Europe and Economic Reform in Africa: Structural Adjustment and Economic Diplomacy (Routledge Studies in Development Economics, 9)

372 Pages·1997·3.79 MB·English

by  Obed O Mailafia

EUROPE AND ECONOMIC REFORM IN
AFRICA
The relationship between Europe and the African, Caribbean and Pacific (ACP)
states has always fascinated economists, political scientists and development
experts.
This book analyses the economics and politics of the European Community’s
relations with Africa with a central focus on the questions of aid, structural
adjustment and development policy since the early 1970s. It concludes that EC
development policy in Africa is at best a moderate success and suggests that if
African states are to avoid marginalization in the emerging world order they
must rise to the challenge of global competitiveness.
Topics covered include:
• the origins of EC—African diplomacy in the Rome Treaty
• the Yaoundé conventions
• the Lomé agreements
• EC responses to the new politics of debt and structural adjustment
• the EC experience in Zambia.
Obadiah Mailafia studied Economics and Law in Paris and completed his
doctorate at Oxford University. He has been a consultant to the United Nations
and an Associate of the Centre for Policy Management, Queen Elizabeth House,
Oxford. He is currently Lecturer in International Finance, Richmond Business
School, the American University in London.
ROUTLEDGE STUDIES IN DEVELOPMENT
ECONOMICS
1 Economic Development in the Middle East
Rodney Wilson
2 Monetary and Financial Policies in Developing Countries
Akhtar Hossain and Anis Chowdhury
3 New Directions in Development Economics (Growth, Environmental
Concerns and Government in the 1990s)
Edited by Mats Lindahl and Benno J.Ndulu
4 Financial Libetalization and Investment
Kanhaya L.Gupta and Robert Lensink
5 Liberalization in the Developing World Institutional and economic changes
in Latin America, Africa and Asia
Edited by Alex E.Fernández Jilberto and André Mommen
6 Financial Development and Economic Growth Theory and experiences
from developing countries
Edited by Niels Hermes and Robert Lensink
7 The South African Economy Macroeconomic prospects for the medium
term
Finn Tarp and Peter Brixen
8 Public Sector Pay and Adjustment Lessons from five countries
Edited by Christopher Colclough
9 Europe and Economic Reform in Africa Structural adjustment and
economic diplomacy
Obadiah Mailafia
EUROPE AND ECONOMIC
REFORM IN AFRICA
Structural adjustment and economic
diplomacy
Obadiah Mailafia
London and New York
First published 1997
by Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2005.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of
thousands of eBooks please go to www.eBookstore.tandf.co.uk.”
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
© 1997 Obadiah Mailafia
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in
writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloguing in Publication Data
Mailafia, Obadiah
Europe and economic reform in Africa : structural adjustment and
economic diplomacy/Obadiah Mailafia.
(Routledge studies in development economics, ISSN 1359–7884)
Includes bibliographical references and index.
1. Economic assistance, European—Africa. 2. Structural
adjustment (Economic policy)—Africa. I. Title. II. Series.
HC800.M338 1997
338.9’1406–dc20 96–2257 CIP
ISBN 0-203-98376-9 Master e-book ISBN
ISBN 0-415-14825-1 (Print Edition)
For Margaret, Emmanuel and Samora
CONTENTS
List of figures ix
List of tables x
List of abbreviations and acronyms xii
Preface xvi
1 INTRODUCTION 1
The general policy context 2
Aid, structural adjustment and international economic relations 4
Power, influence and social exchange 5
The triangle of development diplomacy 10
2 AFRICA AND THE NEW INTERNATIONAL AID REGIME 14
From the Monrovia Strategy to the Berg Report 14
IMF and World Bank Involvement in Africa 16
The critique of Structural Adjustment Programmes 17
African Attitudes to the IMF and World Bank programmes 23
Conclusion 32
3 THE ORIGINS OF EC-AFRICAN DIPLOMACY, 1957–71 34
Eurafrica and the geopolitics of empire 35
The Rome Treaty and the emergence of association 37
The Yaoundé Conventions 45
The Anglo-African Commonwealth and Association 50
Conclusion 32
4 THE EMERGENCE OF LOMÉ AND ITS INSTITUTIONS, 1973– 60
78
vii
Forging a Common African Front 63
The main provisions of Lomé 66
The institutional framework of Lomé 70
Lomé and development policy 78
Conclusion 32
5 LOMÉ, POLICY DIALOGUE AND STRUCTURAL 84
ADJUSTMENT
The Pisani Memorandum on development policy 86
Policy dialogue and Lomé III 87
The EC Council resolution on structural adjustment in Africa 92
Lomé IV and structural adjustment 95
Conclusion 32
6 EUROPE AND THE AFRICAN EXTERNAL DEBT BURDEN 1 12
The African debt in international perspective 1 12
International responses 1 22
European Community responses 1 28
Conclusion 32
7 ECONOMIC DECLINE AND POLICY CHOICE IN ZAMBIA 1 44
Colonial policy and underdevelopment 1 44
The rise of the single—party state 1 45
Mineral dependence and development policy 1 48
The path to economic decline 1 51
The IMF extended programme, 1981–83 1 56
The Interim National Development Programme 1 70
The Fourth National Development Plan, 1989–93 1 72
Return to multi-party democracy 1 73
Conclusion 32
8 ZAMBIA AND LOMÉ AID DIPLOMACY 1 77
The first EEC mission to Zambia 1 78
Aid programming for Lomé I 1 79
viii
Lomé II programming and the Foley mission 1 82
Lomé III programming and the food question 1 84
Lomé IV programming and the road to adjustment 1 87
EC food strategy dialogue in Zambia 1 87
Import support and the Special Action Programme 1 93
Sysmin and the mining sector 1 95
The rural smallholder project 2 02
Germany and the cobalt question 2 03
Problems of development aid management 2 05
Conclusion 32
9 THE EC AND ECONOMIC REFORM IN ZAMBIA 2 11
Liberals, moderates and hard-liners 2 12
European Community responses 1 28
Import financing and the foreign exchange gap 2 20
The EC foreign exchange facility 2 21
The EC Structural Adjustment Facility 2 24
The social dimensions of adjustment 2 27
Export promotion and economic diversification 2 40
Conclusion 32
1 0 EUROPE AND AFRICA IN A CHANGING WORLD 2 46
The prospects of Lomé in a changing world 2 49
Africa facing the twenty-first century 2 53
Notes 2 57
References 3 09
Index 3 37
FIGURE
1.1 The mechanism of influence in conditionality-based aid 11
1.2 The triangle of development diplomacy 12
3.1 EEC tariffs on selected products 46
3.2 Volume of the first three EDFs 55
3.3 Volume of first three EDFs by country 57
4.1 EDF aid under Lomé I and II 66
4.2 The institutional framework of Lomé 71
4.3 Organizational structure of the ACP Secretariat 77
4.4 The Lomé aid programming and implementation cycle 82
5.1 EC financial aid resources, Lomé I–III 92
5.2 Structural Adjustment Funds under Lomé IV 107
6.1 SSA external debt in comparison with other LDCs, 1988 113
6.2a External debts of sub-Saharan Africa, 1970–87 114
6.2b SSA debts in relation to total LDC debts 115
6.3 Growth of SSA debt burden, 1982–90 117
6.4 SSA debt service payments in 1989 118
6.5 Africa’s major debtors, 1983–90 121
6.6 SSA debt restructuring, 1985–89 125
6.7 ACP debt to the European Community, 1963–90 129
7.1 Structure of government participation in the Zambian economy, 1971 149
7.2 Evolution of Zambia’s Terms of Trade, 1970–82 151
7.3 Trends in Zambia’s GDP, 1970–90 152
7.4 Zambia: public expenditure on subsidies, 1980–89 164
7.5 Zambia: external debt, December 1991 175
7.6 Zambia: debt arrears, December 1991 176
9.1 Administrative structure of the EC/World Bank Micro-Projects Unit 230
9.2 Zambia: expenditure on health and education, 1981–91 232
9.3 Structure of local government in Zambia, December 1990 234
9.4 Development financing and the mechanism of rural power in Zambia 237
9.5 Zambia: main non-traditional exports, 1987–89 244