Africa's heavy debts leave it on a precipice
Black Africa's economic and political state is more dangerously precarious than at any time in the first 25 years of the continent's independence. What makes the situation even more worrisome is that all the economic indicators point to further decline.Skip to next paragraph
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During three months of travel from the deep south of the continent up to the edges of the Sahara, this correspondent found most African leaders filled with pessimism, even despair.
''Even if the world financial crisis were to end tomorrow, our situation in the developing world would remain hopeless unless there were to be a basic change of attitude in Western attitudes to trade and aid,'' the president of one radical black African government said. ''And if there isn't, very few of the present governments, including my own, will survive this decade. We will rightly be accused of having made promises that have not been fulfilled.''
While black Africa certainly faces immense challenges, some economists also point to some international trends that could alleviate their plight. Most African nations are oil importers, for instance, and the current decline in world oil prices provides at least some fringe relief. Faint signs of economic recovery in the Western world also provide some grounds for hope that African exports may eventually revive.
In the interim, the economic blizzard has hit countries equally hard, irrespective of political systems or foreign ties. Free-enterprise countries - often cited as models in the West - such as Ivory Coast, Kenya, and Nigeria, have suffered as badly as socialist or Marxist countries like Tanzania, Mozambique, and Zambia.
The Ivory Coast, praised for its achievements as a capitalist paradise, and Tanzania, held up as a model for socialist development, can both expect to end up this year with a downturn of almost 4 percent in their gross domestic product.
At the very best, the continent will register a negative overall growth rate of 1.4 percent in 1983 - as against an average population growth over twice as fast.
To boost exports and gain foreign currency, country after country has been forced recently to devalue its own currency: Kenya and Malawi by 15 percent each , Zambia and Zimbabwe by 20 percent each, Botswana by 10 percent, and so forth.
While devaluation can help to maintain an element of competitiveness in foreign markets, they run the risk of political instability. Besides disrupting domestic and foreign investments, they raise local prices, especially of food and basic household goods, at a time when food subsidies are being withdrawn or reduced to hold down government deficits.
All these conditions are being compounded by the worst drought for 20 years stretching all the way from South Africa through Zimbabwe, Botswana, and Mozambique to parts of Tanzania, Kenya, Ethiopia, Somalia, and across to the Sahel states, which border on the Sahara.
Famine, rather than just food shortages, now faces tens of millions of people - forcing even countries like Mozambique to swallow their pride and launch international appeals for food aid.
Despite all hardships, very few of Africa's 51 independent states have actually defaulted on repayments of their foreign debts. The exceptions are Sierra Leone, Zaire, and Liberia. The latter has defaulted on a foreign debt of has kept all these countries precariously afloat has been the willingness of international lenders (in their own interests as well) to reschedule repayments in hopes of more propitious times ahead.
Oil-rich Nigeria, hit by falling petroleum prices as well as reduced demand for its crude, will be able to sell only about one-third of its oil export capacity. It is having difficulty paying for a foreign debt of $5 billion. Its economic plight is a major reason for its decision last month to expel hundreds of thousands of illegal aliens, mainly Ghanaians and other people from neighboring West African nations and Chad.