Results of African Economic Reforms Now Appearing
IT is hard to be optimistic about the prospects for Africa, particularly when our daily newspapers are full of stories of man-made tragedies, foreign-aid waste, and extensive corruption. Yet right now some of Africa's harshest critics - expert economists at the World Bank and the International Monetary Fund (IMF) - are showing the first signs in many years of cautious optimism.More than 20 African countries have been pursuing economic reform programs for several years now and impressive results are starting to be seen. The aid-flows to these countries are increasingly linked to their implementation of IMF and World Bank programs. At the same time, the aid donors are becoming more discerning with regard to whom they support. The donors, as has recently been seen in Kenya and Zaire, are telling government leaders that there will be no aid for nations run by corrupt regimes. Donors are also set to become more tight-fisted, as Eastern Europe and the Soviet Union lay claim to scarce aid funds and Africa's portion inevitably declines. This may well prove to be tragic, for the reform process that increasing numbers of African countries are pursuing requires substantial support. There are now success stories to encourage both official foreign donors and prospective private investors. Tanzania, for example, has achieved more than 4 percent average growth in the last five years, compared to well below half that level in the early 1980s. It was appropriate that a Tanzanian was the one asked to speak for the more than 40 African national delegations at the recent annual meetings of the World Bank and IMF in Thailand. Finance Minister Stephen Kibona was a symbol of the enormous change now being seen in Africa. Tanzania, which long espoused socialist self-reliance and which tragically became one of Africa's poorest nations, now had a finance minister who could declare to the world's financial leaders that African countries overwhelmingly support economic reform strategies involving efficient public-sector management, leading roles for private investment, open foreign trade, finance and direct investment regimes. "In spite of the difficulties and sacrifices encountered in implementing the reforms, we are determined to stay the course," said Africa's spokesman. Mr. Kibona spoke with conviction of the need to attract foreign business. In recent months a variety of North American mining companies, Korean and French and other hotel and tourism groups, as well as several agro-processing companies, have announced investments in Tanzania. This potentially rich country, with its extensive gold, diamond, nickel, and other mineral deposits, its tourism attractions and its vast agricultural opportunities, has put in place the legislation necessary to offer wide incentive s to foreign investors. A wind of change is gusting through Africa, but can the reform momentum be sustained and indeed gather speed? Foreign investors will want to see evidence of consistent efficient and open economic policies. At the London Economic Summit in July, the leaders of the major industrial democracies agreed that the very poorest nations should be forgiven up to two-thirds of their official foreign debt. But since then the United States, which found no problem securing 70 percent debt-relief for Poland, has claimed that budget problems prevent it from moving on relief for the poorest African countries. Africa simply has no political clout and, accordingly, it may well receive too little aid. Its record of squandering aid in the past does not help its bid today. But the cost of failing to provide aid in terms of human misery could be massive.