structural adjustment programs require four essential elements in the policy
frame of the IDA. First, the government must be committed to a well-designed
program of policy change. Second, the supporting public investment in infra-
structure must be undertaken without allowing government borrowing to crowd
out new private investment. Third, there must be access to the right amounts of
external assistance at the right time. And, fourth, government financing for
programs that are essential to the country's longer-term development must be
protected.
At the regional level, the agreement establishing the African Development
Bank was adopted and opened for signature by a Conference of African Finance
Ministers held in Khartoum, Sudan on August 4,1963. On September 10, 1964,
the agreement came into force when twenty member countries subscribed 65
percent of the capital stock. The main objectives of the bank include: (1)
contribution to the economic development and social progress of regional
members, individually and jointly; (2) the utility of resources at its disposal for
the financing of investment projects and programs, giving priority to projects
that concern several member countries; (3) the mobilization of resources
through cofinancing with bilateral and multilateral development agencies; (4)
the promotion of international dialogue and understanding on development
issues concerning Africa; (5) the promotion of government and private invest-
ment in Africa through policy reforms; and (6) the provision of technical
Foreign Aid in West Africa 67
assistance as may be needed in Africa for the selection, study, and preparation
of development projects. As of December 31, 1993, the ADB had seventy-five
member countries composed of fifty-one independent African countries (re-
gional), twenty-four non-African countries (nonregional) excluding the states
that formed the former Yugoslavia, which was a member of the bank.29 The
other components of the ADB group are the African Development Fund (ADF)
and the Nigerian Trust Fund (NTF).
In the context of the ADB charter, all regional member countries are equally
eligible for development financing from the bank's resources. However, taking
into account the levels of resource endowment and economic development of
the various potential beneficiary countries, the bank has singled out the poorest
countries as the main target for the allocation of its concessional funds, notably
the ADF and NTF. Eligibility for ADF and NTF loans is restricted to regional
countries with GNP per capita of not more than US$990. However, eligibility
for NTF loans is further subject to case-by-case approval of the Federal
government of Nigeria.
Thus, it is against this background of institutional policies that the pattern of
multilateral aid flows to West Africa could be understood. There are already
laid down macroeconomic and microeconomic conditions of flows that these
institutions should follow. These conditions are designed to achieve several
objectives, such as harmonious growth of the world economy, the survival of
the institutions themselves or the interests of the key members of these institu-
tions. As far as the World Bank and the IMF are concerned, there is need for
adequate and appropriate economic policies in the recipient countries to justify
and guarantee the inflow of funds. It therefore follows that the extent of flows
to West African countries may ultimately depend on the extent to which the
governments could accept wholly or in part the conditions laid down by these
institutions. However, it remains to be seen if national political and economic
interests could be placed before global interests in the efforts to secure increased
financial inflows. Let us now examine the multilateral flows to a number of
West African countries.
Table 3.18 illustrates the overall pattern of multilateral ODA flows to West
Africa from 1980 to 1989. Although there appears to be a rise in the volume of
multilateral flow to the subregion during this period, nevertheless its share of
overall flow to Africa somewhat slightly diminished. From 28.7 percent in 1980
to 26.0 percent in 1985 and to 27.0 percent in 1989. This suggests that there are
growing tendencies for multilateral donors to divert aid to other regions in Africa
and elsewhere. The volume of multilateral aid to West Africa declined during
the first half of the 1980s. Some countries have benefited more while a number
of others did not. It would seem the preference of multilateral donors depends
on a number of circumstances that are best explained in the political and
socioeconomic context of the recipient West African countries. For example,
Table 3.18
Net ODA from Multilateral Donors to West Africa, 1980-1989
COUNTRY 1 1980 1981 1982 1983 1984 1985 ' 1986 1987 1988 1989
BENIN 53 35 40 43 ! 38 45 1 63 60 67 HI
BURKINA FASO 61 59 62 55 54 72 98 78 77 73
1 CAPE VERDE 24 14 11 14 23 27 32 24 26 26
GAMBIA 31 28 21 20 20 18 43 49 29 38
GUINEA 57 51 35 42 51 57 73 82 89 139
1 GUINEA-BISSAU 24 24 27 26 22 31 27 54 45 46
LIBERIA 29 20 22 30 26 26 28 27 17 21
1 MAURITANIA 36 50 49 58 57 49 57 73 77 88
1 NIGERIA 18 24 20 19 18 16 20 18 23 36
I SIERRA LEONE 30 26 26 30 25 35 30 21 40 29
TOGO 39 26 23 60 55 52 75 37 73 76
TOTAL WEST 765 703 642 664 732 813 1,306 1,321 1,464 1,387
AFRICA
j TOTAL AFRICA 2.668 2.712 2.604 2,610 2.727 3.116 3.718 4.172 4.605 5,131
Source: UNDPAVorld Bank, African Development Indicators (Washington, D C : UNDPAVorld Bank, 1992), p. 297.
Foreign Aid in West Africa 69
while the flows to Benin and Togo increased appreciably, the flows to Cape
Verde, Liberia, and Nigeria were essentially stagnant.
Benin
The failure of Benin to secure sufficient bilateral aid in the 1980s naturally
compelled it to seek external aid from multilateral sources in order to cope with
the disturbing problems of its economic recession. The problems in the social
and public sectors have compounded those of the private sector; the injection
of foreign assistance was indispensable if solutions were to be found to the
negative effects of these problem on human security in the short and medium
term. However, while the government considered the loan policies of the
International Bank for Reconstruction and Development (IBRD) and the IMF
worthwhile, it does see the entire package as satisfactory in the long-term
interest of the country. In 1979, multilateral aid to the country stood at US$36.9
million, but this rose to US$45 million in 1985 and US$67 million in 1988 as
illustrated in Table 3.18. The government convened a Donors Conference in
Cotonou in March 1983 with the aim of sensitizing donors to the areas of critical
demands for multilateral assistance. In the Development Plan for the period
1983-87, the total cost for development was estimated at US$1,800 million. It
was expected that external sources would provide US$900 million while the
remaining would be raised internally. In effect, the government counted on 50
percent of the cost of development to come in the form of external financial
assistance. But donors at the conference seemed to have their reservations on
the plan. There were pledges amounting to only one-third of this sum by the
ADB and the OPEC Development Fund. Along with them, pledges were made
by Belgium, France, and Japan. Other potential donors were reluctant to make
pledges because of fears that Benin might not be able to pay back given the fact
that its economic recession and development problems then, in spite of strenu-
ous efforts by the government, have defied solutions.
Since 1985, the major sources of multilateral assistance to Benin have been
the IDA, EU, and the African Development Fund. In addition to these, the
UNDP also played a prominent role in the disbursement of multilateral assis-
tance to Benin. IDA flows amounted to US$18.7 million or 36 percent of total
multilateral flows in 1985. It rose to US$26.5 million or 61.1 percent in 1986,
but dropped to US$21 million or 22 percent in 1988. The flow from the EU,
although initially less than that of the IDA, rose substantially during the second
half of the 1980s: from US$5.1 million in 1985 to US$11.8 million in 1987 and
to a record level of US$28.3 million in the following year. Similarly, flow from
the African Development Fund rose from US$3.6 million in 1985 to US$10.4
million in 1986, but thereafter declined to US$5.1 million in 1988. On the
contrary, however, the UNDP apparently maintained an average of US$5.5
million per year during this period. Thus, it has been difficult for many
70 Foreign Aid and Self-Reliance in West Africa
multilateral agencies to increase their aid flows substantially while there were
uncertainties about the prospects for rapid recovery and economic growth. The
difficulties of the government were further highlighted in 1988 when it was
unable to pay the salaries of its teachers and its civil servants in January 1989.
This resulted in strikes that developed into violent incidents where the govern-
ment had to call in the paratroops to restore order. While these strikes prevailed,
the IMF itself could not see how financial assistance could be effectively applied
to the country's economic ailments. It was therefore not until late in 1989, when
the government outlined acceptable austerity measures, that the IMF approved
of financial flows to Benin. The government of Benin, among other things,
restructured two ailing main banks in the country, the Banque Commerciale du
Benin (BCB) and the Banque Beninoise pour le Development, which were crisis
ridden. Consequently, in June 1989, the IMF approved a three-year structural
adjustment facility of US$18.3 million for disbursement to Benin. Thus,
Benin's economic performance remains the highest consideration by multilat-
eral donors for the granting of financial assistance. When this is right Benin can
count on major steady flows from the IDA and the IMF.
Burkina Faso
Unlike Benin, Burkina Faso has not attracted substantial foreign financial
assistance. However, multilateral aid has by and large constituted only a small
proportion of total inflow. Total multilateral aid inflows amounted to US$65.8
million to the country in 1979. This declined to US$62 million in 1982, but rose
to US$98 million in 1986. Thereafter, this declined to US$77 million in 1988
and further to US$73 million in the following year.
The World Bank was a major source of multilateral aid in 1980. Its affiliate,
the IDA, made low-cost loans of US$ 17 million for the Bougouriba agricultural
project, US$6.5 million for irrigated rice at Niena, and US$14.5 million for
reforestation.30 Since 1985, the major multilateral donors have been the IDA,
EU, and the UNDP. Receipts from the IDA amounted to US$20.8 million. This
rose to US$31.3 million in 1986, but thereafter declined, falling to US$19.0
million in 1988. In the case of the EU, there was a decline to US$8.1 million
in 1986 from US$14.8 million in 1985. By 1987 and 1988, it rose to US$14.5
million and US$22.9 million, respectively. The flows from the UNDP amounted
to US$7.8 million in 1985, but the average flow for the following three years
was US$ 11.4 million. It also has to be mentioned that Burkina Faso has to some
extent benefited from the flows from the African Development Fund. The
receipts from it amounted to US$5.5 million in 1985. The flows rose to US$ 12 2
million in the following year but fell drastically to US$4.5 million in 1987.
However, it rose again to US$7.7 million in 1988.
Thus, it is evident that Burkina Faso has since the mid-1980s received a
substantial sum of money from the major multilateral donors. All these have
Foreign Aid in West Africa 71
been vital to the economy in view of the reforms undertaken by the government
to promote economic growth. The country will in the foreseeable future
continue to require steady inflow from these institutions for sustainable eco-
nomic growth and development. However, in order to ensure this, the Burkina
Faso government will, as matter of priority, pay increased attention to its
absorptive capacity. The structures to make concessional external financial
assistance viable must be fully established and maintained in order to ensure
the cooperation of the multilateral institutions.
Cape Verde
In the early 1980s, Cape Verde attempted through its foreign policy to
maximize the inflow of foreign aid in order to provide enough food for the
rapidly growing population and sustain an impressive economic development
program. For example, the 1982-85 Plan projected an investment amounting
to 26 billion CV escudos (US$520 million), a sum three times more than that
of the 1978-81 plan. However, as may be noted from Table 3.18, Cape Verde
did not, in the 1980s, benefit from the growth of multilateral aid to West Africa.
Its receipt plummeted to US$14 million in 1983 from US$24 million in 1980.
In 1987, it attained its 1980 level and slightly rose to US$26 million in 1988
and 1989.
The major response came essentially from the EU. Between 1981 and 1986,
the EU through the European Development Fund provided the sum of US$24
million (EUA17 million). The largest project that received attention during this
period was the water distribution and sanitation scheme for the capital city,
Praia. This consumed a total of EUA7.5 million. The remaining sum was spent
on the improvement of works at the international airport on Sal and the soil and
water resources for agriculture in the Joan Varela region. In 1983, the EU and
Kuwait financed the project to improve water and sanitation services in Pria and
a telecommunication project costing US$11.5 million.31
The precariousness of the islands' economy and their dependence on inter-
national food aid encouraged the government to adopt a highly pragmatic
approach to foreign policy. Cape Verde is strategically located astride Atlantic
shipping lanes. The government of Cape Verde has generally been more inclined
to the development of ties with the West. Hence, it signed the Lome Convention
and formally acceded to the African, Caribbean, and Pacific (ACP) group in
November 1987. The Cape Verde government participates as an observer in the
Franco-African Summits. This was covertly encouraged by the former President
Valery Giscard d'Estaing for strategic reasons. Also, the government allowed
South African Airways to maintain landing rights at the international airport on
the Island of Sal to ensure regular revenue. However, with the termination of
the cold war the strategic importance of the islands has diminished as decoys
for foreign financial assistance. But then, there can be no doubt about the needs
72 Foreign Aid and Self-Reliance in West Africa
of Cape Verde for more multilateral aid for the development of its weak
infrastructures. While the EU assistance is encouraged, the government should
endeavor to secure the cooperation of the IDA and ADB.
Cote d'lvoire
Cote dTvoire enjoys substantial inflow of multilateral aid for its development
when compared with the inflow to other francophone West African countries
as may be noted in Table 3.18. The major sources of multilateral assistance to
Cote dTvoire are the IBRD, EU, and the ADF. For example, the flows from the
IBRD amounted to 75 percent of total multilateral aid flows in 1985 and 78
percent in 1987. The increase in the aid from the EU has been more phenomenal.
By 1988, it had virtually replaced the World Bank as the principal multilateral
donor to Cote dTvoire. There was also an increase in the inflow from the African
Development Fund. The financial flows from it rose from a mere US$0.3
million in 1985 to US$18.4 million in 1986 and to US$104.7 million in 1988.
Cote dTvoire's rapid economic growth since 1960 has required significant
contributions of capital, managerial, and technical expertise and labor from
abroad. Economic growth has again been further aided by the windfall earnings
from coffee and cocoa, especially in 1976 and 1977. However, there has been
growth reversal since 1980, which resulted in rapid deterioration in the standard
of living of the people. The Houphouet-Boigny government did, however,
promptly responded to this development. By 1981, it embarked on some forms
of structural reforms that included the reduction of wages, cuts in public
expenditure, and privatization. The subsequent consolidation of these reforms
by the government was seen as a prerequisite for economic recovery and growth
by France and other developed countries. Hence, there has been a sustenance
of the flow of multilateral assistance. Besides, the comparatively stable govern-
ment in Cote dTvoire was an encouragement for the inflow of multilateral aid
to it.
Gambia
Multilateral assistance to Gambia has on the whole been on a small scale
during the period under study. The major multilateral sources of aid to Gambia
are the EU, ADF, IDA, and the UNDP. Since 1985, the ADF has been a leading
source. For example, in 1986 and 1987, it accounted for 21.3 and 37 percent of
total multilateral aid to Gambia. During both years, the aid from the IDA was
also very significant, accounting for 32.5 and 28.8 percent, respectively. When
compared with bilateral inflow, multilateral aid accounts for a significant
proportion of total flows into Gambia. In 1979, multilateral aid represented 52
percent of the total inflow. It fell slightly to 47 percent in 1981, but rose to 48
Foreign Aid in West Africa 73
percent in 1987. The political and economic importance of Gambia will need
to be brought to the fore if multilateral aid is to increase in the future.
Generally, investment under the First Development Plan (1975/6-1980/81)
was channeled into basic economic social infrastructure (transport and commu-
nications, public utilities, schools, agricultural extension stations, health clinics,
etc.). Gambia initially relied on highly concessional foreign loans and grants to
finance about 70 to 75 percent of its investment programs under the First
Development Plan. The remainder was financed from its current budgetary
surplus and from domestic borrowing.
The World Bank criticized the public investment program implemented under
the First Development Plan for contributing to Gambia's economic deteriora-
tion in the early 1980s because of its low rate of return on investment.32
However, with the drought and the deterioration in the terms of trade severely
reducing real GDP growth over the two-year period 1979/80 to 1980/81, and
export-earnings growth during the three years from 1979/80 to 1981/82, the
World Bank allowed the inflow of financial assistance to the country. The IMF
followed the World Bank with loans to it from its Trust Fund and Compensatory
Financing Loan from 1979 to 1981. There were also further disbursements
under the standby program from 1981 to 1984.
It is significant to note that the growth of industry is hampered by the poor
infrastructure and the extremely small internal market. This, in a way, acts as a
major constraint to the inflow of multilateral assistance. Beyond this, the hopes
of increases in multilateral aid in the future are not bright, as tourism is not
adequately encouraged because the conservative muslims fear that this could
over time destroy their culture and accelerate the rate of crime.
Ghana
Ghana has since the early 1980s been a major recipient of multilateral
assistance from most international agencies and organizations. Total multilat-
eral flows to Ghana increased appreciably during the period considered in this
study. In 1975 the government negotiated US$13.6 million for the cultivation
of rice and cotton, cocoa rehabilitation, and the provision of feeder roads with
the World Bank. It negotiated with the ADB US$3.8 million for the development
of the cotton industry. Furthermore, it sought US$5 million from the Arab Bank
for African Economic Development for the cocoa industry.33
By 1977, Ghana experienced an unprecedented shortage of food and essential
commodities. There was also considerable decline in foreign exchange earnings
as a result of the fall in demand for timber and cocoa. In response to these, the
EU under its STABEX arrangements granted US$0.63 million to compensate
for the shortfall in Ghana's timber earnings. In the same year, a further US$6.9
million from the EU funds was allocated for agricultural projects, road mod-
74 Foreign Aid and Self-Reliance in West Africa
Guinea
In Guinea, multilateral assistance rose from US$47.5 million in 1979 to
US$73 million in 1986 and to US$89 million in 1988 as illustrated in Table
3.18. Since 1985, the major sources of multilateral assistance have been the
IDA, EU, ADB, and the UNDP. For example, the IDA accounted for 38
percent of multilateral assistance to Guinea in 1985; this rose to 54 percent
each in 1987 and 1988. The Arab agencies represent other important sources
of multilateral aid to Guinea. However, Guinea may in the future need to
consolidate its market economy in order to ensure increased inflow. The
critical areas in which multilateral assistance are needed are the infrastruc-
tures, which are still inadequate for the promotion of economic growth. Also,
Foreign Aid in West Africa 75
Guinea-Bissau
There was little increase in multilateral assistance to Guinea-Bissau during
this period. The IDA, EU, ADB, and the UNDP have been the principal sources
of multilateral assistance to Guinea-Bissau. The IDA, for example, accounted
for 48 percent of total multilateral assistance to it. But this declined to 32 percent
in 1987. The need for increased foreign aid in Guinea-Bissau cannot be
emphasized. It had considerable budgetary and payments deficits in the early
1980s. A round table meeting of donors was called in Bissau on April 18,1985,
to raise money for the completion of the 1983-86 four-year development plan.
In this plan, about US$21 million was required for priority projects on the
rehabilitation of health centers, for mining research, and projects in forestry as
well as fishing and agro-industry. In the same year, donors pledged US$61.6
million toward some partially financed outstanding projects. However, donors,
have generally not adequately fulfilled their pledges. The IMF appears to have
been the most reliable source of multilateral assistance after the government
took appropriate steps in economic reforms. However, future increases in
multilateral flows to Guinea-Bissau may depend on the government's ability to
ensure political stability: the 1980s was largely characterized by coups and
counter coups, which created substantial uneasiness in the multilateral financial
institutions. Also, the government should take proper measures to ascertain that
its funds are not mismanaged. Corruption in high places, as illustrated in the
reported case of embezzlement by the Minister of Interior in June 1985, should
be eradicated in order to guarantee the confidence of multilateral financing
agencies.35
Liberia
As far Liberia is concerned, the decade of the 1980s was not particularly
propitious with respect to multilateral aid. By 1975, the IBRD/IDA and US AID
jointly provided US$ 11 million for a rural development project. Also, the IBRD
and the ADB provided an additional US$33.5 million for road development.
Thus, the total commitment from multilateral agencies was an all-time high of
US$80 million in 1975, compared with US$53 million in 1973. All loan
commitments were for priority infrastructural and agricultural development
projects.
However, by 1979 the level of multilateral assistance began to decline. In that
year, total inflow amounted to US$57.6 million. It declined to US$22 million
in 1982, but rose to US$26 million in 1985. Thereafter, it declined precipitously,
reaching a record low level of US$17 million in 1988 (see Table 3.18). It may,
76 Foreign Aid and Self-Reliance in West Africa
however, be noted that the Liberian economy began to deteriorate from 1982
partly as a result of the fall in the price of its principal export commodities,
rubber, iron ore, and hard woods. This, in effect, caused a sharp drop in foreign
exchange earnings. Export earnings, from January to September 1982, dropped
to US$372.9 million from US$400 million compared with the same period in
1981. Thus, there was a need for increased foreign assistance to cushion the fall
in export receipts in order ensure the process of sustained economic growth. It
was for this reason that the late President Samuel Doe, on his first trip abroad,
laid emphasis on financial cooperation with the developed countries. However,
the call bore no fruits while his regime was characterized by overt violations of
human rights. For example, on April 6, 1984, thirteen people were sentenced
to death, without proper trial process, for an alleged plot to overthrow the
government. Besides, the Liberian government did not immediately introduce
a concrete reform program to cope with Liberia's economic recession. The
government introduced some ad hoc measures: the freeze on all government
spending and the suspension of payments to government creditors on February
17, 1986. Later in the same year, the government announced the proposal to
privatize eleven public corporations considered nonprofitable. But all these
were seen by foreign donors and multilateral financial institutions as palliative
measures vis-a-vis the enormous problems of the economy. Thus, there was an
evaporation of interest to assist Liberia financially while these factors prevailed.
In 1987, the United States indicated, for example, that its pledge of US$11
million to Liberia would not be released until all political prisoners, held since
the November 12, 1985 coup, were released.36
However, after 1985, there were modest flows from the ADB, EU, IDA,
UNDP, and IFAD. The EU accounted for 26 percent of total multilateral receipts
in 1985 and 19 percent in 1987. Also, the contributions of the UNDP although
very small, averaged about US$2 million each year from 1985 to 1988.
Mali
In the case of Mali, the 1980s was characterized by substantial increases in
the inflow of multilateral financial assistance as may be noted in Table 3.18.
Beginning from 1985, the major sources of multilateral assistance to Mali were
the IDA, EU, WFP, ADB, and UNDP. Besides, Mali, in the second half of the
1980s, also received substantial support from the World Bank, IMF, and the
IDA while it rigorously applied the measures of its economic reforms.
The increase in the inflow of multilateral aid during the second half of the
1980s was largely explained by the turnaround in the economic policies of the
government. The state-dominated development strategy that the government
pursued until the early 1980s led to serious inefficiencies in resource mobiliza-
tion and allocation. Public investment decisions, among other things, gave
Foreign Aid in West Africa 77
Mauritania
Multilateral aid to Mauritania in the second half of the 1980s increased
substantially with the government undertaking economic reforms in early 1985.
The Mauritanian government entered into negotiations with the IMF and official
and private creditors and embarked on a comprehensive adjustment strategy
designed to redress the large internal and external imbalances that had emerged
in the early 1980s. The adjustment program was cast in a medium-term
framework. Supported by IDA credits and by an IMF standby, it extended
structural adjustment facilities from 1985 to 1990. The adjustment measures
focused first on the stabilization of the economy, then restructuring to assure
steady growth under the principles of a free market economy.
These notwithstanding, it was clear by 1991 that external aid and new
economic policies were still a long way away from the provision of satisfactory
solutions to the development problems of the country. In 1991 the government
was engaged in the drawing up of a comprehensive program that covered,
among other things, the management of renewable and nonrenewable resources,
demographic growth, public health, desertification, and deforestation. Again,
the economic policy of the government in 1993 greatly underscored the need
to eradicate poverty and the need to improve the environment. The government's
determination to continue with economic reforms and to encourage democratic
practices, as illustrated with the introduction of a new constitution in July 1991
and the formation of opposition political parties, are good gestures that are likely
to help in the maintenance of the inflow of multilateral aid.
78 Foreign Aid and Self-Reliance in West Africa
Niger
Multilateral assistance to Niger, unlike Mauritania, dropped during first half
of the 1980s: from US$64 million in 1980 to US$52 million in 1984. However,
it thereafter rose to US$130 million in 1987 before falling to US$95 million in
1989. The stabilization program launched by the government in 1983 was
supported by the IMF and IDA. Further supports were also received from both
institutions when Niger embarked on structural adjustment programs two years
later.
In spite of these programs, however, the economy of Niger remains in the
doldrums, mainly because of the failure of the government to sustain meaning-
ful adjustment measures in the face of a competitive decline that amplified the
economic and financial crises.
Nigeria
Nigeria was not a large recipient of multilateral aid during the 1980s. Apart
from Cape Verde, its share of multilateral aid to West Africa was the least. In
1980, total multilateral inflow amounted to US$18 million. Although this rose
slightly to US$24 million in 1981, the following four years witnessed a
precipitous decline: reaching an all-time low of US$16 million in 1985.
However, it picked up in the following year and rising to an all time eight of
US$36 million in 1989.
The low inflow of multilateral aid to Nigeria is explained by the low priority
accorded to it in government overall economic policies. The government counts
largely on the receipts from oil exports in carrying out its annual budgets and
development plans. In the attempt to arrest economic recession and promote
economic growth, the government introduced a far-reaching structural adjust-
ment program in 1986, which combined exchange rate and trade policy reforms
aimed at revitalizing the nonoil economy with stabilization policies designed
to restore balance of payments equilibrium and price stability. The program
stressed downsizing the public sector and improving the efficiency of public
asset management. Import licenses and agricultural marketing boards were
eliminated, price controls were lifted, and the banking deregulation was initi-
ated. But then the fact that poverty became aggravated in the country in the
early 1990s, after seven years of implementation of the program raises several
questions about its relevance. By 1993, per capita income fell to US$340 from
US$1,000 in 1980. In real per capita terms, consumption and income are now
no higher than they were in the early 1970s before the oil boom. Indeed, basic
social indicators place Nigeria among the twenty poorest countries in the world.
The productive and social infrastructural sectors are still largely inadequate.
While steady increases may not be guaranteed from the oil sector, it must be
recognized that the development of an effective nationwide infrastructure, for
Foreign Aid in West Africa 79
Senegal
On the whole Senegal, unlike Nigeria, received substantial multilateral aid
during the decade of the 1980s. It also experienced a considerable increase in
inflow during this period. Total multilateral flows to it rose from US$79 million
in 1980 to US$129 million in 1981. There was a decline all through the
following four years, reaching a low level of US$60 million in 1985—during
the period when the first structural adjustment program suffered major setbacks.
But it picked up the following year to a record level of US$252 million.
However, there were major declines in the subsequent two years, US$177
million in 1988 and US$103 million in 1989, which suggested that multilateral
donors may be having difficulties in the effectiveness of aid in Senegal. While
a structural adjustment program is yet to be pursued to its logical conclusion,
it is obvious, however, that the economy continues to remain in the woods. Since
1990, it has been evident that the key economic sectors have had serious
declines. In 1991, fish processing declined in volume terms by 66.4 percent;
phosphates by 24.1 percent; textiles by 36.8 percent; and the food processing
industry by 45.8 percent. Also, groundnut exports declined in value by 41
percent. Revenues from tourism over the September 1992 to March 1993 season
were the lowest since 1985, partly because of the closure of the Casamance
region to tourism because of political strife. In other words, Senegal requires
an increase in the inflow of multilateral aid if it is to sufficiently cope with the
unresolved economic problems.
Sierra Leone
Like Gambia, Nigeria, and Cape Verde, Sierra Leone was a low recipient of
multilateral assistance in the 1980s. From 1980 to 1984, the average annual
multilateral inflow was about US$27 million. In 1985, inflow amounted to
US$35 million, but declined to US$21 million in 1987. Although it rose to
US$40 million in the following year, it nevertheless fell drastically to US$29
80 Foreign Aid and Self-Reliance in West Africa
Togo
On the whole, the flow of multilateral aid to Togo increased substantially
during the 1980s after an initial decline in the first two years. Inflow rose to
US$60 million in 1983 from US$23 million in the previous year. Although this
Foreign Aid in West Africa 81
being very weak economically, are also seeking the support of the international
community for their political and economic survival. On the other hand, the
economies of the newly industrializing countries of Southeast Asia continue to
indicate further growth and with high demonstrative effects for other developing
countries. At the same time, there has been an acknowledgment through Agenda
21, agreed upon by the international community in Rio de Janeiro in 1992, for
an environmentally sustainable global development. Along with these factors,
the economic development of African countries south of the Sahara, including
those in West Africa, has not been very encouraging since the beginning of the
1990s. The several years of application of structural adjustment programs
appear to have procured very little positive results on economic growth. In other
words, the donors are confronted, among other things, with the choice of
judicious application of available resources to increasing and competing de-
mands. Equally, they are concerned that resources made available to countries
should be effectively utilized to assist in the promotion of sustainable economic
growth and development. This section will attempt to describe the present
emphasis of the key donors to West African countries, particularly France, the
United Kingdom, the United States, Germany, Japan, Canada, Norway, Swe-
den, the Netherlands, and Denmark.
in 1989. Aid to the least developed countries within France's traditional area
of concentration has, since 1989, been extended either in grant form or in
loans on the IDA's terms. The terms of French financial assistance to
countries outside France's traditional area of concentration have also sof-
tened. Overall, French assistance has been provided on more favorable terms
than the thresholds set in the DAC terms recommendations subtarget for the
least developed countries. However, in the light of the decisions announced
in 1990 by the French government, it seems likely that the target could be
achieved in the near future.
As already mentioned, program aid consisting of grant budget support,
structural adjustment loans, and debt relief extended to countries implement-
ing internationally assisted structural adjustment programs accounts for a
significant rising share of France's ODA to African countries south of the
Sahara. In May 1989, France announced that it would cancel unconditionally
all the outstanding ODA debt, amounting to 16 billion francs (US$2.7 billion
at 1988 exchange rates) owed to it by thirty-five poorer sub-Saharan African
countries. The Maghreb countries also received substantial amounts of
bilateral ODA.
Technical cooperation, of which France is the largest source among DAC
countries, continues to be a major component of ODA (representing 43 percent
of bilateral disbursements in 1988/89), but its share in aid is gradually declining.
Technical cooperation is increasingly being extended within the framework of
integrated projects and programs. Besides, it has been observed that cooperation
with voluntary and nongovernmental organizations has expanded and the
appropriations to support their activities have rapidly increased. Also, there has
been a growing emphasis on programs to protect the environment in the
recipient countries.
On the whole, France's contributions to multilateral institutions increased in
the 1980s as a result of the increased contributions to IDA and the regional
development banks. In the years ahead, it is expected that the government will
accord higher priority to the UN institutions, where France's participation has
so far been more modest.
The aid policy to the least-developed countries in the form of grant or in the
terms of IDA loans by France since 1989 appears very realistic in the context
of the economic crisis of most West African countries. When this is taken
together with the cancellation of the US$2.7 billion debt, these amount to
considerable financial relief for these countries as they needed additional
financial resources to promote economic growth. But the prospects of develop-
ment in these countries would be brighter if France were to reach the thresholds
established in the DAC terms recommendations, since francophone West Afri-
can countries are, to a large extent, dependent on the external financial assis-
tance of France.
84 Foreign Aid and Self-Reliance in West Africa
resources would be required for the promotion of growth in the backward areas
of the new entity, especially in parts of the former East Germany.
Japan: Consolidating National Aid Institutions and
Concessional Aid
Japan is currently in the process of strengthening its aid implementation
system. The government is doing this by (1) expanding staff and upgrading its
developmental expertise through advanced training; (2) reinforcing appraisal
and evaluation; (3) intensifying cooperation with nongovernmental organiza-
tions; and (4) promoting joint activities with other donors, both bilateral and
multilateral. In addition, the government, like the French government, places
greater emphasis on environmental protection in aid programs.
One remarkable step in 1989 was the establishment of the Japan Interna-
tional Development Organization (JAIDO) with public and private funds to
facilitate the promotion of direct private investment in developing countries.
This was apparently a followup to the measures taken by the government in
1988 to consolidate aid coordination and management by setting up a
cabinet-level Council for Economic Cooperation consisting of fourteen
ministers and strengthening the staff both in Japan and in overseas repre-
sentations. Furthermore, in 1989, the Japan International Cooperation Sys-
tem was established with the aim of improving the procurement and
maintenance of equipment financed with JICA (Japan International Coop-
eration Agency) grants. In addition to this, in 1993 the Japanese government
sensitized the international community of the need to reconsider a more
realistic strategy to facilitate the development process in Africa. This action
resulted in the Tokyo International Conference, October 5-6, 1993 and the
Tokyo Declaration on African Development—Towards the 21st Century. It
was a declaration that acknowledged the current efforts at the promotion of
development in Africa but which, in view of the present predicament of the
continent, called for more urgent support from the international community
for humanitarian relief and the financial needs of African countries.
Japan's contributions to multilateral organizations accounted for 27 percent
of total ODA in 1988-89, a ratio close to the DAC average. However, Japan
was not in compliance with the DAC Recommendation on the Financial Terms
of Assistance in spite of a strong increase in the share of grants in total ODA
commitments and a softening of loan terms. But unlike France and the United
Kingdom, about 87 percent of ODA loans in 1988-89 were untied for world-
wide procurement and 12 percent were available for procurement in developing
countries. In addition, a substantial part (51 percent in 1988-89) of bilateral
grant was untied.
The untying of Japan's aid remains a unique feature in its foreign financial
assistance. The more its aid is untied the better the prospects for West African
88 Foreign Aid and Self-Reliance in West Africa
countries that are beneficiaries of bilateral assistance from Japan. Even though
the growing importance of Japan in global foreign aid is acknowledged, the
significance of Canada as a vital donor in the 1990s to Africa's development
cannot, at the same time, be underestimated. Most likely the pattern of aid
policies will be influenced by the implementation of the North American Free
Trade Agreement (NAFTA) and the necessity for Canada to remain competitive
in the global economy during the 1990s.
observed that the Danish emerging foreign aid policies have similarities with
that of the Netherlands.
Denmark: The Alleviation of Poverty
The ODA net disbursements from Denmark, in 1988, amounted to US$9.22
million. At 0.89 percent, the Danish ODA/GNP ratio exceeded the 0.7 percent
target by a large margin. Danish development assistance is governed by a set of
both quantitative and qualitative principles. The most important of these is a
strong poverty orientation in the developing countries. Poverty eradication is
considered a high priority. Other important objectives are the integration in the
development process of environment considerations, of women's roles in the
development process, and of respect for human rights. One of the quantitative
objectives is that total ODA should be approximately equally divided between
bilateral and multilateral aid. Quick-disbursing aid in the form of commodity
assistance is provided in support of structural adjustment programs in coopera-
tion with the IMF and the World Bank. The share of bilateral ODA allocated to
sub-Saharan African countries is approximately 60 percent.
Furthermore, the Parliament, in 1988, approved a draft Plan of Action for
Danish Development Assistance up to 1993. The plan includes the decision to
abandon loans and thus to provide future aid entirely in grant form. It entails
the decentralization of both Danish International Development Agency
(DANIDA) personnel and authority to the field. Furthermore, aid will concen-
trate on a smaller number of recipients (20-25) over a five-year period, and
there will be a comprehensive country programming for all aid recipients based
on specific country analysis. While Denmark maintains its policy of requiring
that about one-half of Danish bilateral aid be procured in Denmark, it has
introduced a more flexible procurement policy as well as a new country program
system so as to avoid the negative effects of this policy. Beyond these however,
important consideration has to be given to the foreign aid from the Eastern
European countries. Aid from these countries has played a vital role in West
African development especially, in the form of technical cooperation. But the
waive of democratization and economic reforms in the mid-1980s, within these
countries are factors that cannot be discounted in their foreign aid policies as
these countries try to confront their economic growth challenges.
The Russian Federation and Eastern European Countries
The developments in the former Soviet Union (now Russian Federation) and
Eastern European countries in the mid-1980s have also elicited new policies on
aid flows to Africa. Hitherto, aid from these countries and other CMEA
countries to African countries and other developing countries rose from
US$2.83 billion in 1980 to US$4.64 billion in 1986. It rose further to US$5.01
billion in 1987 but declined to US$4.69 billion in 1988. However, as the several
92 Foreign Aid and Self-Reliance in West Africa
years of unabated economic recession compelled the Soviet Union and other
Eastern European countries to embark on major economic and political reforms,
these have, inevitably, had far reaching consequences on their broad external
foreign economic policies.
In the Soviet Union, beginning from 1988, aid administration was reorgan-
ized under the Ministry of Foreign Economic Relations. Following the restruc-
turing of the economy, Soviet enterprises were expected to be self-financing
and profitable and were expected to implement projects directly in countries
receiving Soviet aid. Emphasis was laid more on efficiency in both Soviet aid
administration and in the recipient countries.In former Czechoslovakia (now
Czech and Slovak Republics) and GDR (now Germany), students graduating
from their universities and technical colleges now work for about two years
after the completion of their studies to reimburse the scholarships.
Thus, given the ongoing reforms in these countries, West African countries
and other developing countries are not likely in the near future to have increased
aid inflow from the Russian Federation and other East European countries.
CONCLUSION
The flow of foreign aid to West African countries from the mid-1970s to the
early 1990s has, on the whole, been considerable at both bilateral and multilat-
eral levels. However, the volume of inflow varies from one country to another
depending on the political and economic circumstances of each country and the
relationship with the donors. For most countries, the DAC countries remain the
essential sources of bilateral aid. But to this category of donors have been added,
in recent years, the donors from the oil-producing countries in the Middle East.
At the multilateral level, the World Bank, IDA, IMF, ADB, and the UNDP
constitute the essential sources of aid to West African countries with a high
inclination to assist in their development process. To a large extent, both bilateral
and multilateral aids have been directed at the development of the infrastructures
and the strengthening of the productive sectors of the economies of West African
countries. However, while many countries in the subregion continue to remain
at a low level of economic development, it has not been difficult to conclude
that the impact of foreign aid on their development process has been marginal.
94 Foreign Aid and Self-Reliance in West Africa
There are still considerable constraints on the flow and utilization of foreign
aid in West Africa. From the side of the donors, greater aid untying should be
encouraged to increase the value of aid to West African countries. Also, attention
should be paid to the economic interests and special needs of the recipient West
African countries. The role of bilateral donors has been remarkable in several
emergency situations in West African countries. However, these countries
would be better off if they were able to develop the autonomous means to cope
with emergencies as they arise. Of course, the recipient West African countries
themselves have to take more appropriate steps to eliminate the constraints to
the effectiveness of foreign aid. They should, as a matter of urgency, establish
appropriate institutional structures for the effective coordination of foreign aid.
Also, necessary measures should be adopted to address the questions of
mismanagement and corruption in the administration of foreign aid by those
countries seriously concerned. The failure to do this in a timely manner may
eventually result in the marginalization of the affected countries in disbursement
from the donors, since competition for aid becomes more intense from other
developing countries and economies in transition.
The prospects for increases in foreign aid in the future clearly depends largely
on the emerging foreign aid policies of the donor countries. The disappearance
of the East-West rivalry and the universal acceptance of democratic principles
have introduced new dimensions into the thinking of foreign aid. Strategic
considerations now play less of a role in the disbursement of foreign aid bilateral
donors. The economic interests of the donor countries have assumed more
importance. Besides, the capacity of the recipient countries to absorb aid now
plays a critical role. In fact, this thinking has been abundantly shared by the
multilateral donors. In its various dimensions, the capacity to absorb foreign
aid would, among other things, include the implementation of economic
reforms by the recipient West African countries and the strengthening of the
institutional support for aid utilization. Furthermore, aid utilization is expected
to take on board the idea of sustainable development effectively. The economic
growth and development of the developing countries should be environmentally
sustainable. The more the development policies and objectives of West African
countries reflect this, the better their chances for increased foreign aid from both
bilateral and multilateral donors.
NOTES
1. OECD, Geographical Distribution of Financial Flows to Developing Countries (Paris:
OECD, 1990), p. 61.
2. Ibid., p. 71.
3. Linda Van Baren, New African Yearbook 1991-92 (London: I C Publications, 1991), p.
42.
4. OECD, Geographical Distribution, p. 7.
5. Ibid., p. 101.
Foreign Aid in West Africa 95
6. Ibid.
7. O. R. Davidson, A Study on Development Strategies in Anglophone West African States
in the Fields of Education, Science, Culture and Communication (UNESCO: Major Program
1, mimeo, August 1987), p. 14.
8. Carthy L. Jabara, Economic Reform and Poverty in the Gambia: A Survey of Pre- and
Post-ERP Experience, Cornell Food and Nutrition Policy Program, Monograph 8, December
1990, pp. 3-4.
9. OECD, Geographical Distribution, p. 127.
10. Ibid., p. 129.
11. Guinea has very large deposits of bauxite, iron ore, and diamond. Mining accounts for
one-third of its GDP and nearly all export earnings. Guinea is the world's second largest
producer of bauxite after Australia.
12. OECD, Geographical Distribution, p. 139.
13. Linda Van Baren, New African Yearbook, p. 144.
14. Ibid., p. 142.
15. OECD, Geographical Distribution, p. 141.
16. Linda Van Baren, New African Yearbook, p. 150.
17. The other important cash crops are coffee and cocoa.
18. OECD, Geographical Distribution.
19. C. Legum, Africa Contemporary Record 1980/81 (London: African Publishing, 1981),
p. B542.
20. C. Legum, Africa Contemporary1 Record 1981/82 (London: African Publishing, 1982),
p. B457.
21. Ibid., p. B487.
22. International Labour Organization (ILO), Contribution a Une Politique Nationale de
VEmploi Rapport d'Une Mission Multidisiplinaire du BIT (Niamey: Republique du Niger,
mimeo, 1990), pp. 20-30.
23. Louis Berger, Etude sur les Mesures d'Incitation a VIndustrie. Report prepared for the
Government of Niger, Ministere du Commerce de 1'Industrie et de l'Artisanat (East Orange,
N.J.: Louis Berger International Inc., 1989).
24. C. Legum, Africa Contemporary Record 1982/83 (London: African Publishing, 1983),
pp. B564-B565.
25. C. Legum, Africa Contemporary Record 1983/84 (London: African Publishing, 1984),
p. B569.
26. Linda Van Baren, New African Yearbook, p. 355.
27. T. Hayter, Aid as Imperialism (Middlesex: Penguin Books Ltd., 1974), pp. 25-45.
28. For example, IDA credits helped to finance irrigation and drainage projects in India and
Pakistan, where greater agricultural output was vitally needed to keep pace with growing
populations. The association also supported the construction of highways and roads in Latin
America, financed municipal water supply systems in cities such as Amman and Taipei, and
helped build power plants and ports in developing countries.
29. The fifty-one regional member countries include: Algeria, Benin, Botswana, Burkina
Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Cote
d'lvoire, Djibouti, Egypt, Equatorial Guinea, Ethiopia, Gabon, Gambia, Ghana, Guinea,
Guinea-Bissau, Kenya, Lesotho, Liberia, Libya, Arab Jamahiriya, Madagascar, Malawi, Mali,
Mauritania, Mauritius, Morocco, Namibia, Peoples Republic of Mozambique, Niger, Nigeria,
Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, Sudan, Swaz-
iland, Tanzania, Togo, Tunisia, Uganda, Zaire, Zambia, and Zimbabwe. The twenty-four
nonregional member countries are: Argentina, Austria, Belgium, Brazil, Canada, China, Den-
mark, Finland, France, Germany, India, Italy, Japan, Korea, Kuwait, the Netherlands, Norway,
96 Foreign Aid and Self-Reliance in West Africa
Portugal, Saudi Arabia, Spain, Sweden, Switzerland, the United Kingdom, and the United
States. In 1992, Yugoslavia ceased to be a member of the bank and the fund. According to a
decision of the ADB Board of Directors made in early January 1993, the successor states of
Bosnia and Herzegovina, Crotia, Mecedonia, Slovenia, Serbia, and Montenegro cannot auto-
matically acquire any legal claim to membership of the bank or fund by reason of their having
previously been component organs of Yugoslovakia before its dismemberment.
30. Legum, Africa Contemporary Record 1981/82, p. B570.
31. Legum, Africa Contemporary Record 1983/84, p. B420.
32. World Bank, The Gambia: Development Issues and Prospects (Washington, D.C.: World
Bank, 1985).
33. C. Legum, Africa Contemporary Record: Annual Survey and Documents 1974/75
(London: Rex Collings Ltd., 1975), p. B652.
34. Flt.-Lt. Jerry Rawlings was first the head of state and government from June 4 to
September 24, 1979, after a military coup d'etat.
35. Linda Van Baren, New African Yearbook, p. 151.
36. Ibid., p. 182.
37. OECD, Development Cooperation: Efforts and Policies of the Members of Development
Assistance Committee (Paris: OECD, December 1990), pp. 151-52.
38. Carol Lancaster, US Aid to Sub-Saharan Africa: Challenges, Constraints and Choices,
vol. 10, no. 6, Significant Issues Series (Washington, D.C.: Center for Strategic and International
Studies, 1988), p. 1.
39. Ibid., p. 2.
40. Ibid., p. 160.
41. OECD, Development Cooperation: Efforts and Policies of the Members of the Develop-
ment Assistance Committee. Report by J. C. Wheeler, Chairman of the DAC (Paris: OECD,
1980), p. 151.
42. James G. Speth, Seeking a New Consensus on Development, An Address by the Admin-
istrator of the UNDP at the NGO/DPI Annual Conference, General Assembly Hall, UN
Secretariat September 8, 1993, p. 3.
4
INTRODUCTION
Since the mid-1970s most West African political leaders have made spirited
efforts to promote economic growth and development through the policy of
self-reliance. The main goals of West African leaders during this period, among
other things, consisted of: building the key sectors of their economies, agricul-
ture and industry, on a sustainable basis; and raising the standard of living of
their peoples and the alleviation of poverty. The determination of the West
African governments in the pursuit of these objectives was irrevocably reflected
in their consistent and strong statements on the virtues of self-reliance in their
Development Plans and annual Budgets. The call for self-reliant development
was inadvertently reinforced by the worldwide economic recession beginning
from 1973 after the first world oil price shock. The rise in the price of oil was
devastating to most countries in the subregion, which are largely nonoil pro-
ducing (except Nigeria), because they have to buy oil and manufactured goods
at higher prices. The recession became aggravated in the late 1970s as the
foreign debt of these countries rose to high levels. Several countries borrowed
in the mid-1970s in the effort to meet the increased cost of oil and manufactured
imports to sustain the process of economic development.
In the wake of this recession, additional new economic policies in the context
of structural adjustment programs became inevitable and were applied, in their
different forms, across West Africa. While these programs were designed to
ensure economic growth, they have not, to a large extent, eroded the vision of
self-reliant development in the subregion. The programs, as they were, seemed
98 Foreign Aid and Self-Reliance in West Africa
to reinforce, through some of their measures, the drive toward self-reliance. For
example, such major measures on privatization and commercialization, trade
liberalization, reduced role of government in the economy, cut in public
expenditure, to mention a few, hold promises for self-reliant development if
effectively and adequately implemented.
However, the attainment of self-reliance in West Africa has proved very
difficult and elusive. Progress in this direction has not been significant, in both
its individual and collective dimensions. The mobilization of internal resources
has not been adequate for the effective development of identified sectors of
national economies. As a result, it became necessary to seek external financial
resources while not compromising the ideals of self-reliant development. It also
became clear that self-reliant development would call, among other things, for
an accelerated development of human resources, the provision of better and
commensurate health services, a better and higher standard of education with
diverse specializations, in particular, in the natural sciences, and technology.
Besides, the process of self-reliant development, it would seem, would benefit
more in situations where the climatic conditions provide support for the
production of food and cash crops to ensure the sustenance of a growing
population and higher earnings in revenue. In this connection also, a favorable
international trade environment would be an asset. Improvement in terms of
trade and better prices for commodity exports are vital to an increase in the
import capacity for capital formation by West African countries.
Experience during 1970s and 1980s suggests most of the desirable supportive
factors for self-reliant development were deficient. These were very obvious in
a number of key sectors that were the targets for self-reliant development,
namely: agriculture, industry, technology, energy, and foreign trade. In the same
vein, the attempts at collective self-reliance or regionalism encountered several
political and economic difficulties. This chapter will essentially examine the
main initiatives, trends, and problems in connection with self-reliance in the
West African subregion. First, however, efforts will be made to describe the
pattern of growth of production.
Table 4.1 illustrates the average annual growth rate of production in West
Africa from 1965 to 1991. It is obvious from the table that the average annual
growth rate of the GDP for West Africa declined in the period 1980-91, 2.8
percent as against 3.3 percent for the period 1965-80. This is very significant
as it clearly indicates that the various economic policies toward self-reliant
development as well as those on structural adjustment have had no real
substantial positive impact on the process of economic growth and sustainable
development. This is particularly ominous for the subregion, given the fact that
the average rate of growth of the population for West Africa during the period
1980-91 was about 3.1 percent.1 In other words, it was a period characterized
by a general decline in the standard of living in West Africa. The decline in GDP
Table 4.1
The Growth of Production in West Africa
Average Annual Growth Rate (Percent)
COUNTRY 1965-1980 1980-1991 1965-1980 1980-1991 1965-1980 1980-1991 1965-1980 1980-1991 1965-1980 1980-1991
BENIN 2.1 2.4 1.8* 4.9 1.4* 3.6 4.8 2.7* 0.5
BURKINA FASO 4.4* 4.0 1.0* 3.2 2.5* 3.8 4.1* 2.6 19.9* 5.4
CAPE VERDE . . . . .
COTE DTVOIRE 6.8 -0.5 3.3 -1.2 10.4 -1.6 9.1 8.6 0.8
GAMBIA . . . .
GHANA 1.4 3.2 1.6 1.2 1.4 3.7 2.5 4.1 1.1 6.6
GUINEA 3.8 _ . .
GUINEA-BISSAU 2.4* 3.7 3.7* 5.0 2.1* 2.6 . 2.8
LIBERIA 3.3 5.5 2.2 10.0 2.4
MALI 3.9 2.5 2.8 2.4 1.8 4.0 _ 7.6 2.4
MAURITANIA 2.0 1.4 -2.0 0.7 2.2 4.9 . 6.5 0.5
NIGER 0.3 -1.0 -3.4 11.4 . 3.4
NIGERIA 6.9 1.9 1.7 3.5 13.1 -0.4 14.6 7.6 3.1
SENEGAL 2.1 3.1 1.4 2.7 4.8 3.8 3.4 5.1 1.3 3.0
SIERRA LEONE 2.6 1.1 2.3 2.7 -1.0 -0.8 4.3 -1.4 5.8 0.9
TOGO 4.5 1.8 1.9 5.3 6.8 1.5 2.5 5.4 -0.2
TOTAL 3.3 2.8 1.7 2.8 4.6 1.6 6.9 3.0 12.0 2.4
has, during the 1980s, been largely due to the catastrophic decline in the average
annual growth rate in industry and services.
In the 1980s, the average annual growth rate was 1.6 percent as against 4.6
percent in the period 1965-80. Those for the services were 2.4 and 12.0 percent,
respectively. On the contrary, there was an improvement in the average annual
growth rate in agriculture, 2.8 percent in the 1980s, compared with 1.7 percent
during 1965-80. This suggests that, on the average, subregional agricultural
development policies in the 1980s have had a somewhat positive impact and
that producers of agricultural products could have experienced some increases
in income. Such general broad agricultural policies should therefore be consoli-
dated to ensure increased agricultural production in the decade of the 1990s.
This is very important in the drive toward self-reliance and sustainable devel-
opment given the fact that the agricultural sector accounts for over 80 percent
of the GDP of the West African subregion and provides livelihood for over 85
percent of the working population.
However, it must be underscored that the average annual growth rate for the
subregion as a whole does not truly reflect the disappointing decline in many
countries. The cases of Nigeria and Cote dTvoire are, for example, very
illustrative. The average annual growth rate of the GDP for Nigeria in the 1980s
was 1.9 percent compared with 6.9 percent in 1965-80; the corresponding
growth rate for Cote dTvoire during these periods were -0.5 and 6.8 percent,
respectively. Only very few countries such as Ghana, Senegal, and Guinea-Bis-
sau succeeded in raising their growth rate in the 1980s.
AGRICULTURAL DEVELOPMENT
As already noted, the agricultural sector represents a major sector in terms
of its contribution to the GDP of West African countries. An advancement in
this sector therefore represents a precondition for a meaningful self-reliant
development in West Africa. Progress in agricultural development would not
just imply an increase in food output but also increases in the production and
export of cash crops. Progress in both areas are tied, in the first place, to adequate
economic policies and good weather conditions. And as far as cash crops are
concerned increases in the world prices and demand for commodities by the
industrially developed countries represent important stimulants for higher
output. There were some increases in production in the 1980s in the agricultural
sector. In what areas were these? What accounted for the increases and what
should have been done to ensure higher output, especially in those countries
with modest increases in order to enhance the prospects for self-reliance?
The major food crops in West Africa consist of rice, maize, yams, cassava,
millet, plantains, sorghum, palm oil, palm kernel, and groundnuts. For most
countries in the subregion, in the 1980s, the output of these crops increased
substantially to meet internal demand. For example, in the case of rice, it may
Self-Reliance in West Africa 101
be noted that Cote dTvoire increased its output from 42,000 metric tons in 1980
to 650,000 metric tons in 1989, an increase of about 55 percent.2 On the contrary
however, Burkina Faso, Gambia, and to some extent Sierra Leone experienced
decline in their rice output during the 1980s. The output of maize was more
phenomenal for a number of countries in which output in 1989 was about double
the output in 1980. The cases of Benin, Burkina Faso, Gambia, Ghana, Guinea-
Bissau, Mali, Nigeria, Senegal, and Togo, to mention a few, are very illustrative.
However, unlike these countries, Mauritania had general decline in the output
of maize, partly as a result of bouts of drought. Other crops with substantial
increases in output are sorghum, millet, and cassava. However, on the whole,
the output in palm oil and palm kernel were not very substantial during the
decade.
These are generally good signs for the subregion in terms of the reduction in
food importation and the drive to self-sufficiency in food. It implies that some
of the countries were, in the 1980s, in the position to conserve foreign exchange
earnings for the importation of capital goods. This pattern of development also
appeared to have taken shape at the beginning of the 1990s. The aggregate
import requirement of cereals in 1991/92, mainly wheat and rice, was estimated
at 3.6 million tons, some 3 percent lower than that of 1990/91. But commercial
imports, estimated at 2.9 million tons, are anticipated to cover some 80 percent
of the aggregate requirement for 1991/92. Food aid needs are estimated at
677,000 tons, which were already fully covered by donor pledges.3
Thus, while some appreciable progress seems to have emerged and consti-
tuted a pattern in the 1980s in food crop output in West Africa, the total need
of the subregion remained to be comprehensively attained. The efforts of West
African governments would, therefore, need to be strengthened in order to
reduce food import to the barest minimum or make it superfluous.
In the case of cash crops such as cocoa, coffee, groundnuts, and so on, the
performance has been characteristically dismal in the 1980s. Table 4.2 shows
the value of agricultural exports from 1980 to 1990 in West Africa. The table
indicates that total agricultural exports of the subregion declined from US$4.1
billion in 1980 to US$2.8 billion in 1983, but rose thereafter to US$4.1 billion
in 1986. However, it again declined precipitously as from 1987 when it
amounted to US$3.7 billion and US$3.4 billion in 1990. This decline was
largely accounted for by the export decline of the three largest exporters of the
subregion, Cote dTvoire, Ghana, and Nigeria.
Thus, the decline in agricultural exports during the 1980s was a considerable
setback to many West African governments in their efforts to promote self-re-
liant development. This in effect reduced their capacity to import capital goods
for development. It also, resulted in a drastic fall in the income and the standard
of living of West African farmers. Besides, it may be added that the lot of the
farmers had not been made easier because many of these countries at the same
time experienced a steep rise in the rate of inflation. In other words, as a matter
Table 4.2
West African Agricultural Exports, 1980-1990
USSMills., Current Prices and Exchange Rates
COUNTRY 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
| BENIN 55 22 20 30 79 73 69 74 77 75 89
1
| BURKINA FASO 80 63 48 53 72 50 51 87 81 97 108
1 CAPE VERDE 1 2 1 1 0 1 1 1 1 2 2
COTE D'lVOIRE 2,009 1.696 1.412 1,280 1.866 2,144 2.420 2.067 1.737 1,619 1,748
GAMBIA 28 18 16 26 29 17 12 7 19 8 13
GHANA 744 436 422 269 382 403 504 538 481 425 387
1 GUINEA 33 28 29 33 21 18 25 25 26 32 22
GUINEA-BISSAU 6 8 7 6 12 8 7 13 11 13 13
| LIBERIA 151 124 89 107 129 120 108 107 119 162 68 |
[MALI 192 201 197 174 228 157 182 226 203 228 287
MAURITANIA 39 43 41 35 33 36 32 31 33 33 33
1 NIGER 86 87 69 46 77 62 65 48 48 49 45
1 NIGERIA 446 429 348 448 348 310 376 251 444 251 255
SENEGAL 115 64 167 190 157 103 105 118 132 209 214
1 SIERRA LEONE 59 34 35 28 35 54 49 42 31 22 17
|TOTAL 4.121 3,322 2.957 2.777 3,545 7.573 4.107 3.734 3.542 3.318 3,383
Source: UNDP/World Bank, African Development Indicators (Washington. D.C.: UNDPAVorld Bank, 1992), p. 230.
Self-Reliance in West Africa 103
very clear to the government that the country could face considerable difficulties
in the near future if dependence on food importation, which had been a main
feature in its imports since the mid-1970s, was not removed. However, oddly
enough, without learning any lessons from OFN, the Green Revolution col-
lapsed shortly after its formation. The program ran into difficulties partly as a
result of poor management, with fertilizers and other inputs not getting to the
farmers at the appropriate time. In addition, the program was hastened to its
death as a result of massive corruption and mismanagement of its funds by
government officials.
By 1987, the military government began to look into the problems of food
production from a broader perspective. The Directorate of Food, Roads and
Rural Infrastructure (DFRRI) was established to look into all aspects of food
production. The program attempted not only to increase food production but to
also solve the related problems, the supportive structures for production and
distribution of food, without which the costs of food would be high. Substantial
efforts under this program were directed at the infrastructural aspect. A number
of feeder roads were constructed to open up food production areas to consumers
or to provide water to rural communities. But by mid-1993, it was clear that the
program has done very little for food production. To a large extent, the
importation of food still constituted a major aspect of total imports. The
difficulties here were not just in over-focusing attention on infrastructural
development but also in mismanaging funds. Thus, it was clear that adequate
funding and efficient management as well as the identification of priority areas,
are prerequisites in the direction of food self-sufficiency in Nigeria.
In the case of Niger, agricultural policy, before the introduction of structural
adjustment, was characterized by a preference for state monopoly and numerous
regulations. The government gave parastatals the legal responsibility for secon-
dary and, in most cases, for primary marketing of nearly all agricultural outputs.
Input supply, including provision of credit, was linked to official marketing to
reinforce the primary marketing monopoly.
Several parastatals were connected with agricultural output and input mar-
keting in Niger. For example, an important one is the Office des Produits
Vivriers du Niger (OPVN), which purchases millet, rice, and sorghum, espe-
cially from other parastatals. Also, the Societe National de Commercialisation
de 1'Arachide (SONARA) purchases peanuts and cowpeas and sells them at its
price to industrial establishments.
It is important at this point to state that the 1979 to 1983 five-year plan
established a national grain reserve stock of 100,000 tons, of which 65,000 tons
were to compose a security stock. The security stock served as a buffer to supply
grain to deficit areas until commercial or food aid imports could arrive in the
event of a food shortfall. This stock was placed under the management of OPVN
in order to add to its crop purchase responsibilities. Besides, OPVN was also
responsible for the sale of grain to consumers at officially determined prices.
Self-Reliance in West Africa 105
But then, the quantity of grain that could be purchased from OPVN at these
prices was always limited, especially in periods of shortage when market prices
exceeded official prices. Other important parastatals include the Orginisation
Nigerien de l'Amenagement Hydro Agricole (ONAHA), which manages rice-
growing farm cooperatives, supplies inputs and irrigation services. The Union
Nigerienne de Credit et de Cooperation (UNCC), which manages the coopera-
tive movement, supplies farmers with inputs and credit through branch subsidi-
aries (for example, Centrale d' Approvisionnement), and serves as primary
agent for SONARA, and OPVN, among others in the primary marketing of
crops.4
As a result of the several measures on stabilization and structural adjustment
program, a number of changes were advocated for OPVN and SONARA. In
1984, the government ended the monopoly of OPVN in cereal and of SONARA
in groundnut. In 1986, OPVN operations were limited to the management of
80,000 tons in security stock. Also, OPVN was confined to the renewing of a
third of this stock every year. But this did not entirely solve the problem of
pricing and supply.
It will be noted that in 1983, the trend in Ghana when the economic recovery
program began that has been toward the liberalization of output pricing through
Agricultural Commodity Pricing Committee. In Burkina Faso, the agricultural
policy of the Sankara administration in the 1980s consisted of nationalizing
land, doubling the share of agriculture in budget spending to 40 percent, and
raising producer prices for both cash and food crops.
Thus, as far as self-reliance is concerned in agricultural development in West
Africa, the various governments in the subregion have demonstrated a very high
degree of commitment. The common objectives were increases in the output of
cash crops and the attainment of self-sufficiency in food production. Increased
output of cash crops was desirable in order to increase foreign exchange
earnings and provide funds for other development programs within the econ-
omy. Also, self-sufficiency in food production was necessary not only to reverse
the rising trend of food imports of the early 1970s and save foreign exchange
but also to provide a comfortable base for self-reliant development.
The determination of the West African leaders to ensure the attainment of
these objectives has been illustrated in their consistent articulation of the
relevant policies and measures since the second half of the 1970s in their
development plans and annual budgets. Such policies and measures have
covered several aspects of agricultural production and distribution as well as
certain institutional matters. In fact, the policy orientation for increased produc-
tion in the subregion was further strengthened since the mid-1980s, as many
countries in West Africa embarked on structural adjustment programs in order
to find a lasting solution to the endemic problem of economic recession and to
promote economic growth. Agricultural reforms under structural adjustment
programs underscored not just appropriate prices for cash and food crops but,
706 Foreign Aid and Self-Reliance in West Africa
also stressed basic institutional changes in order to open up the sector to market
mechanisms of demand and supply. Also, while large-scale farming was en-
couraged, the governments of many West African countries took steps that
would enhance an increase in the participation of the private sector in the
agricultural sector.
However, as it is today, the results of these efforts across the West African
subregion could at best be described as modest. There are little improvements
here and there from one country to another, but the problems of increased
production of cash crops and self-sufficiency are not comprehensively solved.
This is an indication that there are still many unresolved problems. In the first
place, it is obvious that the successful implementation of agricultural policies
would require increased external assistance. External assistance would be
required especially in the areas of inputs and research into high-yield crops and
seeds. Secondly, many countries would need to find an immediate solution to
the administrative malpractice and corruptions that pervade the administration
of inputs into the agricultural sector. Thirdly, better world prices for commodi-
ties are still very fundamental for increased production. Higher world prices
would enhance the commitment of farmers to the intensification of output.
Fourthly, the method of production should be improved to ensure more me-
dium- and large-scale mechanization. But this should not imply the abandon-
ment of the small-scale farmers, which constitute the bulk of the farming
population. Fifthly, attempt must be made to find lasting solutions to adverse
weather conditions, especially of drought and desertification, which have had
far-reaching negative consequences for higher output of cash and food crops,
particularly in the Sahelian countries. Of course, progress in industrial devel-
opment appears not to have brought much relish to West African government.
The slow progress in this sector has apparently confounded the observers of
economic development in Africa, given the strong potential to make advance-
ments in the sector.
INDUSTRIAL DEVELOPMENT
For many West African governments since the early 1960s, rapid industrial
development has been at the forefront of the agenda for economic growth and
development. This was considered necessary in order to reduce over depend-
ence on the agricultural sector, as well as to extricate the economy from its
dualistic structure. Also, it was deemed necessary as the path to an accelerated
improvement in the standard of living of their peoples. After independence,
West African governments generally felt that the few processing plants estab-
lished by the metropolitan countries should be rapidly transformed into full
manufacturing industries, while new ones would be established to cope with
the industrial needs of the peoples. Industrialization, as it was commonly
envisaged, would move from import substitution industrialization through
Self-Reliance in West Africa 107
intermediate industries to the level of heavy industries. All these were again
restated and put in better focus within recasted industrial policies in the early
1970s, when West African countries emphasized the goal of self-reliant devel-
opment. It was then more evident that industrial development would enhance
their foreign exchange earning capacity and should be part of the cornerstone
of the whole plan of self-reliant development.
However, as has been observed, most West African countries have yet to make
remarkable progress in industrial development. This has particularly been
illustrated in the area of manufacturing where most countries are still decades
behind newly industrializing countries of Southeast Asia and Latin America, let
alone the industrially developed countries. It has become increasingly clearer
that progress in this area would necessitate more efforts on the part of the
government and the private sector to surmount a number of internal and external
formidable political and socioeconomic obstacles.
Table 4.3 illustrates the structure of manufacturing value added for West
African countries. It is obvious that only a few countries have seriously
embarked on manufacturing. Cote dTvoire, Ghana, Mali, Nigeria, and Senegal
are the few countries in West Africa where industrialization appears to have
made a start. But then, it is obvious that manufacturing activities are essentially
in the food, beverages and tobacco, and textile and clothing industries. Machin-
ery and transport equipment as well as chemicals represent a small proportion
of total manufacturing establishments. In Ghana, for example, food, beverages,
and tobacco accounted for 34 percent of manufacturing value added in 1970.
Textile and clothing 16 percent, machinery and transport equipment 4 percent,
and chemicals 4 percent. By 1988, food, beverages, and tobacco increased its
share to 40 percent of value added in manufacturing while textile and clothing
declined to 6 percent. Also, manufacturing value added in machinery and
transport equipment declined to 1 percent. But the manufacturing value added
in chemicals rose to 7 percent.
Cote d'lvoire has a seemingly diversified manufacturing sector. But this
structure has not altered over the years. Food, beverages, and tobacco, together
with textile and clothing, are very predominant in manufacturing. However, the
proportion of manufacturing and transport equipment is substantial. The manu-
facturing value added of this sector was 10 percent in 1988 as in 1970.
It is thus clear that West African countries, by the end of the 1980s, were
generally at the level of import substitution. Progress in the areas of intermediate
and heavy industries by Cote d'lvoire, Ghana, Mali, Nigeria, and Senegal,
which made some incursions into these areas, has been very minimal. Conse-
quently, the external dependence of West African countries on the industrially
developed countries for both capital and consumption goods remained very
strong at the end of the 1980s. Table 4.4 illustrates the structure of merchandise
imports of West African countries. The table shows that machinery and transport
equipment together with other manufactures constitute large proportions of the
Table 4.3
West Africa: Structure of Manufacturing Value Added
Distribution of Manufacturing Value Added (percentages)
Food, Beverage, and Textiles and Clothing Machinery and Other Chemicals
Tobacco Transport Equipment
COUNTRY 1970 1980 1988 1970 1980 1988 1970 1980 1988 1970 1980 1988
BENIN 59 . . 14 0 . . ' 6 .
BURKINA FASO 69 . _ 9 . . 2 . l
CAPE VERDE . _ _ . . . . . .
COTE DTVOIRE 27 35 . 16 . . 10 10 . . 5 .
GAMBIA . 35 . . 2 . 0 . . 3
GHANA 34 37 40 16 11 6 4 2 1 4 5 7
GUINEA . . . . . . . .
GUINEA-BISSAU . . _ . . . . .
LIBERIA 27 . . . . .
MALI 36 . _ 40 . . 4 5 . 1
MAURITANIA . . . . . . . . . . I
NIGER . . _ . . . . . .
NIGERIA 36 . . 26 . _ 1 6 1
SENEGAL 51 48 48 19 19 15 2 4 6 6 8 7
IERRA LEONE . 65 . . , . . 0 . . 4
TOGO - - - - - - - - 4
BURKINA FASO 19 23 8 16 8 5 27 24 37 31
CAPE VERDE . . .
COTE D'lVOIRE 15 18 5 21 3 3 33 23 44 34
GAMBIA . . . . . -
GHANA 20 9 6 31 4 3 26 26 44 31
GUINEA . . . .
GUINEA-BISSAU 28 32 7 7 4 3 16 15 45 43
LIBERIA . .
'
MALI 29 18 9 28 6 2 21 25 36 28
MAURITANIA . . . . . . .
"
NIGER 13 15 4 20 6 6 26 28 51 31
NIGERIA 8 18 3 , 3 5 37 36 48 41
SENEGAL 28 26 5 20 5 5 25 21 38 29
SIERRA LEONE 23 24 7 28 4 3 22 19 44 46
TOGO 16 20 4 7 11 6 22 24 47 43
TOTAL 19 20 6 17 6 5 25 24 45 37
Table 4.5
Ghana: Estimated Production Rates in Several Manufacturing Industries,
Large- and Medium-Scale Factories, 1982-1987
Percentage of Capacity
Sources: Government of Ghana, Quarterly Digest of Statistics (Accra: Ghana Statistical Service, 1989); H.
Alderman, Downturn and Economic Recovery in Ghana: Impacts on the Poor (Cornell Food and Nutrition
Policy Program, Monograph 10, March 1991), p. 70.
increases during the first four years after the introduction of the recovery plan.
The short-term increase was due to effective demand increases. Also, it was
aided by the deregulation of inputs and intermediary investments. But produc-
tion in many manufacturing industries remained below 50 percent of capacity
four years into recovery. This was, in part, due to several years of mismanage-
ment. Besides, in Ghana, local investorsfindit difficult to obtain capital through
either share investment or loans.
TECHNOLOGY
Technology may be considered as the systematic application of scientific
principles acquired through cumulative but systematic research to the solution
of problems, especially by exerting control over nature.6 It is a matrix of the
knowledge, skills, methods, and procedures that are involved in the production
of goods and services intended for the enhancement of the quality and standard
of living of man. In this context therefore, four main attributes may be identified.
In the first place, it is a major instrument for the creation of wealth. Secondly,
it represents an instrument for the easing of the exercise of social control.
Thirdly, it affects the modes of decision making to achieve social change.
Fourthly, it is a central area where innovations are uncovered.7
112 Foreign Aid and Self-Reliance in West Africa
There were few training facilities and these were confined to the areas of
operational and managerial know-how. Only few establishments were commit-
ted to local R&D. In fact, less than 20 percent of the establishments had
provisions specifically designed for R&D. Even then, these were meager. In the
light consumer-based subsector, for example, total annual expenditure on R&D
between 1983 and 1985 was about N1.6 million compared to an estimated total
capital input of about N380 million. Consequently, the technologies generated
locally from existing manufacturers and R&D establishments were very few.
Besides, the efforts of the latter have been severely hampered by the low rate
of commercialization of their findings. Because of all these, the process of
learning-by-doing, which is just as important now as it was at the beginning of
the European Industrial Revolution, was not open to most Nigerians.12
Furthermore, in the view of A. Adubifa, the science and technology system
was plagued by many weaknesses: in particular by the lack of modalities for
implementation of objectives; grossly inadequate and sometimes misdirected
funding; the absence of national programs for the mobilization of the public
appropriately for the understanding of science and technology; the lack of any
serious effort to develop a national information system for scientific and
technological activities; and the inability of the research institutes to recruit and
retain appropriate scientific and technical skill.13 These difficulties, which are
typical for many other West African countries, should be speedily addressed if
West African countries are to make tangible progress in self-reliant develop-
ment.
ENERGY
Energy in its various forms—solids, liquids, gases, electricity, and traditional
fuels—constitute important inputs into the process of economic growth and
development. They form vital factors in the manufacturing and commercial
sectors in the process of production. Also, in the private sector, they are very
important factors for daily existence. For self-reliant development, the West
African governments have recognized that it is an aspect of the development
process that must be accorded a pride of place. The provision of energy at the
required quantity would ensure continuous growth. Excessive dependence on
external sources would expose the development process to dangers of undue
disruptions. Reduced supply or higher prices for imported energy could have
the unpleasant effect of reducing output or increasing the cost of output. West
African countries are differently endowed with natural resources. The extent of
independence in energy supply would in the first place be a function of the
ability to exploit the energy resources available to each country.
The basic forms of energy required by West African countries include liquids,
gases, primary electricity, and traditional fuel. But the countries with require-
ments for solids are Niger and Nigeria. Solid fuels include hard coal, lignite,
Self-Reliance in West Africa 115
peat, and coke. The countries with large demand for liquids include Nigeria,
Cote dTvoire, Senegal, Ghana, and Mauritania. In Nigeria, the demand for
liquids rose to 444,000 terajoules in 1990 from 284,000 terajoules in 1980. In
the case of Cote dTvoire, it rose from 51,000 terajoules in 1980 to 91,000
terajoules in 1987, but declined to 61,000 terajoules in 1990. There was a
considerable increase in the case of Mauritania, from 8,000 terajoules in 1980
to 43,000 terajoules in 1987, but demand declined to 34,000 terajoules in 1990.
In Senegal and Ghana, the requirements declined during this period. In the case
of Senegal, it fell to 30,000 terajoules in 1990 from 36,000 terajoules in 1980.
In Ghana, it was a decline to 26,000 terajoules from 31,000 terajoules in 1980.
Apart from Liberia, with a major decline in requirements, possibly as a result
of the civil war, all other West African countries generally maintained the level
of their requirements for liquids in the 1980s.
In the subregion, Nigeria is the only country with requirements for gases. Its
requirements increased considerably during the 1980s. It rose to 166,000
terajoules in 1989 from 52,000 terajoules in 1980. But fell to 145,000 terajoules
in 1990.
The countries with large demand for primary electricity are Cote dTvoire,
Ghana, and Nigeria. For these three countries, the demand was more or less
stable. As for Cote dTvoire, this was an annual average of about 5,000
terajoules, Ghana 17,000 terajoules and Nigeria 8,000 terajoules. Thus, Ghana
had the largest requirements for primary electricity in West Africa in the 1980s.
As already noted, the largest energy requirements in West Africa in the 1980s
was in the area of traditional fuels. The largest requirements were recorded for
Nigeria, Ghana, Cote dTvoire, Burkina Faso, Mali, Senegal, Niger, Benin, and
Liberia. For all these countries, there was a steady increase in traditional fuels
requirements during this period. In Nigeria, for example, it rose to 977,000
terajoule in 1990 from 725,000 terajoules in 1980. Also, in Cote dTvoire, it rose
from 69,000 terajoules in 1980 to 99,000 terajoules in 1990. The high and
increasing requirements for traditional fuels in the subregion indicates a failure
to provide affordable prices and cleaner forms of energy for domestic use by
West African governments. However, this development may need to be halted
and reversed in order to ensure sustainable and environmentally sound devel-
opment to ascertain that the subregion is in the mainstream of current global
development efforts. The only exception is Cape Verde, which apparently
depends less on traditional fuel, possibly by geographical design and/or gov-
ernmental efforts, for domestic purposes.
However, while the energy requirements of West African countries have
generally increased during the 1980s, it has been noted that there has not been
corresponding increases in production. For a number of countries, total produc-
tion fell far short of requirements. During this period, Nigeria was the only
country that was able to meet its commercial energy needs, importing a very
small proportion of its requirements. Its exports of commercial energy was 4.08
116 Foreign Aid and Self-Reliance in West Africa
million terajoules in 1980, but this declined to 3.24 million terajoules in 1990.
Whereas Burkina Faso, Cape Verde, Gambia, Guinea-Bissau, Senegal, and
Sierra Leone substantially depended on the import of commercial energy. It
therefore follows that for many countries in the subregion, self-reliance in
energy production remain an elusive goal. The governments of West African
countries would therefore have to adopt more purposeful policies to exploit
more meaningfully their resources in this area. This will in no doubt require
huge investments of capital and technology. However, careful packages and
arrangements with foreign partners are the shortest escape routes from these
difficulties.
FOREIGN TRADE
Foreign trade constitutes an important sector in the process of economic
growth and development. Its importance lies in raising funds for economic
growth and development. The more the increases in the exports of a country the
better are the chances for the promotion of economic growth if the prices the
exports do not fall. However, to increase exports on a sustainable basis, it is
vital that the components of exports are diversified. Also, the trading partners
must be varied to reduce the vulnerability of the exporting country. The
diversification of export components is desirable in order to avoid shocks in
earnings that may follow from a fall in the price of one or two export items.
Trading patterns should also be diversified in order to ascertain that a fall in the
demand for an export item does not unnecessarily lead to a drastic fall in the
earnings of the country.
Self-reliant development, as already noted, involves reduced dependence on
foreign trade. Trade disengagement is a call for partial reduction in the magni-
tude of international economic transactions with the industrially developed
countries. Since the objective is to reduce the magnitude and influence of
foreign goods, it is normally in the area of imports that policy measures should
be directed. Comprehensive trade disengagement must therefore include poli-
cies directed at exports. Their objective is not to decrease exports as such but
to decrease reliance on export receipts for national income.14 However, it has
been very difficult to attain this goal in West Africa. As may be observed from
Table 4.6 on the structure of merchandise exports, the subregion has not, at a
general level, succeeded in the diversification of exports. The major exports are
fuels, minerals, metals, and primary commodities. In 1965, fuels, minerals, and
metals accounted for 25 percent of West Africa's exports. Although it fell to 18
percent in 1970, nevertheless, it rose to 34 percent in 1991, which is an
indication of the poor performance of the subregion in industrial development
in the 1970s and 1980s. Other primary commodities rose to 71 percent in 1970
from 67 percent in 1965 but fell to 55 percent in 1991. The increase in the
proportion of the export of fuels, minerals, and metals in the subregion between
Table 4.6
Structure of Merchandise Exports of West African Countries
Percentage Share of Merchandise Exports
Fuel Minerals and Other Primary Machinery and Other Other Manufacturing Textiles and Clothing
Metals Commodities Transport Equipment
COUNTRY 1965 1970 1991 1965 1970 1991 1965 1970 1991 1965 1970 1991 1965 1970 1991
BENIN l 0 3 94 89 67 2 3 3 3 8 28 0 6 1
B U R K I N A FASO I 0 0 94 95 88 1 1 4 4 3 8 2 0 2
CAPE VERDE . . . . . . .
COTE DTVOIRE 2 2 11 93 92 79 1 1 2 4 5 9 1 1 2
GAMBIA . . . . . . _ . . . . . . .
GHANA 13 13 15 85 86 84 1 0 0 2 I 1 0 0 0
GUINEA _ . . . . . . . . . . . . .
GUINEA-BISSAU . 0 0 . 98 97 . 1 . . 1 0 0
LIBERIA 72 . . 25 . . 1 3 . 0
MALI 1 1 0 96 89 93 1 0 0 2 10 7 I 8 6
MAURITANIA 94 88 86 5 11 9 1 0 4 0 0 1 0 0 0
NIGER 0 0 86 95 96 12 1 1 0 4 2 1 1 0 1
NIGERIA 32 62 96 65 36 3 0 . 0 2 1 1 0 0 0
SENEGAL 9 12 22 88 69 56 1 4 3 2 15 20 1 6 0
SIERRA LEONE 25 15 34 14 22 33 0 . 60 63 32 0 0 .
TOGO 49 25 49 48 69 42 1 2 1 3 4 9 0 1
TOTAL 18 34 67 71 55 1 10 1 2 1
25
' 2 7 9
1970 and 1991 was largely due to the rise in the export of these commodities
by Niger, Nigeria, Senegal, Sierra Leone, and Togo. The fall in the proportion
of other primary commodities in the subregion between 1970 and 1991 was
essentially due to decreases in the export of these commodities by Niger,
Nigeria, Senegal, Sierra Leone, and Togo. The share of the export of machinery
and transport equipment rose to 2 percent in 1991 from 1 percent in 1956. This
suggests that West African countries have not made tangible progress in the
areas of intermediate and heavy industries. The share of other manufactures in
exports rose slightly; from 7 percent in 1965 to 9 and 10 percent in 1970 and
1991, respectively. The countries which have, to some extent, increased the
share of machinery and transport equipment in their exports are, Benin, Burkina
Faso, Cote dTvoire, Mauritania, and Senegal. But as far as other manufacture
exports are concerned, Sierra Leone, Benin, Senegal, Mali, and Cote d'lvoire
have performed better than the other countries in the subregion. Also, it has
been noted that the structure of West African imports has not changed substan-
tially. There is high dependence on the import of food and fuels. The latter, in
particular, rose dramatically between 1970 and 1991 from 6 to 17 percent of
merchandise imports. In 1991, the subregion virtually maintained the level of
the shares in the import of other primary commodities and machinery and
transport equipment that was attained in 1970. As regards other manufactures,
there was a decline to 37 percent in 1991 from 45 percent in 1970. All countries,
except Sierra Leone, had a reduction in the import of other manufactures during
this period.
From 1980 to 1990, the performances of both exports and imports of West
African countries have essentially been on the downward trend for the subregion
as a whole. Total exports of West Africa declined to US$15.6 billion in 1983
from US$33.5 billion in 1980.
It picked up in 1984 and rose to US$19.3 billion in 1985, but thereafter
proceeded on a precipitous decline to US$2.1 billion in 1990.15 This seems to
indicate that the structural adjustment programs in many countries in West
Africa had only a short-lived effect on the export of primary commodities. Trade
liberalization and exchange rate measures have not produced the expected
desired result of trade expansion. The bulk of the exports in West Africa is
accounted for by few countries, namely, Nigeria, Cote dTvoire, Ghana, Senegal,
Niger, Guinea, Liberia, and Togo.
The imports of West Africa declined during this period. Although it rose to
US$26.5 billion in 1981 from US$22.9 billion in 1980, it fell steeply to US$9.9
billion in 1986. But thereafter, it rose to US$12.5 billion in 1990. This was an
indication that economic activity did not pick up in the 1980s to encourage the
importation of more capital and consumption goods.
Given this similar pattern of downward trend in both exports and imports,
the subregion recorded deficits in its balance of trade from 1981 to 1983, but
had surpluses in its trade balances in all other years. However, this does not
Self-Reliance in West Africa 119
reflect the true situation across the subregion. In a number of the economically
weak countries such as Benin, Burkina Faso, Cape Verde, Gambia, Guinea-Bis-
sau, Mali, Niger, Sierra Leone, and Togo, trade deficits were common features
in their trade balances during this period. In addition to these countries both
Ghana and Senegal experienced trade deficits in many years. The trade deficits
of these countries were in part accounted for by the increases in the import of
manufactures and food. Also, deficits were further fueled by the decline in
export commodities of some countries during this period.
In the direction of trade, the indications are that most countries have not
sufficiently diversified their foreign trade. For some countries, the number of
foreign trade partners has increased. However, this notwithstanding, the pre-
ponderance of the metropolitan countries is still very significant.16 In the case
of Benin for example, exports to France accounted for 22 percent of total exports
in 1981; this fell to 8 percent in 1987 as exports to the United States and
Germany increased. For Cote dTvoire, exports to France represented 19 percent
in 1981 but declined slightly to 17 percent in 1987, when there were substantial
increases in the exports to Germany, the United Kingdom, and the United States.
In 1981, the United Kingdom accounted for 1 percent of the exports of Nigeria,
but this rose to 3 percent in 1987. There were major export increases to both
the United States, France, and Germany. The reason for this being that the
United Kingdom, an oil producer, needs little or none of Nigeria's petroleum.
Imports have, to a large extent, continued to be from the metropolitan
countries. As may be observed, about 20 percent of the imports of Benin in 1981
came from France. But this declined slightly to 19 percent in 1987. The imports
from Japan and Germany have risen significantly during this period. In Cote
dTvoire, imports from France represented 31 percent of total imports in 1981,
but this increased to 34 percent in 1987. Other major sources of imports were
Germany, Japan, the United States, and the United Kingdom. In the case of
Nigeria, the United Kingdom accounted for 19 percent of its imports in 1981,
but this declined to 16 percent in 1987. This is partly due to the general
governmental policy to cut down imports in the wake of the economic recession
beginning from 1980. This notwithstanding however, countries such as Ger-
many, France, the United States, and Japan emerged to be prominent trading
partners of the country by the end of the 1980s.
The practical problems of trade disengagement in West Africa have, to a large
extent, been vividly illustrated in the case of Nigeria. The Second, Third, and
Fourth National Development Plans sought reduction in the country's depend-
ence on the external sector in general, including the petroleum sector.17 In the
first place, this implied a decrease in the reliance on nonoil export receipts for
national income. However, paradoxically, the government has at the same time
underscored the role of foreign exchange in the process of economic growth
and development. Thus, the Second Plan further clearly indicated that increased
earnings of foreign exchange was critical, since the country in its growth process
120 Foreign Aid and Self-Reliance in West Africa
Table 4.7
Nigeria: Importation of Passenger Cars, 1967-1978
N Mills.
Year 1 2
Value of Car Value of Total I as a
Import Import Percentage
of 2
Regional Integration
In its collective context, self-reliance has been demonstrated in increasing
involvement in regionalism. The basic rationale for regional integration are,
among other things, found in the large market that it will provide for the
integrating states. The markets of most West African countries, apart from
Nigeria, are very small to sustain rapid industrialization. A large West African
market could ensure the right location and the establishment of industries at
Self-Reliance in West Africa 121
optimum level. When industries produce at the optimum level, this would
procure production at the lowest cost per unit in output.18 Also, it has been
observed that regional economic integration was a prerequisite for the foreign
trade expansion of West African countries. These countries, like many develop-
ing countries elsewhere, experience considerable constraints in the export of
goods to the industrially developed countries as a result of the latter's import
restrictions. With the trade liberalization regime of regional economic integra-
tion, it would be easier for West African countries to expand their foreign trade.
It is important to underscore from the outset that West Africa has had
considerable experience in varying forms of economic cooperation, commenc-
ing, in particular, during the colonial times when the metropolitan countries
devised these arrangements to ease the administration of the territories under
their rule. At the moment, there are about 40 cooperative intergovernmental
arrangements in the subregion dealing with different aspects of economic
cooperation.19 However, the Economic Community of West African States
(ECOWAS), established on May 28, 1975, has been the most important as its
membership consists of all the sixteen anglophone, francophone, and lusophone
countries in West Africa.20
The main purpose of the ECOWAS was to promote the expansion of trade
among the member states; foster industrial and agricultural development among
them; and assist in social, cultural and scientific cooperation for the overall
development of the West African subregion.21 Along with the ECOWAS, special
recognition may also be accorded to the West African Economic Community
or Communaute Economique de 1'Afrique Occidentale (CEAO), established in
1973 and consisting of Benin, Burkina Faso, Cote dTvoire, Mali, Mauritania,
Niger, and Senegal; and of Mano River Union (MRU), also established in 1973
and made up of Liberia and Sierra Leone. The objectives of these two groupings
are identical to those of the ECOWAS and both have continued to operate after
the formation of the ECOWAS.
The community has, since its inception, taken a number of integrative steps
aimed at achieving the objectives set in the treaty. Among other things, it has
commenced on the development of infrastructure; adopted agricultural and
industrial cooperation programs; established a program for the creation of a
single monetary zone; and introduced the ECOWAS immigration program,
visa-free travel program for the citizens of the community. These citizens also
have the right to reside and settle in any country in the subregion.
This notwithstanding, it is a well-known fact that these have not contributed
in any remarkable manner to the process of self-reliant development in West
Africa. The process of integration in the ECOWAS has disappointingly been
constrained by a number of endogenous and exogenous factors. Many of these
are well-known but it will be instructive to underscore here some of the most
prominent ones. For example, as it is today, the legacy of national sovereignty
affects the regional integration process. The ECOWAS member states tend to
122 Foreign Aid and Self-Reliance in West Africa
CONCLUSION
Self-reliant development is a dream yet to be realized in West Africa.
Economic policies and specific sectoral areas of focus were clearly articulated
in the early 1970s by many West African countries in order to attain this goal.
But the achievements by the second half of the 1990s, as could be observed, are
nothing to write home about. It is evident that there are a number of obstacles
in the capacity to implement such policies. Also, progress in sectoral areas for
self-reliant development ran into difficulties because of overwhelming endo-
genous and exogenous factors, some of which are beyond the control of West
African countries, individually or collectively. Clearly a major and in fact
foremost problem is the machinery for implementation of policies.
In many countries the institutions, the government departments, are neither
adequate nor well staffed. The paucity of sufficient and dedicated professional
staff militated against a systematic implementation of the policies in most
countries. In addition, the problems were compounded in some countries where
these departments were operated by corrupt officials.
It is obvious that the question of food self-sufficiency cannot be adequately
solved in most countries if the problems of the mode of production are not
124 Foreign Aid and Self-Reliance in West Africa
will require greater political commitment by the member states through the
implementation of community decisions, payment of contributions, effective
support of subregional projects, prevention of conflicts, and the support of the
international community.
These issues are critical to the future of economic development in West
Africa. The pace of economic development in West Africa in the foreseeable
future is likely to be determined by the extent to which solutions are found to
these fundamental problems. It is for this reason that the next chapter of this
study is devoted to the critical elaboration of some of these problems.
NOTES
1. World Bank, World Bank Development Report 1993 (Oxford: Oxford University Press,
1993), p. 288.
2. UNDPAVorld Bank, African Development Indicators (Washington, D.C.: UNDP/World
Bank, 1992), pp. 225-28.
3. FAO, Food Supply Situation and Crop Prospects in Sub-Saharan Africa: Special Report
(No. 2, June 1992), p. 10.
4. Carthy L. Jabara, Structural Adjustment and Stabilization in Niger: Macroeconomic
Consequences of Social Adjustment\ Cornell Food and Nutrition Policy Program, Monograph
11, June 1991, pp. 77-79.
5. These are utilities or firms involved in transportation and communication. Also, the
government intends to retain control of the Ghana Cocoa Board and the State Mining Corpo-
ration.
6. Nigerian Institute for Social and Economic Research (NISER), The Technological Impact
of Nigeria's Structural Adjustment Programme (SAP) (Monograph Series, No. 3, 1988), p. 1.
7. Ibid.
8. Statement by Nigerian General I. B. Babangida at the launching of the SAP on June 26,
1986.
9. A. Adubifa, Technology Policy Failures in Nigeria (Dakar: IDRC, 1987), p. 12.
10. Ibid., p. 14.
11. Ibid., p. 20.
12. National Office of Industrial Property (NOIP), Annual Report 1986 (Lagos: NOIP).
13. A. Adubifa, Technology Policy Failures in Nigeria.
14. O. Ojo, "Self-Reliance as a Development Strategy," in C. Ake (ed.), Political Economy
of Nigeria (Lagos: Longman, 1985), p. 147.
15. UNDPAVorld Bank, African Development Indicators, pp. 63-64.
16. IMF, Direction of Trade Statistics 1988 (Washington, D.C.: IMF, 1988).
17. Federal Republic of Nigeria, Guidelines for the Fourth National Development Plan
1981-1985 (Lagos: Federal Ministry of National Planning, 1980), p. 20; Federal Republic of
Nigeria, Second National Development Plan 1970-1974 (Lagos: Ministry of Economic Devel-
opment and Reconstruction, 1970), pp. 33-37; and Federal Republic of Nigeria, Third National
Development Plan 1975-1980 (Lagos: Federal Ministry of Economic Development, 1975), p.
30.
18. For details, see R. L. Allen, "Integration in Less Developed Areas," Kyklos, 3(14), 1961,
pp. 315-334; G. M. Meier, International Economics: The Theory of Policy (New York: Oxford
University Press, 1980); F. Andic, Suphan Andic, and Douglas Dosser (eds.), A Theory of
126 Foreign Aid and Self-Reliance in West Africa
Economic Integration for Developing Countries (London: Allen and Unwin, 1971); and P.
Robson, The Economics of International Integration (London: Allen and Unwin, 1980).
19. Abass Bundu (Executive Secretary), ECOWAS and the Future of Regional Integration
in West Africa, Paper presented at the IDRC-ECOWAS International Conference on West
African Integration, Dakar, January 11-15 1993, p. 4.
20. The ECOWAS consists of Benin, Burkina Faso, Cape Verde, Cote d'lvoire, Gambia,
Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra
Leone, and Togo.
21. Article 2, Treaty of the Economic Community of West African States (ECOWAS), 1975.
22. Abass Bundu, ECOWAS and the Future, pp. 12-13.
23. R. Omotayo Olaniyan, "Nigeria and ECOWAS," in G. O. Olusanya and R. A. Akindele
(eds.), Nigeria's External Relations: The First Twenty-Five Years (Ibadan: University Press
Limited, 1986), pp. 130-133.
5
INTRODUCTION
Deliberate efforts have been made by West African governments since the early
1970s to raise the standard of living of West African peoples. This was based
on the recognition that it is the primary duty owed to the people and without
which they could be severely handicapped in the comity of nations. The goal
of economic development is not controversial; however, there were disagree-
ments on how best to achieve it. Whatever strategies that were adopted, the
nature and economic circumstances of these countries were generally the major
determining factors. Considerable weight is given to the historical, political,
and sociocultural development. What is the level of economic development?
What factors are locally available for economic development? Also, in the
adoption of the strategy for economic development attention is given to the
understanding of the influence of the positive and negative factors. How could
the positive factors be strengthened and promoted and the negative ones
contained or eliminated in order to ensure development on a sustainable basis?
Traditionally, West African countries have been recipients of foreign aid from
the metropolitan countries during the colonial days. This practice continued
after independence as the metropolitan countries endeavored to maintain and
strengthen their influence in the former colonies. However, the poor economic
performance beginning from the early 1970s, as manifested in part in the decline
in foreign exchange earnings and poor internal savings, convinced West African
political leaders that increased foreign aid should be sought not only from the
metropolitan countries but also from other industrially developed countries.
128 Foreign Aid and Self-Reliance in West Africa
COLONIALISM
For most West African countries, colonialism'continues to constitute an
important influential factor in foreign aid, self-reliance, and economic devel-
opment. Admittedly, colonial administration laid the foundation for several
political and socioeconomic structures in West African countries. These, to a
large extent, contributed to the uplift of the political and economic structures
with the introduction of Western civilization, but questions continue to be asked
Foreign Aid, Self-Reliance, and Economic Development 129
DONORS' INTERESTS
The interests of donors as determined principally by international and
national economic development will play a critical role in the volume of foreign
reign Aid, Self-Reliance, and Economic Development 131
aid flows to West Africa in the future. These have played a significant role in
the past and will continue to assume a preeminent position in the flow of aid to
the subregion as circumstances change in the political and economic spheres at
both national and international levels. For a number of aid donors, the assistance
to developing countries is not based on the needs of these countries. As already
noted in Chapters 2 and 3, the rationale for aid flows to developing countries,
among other things, include economic growth promotion of the donor countries,
their political influence, and the strategic importance of the recipient countries.
Of these three determinants, the first two are likely to play a more powerful role
in West Africa in the foreseeable future. The case for strategic interests has been
weakened following the collapse of the former Soviet Union in 1990. With the
collapse of the Soviet Union and the weakening influence of socialism world-
wide, the East-West ideological rivalry that characterized international relations
in the cold war years has been relegated to the background in global politics.
The broad focus of the United States and the international community at large
now is the promotion of democracy, conflict resolution, international peace,
security, and development.
The economic growth interests of the donor countries will continue to be a
primary consideration while many of them endure the process of world eco-
nomic recovery. The promotion of economic recovery for them, among other
things, entails increasing investments and the creation of more employment
opportunities at home while taking the measures to reduce the rate of inflation.
There is a strong link between the economic growth of the donor countries and
the flow of foreign aid to West African countries. The other motives of aid
notwithstanding, the performances of the economies of the industrially devel-
oped countries are very important determinants of the pattern of aid flows. The
pattern of aid flow in the past indeed strongly supports this proposition. Table
5.1 illustrates the trend of bilateral aid flows from the OECD countries to
low-income countries, many of which include West African countries, over the
period 1965 to 1990. It is clear from the table that foreign aid as a percentage
of donor GNP declined from 0.20 percent in 1965 to 0.07 percent in 1985, but
rose slightly to 0.09 percent in 1990 for the OECD countries as a whole. The
major declines occurred in the United Kingdom, Belgium, Germany, the United
States, and Japan. But France and Canada tended to maintain their level of
disbursement. Whereas Italy, the Netherlands, Austria, Denmark, Finland,
Sweden, and Switzerland increased their disbursements to the low-income
countries.
It is a development that appears to correlate with the growth rate of the OECD
countries from 1970 to 1991, as illustrated in Table 5.2. The average annual
growth rate of the GDP of the OECD countries fell to 2.9 percent in 1980-91
from 3.1 percent in 1970-80. The table shows that Belgium, Germany, the
United States, and Japan experienced a decline in growth rate. Also, increases
in the average annual growth rate of the GDPs of Austria, Denmark, Sweden,
132 Foreign Aid and Self-Reliance in West Africa
Table 5.1
OECD: Total Bilateral Flows to Low-Income Economies
As a Percentage of Donor GNP
Source: World Bank, World Development Report 1993 (New York: Oxford University Press. 1993), p.
275.
Table 5.2
OECD: Average Annual Growth Rate of GDP
Percentage
Country 1970-1980 1980-1991
raised more questions is the way foreign aid has been managed by both donors
and recipients.
development problems and aid needs of the countries concerned and to enter
into an active dialogue.
Although the UNDP-sponsored round tables have increased considerably for
the least-developed countries, nevertheless, such meetings have not been very
substantial for West African countries. Since the motivating force for holding
round tables is the recipient country itself, UNDP's role as the provider of
services to these countries has been passive: the organization has merely
performed the task of an honest broker on behalf of the recipient country toward
the donor community. As a result of this, round tables have suffered from weak
chairmanship. Furthermore, enough attention has not been paid to adequate
preparation of all partners for policy dialogue. Hence, there has been lack of
focus on major development issues at these meetings.5
Apart from these, it should also be noted that coordination in recipient
countries has been subjected to a number of difficulties. At the moment, there
is a wide range of coordination activities carried on at the "local" level in most
developing countries, including those in West Africa. Such activities, largely
informal, have been tailored to the special circumstances of the individual
countries. Generally, the UNDP resident representative prepares an annual
report on donor aid activities, providing important baseline data for use in
planning programs. A variety of "technical teams" from the World Bank, EU,
UN agencies, regional banks, and donor countries undertake joint studies or
reviews at all levels of the economy with particular emphasis on the sector and
project levels. These undertakings involve contacts with other members of the
donor community, but mainly with the recipient government development
agencies.
Since 1985, the emergency relief area has been the most extensive and
effective area of aid coordination. In some cases, bilateral donors are taking on
responsibility to play a lead or supportive role in selected areas. Thus, for West
Africa for example:
Albeit, much still needs to be done in order achieve more effective coordi-
nation. A large number of sectoral meetings or consultations that have been held
locally have not been satisfactory. In many instances, project concerns predomi-
nate, and followup measures by the recipient governments and donors have been
inadequate.7
Furthermore, basic problems have emerged from the quality of donor pres-
entation in the recipient countries: perceived political risks and staffing and
budgetary problems that acutely hinder the ability of donors to prepare and
participate in local aid coordination adequately and effectively; inadequate
communication between headquarters and the field; insufficient delegation of
authority to local staff; an excessive number of participants in local meetings
(particularly UN agencies); and differences in donor aid procedures.8
Thus, for foreign aid to be more meaningful in the development process in
West Africa, it is imperative that solutions be found to the bottlenecks in aid
coordination and management. As the first step, donor policies should be
adequately harmonized in order to facilitate coordination with the economic
policies of the recipient West African countries. Secondly, there should be a
single, designated focal point, a ministry, in the recipient West African country
solely authorized for the coordination and management of foreign aid. The
ministry, with a well-trained staff, should liaise with donor agencies on all
aspects of the cycle of foreign aid: project appraisal, implementation, monitor-
ing, and evaluation. Thirdly, for greater effectiveness of aid in development,
donors would be helpful to the development process by directing aid to priority
areas designated by the recipient West African countries. The more this is
practiced the better the prospects for West African countries' development.
Fourthly, assistance should be given to institutional capacity-building of recipi-
ent West African countries, the training of manpower, and providing adminis-
trative infrastructures that would enable the countries deficient in these areas to
be able to cope effectively with aid coordination and management. This alone,
it must be acknowledged that the overall economic development in West African
countries primarily rests on a stable political environment. At this point, one
Foreign Aid, Self-Reliance, and Economic Development 139
may underscore that this has been a rare commodity for a number of countries
in the subregion from the 1970s to the 1990s.
POLITICAL STABILITY
When the general development of West African countries is put in perspec-
tive, political stability constitutes an important critical variable. As a matter of
fact, the ideal thing for economic development is a complementary political
system that develops progressively without major conflict within and among its
institutions. The political parties and pressure groups as well as other political
institutions should become more articulated and consolidated to enable the
smooth transition from one government to the other. This would guarantee the
atmosphere in which development issues could be continuously and effectively
addressed. However, very few countries in West Africa enjoy political stability.
Beginning from the second half of the 1960s, many West African countries have
experienced varying forms of political instability. The cases of a number of
countries have been very illustrative.
In 1966, the army intervened in Nigeria in an attempt to create a unitary
government. This precipitated regional rivalries and in the following year, Igbo
officers from eastern Nigeria declared a secessionist republic of Biafra. After
three years of warfare the federal government of General Yakubu Gowon
liquidated Biafran independence. Gowon tried to prevent future secession
attempts by enlarging the number of regional states to twelve (increased to
nineteen in 1976 and latter to thirty during the Babangida administration), but
his government lost support because of its perceived reluctance to surrender
power. Gowon was toppled in 1975 by a coup led by Brigadier Murtala Ramat
Mohammed, who was himself assassinated in 1976. The army continued to be
in power under General Olusegun Obasanjo, who instituted measures to restore
Nigeria to civilian rule. In 1979, multiparty elections led to the formation of the
Second Republic under President Alhaji Shehu Shagari, who in mid-1983 won
a second term. By then, the revenues generated by Nigeria's oil boom in the
1970s were drying up. There was a widespread assumption that Nigeria's oil
wealth had been corruptly squandered, and at the end of 1983, the Second
Republic was replaced by a military regime under Major General Mohammed
Buhari. In 1985, Buhari was replaced in a military coup by General Ibrahim
Babangida, who promised to return Nigeria to civilian rule in 1992. He did not
do this, however, until he was forced out of office after annulling the result of
a general election in June 12, 1993. It was widely reported that a wealthy
southerner, Chief M.K.O. Abiola won the election. In August 1993, General
Babangida handed over the government to Chief Shonekan, who served with
him in his transitional government. Three months later, Chief Shonekan was
toppled by General Sanni Abacha.
140 Foreign Aid and Self-Reliance in West Africa
In the case of Ghana, the army toppled the government of Kwame Nkrumah
in 1966. In 1969, under military tutelage, the Second Republic was instituted
under Kofi Busia. In 1972 the army again intervened, but the successive regimes
of Generals Ignatius Kutu Acheampong and Frederick W. K. Akuffo failed to
resolve Ghana's deepening economic crisis. The military reluctantly promised
a return to civilian rule in 1979. In June of that year, however, a group of junior
officers under Flight Lieutenant J. J. Rawlings carried out a coup, purged senior
figures in the army, and held elections. But the Third Republic, headed by Hilla
Limann, proved incapable of reversing Ghana's economic decline, and in 1981,
Rawlings led another coup. In the 1980s the government pursued broadly
socialist programs of democratization. At the same time it tackled Ghana's
long-term economic decline and concluded a wide-ranging structural adjust-
ment program with the IMF and the World Bank.
These experiences have been well-repeated in varying forms in Sierra Leone
beginning from 1967 when the army installed Siaka Stevens; in Liberia in 1980
after the coup led by Samuel K. Doe; in Niger in 1974 when the army removed
Hamani Diori; in Burkina Faso in 1983, when Captain Thomas Sankara
assumed power; in 1978 in Mauritania, when Moktar Ould Daddah was
overthrown through a coup; and in Guinea in 1984 after the death of Ahmed
Sekou Toure. There have been about three military interventions in Togo since
1960. Also, Benin has experienced about five military coups after its achieve-
ment of independence.
The several military takeovers in West Africa have been attributed, in the eyes
of the coup leaders, to the failures of the civilian regimes to promote economic
growth and development. However, it is doubtful if all these coups could be
justified in the face of continuous poor economic performance across the
subregion. In most of the countries with series of military coup d'etats, there
has been the aggravation of poverty. For example, the GNP per capita of Nigeria
in 1990 was US$266 compared with US$1,029 in 1980; that of Togo fell to
US$392 in 1990 from US$414 in 1980. In the Gambia, it fell from US$348 in
1980 to US$260 in 1990.9 In fact, in many of the these military regimes, the
waste of resources had reached unprecedented levels while corruption had
assumed unimaginable proportions. The emergence of several millionaires
among the ruling elites is a sign that the interests of these ruling elites are
elsewhere. These are strong indications that the military regimes have not been
efficient in implementing the appropriate economic policies and in arresting the
tide against economic development. Furthermore, the policies of the military
regimes in West Africa have become increasingly controversial and problem-
atic, as they often lack sufficient understanding of the role of the international
community for development. The summary trials and executions of presidents,
ministers, and political activists as illustrated in the administrations of Rawlings
in Ghana, Doe in Liberia, and recently of Abacha in Nigeria (with the hanging
of Ken Sarowiwa and eight other political activists), seem to indicate a lack of
Foreign Aid, Self-Reliance, and Economic Development 141
of West African countries, like those of other developing countries, have been
inadequate and poorly implemented. Since these programs have, to some extent,
shifted focus from self-reliant development, there are considerable doubts about
their positive impacts on economic recession and the promotion of growth and
development in the subregion. Partly because of this, the degree of commitment
to the implementation of the program varies from one country to another. And
as scholars of West African development have generally observed, the programs
have to a large extent generated a number of undesirable and unintended
economic and social problems while attempting to promote economic growth.
In West Africa, Ghana, Nigeria, Cote dTvoire, Senegal, Niger, and Gambia,
among others, have embarked on various forms structural adjustment programs.
Generally, structural adjustment programs in West Africa have the hallmark of
conventional Keynesian economics. The broad objective is to promote eco-
nomic growth while maintaining external balance: that is, the maintenance of
the level and rate of growth of economic activity at a high rate while ensuring
balance of payments at least in the medium term. * * Although there is a common
agreement on what the objectives of structural adjustment programs should be,
the strategies adopted toward reaching it often vary nevertheless. In spite of
these variations, however, some common approaches may be identified,
namely: deregulation and privatization, trade liberalization, foreign exchange
price flexibility, financial structure reforms, and international cooperation.
The SAP prescribes for the deregulation of utility prices in order to achieve
cost recovery in the public supply of water, energy, transportation, and commu-
nication as well as other utilities. It is assumed that excessive regulation of
public utility prices constitutes an important source of budget deficits. Deregu-
lation will reduce budget deficits. But then, it should be pointed out that one
fundamental problem of cost recovery is the inevitability of negative political
and social effects. The principle of equity will be lost because this will reduce
the supply of basic needs to the vulnerable groups in society.
Trade liberalization implies tariff rationalization, discontinuation of import
licensing, and the elimination of marketing boards.12 Higher tariff and nontariff
barriers generate the high effective protection rates that make domestic produc-
tion inefficient and noncompetitive against foreign products. The rationaliza-
tion of tariff will promote efficiency in domestic industries. The discontinuation
of the system of import licensing will remove the channels for corruption, but
the elimination of marketing boards will generate fresh problems.13
Foreign exchange rate represents the core of adjustment program for most
countries in the subregion. This is, for example, well illustrated in cases of
Gambia, Ghana, Sierra Leone, Mauritania, and Nigeria. It has been central to
the demand management policy. The measures suggested avoid the periodic
shocks of currency devaluation in favor of smooth market-oriented currency
depreciation resulting in market-determined exchange rates through Central
Foreign Aid, Self-Reliance, and Economic Development 143
Bank auction or forex bureaux, in which commercial banks and private vendors
purchase and sell foreign exchange on the free open market.14
It is calculated firstly that if foreign exchange flexibility is achieved, it will,
among other things, attract the inflow of remittances and other foreign transac-
tions away from the parallel market and reverse capital flight. As regards the
supply-side price incentive, the flexible exchange rate permits the raising of
producer prices to stimulate production and supply of export products which,
all things being equal, should lead to increased export revenues, lower import
costs as demand for imports falls, and therefore of improvements in the balance
of payments.
The financial structure reforms would, among other things, involve the
expansion of rural branch banks and the introduction of mobile banks to the
weekly run rural market days and the integration of the credit unions and
cooperatives into the formal financial system. But as regards interest rates, all
deposit rates would be raised above the current or expected inflation rate to yield
positive real interest on deposits, for this is the only way to attract savings into
the financial system. The relatively higher costs of credit would ensure that only
projects with higher social rates of return are undertaken.
The cooperation of the international community constitutes an important part
of the reform package for West African countries. The paucity of capital has
generally been a limitation to the implementation of economic development
programs in the past. But increased financial resources would be required as
new projects would be proposed in the productive sectors under SAP. The
cooperation of the international community is expected in the promotion of
better prices for commodity exports to increase the foreign exchange earnings
of the adjusting countries and assist in foreign debt reduction.
However, the general survey of West African economies has indicated that
the program has, on the whole, had very little positive impact on economic
growth and development since 1985. Table 5.3 illustrates the pattern of growth
of the GDP of adjusting countries in West Africa. It is clear from the table that
although for most of the "strong adjusting" countries in West Africa there were
increases in the growth of the GDP in first three years after 1985, nevertheless,
growth declined for almost all thereafter. In fact for a number of them the growth
rates in 1990 were worse off than what was obtained at the height of the
economic recession in 1980. This is illustrated, for example, in the cases of
Mauritania, Niger, and Togo. For the "weak adjusting" countries, the growth of
the GDP has not been significant compared to those of the strong adjusting
countries. Mali has significant growth in 1986 but declined in the following
year. Growth rose to 9.2 percent in 1989 but fell precipitously to 0.3 percent.
The reasons for these are very obvious. In the first place, as far as exchange
rate policy is concerned, the standard conditions of domestic supply and
demand, as well as foreign demand, which must hold to make devaluation
successful, are often not satisfied. This is especially so because the entrenched
Table 5.3
Growth of GDP of Adjusting West African Countries, 1980-1990
STRONG ADJUSTING
COTE DTVOIRE -0.9 4.3 1.6 -1.2 -1.0 3.7 3.7 \ -0.2 1 -1.8 1-1.3 -6.1
GAMBIA 9.8 10.2 12.8 -5.3 3.0 0.6 2.8 6.0 8.0 4.7 4.5
GHANA 0.6 -2.9 -6.5 -4.5 8.8 5.1 5.1 4.6 6.2 6.1 4.1
[GUINEA . 0.7 1.8 1.2 -2.7 5.1 7.1 3.0 5.9 4.3 4.7
GUINEA-BISSAU -18.8 18.8 4.5 -3.2 5.5 4.3 -1.0 6.0 6.8 5.0 3.1
MAURITANIA 4.0 3.8 -2.1 j 4.9 -7.3 2.8 5.6 3.1 3.7 3.4 0.3
NIGER 4.8 1.2 -1.2 -1.8 -16.9 3.1 6.4 -2.4 5.0 -3.5 3.1
NIGERIA 3.4 -5.7 -0.2 -6.2 -7.3 8.7 2.0 -4.6 4.8 5.8 5.3
SENEGAL -2.7 -0.5 14.8 2.5 -4.7 3.8 4.6 4.1 5.1 -1.5 4.5
TOGO 14.7 -3.4 -3.7 -5.2 5.9 3.2 3.4 1.5 5.0 3.7 1.9
|| Subtotal -0.5 2.7 2.2 -1.9 -1.7 4.0 4.0 2.1 4.9 2.7 2.5
WEAK ADJUSTING
BENIN 20.9 9.0 6.8 -2.0 2.0 6.4 -1.7 -3.9 1.2 2.4 1.1
1 BURKINA FASO -0.1 4.5 10.0 0.8 -1.8 9.8 10.0 1.8 7.4 -0.2 1.7
SIERRA LEONE 15.2 8.7 0.0 -3.1 2.3 -3.4 1.9 5.4 0.0 -0.7 2.6
1 Subtotal 6.0 5.1 4.3 -2.1 0.3 2.3 4.5 0.7 2.2 2.1 1.1
TOTAL 1.7 3.5 2.9 -2.1 -1.0 3.5 4.2 1.7 3.4 2.5 2.1
technological structures do not easily permit the substitution of local inputs for
imported ones. In the case of countries whose main exports are primary
commodities that are subject to quotas and whose prices are externally deter-
mined and/or whose imports are essentially (petrol, capital goods, spare parts,
medicine, etc.), devaluation can only have a negligible effect on the improve-
ment of the balance of payments.15
Secondly, the justification of trade liberalization derives basically from the
classical theory of comparative advantage, that is not compatible with situations
in which import elasticities far exceed export elasticities. In the context of the
present West African situation, excessive trade liberalization is not a feasible
policy in view of the protectionist practices of the industrially developed
countries against exports from Africa.
Besides, the excessive reliance on markets and prices as allocative mecha-
nisms in stabilization and adjustment programs in West Africa is based on the
assumption that markets are competitive and that resources are perfectly mo-
bile.16 It is for this reason that SAP recommends liberalization, deregulation,
and the minimization of the role of the state in resource allocation. However,
in West Africa, the existence of widespread market imperfections and structural
rigidities make such assumptions invalid. Most government's excessive reliance
on the price mechanism underestimated the necessity for selective governmen-
tal interventions that may be absolutely essential when a country experiences
structurally induced shortages and skewed income distribution.
Thus, since the measures in SAP in West Africa are fraught with several
limitations it was inevitable that they would generate a number of unintended
problems. In particular, poverty has been aggravated in many adjusting coun-
tries in West Africa. In most countries of the subregion, this is not just a
phenomenon in the rural areas but an overwhelming situation in the urban areas,
where the middle class has been completely wiped out of the social strata
because of the devaluation of local currencies, spiral inflation, cuts in public
expenditure, and privatization and commercialization. The latter two issues
have served as major sources for the aggravation of the problem of unemploy-
ment. Table 5.4 illustrates the trend in poverty in West Africa with dependent
population as an indicator. Although the average for the subregion as a whole
showed somewhat of a decline in dependent population during the 1980s, this
does not however represent the true picture for most countries that experienced
a significant increase in dependent population. As may be observed, in Benin,
Burkina Faso, Cote d'lvoire, Ghana, Guinea-Bissau, Mauritania, Senegal, and
Togo the number of dependent population increased substantially. The others
have slight decreases, for example, Cape Verde and Nigeria.
The menace of these problems has drawn the attention of the World Bank
which responded by supporting specific actions to mitigate poverty in the
adjusting countries. The measures taken by the World Bank, among other things,
include: (1) protection of the most vulnerable groups; (2) compensatory actions
146 Foreign Aid and Self-Reliance in West Africa
Table 5.4
Poverty in West Africa: Dependent Population
BENIN 96 98 101
BURKINA FASO 88 90 95
GAMBIA 84 82 87
GHANA 91 98 99
GUINEA - 90 95
GUINEA-BISSAU 80 87 87
| LIBERIA 91 93 92
MALI 95 98 99
MAURITANIA 88 88 92
NIGER 99 95 99
SENEGAL 89 97 98
1 SIERRA LEONE 86 83 87
TOTAL 93 94 91
and transitional arrangements; (3) measures to ensure that the poor effectively
participates in the growth process; and (4) protection of the long-term interests
of the population. These actions may be part of a structural adjustment loan or
a sectoral adjustment loan, or have as their vehicle other projects and instru-
ments.17
A number of West African countries have benefited from these actions. As
far as the protection of vulnerable groups is concerned, the most vulnerable
groups in the society are the poor generally, and women and children specifi-
cally. The key services they benefit from need to be protected from the possible
adverse effects of budget cuts. This is done primarily through shielding public
expenditure on key health, education, nutrition, and other basic welfare serv-
ices. In Senegal in fiscal 1990-92, an education sector loan supported the
Foreign Aid, Self-Reliance, and Economic Development 147
HUMAN DEVELOPMENT
The promotion of economic development in West Africa requires in the first
instance the effective promotion of human development. Human development
has been defined as the process of enabling people to have wider choices. These
choices include income, health, education, good physical environment, and
freedom of action and expression. It stresses the need to develop human
capabilities and how the capabilities are used, especially by people who can
participate freely in social, political, and economic decision making and who
can work productively for development.20
Like other developing countries, West African countries have, to some extent
in recent years, improved their capabilities. In life expectancy and basic
Foreign Aid, Self-Reliance, and Economic Development 149
education, they have closed the gap between them and the industrially devel-
oped countries. However, in other areas the gaps are widening, particularly in
higher education, technology, informatics and labor productivity. Since 1960
West African countries, like many other African countries, have had their infant
mortality rate reduced by 37 percent, and life expectancy has increased from
forty years to fifty-two years. Adult literacy increased by two-thirds between
1970 and 1985.21 But over half the population has no access to public health
services. About two-thirds lack safe drinking water. Tropical diseases afflict a
high proportion of the population, including sleeping sickness and malaria,
which kills hundred of thousands of young children each year. Furthermore, in
recent years AIDS has devastated many families. Urgent action is therefore
needed in public health services.
Besides, since 1980, the lack of job opportunities at home has led many of
the better educated to emigrate in search of work. This has been very significant
in the cases of Nigeria and Ghana, which have lost hundreds of highly special-
ized medical personnel and university professors to the industrially developed
countries because of better remuneration. These cases have, to a large, extent
constituted a major drain to the economy and a serious handicap to the effective
promotion of economic growth and development.
Given the importance of human development to overall economic growth and
development, it is a primary issue that West African countries must urgently
promote. The priority areas of the multidimensional problems of human devel-
opment should be ascertained. The goals on these issues should be clearly
defined and appropriate strategies for achieving them stipulated. While the
specific needs and priorities of each country may differ, there is no doubt that
it is imperative for all countries to consolidate the gains that they have made in
human development in the 1970s through the 1990s if the goals of self-reliant
development are to be ultimately attained. The modest gains here are in the area
of education: primary, secondary and university, and health, both in the preven-
tive and curative aspects. But special efforts are required to promote advanced
skills in new technological frontiers. The East Asia industrial "Tigers'1 have
widely demonstrated their relevance to economic growth and development.
The way in which these objectives are achieved would, however, in the first
instance depend on the priorities given to them in scheme of things and the
availability of funds. Governments differ greatly in how much of their spending
goes to social areas like nutrition, health, and education. For many countries in
West Africa, the trend in social spending has been disturbing. For example, in
the case of Burkina Faso, expenditure on education and health increased by 34.7
percent between 1973/75 and 1985/87. But a drastic decline was recorded for
Liberia during the same period: 16.2 percent between 1973/75 and 1979/81 and
-14.0 percent between 1979/81 and 1985/87.22 Many governments in the
subregion were confronted in the 1980s with the urgent task of overcoming
economic recession. The focus of most governments was more on the revival
150 Foreign Aid and Self-Reliance in West Africa
and promotion of growth in the agricultural and industrial sectors. But for some
others experiencing or perceiving internal or external threat to security, expen-
ditures on arms have been substantial.
It was also clear that many countries' capacity to finance human development
eroded considerably in the 1980s as they continued to experience decline in
their foreign exchange earnings. At the same time considerable strain has been
placed on the financing of human development because of the need to service
external and internal debts. All of these problems will need to be resolved in
order to increase expenditure on human development. While the need to
mobilize internal resources is vital, the external resources represent a very
useful source in the short run for many West African countries.
The aid to the social sector for human development in West Africa will need
to be increased. Aid social-sector ratios have fallen in recent years as far as many
developing countries are concerned. For example, health, population, and
education accounted for 24.5 percent of total bilateral aid to developing
countries in 1979. However, this fell to 17.4 percent in 1989. Aid to the social
sector has fallen as a result of the current general "aid fatigue."
Aid donors are therefore likely to assist West African development more
meaningfully if they reassess their aid priorities and commit themselves more
to the support of human development. It is essentially through this that genuine
self-reliant development could be attained in the short run in the subregion. At
the same time however, it is equally imperative that West African governments
steadily increase their budgetary allocations to human resource development.
This may entail reductions in expenditures in other areas such as defense. The
latter has, in recent years, turned out to be superfluous for many countries where
there are no immediate threats to territorial sovereignty. At the same time the
cost of military hardware has risen considerably, partly as a result of global
inflation. The governments of West African countries should increase their
commitments to the effective implementation of policies on human resource
development without which genuine development could prove elusive. A not
too distant question to human development is the issue of technological ad-
vancement in West Africa. Progress in this area hingesfirston human develop-
ment, in particular, of broad based education and increased concentration in the
sciences. It is an area in which the dreams and promises of West African
countries are yet to be fulfilled.
TECHNOLOGY
It is clear from the analysis in Chapter 4 that poor technological advancement
constitutes a major bottleneck in the process of self-reliant development in West
Africa. Technology has apparently negligible input into the process of devel-
opment in West Africa. Also, there is a dearth of relevant policies and a
deficiency in local technological culture. West African countries appear gener-
Foreign Aid, Self-Reliance, and Economic Development 151
cial technology flows to them as a group, including those in West Africa, have
remained unchanged during the decade.24
There are several problems associated with the transfer of technology to
developing countries that are directly related to the conflicting interests of the
foreign investors and the host countries. Although transnational enterprises
differ in goal orientation, there are some generally valid primary goals that guide
their operations. These are growth, security, and profit maximization. Thus, the
prime motivation is commercial, and the foreign investor expects return from
his or her investment.25 In this context, therefore, foreign investors attempt to
apply as well as exploit the technological and commercial organizational
know-how specific to their business to the greatest advantage.
The technologies made available in the mother country and the know-how
acquired there are transferred without significant modifications and thus with-
out considerable additional costs to the subsidiaries in the developing countries.
In this way, foreign investors gain a competitive edge vis-a-vis other enterprises,
especially local firms. In effect, the efficiency potential tied to these products,
production methods, and technical-organizational know-how, and transferred
via direct investment, is oriented toward the socioeconomic requirements of the
mother countries.
To West African countries this form of technology is characterized by high
capital intensity, high consumption of energy, heavy use of raw materials (partly
with nonrenewable resources), and the replacement of labor by capital (mecha-
nization, automation). West African countries, like other developing countries,
have generally found themselves in weak bargaining positions in the negotia-
tions on these issues. They have, in part, been handicapped by the lack of
adequate knowledge concerning technological developments and the absence
of adequate knowledge on the components that are frequently tied in a package
in which the specific technological content is integrated.26
As opposed to the diminishing volume of technology transfer to developing
countries in recent years, international technology markets have become more
diversified and open. The forms of technology transfer more commonly applied
and of the sources of supply have both been widened. This has been a significant
development for developing countries, as it has increased the range of options
available to technology-receiving firms and allowed them to assume a greater
involvement in design construction and the operation of investment projects.
The most obvious has been the trend toward nonequity or minority-owner-
ship forms of technology transfer, as compared to that through majority-owned
affiliates. These forms include joint ventures, licensing and know-how agree-
ments, machinery imports, management contracts, leasing and countertrade
arrangements involving technology transfer. This trend has been influenced by
several factors. Firstly, the policy and legal measures adopted by host-country
governments in the 1960s and early 1970s relating to foreign direct investment
encouraged joint ventures and new forms of transfer of technology. Secondly,
Foreign Aid, Self-Reliance, and Economic Development 153
FOREIGN INVESTMENT
As already noted, foreign investment is a key issue that needs urgent attention
in the effort to promote self-reliance and economic development in West Africa.
Although self-reliance to many West African countries implies less and less
dependence on the external world, nevertheless, the role of foreign investment
from the start was seen as inevitable if development were to make any head
way. The reservations of West African governments on unfettered foreign
investments have, to a large extent, been based on the perceived massive
repatriation of profits and the large-scale exploitation of labor as well as the
plundering of natural resources without significant benefits to the host coun-
tries. However, given the fact that most countries in the subregion have not been
able, to increase their levels of savings to appropriate levels for desired invest-
ments, and are not likely to be in the near future, the various governments have
recognized and shown keen interests in foreign investment. The desire for
increases in the inflow of foreign investments has further been strengthened
with the economic decline of West African countries since the beginning of the
1980s. The commitment of West African governments to the encouragement of
investment inflows was further illustrated in various forms of improved foreign
investment codes that they introduced as part of the measures to complement
the successful implementation of structural adjustment programs. In spite of all
these measures, as already noted, there have not been significant increases in
the inflow of foreign investments to West African countries in recent years. This
suggests that there are important problems to be understood and resolved in
order to ensure the contribution of foreign investments to economic develop-
ment in the subregion. Let us now look at some of the important aspects of the
new investment policies for some selected countries.
In Ghana, after the overthrow of Busia, the government's policies discour-
aged foreign participation in the economy. Foreign debts were repudiated and
Foreign Aid, Self-Reliance, and Economic Development 155
Further vital incentives to foreign investors took the form of customs con-
cessions. Within this framework, import duties paid on raw materials used for
producing export goods are to be repaid in full. The incentive is enhanced by
the opportunities of investors to retain all export proceeds in a domiciliary
account.33
In spite of these varying forms of incentives in several West African countries,
foreign investments have not increased significantly to assist in the process of
development. Table 5.5 illustrates the pattern of the flow of foreign direct
investments to West Africa from 1980 to 1990. The table shows that there was
a general decline in the inflow of foreign direct investment to the subregion
except in 1989, when it rose to US$2,037 million compared to US$1,036
million in 1980. This was particularly due to an exceptional rise in foreign direct
investment to Nigeria in that year. Foreign direct investment to West Africa fell
to the lowest level in 1984 with a total inflow of US$327 million. It rose
thereafter, reaching US$710 million in 1990, but which was far below the figure
for 1980.
The West African totals do not compare favorably well when viewed vis-a-vis
the flows to North African countries during the same period. For the North
African subregion, total inflows rose from a mere US$45 million in 1980 to
US$ 1,528 million in 1986, but declined to US$ 1,167 million in 1988. The Arab
Republic of Egypt and Libya were the principal beneficiaries of foreign direct
investment in North Africa during this period.34
In the West African subregion, Benin, Cote dTvoire, Mauritania, Liberia,
Niger, Sierra Leone, Senegal, and Togo suffered substantial reductions in
foreign direct investment during this period. The reduction ranged between 50
and 70 percent for these countries by 1990 compared with the figures for 1980.
In contrast, there appeared to be some little increase for a handful of countries,
especially as illustrated in the cases of the Gambia and Mali. Although there
was a drastic fall in the case of Ghana to US$2 million in 1983 and 1984 as
against the three previous years when US$16 million each was invested, it
picked up again in the following year and rose to US$15 million in 1989 and
1990. This figure was still less than what was received in 1980 but still shows
improvement thanks to the introduction of economic reforms. Liberia, it would
seem, had suffered a major setback since the escalation of its internal conflict
in 1988. In Nigeria, the figure for 1990, US$588 million was far below US$740
million for 1980. The decline in foreign direct investment in Nigeria obviously
has much to do with the economic and political uncertainties about the future
of the country under the grip of military regimes.
The general decline in foreign direct investment in West Africa in the 1980s
was due to a number of factors that need immediate attention. Firstly, there is
the problem of poor economic growth of most of the countries. In spite of
structural adjustment programs, economic growth has not picked up in many
West African countries. The high rate of inflation and the erratic rate of
Table 5.5
Foreign Direct Investment in West Africa, 1980-1990
USSMills., Current Prices and Exchange Rates
COUNTRY 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
BENIN 4 2 1 I 1 1 1 1 1 1 2
BURKINA FASO 0 2 2 2 2 1 3 6 2 2 2
CAPE VERDE . . . . . . . 3 0 1 2
COTE DTVOIRE 95 33 47 38 22 29 71 88 56 78 48
GAMBIA . 2 . . 1 2 6 1 1 15 9
GHANA 16 16 16 2 2 6 4 5 5 15 15
GUINEA 34 _ 0 0 0 0 5 5 7 10 11
GUINEA-BISSAU . . _ . . _ . . . 0 1
LIBERIA . . 35 49 36 15 17 39 . .
MALI 2 4 2 3 10 3 8 6 1 15 6
MAURITANIA 27 12 15 I 9 7 3 1 1 3 7
NIGER 44 7 25 0 1 10 . . . .
NIGERIA 740 546 433 344 200 478 167 603 377 1882 588
SENEGAL 13 20 10 36 27 19 13 3 0 10 8
SIERRA LEONE 19 8 5 2 6 31 140 39 23 5 3
TOGO 42 10 16 2 10 17 7 7 _ 8
TOTAL 1036 662 607 480 327 619 445 807 474 2037 710
FOREIGN DEBT
In the short run, the attainment of self-reliant development in West Africa
would much depend on the extent to which solutions are found to the problems
of foreign debt. Many West African countries have the problems of domestic
debt. Nevertheless, foreign debt has, in the 1980s, been a major constraint to
the promotion of development in spite of several national and international
efforts.
Table 5.6 illustrates the extent of external debt of West African countries in
1980 and 1989. The numbers show that the external debt of the subregion rose
from US$24.3 billion in 1980 to US$70.2 billion in 1989. A substantial part of
the increase has occurred in the area of multilateral borrowing. The concessional
multilateral assistance for the subregion rose from US$1.9 billionin 1980 to
US$7.5 billion in 1989. The nonconcessional rose to US$7.7 billion in 1989
Table 5.6
The Structure of External Debt of West African Countries
USSMills., Current Prices and Exchange Rates
1980 1989 1980 1989 1980 1989 1980 1989 1980 1989 1980 1989 1980 1989
GUINEA 598 905 208 406 93 523 72 100 163 63 83 178 1117 2175
MAURITANIA 404 1002 54 194 135 445 52 163 120 38 79 167 844 2009
NIGERIA 413 454 21 11630 131 111 440 3057 380 10342 7549 7238 8934 32832
SENEGAL 221 1376 169 752 232 1090 166 423 327 135 353 364 1468 4140
SIERRA LEONE 103 128 42 122 71 190 50 87 110 88 53 440 429 1055
TOGO 155 101 210 294 118 488 33 87 307 15 221 201 1044 1186
TOTAL 3805 7666 1206 16150 1912 7540 1629 7686 3404 11867 12362 19318 24318 70245
AFRICA 23757 47508 12182 56615 7974 24976 7360 27003 23324 36495 34562 57560 109159 250157
Country Debt-GDP Ratio Total External Percentage of Debt-Export Ratio Debt-Service Export Ratio
Debt/Capital, Debt Disbursed
Nonconcessional US$
Concessional Concessional Nonconcessional Ex ante Ex post
countries was slack for many of the suppliers' products, such financing re-
mained readily available throughout the 1970s. Thus, from 1972 to 1979
suppliers' credits increased at an annual rate of 19 percent to the African
continent.37
The export credit agencies played a large role in the debt evolution. The
majority of export credit was either directly extended through official bilateral
agencies or officially guaranteed by export credit agencies, where the latter can
be converted to official credit in the event of arrears or rescheduling.38 Also,
most of the nonconcessional credit from the DAC countries can be assumed to
be export-related.
Much of the external borrowing went to finance large public investment
projects that spanned the range of economic efficiency. Nigeria, in particular,
engaged in massive public expenditure and investment programs. There were
a number of examples of public investments in nonproduction categories whose
external financing was burdensome. Large-scale commercial borrowing was
used tofinanceconference centers, administrative buildings, new capitals, and
university centers.
In the "productive" sectors, many of the externallyfinancedprojects, proved
to be economically unviable. Ill-conceived projects include luxury hotels, oil
and sugar refineries, and steel mills. Certain major agricultural projects proved
inviable because of weak administrative framework. World price trends have
also weakened the viability of many projects in both the agricultural and mining
sectors. Ambitious infrastructural projects were often externally financed at
terms much shorter than the profile of returns. These include hydroelectric
projects, airports, and highways.
New global developments in the early 1980s also contributed significantly
to the aggravation of the foreign debt crisis in West Africa. The oil price increase
in 1979-80 contributed to the sharp drop in the terms of trade for oil importers.
With limited short-term flexibility in the volume of imports, the second oil
shock sharply increased their oil import bill and their current accounts deficits.
On the other hand, the expectations of continued oil price strength allowed oil
exporters, especially Nigeria, to continue their ambitious investment programs,
and their external debt grew as a result.
Unlike the first oil shock when export commodity price booms offset some
of the balance-of-payments difficulties of the oil importers of the subregion, the
second shock was not accompanied by any such offset. Rather, the world
recession beginning from the late 1970s and extending into the early 1980s
contributed to a decline in export earnings. The terms of trade for oil importers
in West Africa fell by an average of 11 percent between 1980 and 1982. The
current account pressures of these purely exogenous factors led to the expansion
of external debt in the early 1980s.
International real interest rates rose from low levels in the 1970s to over 8
percent in the early 1980s. For the whole of sub-Saharan Africa, all loans rose
Foreign Aid, Self-Reliance, and Economic Development 163
from -7 percent to over 6 percent in 1982 and 1983; for nonconcessional loans
from -5 percent in 1979 to 10 percent in 1982.39 The high-interest impact was
felt immediately through loans carrying variable interest rates, primarily inter-
national bank lending, and through short-term loans. The countries mainly
affected were Niger, Liberia, Senegal, and Cote dTvoire.
As the adverse impact of the external debt crisis became more acute in the
mid-1980s, African countries and the international community have shown
considerable concern to find solutions in order to ensure economic growth and
development. At the United Nations, for example, discussions at the General
Assembly have led to international impulses for new policy departures in several
international fora. The international community has sought to alleviate the
immediate debt-servicing burden of countries in debt crisis and reduce the "debt
overhang" that impedes a return to normal access to international finance in the
three principal areas of African debt, namely, commercial debt, bilateral official
debt and multilateral debt.
In the area of commercial debt, the attempt has largely been to reduce the
burden of interest payments to release resources for debtor African countries.
In this case, each debtor African country has been dealt with separately,
depending on its economic situation and the disposition of the creditor banks.
Generally, commercial banks select from menus that have employed three
main categories of options (not all are necessarily available in each case): debt
reduction, debt-service reduction, and new loans. Debt reduction can involve
buybacks at discounts or swaps of debt for bonds with a lower face value than
the original loans (discount bonds). In both cases, the discounts largely reflect
the market value of the debt at the time of negotiation, as indicated by the
discount prevailing in the secondary market for such debt. Debt-service reduc-
tion, normally in the form of interest-reduction bonds, has been offered in three
ways. The first is below-market fixed-rate bonds. The second is the so-called
"step-down/step-up" arrangements, where a very low interest rate is paid in the
first year, but it gradually increases in a prearranged schedule. The third is
temporary interest-reduction bonds, where interest rates start from a very low
level and rise over several years, followed by payment of a variable interest rate
calculated as a floating international base rate plus a fixed margin. Finally, new
loans (called the "new-money" option) can be offered with or without conver-
sion bonds.
The discount bonds and par bonds were generally made more attractive to
the creditors with the purchase by the debtor of collateral in the form of
zero-coupon US Treasury securities that would mature on the same day as the
debtor-country bond (equivalent securities from other countries could be used
to cover nondollar bonds).
However, in order to assist low-income countries, additional international
measures are often needed. For example, the World Bank established a Debt
Reduction Facility for low-income countries in 1989, set to last until June 1992,
164 Foreign Aid and Self-Reliance in West Africa
to which the bank contributed US$100 million. Nevertheless, the initial utili-
zation of the facility was slow, owing to difficulties faced by the debtor countries
in pursuing their structural adjustment programs and in concluding negotiations
with the commercial banks. Thus, by March 1992, when the life of the facility
was extended through June 1994, only two countries had carried out buyback
operations (Niger in March). Nevertheless, the facility was broadened at the
time of the extension to cover, for example, consultation fees to prepare for the
debt-reduction operations and to cover short-term debt. Since then, Seirra Leone
and other African countries, for example Sao Tome and Principe and Zambia,
have engaged in the process of buyback operations under the facility.40 Apart
from these, debt conversions have also taken place through many forms of swaps
of debt for equity in a local enterprise or on a smaller scale for local government
commitments to environmental or other expenditures. Also, debtor countries
have bought back their debt on the secondary market.41
International debt reduction strategies at both bilateral and multilateral levels
have had limited effect on the debt growth and burden of West African countries.
For example, the Trinidad Terms (proposed by the governments of the United
Kingdom of Great Britain and Northern Ireland) would cancel two-thirds of the
entire stock of eligible debt. The remainder would be rescheduled at market
rates over twenty-five years with afive-yeargrace period. An assessment of the
impact of alternative rescheduling terms may be carried out by measuring the
reduction in the present value of debt-service obligations they are expected to
produce. This measure captures the outright debt forgiveness and the larger
degree of concessionality of rescheduled debt resulting from lower interest
charges. The impact is expressed by the ratio of the present value of debt exports.
When simulations were made to assess the impact of alternative terms on the
severely indebted low-income countries, it was found that even after the
application of the Trinidad Terms and assuming the forgiveness of all bilateral
concessional ODA loans, the debt-to-export ratios remain unsustainable for a
number of African countries.42 However, the summit meeting of the seven major
industrialized countries held in Tokyo, Japan, in July 1993 could not reach
agreement on the implementation of these terms. Hence, the heads of state and
government urged the Paris Club to consider extending further debt relief to the
low-income heavily indebted countries, noting, in particular, the matter of the
stock of debt.
The debt owed to multilateral financial institutions is the only category of
developing-country debt that has no formal framework of restructuring. Indeed,
any rescheduling of debt-servicing obligations is expressly forbidden. Some
countries became unable to make their payments and have accumulated arrears
to these institutions, particularly to the IMF. As of the end of January 1993,
US$4.6 billion in debt-service obligations owed to the IMF by ten countries
were overdue six months or more.
Foreign Aid, Self-Reliance, and Economic Development 165
Thus, it is clear that the external debt of West African countries still consti-
tutes a major impediment to their process of economic growth and development.
These countries are denied the resources that are essential for the revamping of
their economies while they are compelled to use them for debt-servicing. West
African economies continue to face considerable difficulties in the sector as a
result of the unfavorable international economic environment. The decline in
the prices of commodities in the 1970s and 1980s continues to undermine
severely the possibilities for higher earnings of foreign exchange for economic
development. Also, as already noted, foreign investments have declined over
the years in spite of their economic reforms and the introduction of more
generous foreign investment incentives. Furthermore, West African countries
have, in the 1980s, been experiencing a decline in the real value of foreign aid
while doubts are being expressed by the developed donor countries about the
effectiveness of additional financial aid. However, it is very obvious that a more
imaginative approach to the question of external debt would, in a long way, ease
the difficulties of the debt-distressed West African countries. This will call for
an intensification of efforts at both national and international levels.
The debtor West African countries will need to ensure that their present
economic reforms are reviewed while taking adequate care to overcome the
undesirable adverse social effects generated by them. The industrial and agri-
cultural sectors must be rejuvenated and growth promoted. They must also make
more efforts to ensure that higher levels of industrialization are attained while
they engage in the process of the diversification of commodity exports.
At the international level, there will be the need to ensure better prices for
the commodities of West African countries in order to enable them to have
increases in their foreign exchange earnings. These taken together with in-
creases in foreign investments would enable West African debtor countries to
build up the capacity within their economies to address, on a long-term basis,
the question of external debt.
Furthermore, at the international level, there will be a need for the adoption
of a more effective strategy to cope with the immediate adverse impacts of
external debt on African countries. A creditor and debtor conference may
provide an appropriate forum to spell out clearly the formula to apply for the
unloading of the commercial bank debts, bilateral debts, and multilateral debts.
As far as the commercial debts are concerned, better arrangements should be
devised not only for the reduction of interest payments but for a significant
reduction in the capital without jeopardizing the interest of the commercial
banks. On the bilateral official debts, this calls for more political will on the
part of the creditor countries. The low-income, heavily indebted West African
countries would require the write-off of a substantial part of their external debt
in order to be able to promote economic growth and development. Furthermore,
international financial institutions should ease the external debt of West African
166 Foreign Aid and Self-Reliance in West Africa
countries with the adoption of better terms for interest payments and increased
inflow of concessional finance.
COMMODITY
In order to promote authentic self-reliance and economic development in
West Africa, it is imperative that solutions should be found to the problems of
commodity. As already noted in Chapter 4, commodity exports such as cocoa,
coffee, cotton timber, bauxite, oil, iron ore, groundnut, and rubber, to mention
a few, account for over 85 percent of total exports. In effect, they constitute the
main source of foreign exchange earnings. Over the years West African coun-
tries, like other African countries, have experienced a marked decline in
earnings. For example, leaving aside fuels, commodities earned US$18 billion
for Africa in international markets in 1988. This was 26 percent lower in real
terms than in 1980 and 35 percent lower than in 1970.43
There are many reasons for the decline in export earnings of African coun-
tries. At the national level, the causes are to be found essentially in low
productivity and uncompetitive production. There are also the limitations
imposed by ill-advised government policies, the paucity of agricultural scien-
tists and extension officers, and the limited knowledge of international markets.
Other causes are lack of investment in transport and other infrastructures
necessary for effective competitive production. Given all of these causes, it has
been difficult for West African countries to ensure an increase in output of export
commodity.
Beyond these however, the problems of commodity exports of West African
countries have been more profound at the international level. The prices for
most primary commodities of the subregion have fared poorly compared with
those for manufactured goods. The terms of trade for nonfuel commodities with
respect to manufactured goods have fluctuated and have on the whole declined
since 1960; they have been lower than at any time since 1960 from 1987 to
1990.44
At various times in the past, several International Commodity Agreements
(ICAs) functioned satisfactorily and played a useful stabilizing role. However,
because of the inadequacies of the structure of many of these agreements, the
lack of adequate support by participants, and the lack of financial support, the
price mechanism has not been satisfactory: it has been characterized by severe
imbalances between supply and demand. Thus, there is an urgent need for
commodity cooperation between consumers and producers regionally and
globally.
All these problems should be more imaginatively approached in order to
promote self-reliance and economic development in West Africa. Among other
things, West African governments should elaborate on a commodity strategy
within overall process of economic development. This should take into account
Foreign Aid, Self-Reliance, and Economic Development 167
DROUGHT
Climate conditions are strong determinants of the future course of self-reliant
development in the subregion. Many of the countries in West Africa lie in the
Sudano-Sahelian region, which is constantly affected by drought, desiccation,
and dryland degradation. Of all these however, the impact of drought appears
to pose a major threat to economic development.
There have been two distinct droughts since 1960. The nadir of the first
drought was in 1970. The second drought, which was more severe, was in 1984.
The recovery between these droughts never reached the rainfalls of the 1950s
of 1960s. The period since 1984 has witnessed a steady recovery in rainfalls in
most areas until the late 1980s when it ebbed. The recovery was somewhat
modest in Burkina Faso, Mali, and Niger. The effects of these droughts have
been devastating on cultivated crop yields and pastoral production.45
Although the great Sahelian drought started in the western Sahel in 1970, the
first major response at the subregional level did not occur until 1973 through
the establishment of the Permanent Interstate Committee for Drought Control
in the Sahel or Commite Permanent Inter-Etats de Lutte contre la Secheresse
dans le Sahel (CILSS). With its headquarters in Ouagadougou, its original
members besides Burkina Faso were Chad, Mali, Mauritania, Niger, and
Senegal. Cape Verde and Gambia became members in 1977, and Guinea-Bissau
in 1986. One of the main objectives of CILSS is to achieve subregional food
self-sufficiency by the year 2000. It organizes many subregional forums on
drought and acts as an animator for subregional projects on efficient woodburn-
ing stoves, butane promotion, pest control, seed banks, and soil erosion control,
to mention a few.
In 1976, major aid donors established, under the OECD auspices, the Club
des Amis du Sahel, committed to supporting CILSS's objective through the
mobilization and coordination of aid to the Sahel. Both agreed that their joint
goal should be in "food self-sufficiency and ecological equilibrium." There
would be an acceleration of the growth in the production of both the
traditional food crops and livestock to a rate higher than the rate of population
Foreign Aid, Self-Reliance, and Economic Development 169
countries in West Africa. Moreover, the difficulties are more disturbing the more
the growth rate of the population continues to outstrip the growth rate of food
production. Consequently, there should be a more comprehensive design and
long-term pursuit of coherent national food strategies to address training,
technical research and institutions, infrastructure, and finance.
Also, there is a growing recognition that the original concept of the Club des
Amis du Sahel needs to be reaffirmed by donors and the Sahelian governments
should reaffirm their commitment to the preference for long-term development
through which a lasting solution could be provided on the main problems of
drought in the subregion.48
REGIONALISM
It is important to state that the poor advancement in regional economic
integration constitutes one of the weakest factors in the process of economic
development in West Africa. Regionalism on the whole has suffered consider-
ably for several reasons. The difficulties of regionalism as already noted ranged
from competition for the same resources by different economic groupings to a
number of historical, political, and socioeconomic limitations.
However, as it is today, the ECOWAS remains one of the foremost integration
arrangements for collective self-reliance in the subregion. But it can only fulfil
this purpose through effective consolidation. The nineteen years of existence
of the ECOWAS has, in spite of a stated gradualist approach, indicated that there
has been very little commitment to the strengthening of the community. The
member states will need to pay special attention to the question of implemen-
tation community decisions among the several factors militating against the
progress of the community.
Decisions of the Authority of the Heads of State and Government and of the
Council of Ministers constitute the legal bases for the implementation of the
provisions of the treaty. They also form the structure for additional measures to
enable the ECOWAS to cope with new political, economic, and social demands
as integration proceeds.
The salient aspects of the ECOWAS treaty cover the common market
provisions. These consist of trade liberalization, common external tariffs, the
harmonization offiscalincentives, and monetary integration. Regional integra-
tors have, from the outset in 1975, been very selective as to which of these
provisions should be implemented given the economic situation of the member
states and the need to build the necessary momentum into the process of
integration. Within this context, decisions and protocols have been adopted at
different times, notably those on the free movement of persons, trade liberali-
zation, nonaggression, and a mutual defence pact, to mention a few. However,
these have not been promptly implemented at the national level with the result
that the protocols do not have the subregional development impact that they are
Foreign Aid, Self-Reliance, and Economic Development 171
SUSTAINABLE DEVELOPMENT
"Sustainable development," yet to acquire a universally accepted definition,
poses some challenges and opportunities to the overall development in West
Africa. The major challenge for the world community in the 1990s and beyond
is the promotion of sustainable development. With the adoption of Agenda 21
in Rio de Janeiro, the international community agreed that global development
in our time should be environmentally sustainable.50 In this context, the eco-
nomic policies of individual countries and international economic relations
have vital roles to play. To fully ensure this, national economic policies should
be effectively supported by an appropriate international economic policy on the
environment. Within this thinking, the three broad issue areas in sustainable
development therefore related to: (1) social and economic dimensions, (2)
conservation and management of resources for development, and (3) strength-
ening the role of major groups.51
Thus, the global program on sustainable development is all-embracing,
dealing with all aspects of development for both developed and developing
countries. For West African countries, this has widened the scope and dimen-
sions in the concept of self-reliance for development with far-reaching impli-
cations on financial resources. To some extent, the program is complementary
in some aspects to some initiatives already taken at the subregional level on
development issues especially in the areas of desertification and drought and
the dumping of toxic waste. The program is also useful as it stresses global
partnership and cooperation in external issues such as foreign trade, external
financial assistance, and the transfer of technology to developing countries. For
example, the several issues to be tackled under the conservation and manage-
ment of resources for development would require enormous funds even though
the cooperation of the international community is envisaged.
Agreement was reached on the Convention on Desertification and Drought
in early 1995. Furthermore, the Global Environmental Facility (GEF) has been
reorganized to act as an important catalyst in the integration of global environ-
mental concerns into national development goals.52
The GEF draws collaboratively on the experience and expertise of three
existing international agencies: the UNEP, the UNDP, and the World Bank. The
UNEP provides the Secretariat with the Scientific and Technical Advisory
Panel, offers environmental expertise for the facility, and supports research and
information dissemination. The UNDP is responsible for technical, operational,
and capacity-building activities and is charged with managing the Small Grants
Foreign Aid, Self-Reliance, and Economic Development 173
Program for NGOs. The World Bank on its part chairs and administers the pilot
facility, manages the trust fund, and is responsible for investment projects.53
However, in view of the fact that the GEF was not originally designed for
Agenda 21 and again because of its pilot nature, questions have been asked on
how it could effectively play a catalytic role in integrating global environmental
considerations into the regular development assistance programs of bilateral
and multilateral agencies.
In West Africa, poverty is a complex multidimensional problem with origins
in both national and international domains. The main objectives of the program
at the national level, in this regard, include: (1) the opportunity to earn a
sustainable livelihood; (2) the implementation of policies and strategies that
promote adequate levels of funding and focus on integrated human development
policies; (3) the development for all poverty-stricken areas integrated strategies
and programs of sound and sustainable management of the environment,
resource mobilization, poverty eradication and alleviation, employment, and
income; and (4) the creation of a focus in national development plans and
budgets on investment in human capital, with special policies and programs
directed at rural areas, the urban poor, and women and children.
The actions of national governments for the realization of these objectives
are very fundamental even though the support of the international community
is anticipated. The first national action is in the empowerment of communities.
Women should be empowered for full participation in decision making. Also,
it would entail the establishment of a network of community-based learning
centers for capacity-building and sustainable development.54
In management-related activities, the government, with the assistance and in
cooperation with appropriate international, nongovernmental and local com-
munity organizations, is expected, among other things, to generate remunerative
employment and productive occupational opportunities compatible with coun-
try-specific factor endowments, on a scale sufficient to take care of prospective
increases in the labor force and to cover backlogs and implement mechanisms
for popular participation, particularly by the poor.55
However, the prospects for the implementation of this aspect of Agenda 21
appear gloomy because of the weak autonomous financial capacity of West
African countries. Thus, to effectively tackle the problems of poverty in the
context of sustainable development in West Africa, there is a need to strengthen
external financial resources as well as the earning capacity of the countries in
the subregion.
Another important issue of concern to West African countries is technology.
Technology is both the source of assaults on the ecosystem and the potential
solution to the apparent conflict between increased material prosperity for all
and improvement in environmental quality. Sustainable development program
requires that technology should be environmentally sound.
174 Foreign Aid and Self-Reliance in West Africa
CONCLUSION
There are critical issues that need urgent solutions if West African countries
are to secure increased foreign aid and promote economic development. In the
first place, aid recipient West African countries should strengthen their absorp-
tive capacity in order to enhance the inflow of foreign aid. In this connection,
special attention should be accorded to aid coordination and management by
West African governments in order to ensure that the aid inflow is effectively
utilized for development. Foreign aid donors on the other hand would need to
cooperate with the recipients in the disbursement of aid. The recipients would
Foreign Aid, Self-Reliance, and Economic Development 175
benefit more if aid were directed to the areas of priority in national development.
While acknowledging the interests of the donors, misdirected aid would serve
no purpose in the efforts at the promotion of economic development. For most
West African countries, the critical areas where foreign aid is urgently required
is in human resource development and infrastructural development. Both are
basic requirements for sustainable and self-reliant development.
In order to promote economic development, the problems of drought should
be effectively tackled to reduce and eliminate incessant food shortages and
erratic reduction in foreign exchange earnings. The implementation of devel-
opment plans and annual budgets suffers considerably with irregular and
unpredictable earnings in foreign exchange. In the same vein, the cooperation
of the international community is desirable on the commodity problems of West
African countries. The diversification of exports is very fundamental for eco-
nomic growth. Also, growth and development in West Africa would be enhanced
with better prices for their export commodities at the international market.
Structural adjustment programs, which are basic instruments for economic
growth, have produced very little positive impact on development in West
African countries. The unintended negative effects have on the whole removed
the dynamics in the growth process of the adjusting countries. There are
problems in policies if they generate inflation, increase unemployment, and lack
appreciable capacity to promote growth in key economic sectors. Thus, a major
review of structural adjustment programs is desirable if the aggravation of
poverty is to be averted in the subregion.
Sustainable development has broadened the concept of self-reliance and
economic development in West Africa. While its requirements are very com-
plementary to the requirements of development in West Africa, there is however
no doubt that it is not without additional cost to the weak economies of West
African countries. It will entail competition with urgent priority development
issues of West African countries. To cope with these preconditions and the
prescribed financial demands at the national level in areas of poverty and
technology application, it would be desirable that the international community
pay special attention to the countries of the subregion. The need for this is
underscored by the fact that a significant part of the forty-one least-developed
countries in the world are in West Africa.
NOTES
1. World Bank, The World Bank Annual Report 1993 (Washington, D.C.: World Bank, 1993),
pp. 25-28.
2. T. L. Hutcheson and R. C. Porter, The Cost of Tying Aid: A Method and Some Colombian
Estimates, RED Reprints New Series, No. 29, 1972.
3. J. C. Wheeler, Development Co-operation: Efforts and Policies of the Members of the
Development Assistance Committee (Paris: OECD, 1987), p. 113.
176 Foreign Aid and Self-Reliance in West Africa
29. The pioneer status represents an important cornerstone for the encouragement of new
investments. It was based on the Income Relief Act of 1958, which was amended in 1971 by
Decree No. 22.
30. Federal Ministry of Industries, Industrial Policy of Nigeria: Policies, Incentives, Guide-
lines and Institutional Framework (Abuja: Federal Ministry of Industries, 1989), pp. 8-9.
31. R. Omotayo Olaniyan, Private Foreign Investment and Nigeria's Economic Recovery:
Problems and Prospects for Increases in Inflow, mimeo, A study for the Social Science Council
of Nigeria, 1990, p. 22.
32. Federal Ministry of Industries, Industrial Policy of Nigeria, pp. 22-23.
33. For details, see Olaniyan, Private Foreign Investment, pp. 19-26.
34. UNDPAVorld Bank, African Development Indicators, p. 70.
35. P. A. Volcker, The Recycling Problem Revisited (New York: New York University, March
1980).
36. K. Larrecq, Foreign Borrowing in the Mid-Seventies and the Role of International
Commercial Banks, Report No. 2239-WA, World Bank, October, 1978.
37. K. L. Krum, The External Debt of Sub-Saharan Africa: Origins, Magnitude and Impli-
cations for Action, World Bank Staff Working Papers No. 741, p. 10.
38. Ibid.
39. Ibid., p. 14.
40. World Bank, Financial Flows to Developing Countries, Quarterly Review, July 1993, p.
19.
41. UN General Assembly, External Debt Crisis and Development: The International Debt
Strategy as of Mid-1993, Report of the Secretary-General, A/48/345, September 9, 1993.
42. World Bank, World Debt Tables 1992-93, p. 32.
43. UNCTAD Secretariat, Africa's Commodity Problems: Toward a Solution, A Report by
UN Secretary General's Expert Group on Africa's Commodity Problems, UNC-
TAD/EDM/ATF/1, 1990, pp. 15-16.
44. Ibid., p. 29.
45. P. M. Newhouse, Les conditions de croissance dans les pays saheliens et les pays de
Vouest coders de I'Afrique occidentals Food and Agriculture Organization of the United
Nations (FAO), Rome, 1987; R. T Wilson, R. N. de Leeuw and C. de Haan, CIPEA Rapport de
Recherche, 5, Centre International pour l'Elevage en Afrique, Addis Ababa, 1983, pp. 19-23;
UNSO, Assessment of Desertification and Drought in Sudano-Sahelian Region 1985-1991
(New York: UNSO, 1991), pp. 28-29.
46. R. M. Poats, Development Co-operation, pp. 17-18.
47. UNSO, Assessment of Desertification, p. 59.
48. Poats, Development Co-operation, p. 20.
49. Abass Bundu, ECOWAS and the Future of Regional Integration in West Africa. Paper
presented at the IDRC-ECOWAS International Conference on West African Integration, Dakar,
January 11-15, 1993.
50. UNCED, Adoption of Agreements on Environment and Development, A/CONF.151/4
(Part I), April 22, 1992, p. 4.
51. Ibid.
52. World Bank, The World Bank and the Environment: Fiscal 1993 (Washington, D.C.:
World Bank, September 1993), p. 112.
53. Algeria, Austria, Belgium, Brazil, Canada, China, Cote d'lvoire, Denmark, Egypt,
Finland, France, Germany, India, Indonesia, Italy, Japan, Mexico, Morocco, the Netherlands,
Nigeria, Norway, Pakistan, Portugal, Spain, Sweden, Switzerland, Turkey, and the United
Kingdom.
178 Foreign Aid and Self-Reliance in West Africa
Conclusion
policy would be articulated, and the impact of foreign aid would be more
positive on the development process of West African countries.
Self-reliance and economic development as strategy and objective are com-
plex processes. Both, in practice, require the creation of the right political
climate and an effective mobilization of internal and external resources. In
principle, West African countries have accepted the philosophy of democracy
as the basis for political development. The main platforms of governance would
be political parties, and governments would be responsive to the demands of
political institutions and pressure groups, the people, and, in general, the main
practices of democratic processes. However, this is still far from the case in a
number of countries in the subregion, where the rule of the military still prevails
in many of them. The military should relinquish political power as soon as
possible to democratically elected governments in such places as Benin, Burk-
ina Faso, Gambia, Ghana, Nigeria, and Sierra Leone, to name a few. Governance
by the military should be discouraged, as their constant interventions in political
processes have been a major source of political instability. The constant
interventions have negatively impacted the evolution of durable democratic
systems through learning. In most cases, they have failed to promote economic
development and national unity. With poorly conceived and implemented
economic policies as well as failures in the arrest of mismanagement and the
eradication of corruption, military regimes in most West African countries have
ended up leaving economies in worse situations than what they were when they
first seized power. Also, their failures to come to full grips with national
questions, broadening the base of participation and the promotion of equitable
development, have in most cases led to civil wars that have threatened the
existence of these countries. Examples abound in cases such as Nigeria's civil
war (1967-1971), and the ongoing civil war in Liberia. The more the prevalence
of political instability, the less are the chances of increased foreign financial
assistance. Political instability creates a mountain of uncertainties about the
effectiveness of foreign aid in the recipient countries.
As it is, most West African countries still lack the critical internal mass for
self-reliance and economic development. There is a need for well-articulated
domestic economic policy based on the realities of the domestic and interna-
tional economic situations. The domestic economic policy should be well-fo-
cused to address critical microeconomic and macroeconomic issues that would
spontaneously lead to cumulative economic growth and development. Exam-
ples of growth targets could be accelerated food and agricultural production or
of increased industrial expansion based on specific identified products. There
is also a need for a more rigorous and disciplined approach to the implementa-
tion of economic policies. A number of well-intended policies have failed in
the past partly as a result of the attitudes of the bureaucrats and a lack of
sufficient information on the nature and objectives of the policies to both the
public and private sectors. The success of most of the newly industrializing
Conclusion 183
countries in Southeast Asia are partly due to the excellent and disciplined
approach to economic policy implementation. A sound, effective, honest, and
efficient bureaucracy is a basic prerequisite for meaningful economic develop-
ment.
In this connection, it is obvious that the structural adjustment programs
embarked upon by most of the countries in West Africa have been less beneficial
to overall economic growth and development. Any microeconomic and macroe-
conomic policies in the future should take into full consideration the social
implications. Besides, it is equally important to underscore that the foreign
investment policies of West African countries should be more liberal and made
more comparable with those of the other developing countries as well as those
of the economies in transition, since West African countries are inevitably in
competition with them over scarce resources in the industrially developed
countries and in the same international financial institutions. It is natural that
international capital would move to countries that offer maximum returns on
profits. At the same time, maximum efforts should be made by West African
governments to ensure higher levels of domestic savings in order to increase
the level of domestic investment.
Human development constitutes an important area that should be accorded
high priority in the agenda for self-reliance and economic development in West
Africa. It is important that adequate provisions are made for all levels of
education without which the skills necessary for development may not be
available. Universal primary education should be provided and strengthened
where they now exist. Better high schools should be provided with modern
facilities to enhance the quality of education before admission into the univer-
sities. The universities of West African countries should be well-structured to
meet the demands of the different economies. In particular, special attention
should be paid to the training of West Africans in technical fields. An emphasis
in this area is vital in order to put West African countries in the mainstream of
global technological advancement. West African countries should strive to
evolve a sound technology policy upon which the culture of West African
technology could be built. In this connection, the relationship between popula-
tion and development should also be brought into focus. Clear population
policies should be formulated and effectively implemented by West African
countries to ensure the control of population growth. The standard of living will
continue to be undermined the more the rate of population growth, currently at
3.0 percent per annum, continues to outstrip the growth rate of the GDP,
currently estimated at 2.5 percent per annum.
At the international level, a better international economic environment is a
prerequisite for the promotion of self-reliance and economic development in
West Africa. The absorptive capacity of foreign investment of West African
countries should be strengthened through increased financial assistance from
multilateral financial institutions such as the IDA, ADB, Arab Development
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Index
Bilateral aid, 9, 30-64; aid tying, 84; con- 168; price stabilizing arrangements,
straints in, 94, 138-139; destination of, 167; role of policy, 166-167. See also
38,40, 45; donors' interests, 30; envi- Agriculture
ronmental considerations, 89,90; food Compaore, Blaise, 129
aid, 38, 45, 48, 50, 62; grant element, Cote dTvoire, 2, 40, 57, 107, 142, 147,
33, 34, 37, 40, 52, 89, 90; program as- 160, 163; bilateral aid, 34-37; eco-
sistance, 40, 42, 57; relevance to pro- nomic performance, 34; export diversifi-
ductive sectors, 37, 42; social and cation, 2; grant element, 37; gross
administrative infrastructure, 42, 57; domestic product, 2, 100; import substi-
support for low-income countries, 90; tution industrialization, 2; improved re-
support for women in development, 90, lations with donors, 37; multilateral aid,
91; technical cooperation, 38,40, 42, 72; relations with France, 34; relevance
48, 54, 59, 64, 83, 84 of technological cooperation, 37; role
Brazil, 153 of the World Bank, 72; volume of ex-
Buhari, Mohammed, 139 ports, 2
Burkina Faso, 2, 40, 138, 140, 147, 160, Council for Mutual Economic Assistance
168, 182; agricultural policy, 105; bilat- (CMEA), 42, 91
eral aid, 32-34; economic reforms, 71;
foreign trade deficit, 34; grant element Daddah, Moktar Ould, 140
of bilateral aid, 33; multilateral aid, 7 0 - Democracy: encouragement of, 77; transi-
71; predominance of agriculture, 34; tion to, 81
volume of exports, 2; weak economy, 34 Denmark, 131; cooperation with multilat-
eral institutions, 91; foreign aid policy,
Cameroon, 151 91; Plan of Action for Danish Develop-
Canada, 40, 42, 48, 53, 57, 60; aid unty- ment Assistance, 91
ing, 88; foreign aid policy and human Dependence theory, 18-20
resources development, 88; grant ele- D'Estaing, Valery Giscard, 32,44,71
ment, 88; poverty alleviation, 88; pro- Developmentalism, 9; importance of capi-
ject implementation, 59; reorganization tal accumulation, 17; problems of, 24;
of Canadian International Development role of terms of trade, 17; theory of, 17-
Agency (CIDA), 88; support for multi- 18
lateral aid, 74 Development Assistance Committee
Capital: accumulation, 18, 21, 153; move- (DAC), 39,40,42, 60, 83, 84, 87, 89,
ment, 23. See also Foreign investment 90, 93; contributions to program assis-
Cape Verde, 160, 168; bilateral aid, 34; tance, 62; decline of flow, 63-64; tech-
end use of multilateral aid, 71; multilat- nical cooperation, 45, 50
eral aid, 71-72; trend in the flow of Diori, Hamani, 140
multilateral aid, 71 Dodd,C. H., 141
Cardoso, E, 18, 19 Doe, Samuel, 46,76, 140
Chad, 168 Donors: aid-tying, 31; donor-oriented theo-
China, development of plantation and cane ries, 16—17; Donors Conference, 69; do-
mill, 62 nors' policies, 81-92, 94, 168, 169,
Colonialism, 128-130; economic linkage, 170, 175; international relations theo-
129-30; political linkage, 129 ries, 17
Commodities, 166-168,175,184-185; bet- Dos Santos, T, 18
ter prices of, 143, 165; decline in earn- Drought, 32, 38, 48, 50, 52, 53, 73, 168-
ings, 166; demand for primary 170, 175; effects on food production,
commodities, 24, 27, 151; diversifica- 46; impact on agricultural production,
tion, 167; international commodity 55, 57; institutions for, 168-169; Perma-
agreements, 166; international prob- nent Interstate Committee for Drought
lems of, 166; Lome Convention, 71, Control in the Sahel or Commite Perma-
Index 199
on target, 4-5; priority projects, 8; pros- ment, 37, 40,42, 47; performance in
pects for, 181; for public sector develop- foreign aid target, 4; support for eco-
ment, 5; rationale for foreign aid, 5; nomic reforms, 86; support for rural
rejection of, 21; relationship with for- projects, 60; tied aid, 134
eign trade policies, 5; relevance to eco- Ghana, 2, 136, 137, 138, 140, 142, 147,
nomic growth, 5; rural development, 154, 160, 182; agricultural policy, 105;
32; skepticism, 27; sources of, 28; as bilateral aid, 39-40; economic perform-
supplement for savings, 15; support for ance, 39-40; end use of multilateral aid,
social sector, 150; target of, 4, 134; utili- 73; grant element, 40; gross domestic
zation, 28, 94. See also Donors product, 2, 100; industrialization, 107,
Foreign exchange, 21, 30, 60; reduction of 110-111; major sources of bilateral aid,
earnings, 63, 76, 127, 143 40; multilateral aid, 73-74; rate of infla-
Foreign investment, 1, 20, 124, 151, 154- tion, 2; trend in the flow of multilateral
158; diversion of, 3-4; export-free aid, 73; volume of bilateral aid, 40; vol-
zones, 158; infrastructures, 158; institu- ume of exports, 2
tion of, 18; role of, 154; negative trans- Global Environmental Facility (GEF), 172,
fer of resources, 7; obstacles to inflow, 173,174
156, 158; policies for, 154-156; rela- Gowon, Yakubu, 139
tionship with foreign aid, 13, 14; role of Great Britain. See United Kingdom
exchange rate, 156-157; trend in in- Guinea, 147, 160; bilateral aid, 4 1 ^ 4 ; eco-
flow, 156, 157, nomic performance, 41-42; free-market
Foreign policy, 71 enterprise system, 44; grant element,
Foreign trade, 1, 116-120, 124, 16; bal- 42; multilateral aid, 74-75; problems of
ance of trade, 118-119; deficit, 34, 48; economic development, 42; relations
direction of trade, 119; problems of dis- with France, 42-44; socialist orienta-
engagement, 119-120; role in develop- tion, 42; trend in multilateral aid, 74
ment, 116; tariff and nontariff barriers, Guinea-Bissau, 160; agricultural coopera-
20,22,23, 142 tives, 46; bilateral aid, 44-46; corrup-
France, 38, 40, 44, 48, 50, 55, 64, 69; aid- tion, 46; economic features, 44; food
tying, 30; budgetary support, 83; debt- aid, 46; growth rate, 100; industrial de-
relief, 83; economic interest, 28, 53; velopment, 44; multilateral aid, 75; po-
grant element of bilateral aid, 33, 37, litical instability, 46; problems of
42, 47; influence, 28, 134; preeminent corruption, 75; technical cooperation, 46
position of, 57; strategic interests, 53;
strengthening financial capacity, 82-83; Haberler, G., 17
structural adjustment loans, 83; techni- Hirschman, A. O., 14
cal cooperation, 59, 83 Hong Kong, 151
Frank, A. G„ 18 Houphouet-Boigny, Felix, 72
Furtado, C , 18 Human rights, 76
Gambia, 142, 147, 168, 182; bilateral aid, Imports: cost of imports, 3; food import, 9,
37-39; destination of bilateral aid, 38; 34, 60; import-substitution, 52; protec-
economic performance, 37; food aid, tionism, 9; rise in global price of oil, 3;
38-39; impact of drought, 38; major sources of, 119; volume of imports, 3,
sources of bilateral aid, 38; multilateral 118
aid, 72-73; obstacles to economic India, 153
growth and development, 37-38; vol- Individual self-reliance, 21; international
ume of bilateral aid, 38 negotiations, 21; problems of, 98; proc-
Germany, 4, 38,48, 50, 53, 56,60, 64, ess of reassociation, 21; relevance to
131; debt relief, 86; foreign aid policy, West Africa, 21-22, 24. See also Self-re-
consolidating capacity, 85-86; grant ele- liance
Index 201
Industrial development, 106-111, 179, ing institutions, 87; foreign aid policy,
180, objective of, 106. untying of aid, 87-88; role of Japan In-
Industrialization, 9, 14, 37; capacity utiliza- ternational Development Organization
tion, 18, 55; economies of scale, 18; ef- (JAIDO), 87; importance of Tokyo Inter-
fects of protectionism, 18; import national Conference on Africa's devel-
substitution, 14, 17, 22, 24, 55, 107, opment, 87
153; new industries, 22; role of capital,
18; role of entrepreneurship, Ig; techni- Kerekou, Matthew, 32, 129
cal cooperation, 24 Korea, Republic of, 153
Industrialization, progress in, 107; interme- Kuwait, 59; Kuwait Arab Economic Devel-
diate and heavy industries, 107; manu- opment Bank, 74; technical assistance
facturing, 107; problems of, 110-111 in, 51
Industry, acceleration of, 22, 124
Inflation, 4, 55; in developed countries, 28; Lagos Plan of Action, 21
global inflation and development, 5; Latin America, 14, 19, 23, 151; import sub-
role of SAP, 4 stitution, 16, industrialization, 17, 18;
Infrastructures, 28, 35, 37, 38, 40, 42, 50, role of market in development, 17
180, 184; economic infrastructures, 50, Liberia, 2, 140, 160, 163; bilateral aid, 46-
57; social and administrative, 46, 48, 48; end use of bilateral aid, 48; gross do-
52,57,61-62 mestic product, 2; major sources of
International Development Association bilateral aid, 47; multilateral aid, 75-
(IDA), 64, 69, 72, 76, 83, 93; aims and 76; politics and economy, 46; program
policies, 66; low-cost loans, 70; multi- assistance, 47, 48; technical coopera-
lateral assistance, 69, 74; support of tion, 48; trend in multilateral aid, 75-
credits, 77; support for stabilization pro- 76; volume of bilateral aid, 47
gram, 78 Libya, provision of subsidies, 51
International economic development: ad- Limann, Hilla, 140, 155
vancements in science and technology,
23; interdependence, 23; international Malaysia, 151
division of labor, 23; primary commodi- Mali, 2, 137, 147, 168; aid from Arab coun-
ties and decline in price, 24; sustainable tries, 48; balance of payments deficits,
global development (Agenda 21), 82; 48; bilateral aid, 48-50; costs of infras-
world economic recession, 81-82 tructural development, 50; destination
International economic policy, 22 of bilateral aid, 48; external depend-
International Financial Corporation, princi- ence, 48; gross domestic product, 2; in-
ple and policies, 65-66, 74 dustrialization, 107; Institute of Rural
International Fund for Agricultural Devel- Economy, establishment of, 49; multilat-
opment (IFAD), 74, 76 eral aid, 76-77; program assistance, 50;
International Monetary Fund (IMF), 20, rural development, 49; sources of major
64, 69, 89, 91, 93, 140, 141, 164; activi- bilateral aid, 48; sources of major multi-
ties, 65; policies, 65; role in multilateral lateral aid, 76; structure of the econ-
aid, 75; stabilization agreement, 136; omy, 48; technical cooperation, 50;
support for stabilization program, 78; trend in multilateral aid, 76; volume of
support through standby credits, 77, 81. exports, 2
See also Structural adjustment program Mauritania, 136, 140, 142, 147, 168; bilat-
Investments, 23, 24; nationalization of, 43, eral aid, 50-52; characteristics of the
155. See also Foreign investment economy, 50; multilateral aid, 77; trade
Italy, 38, 44,48, 53, 57, 131 deficits, 50; war against Polisario, 50
Mikesell, R. F, 16-17
Japan, 38, 40, 42, 44, 47, 53, 55, 60, 69, Mohammed, Murtala, R., 139
131, 153; foreign aid policy, strengthen- Momoh, Joseph, 60, 62
202 Index
Multilateral aid, 9, 183-184, 185; influen- for economic reforms, 59; technical co-
tial factors, 64, 67; pattern of flow, 6 7 - operation, 59, 60, 64,
69; policies, 92-93; problems of, 80
Political development, 127, 128-129, 141;
Netherlands, 38, 40, 44,48, 89; coopera- civil war, 182; governance, 141, 182;
tion with multilateral institutions, 90; national questions, 182; role of the mili-
foreign aid policy, 90-91 tary, 182
Niger, 2, 137, 142, 147, 163, 164, 168; ag- Political instability, causes of, 16; prob-
ricultural polices, 104-105; bilateral lems of, 46, 75, 79, 139-141; promo-
aid, 52-55; economic policies, 52; fea- tion of, 24
tures of the economy, 52; importance of Population growth, 145, 146, 150, 170,
Uranium to the economy, 52-53; multi- 173,179
lateral aid, 78; self-sufficiency in food Portugal, 129; political influence, 134
production, 52; uranium industry, 2; vol- Poverty, 1, 173; alleviation of, 24, 27, 91,
ume of exports, 2 145; degeneration of, 34, 179; eradica-
Nigeria, 2, 60, 79, 139, 141, 142, 151, 155, tion of, 7; vicious circle of, 1
160, 162, 182; agricultural policies, Prebisch, Raul, 17, 18
103-104; bilateral aid, 55-57; develop- Protectionism, 23, 24; of developed coun-
ment plans, 119; development of tech- tries, 145, 167-168
nology, 112-113; economic features,
55; factors in economic recession, 55; Rawlings, Jerry, 74, 140
foreign aid policy, 55; growth rate, 100; Regional integration, 10,24,120-123,130,
industrialization, 107; industrial policy, 170-172,185; Caribbean Community
155-156; multilateral aid, 78-79; presi- (CARICOM), 22; Council for Mutual Eco-
dential system, 129; principal bilateral nomic Assistance (CMEA), 22; Economic
aid partners, 55-57; problems of agri- Community of Eastern and Southern Afri-
cultural programs, 103-104; protection- can States (COMESA), 22; Economic
ism, 22; rate of inflation, 2 Community of West African States
Nigeria Trust Fund, mode of operation, 67 (ECOWAS), 17-18, 121; erosion of sover-
Nkrumah, Kwame, 18, 140 eignty, as instruments of economic poli-
Norway: foreign aid policy, 89; support for cies, 22; European Community (EC), 22;
least-developed countries, 89; support impediments to integration, 121-123,124-
for SAPs, 89; support for women, 89 125, 171-172; Mano River Union, 121;
progress in ECOWAS, 121,170-171; ra-
Obasanjo, Olusegun, 139 tionale for, 120-121; relevance of political
Official Development Assistance (ODA), will, 24; research and development, 167;
4,37,83,84,87,88,89,90,91 role of regional integrators, 185; Southern
Organization for Economic Cooperation African Development Community
and Development (OECD), 4, 168; eco- (SADC), 22; West African Economic Com-
nomic growth, 132-134; performance munity (CEAO), 121
in aid target, 4; promotion of export in- Resources, mobilization of, 5, 98, 128, 173,
dustries, 16 174, 182, 185; budgetary allocations,
Organization of African Unity (OAU), 5, 150; definition of, 148; human develop-
21,60,169 ment of, 98, 124, 148-150, 179, 183; im-
Organization of Petroleum Exporting provement in, 148-149; problems of,
Countries (OPEC), 5; Development 149, 150; promotion of, 149-150; role
Fund, 69; performance in foreign aid, 5 in technological advancement, 153
Overseas Development Fund (ODF), 52, Rostow, W.W., 14,15-16
53-54, 57; commitments to production Russian Federation (former Soviet Union):
sector, 64; program assistance, 59; sup- foreign aid policy, 91-92; interest in,
port for debt reorganization, 62; support 59; role of loans, 8
Index 203
Sankara, Thomas, 129, 140 146-148; support for, 77, 84, 86; sup-
Sao Tome and Principe, 164 portive actions, 145-148; trade liberali-
Saudi Arabia, 59 zation, 142
Savings, 21, 124, 143, 154, 183. See also Supplemental theories, 15-16
Resources, mobilization of Sweden, 44, 131, foreign aid policy, 89-90
Self-reliance, 5, 120, 121, 122, 123, 130, Switzerland, 40, 131
150, 154, 158, 166, 168, 182; collective
self-reliance, 21; defined, 13; as devel- Technology, 14,21, 150-154; charac-
opment strategy, 5, 23, 97, 128; disen- teristics of, 152; definition, 111; devel-
gagement from world economic system, opment or adaptation of, 20; dynamics
20; importance in national development of, 153-154; environmentally sound,
plans, 5; mobilization of internal re- 173-174; flow of, 151-152; forms of
sources, 5; origin of, 5; reduction of de- transfer, 152-153; importance of domes-
pendence on the international economy, tic effort, 153; importance of techno-
5; reduction of international economic logical cooperation, 37; influencing
transactions, 20; restructuring economic conditions, 153; market of, 152; mecha-
transactions at national and interna- nisms of, 151; policy, 150-151; prob-
tional levels, 21; theory of, 20-23. See lems of, 152-153; promotion of, and
also Individual self-reliance; Regional problems, 112-114, 124; role in self-re-
integration liance, 112; technological know-how,
Senegal, 136, 137, 142, 147, 160, 163, 23; transfer in services, 153
168; bilateral aid, 57-60; industrial Terms of trade: deterioration, 24, 73, 162;
growth rate, 107; multilateral aid, 79; improvement in, 98
problems in economic development, 57; Thailand, 151
rural development, 59; strong ties with Togo, 138, 140, 160; bilateral aid, 62-64;
France, 57 decline in coffee output, 62; demand for
Shagari, Alhaji Shehu, 139 phosphates, 63; destination of bilateral
Sierra Leone, 2, 140, 142, 160, 164, 182; aid, 64; foreign debt, 62; issues in the
bilateral aid, 60-62; diamond export, 2; economy, 62; multilateral aid, 80-81;
issues in development, 60; multilateral preponderance of phosphate, 62; trend
aid, 79-80 in bilateral aid, 63-64,
Singapore, 151 Toure, Sekou, 43, 140
Smuggling, 62 Transnational corporations, 9; objectives,
Southeast Asia, 23, 82, 183 152
Stephens, Siaka, 140 Transnational enterprises, 18; and local
Structural adjustment program (SAP), 4, economy, 19; vertical integration, 19.
28, 55, 78, 90, 97-98, 141-148, 154; See also Transnational corporations
aims of, 4, 142; characteristics of, 80; Tunisia, 151
deregulation, 142; financial structure re-
forms, 143; foreign exchange rate, 142— Underdevelopment, 9, 14
143; impact on technological United Kingdom, 38, 40, 44, 57, 60;
advancement, 113; international coop- economic interest, 28, 134; external
eration, 143; measures of, 98, 142; per- financial support, 8; foreign aid pol-
formance of, 4, 143; problems of, 78, icy and high concessionality, 84; in-
79, 143-145; problems of devaluation, fluence of, 28, 134; sustainable
143, 145; role of banks, 143; role of development, 83; technical assis-
concessional flow, 4; social dimensions tance, 84; tied aid, 134; support for
of, 147-148; social effects, 183; strong Njala University, 60
adjusting countries, 144, weak adjust- United Nations, 4, 65; agencies, 137; Con-
ing countries, 144; structural adjust- ference on Least-Developed Countries,
ment/sectoral adjustment loan, 136; promotion of development, 4
204 Index
United Nations Conference on Trade and mitment to democracy and good govern-
Development (UNCTAD), problems of ance, 141; corruption, 140, 182; de-
international development, 19-20 fense expenditures, 150; economic
United Nations Development Programme growth, 2; export components, 2; ex-
(UNDP), 65, 147; multilateral assis- ports, 2; external dependence, 8-9; fac-
tance, 69, 70, 72, 74, 76, 93; round ta- tors affecting exports, 3; gross domestic
bles, 136-137 product, 2, 98-100; implementation of
United Nations Economic Commission for Agenda 21, 6-7; important minerals, 8;
Africa (UNECA), 5, 14, 21; and the import substitution, 22; improvements
Trans-African Highway, 62, 169 in balance of payments, 143; industriali-
United Nations Economic Commission for zation strategy for development, 17; in-
Latin America and the Caribbean (UNE- flation, 2; landlocked countries, 2;
CLA), 14, 18 least-developed countries, 2; limitations
United Nations Environment Programme of self-reliance theory, 24; limitations
(UNEP), 172 of the theory of comparative advantage,
United Nations Sudano-Sahelian Office 145; military leaders, 16; mismanage-
(UNSO), 169 ment, 182; oil price shock, 27; prob-
United States, 4, 38, 40, 42, 44, 47, 48, 50, lems of privatization and
57, 60, 64, 131, 153; congressional re- commercialization, 145; relevance of de-
view of foreign aid legislation, 85; velopment theories, 24; relevance of for-
emergency needs, 53; foreign aid pol- eign aid theories, 23-24; standard of
icy, absorptive capacity, 84-85; foreign living, 98; tribal division, 16; volume of
aid target, 4; political and development imports, 3
objectives, 85; role of Export-Import World Bank, 64, 91, 92, 93, 136, 137, 140,
Bank, 85; role of loans, 8; role in multi- 141, 145-148, 163-164; activities, 65;
lateral aid, 75; strategic considerations, policies, 65, 72, 73, 89; provision of
58-59, 85, support for Njala University structural adjustment lending, 81; rural
agricultural extension, 60-61 development project with IDA and
USAID, 76; support for Kpong hydro-
Vary, Joan Bernard, 46 electricity, 74
World Food Programme (WFP), 74, 76
West Africa: balance of payments difficul-
ties, 162; budgetary deficits, 142; com- Zambia, 164
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