Sub-Saharan Africa Development: A Hope or Reality?

In response to Annelise’s post, it is personally shocking how quickly the status of Sub-Saharan Africa has flipped in relation to South Africa. In my book for class, The Bottom Billion, published in 2007, Collier emphasizes how Sub-Saharan African countries are in a stagnant existence of poverty and resource dependence. I’m not sure how drastically their status on development has turned around over the last few years, but if the Economist’s article is correct, they have made substantial progress.

I completely agree that the quality of governance has a large impact on the success of economies, and Africa has historically been the poster-child for bad government. While government may be becoming more legitimate as there is less dependence on natural resources, we cannot disregard that government in Africa is still of lower quality than developed countries. Additionally, governments may be becoming less corrupt in some areas, in Ghana especially, but in Eastern Africa, elections in Kenya and Tanzania still create mass uprisings and make these countries inherently unsafe to travel too. Collier emphasizes that most areas that are landlocked with few natural resources or access to industrial markets have failed to become independent countries, but in Africa, they have succeeded. Thus, many African countries started with a disadvantage for development, and they will need ample time to catch up; something we must take into consideration.

While the IMF and other international agencies are increasing their presence in Africa, as Annelise states, they are not consistently invested in. Collier explicitly notes this, as some African countries do not even have an IMF representative. Wolf and Stiglitz actually agree on this issue, by claiming that the IMF will not come up with a solution in African countries by visiting for merely 3 weeks; they must increase their investment here if they are to enhance the economic standing of African countries. Rogoff’s article indicates that the IMF has increased its communication and commitment to developing countries, but this must be taken in context with the reading of Stiglitz and Wolf; a 3-week visit does not mean investment.

Annelise also emphasizes investment confidence, a prevalent topic in Africa today. Wolf specifically emphasizes the need for foreign direct investment in today’s IPE. It is true that the IMF and other governing organizations may be too optimistic about Africa’s development, as investment without regulation can spur the wrong kind of development. This point directly relates to the moral hazard argument presented by many critics of the IMF; additional funds given to developing countries can be used unjustly. The aftermath of this can readily be seen in South Africa, as they are currently on the decline from a sub-par education system, high unemployment, and corrupt governance.

The best way to develop Africa is an unending debate that began in colonial times and will undoubtedly spread into the foreseeable future. The IMF and other international agencies should not merely visit these regions; they must actually invest in understanding the unique situation of each African country, as each has specific setbacks and resources. International loans are not inherently bad, but unless we increase regulation and the responsibility of lenders as well as borrowers, the hope for Sub-Saharan Africa’s development may not become a reality.