The NEPAD Initiative and Alternatives in Sub-Saharan Africa: A Critique of the Neo-Liberal Development Paradigm

By Gian-Paolo Mendoza 301 154 165 SA302W Instructor: Megan Humphrey Simon Fraser University April 9, 2012

Introduction The ability of the sub-Saharan Africa to take ownership of its own socioeconomic development has been inhibited by the imposition of a Western, market-driven model of development, levied through the economic dominance of the countries in the North. The ideology of Neo-Liberalism has placed capitalism at the forefront of this development paradigm, promoting the importance of economic competition and the marketplace as catalysts for the development of the former colonial states. In the face of inherent poverty, disease, hunger, and unemployment plaguing the sub-Saharan region, a critical approach to capitalism and the free-market as the driving force of economic development is warranted. My argument maintains that Neo-Liberal development policies in Africa have not promoted growth, and that an effective strategy for continental development should recognize the value of African culture, norms, and values stemming from the local level, compared to being imposed externally. I will begin by defining the concept of development and the social problems it seeks to address for states in sub-Saharan Africa. Following this, I will critically examine the neo-liberal development model in the context of the African Unions NEPAD initiative, the role of South African leadership in NEPAD, and how certain civil society organizations (CSOs) of South Africa have responded to the implications it poses for the rest of the continent. Following my discussion of the response to NEPAD and its connections to neoliberalism, I intend to examine the theoretical framework for an alternative model of economic development, one that places more emphasis on sociocultural factors and the role of civil society in the development process.

Neo-Liberalism and Development in Sub-Saharan Africa According to Matthews (2004), the concept of development can be framed in three aspects: a characterization of the current undesirable situation, the vision of a desirable future, and the formation of a strategy that should be followed to bring about this desirable future.1 A wide array of social problems constitutes this undesirable situation in sub-Saharan Africa; this includes issues such as poverty, illiteracy, child and maternal mortality, disease and environmental degradation. The modern concept of development strategy has largely been driven by the tenets of free-market capitalism in the wake of the Second World War. Levied on regions such as Latin America, East Asia, and sub-Saharan Africa at the global level by the Bretton Woods institutions of the International Monetary Fund (IMF) and the World Bank, the modern concept of economic development has stemmed from the ideology of Neo-Liberalism, driven by a Western assumption that modern agricultural techniques and modes of communication were superior to those in the indigenous populations.2 The neo-liberal framework views economic growth as primarily driven by the private sector: the idea that the efficiency and innovation of private enterprise would drive the economies of the former colonial countries to the Western conception of a developed state. In placing the growth of capitalism and the private sector at the forefront of economic policy, Neo-Liberalism has targeted large public sector employment, trade protectionist measures and state ownership of key industries as

Sally Matthews, Investigating NEPADs Development Assumptions, Review of African Political Economy, No. 101 (2004): 499. 2 Richard H. Robbins, Global Problems and the Culture of Capitalism, (New Jersey: Prentice Hall 2011), 174.

barriers to economic growth and development in Africa.3 Collier and Gunning (1999) state that, since major areas of economic activity were reserved for the public sector often including transport, marketing and bankingand African elites looked to the public sector rather than the private sector for advancement, Africa was slow to develop indigenous entrepreneurs.4 It was under this rationale that the Bretton Woods financial institutions have levied policies to facilitate private sector growth in African states through years of ongoing structural adjustment; domestic laws that were viewed as hindrances to African private enterprise were removed as part of conditions attached to development loans. All across sub-Saharan Africa, years of ongoing adjustment reforms have seen the removal of protective tariffs and subsidies for local industries, the privatization of state companies, tax cuts on foreign direct investment by multi-national corporations, and cuts to public services designed to protect the poor. These neo-liberal policies have adversely affected the poorest sectors of Africa by curtailing access to services such as health care, welfare, and education, resulting in an impedance of socioeconomic growth across sub-Saharan Africa. McGregor sums up the nature of the criticism associated with market-led development, stating that, in reality, despite the development assistance and relief efforts undertaken over several decades by countries from the North, poverty, hunger, and general despair have increased substantially in Third World countries.5 Even James Wolfensohn, the President of the World Bank, acknowledged the failure of the structural adjustment approach, stating in
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Eunice Sahle, African States NEPAD Project: A Global Elite Neoliberal Settlement, in Neoliberalism and Globalization in Africa: Contestations on the Embattled Continent , ed. By Joseph Mensah. New York: Palgrave-Macmillan (2008), 137. 4 Paul Collier and Jan Willem Gunning, Why Has Africa Grown Slowly? The Journal of Economic Perspectives 13, No. 3 (Summer 1999): 11. 5 Sue McGregor, Structural adjustment programmes and human well -being, International Journal of Consumer Studies 29, no. 3 (May 2005): 173.

1998 that the policies imposed had contributed to the crisis in Africa.6 The failure and negative perception of the Neo-Liberal model, in regards to its external imposition on the developing countries of sub-Saharan Africa, has provoked the question of alternative approaches to economic development. The NEPAD Initiative For the African continent, the first major regional response to this approach is represented in the New Partnership for Africas Development (NEPAD). It was undertaken in 2001, spearheaded by a number of African leaders at the Organization for African Unity (OAU), later ratified at the Durban summit of the African Union (AU) in 2002. NEPAD was intended to represent the continental ownership of a comprehensive development strategy, in contrast to the reforms imposed through decades of Western-led structural adjustment. NEPADs objectives include the establishment of good governance, the eradication of poverty and sustainable development, as well as regional and global integration of the African continent.7 The major focus of NEPAD is on the development of good governing institutions. NEPAD recognizes of the importance of institutions such as efficient civil services, accountable legislatures, impartial judiciaries, and a free market economy in facilitating the growth of African private enterprise and further integration into the global economy.8 The initiative advocates a market-led approach to poverty eradication, seeking to facilitate competition in African private enterprise as a catalyst for the creation of wealth and economic growth. NEPAD has also
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James Wolfensohn (1998) as cited in E. Osei Kwadwo Prempeh, Against Global Capitalism: African Social Movements, England: Ashgate 2006), 92. 7 Emmanuel Nnadozie, NEPAD, APRM, and Institutional Change in Africa, in The African Union and New Strategies for Development in Africa, ed. Said Adejumobi and Adebayo Olukoshi. New York: Cambria Press (2008): 214-215. 8 John M. Mbaku, NEPAD and Prospects for Development in Africa, International Studies 41, (2004): 394.

established a mechanism known as the African Peer Review Mechanism (APRM), through which it seeks further regional integration through the coordination of African states fiscal and monetary policies. NEPAD as Neo-Liberalism Consolidated: The Role of South Africa The role of South African leadership and the response of Civil Society Organizations (CSOs) from the country are important to understanding the socioeconomic implications of NEPAD, given the countrys prominent leading role in the early stages of its formulation. President Thabo Mbekis African Renaissance speech in 1998, a vision of formulating African solutions to African problems, signaled the beginnings of a home-grown African development program following largely from the vision of his predecessor, Nelson Mandela.9 Incorporating African language, symbols, and culture, Mbekis vision encompassed a neo-liberal discourse set to achieve the goal of poverty reduction, rooted in a belief in the free market as driving the development process. This vision was reflected in the African Unions framework for the NEPAD strategy, focusing on upholding African integrity while seeking to incorporate the continent into the global economy.10 However, this particularly strong focus on private sector development has a number of serious implications for the welfare of the South African population. NEPAD and Neo-Liberalism: The Response of South African Civil Society The response by the South African public to the adoption of NEPAD by the African Union has stemmed largely from the following criticisms: NEPADs focus on

E. Osei Kwadwo Prempeh, Against Global Capitalism: African Social Movements, England: Ashgate 2006), 93. 10 R. Kiki. Edozie, Promoting African Owned and Operated Development: A Refl ection on the New Partnership for African Development (NEPAD), African and Asian Studies 3, no. 2 (2004): 152.

encouraging Africas global integration, its adherence to Neo-Liberalism, and the lack of avenues for public consultation, during both its formation and its current state. Representatives of many historically marginalized groups in Africa consider NEPAD as an external imposition designed to benefit foreign capital and the privileged elite in Africa. Patrick Bond (2002) argues that, NEPAD fits into the modified neoliberal project, by which it is vigorously asserted that integration into global markets solves poverty.11 Critics in this area highlight Africas weak position in the global economy, arguing that NEPADs goal of further integrating the continent into the violent flow of global capitalism will result in further marginalization, exacerbating Africas already weak economic position relative to the economies of the Western world.12 A number of NGOs, trade unions, and youth and womens organizations, through the African Social Forum (ASF), have highlighted the fact that NEPAD fails to reflect Africas struggles for participatory democracy and decentralization of power; criticizing its use of rhetoric such as democracy and good governance as intended to guarantee foreign donors and investment.13 Also noteworthy is the fact that NEPAD is highly dependent on foreign aid for funding; there exist no attempts or provisions within NEPAD to deal with the historic regional subjection to the Western financial institutions and how to avoid becoming heavily dependent on aid in the long run.14 The feasibility of NEPADs consolidation of neo-liberalism in Africa is questionable for a continent so historically marginalized through capitalism.
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Patrick Bond (2002) as cited in, Against Global Capitalism: African Social Movements, England: Ashgate 2006), 98. 12 Ibid, 395. 13 E. Osei Kwando Prempeh, The Anticapitalism Movement and African Resistance to Neoliberal Globalization, in Neoliberalism and Globalization in Africa: Contestations on the Embattled Continent , ed. by Joseph Mensah. New York: Palgrave-Macmillan (2008), 64. 14 John Loxley, Imperialism & Economic Reform in Africa: Whats New about the New Partnership for Africas Development (NEPAD)? Review of African Political Economy 95, (2003): 124.

The second major criticism is that strategies embodied in NEPAD are no different from those advocated by the I.M.F. and the World Bank. Matthews (2004) relates this to the idea Copycat Development, through which NEPAD seeks to follow eagerly in the footsteps of the advanced societies, emulating them as Africa becomes more similar to them.15 Highlighting the failures of Neo-Liberalism in South Africa has not been excluded from the criticisms of NEPAD either. Specifically in regards to the social effects of South Africas embrace of free-market policies, undertaken through the Growth, Employment and Redistribution Strategy (GEAR) the neo-liberal discourse embodied in NEPAD has caused many civil society actors to be wary of its future. Since the adoption of GEAR under structural adjustment in 1996, private sector led strategies that sought to restore economic competitiveness and reduce poverty within South Africa have adversely affected the population. Subjecting formerly state-owned and regulated services to the private sector has resulted in a number of job losses in the cities of Johannesburg and Cape Town. The municipal governments in these cities have embarked on policies designed to increase the role of the private sector in providing public services, resulting in the corporatization, and rise in usage costs of utilities such as water and electricity. This has provoked the response of CSOs such as the Anti-Privatization Forum (APF) based out of Johannesburg, established as a point of contact between other CSOs such as the Soweto Electricity Crisis Committee (SECC) and the Anti-Eviction Campaign (AEC) demanding reconnections to electricity, and responding to the evictions of families that failed to meet their mortgage payments.16 A third major criticism of NEPAD focuses on the lack of transparency in the
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Matthews, Investigating NEPADs Development Assumptions, 502. Josep M. Antentas, Resistance to neoliberalism, International Viewpoint Online Magazine 380, (July August 2006): para. 22. Accessed via: http://www.internationalviewpoint.org/spip.php?article1088

institution. Lesufi (2004) states that in its formation, the undemocratic and nonconsultative nature of the process has been emphasized. He further points out that, Only heads of states and their designated experts took part in the formulation and adoption of the development framework.17 Opponents of neo-liberalism in sub-Saharan Africa also question NEPAD as a home-grown development initiative for this reason, in that it was a top-down strategy imposed by Africas elite with little public representation or consultation. Carmody (2007) further argues that an elite-led development program such as NEPAD has the potential to further reconstruct hegemony, as empowerment is imposed from the top-down, integrating the poorer sectors of the continent into the society of the middle class.18 The South African Council of Churches have been notable outspoken critics of NEPAD in this regard, maintaining that its vision has been blurred by fixing its sights on increased global integration and rapid private sector growth and by its failure to engage with Africas people to transform the continent.19 They go on to echo the argument that NEPADs economic strategies are discredited by similar policies having been undertaken in the past, arguing in this sense that the initiative has largely neglected Africas people as the primary focus of development.20 Furthermore, Moyo (2008) argues that NEPAD must open up its consultations with civil society through regular contacts beyond think tank members. Current avenues within NEPAD that do allow for public engagement are largely limited to think tank experts at the global, regional, and national levels; CSOs operating at the grassroots levels are mostly
17

Ishmael Lesufi, South Africa and the Rest of the Continent: Towards a Critique of the Political Economy of NEPAD, Current Sociology Vol. 52, no. 5 (Sept. 2004): 811. 18 Padraig Carmody, Neoliberalism, Civil Society and Security in Africa , New York: Palgrave MacMillan (2007), 65. 19 South African Council of Churches (2002) as cited in, Against Global Capitalism: African Social Movements, England: Ashgate 2006, 102. 20 Ibid, 103.

excluded.21 The elitist perception of NEPAD and its lack of transparency and accessibility represent the hostility towards the concept of institutionalizing an approach to empower the free market to lead the development process, provoking discourse of the notion that placing Africas people at the forefront of development may be more effective than the market in the long run. An Alternative Vision for Development: The Role of Social Capital Given the limitations of the Neo-Liberal approach to economic development, an alternative vision for economic growth on the continent should place more substantial focus on the social elements of Africas diverse societies. The problems associated with NEPADs approach to development stem largely from discordance in cultural relativism. The model advocated by NEPAD is most associated with what Sally Matthews (2004) terms the post-World War II development project. Being prominently rooted in the Western concept of capitalism, Matthews states that, several of the assumptions which are core to the (Post World War II) development project are far from universal, and that their lack of universality results in the rejection of the Post World War II development project by communities who do not share these supposedly universal assumptions.22 In other words, the pro-capital nature of NEPADs development approach lacks synthesis with African indigenous modes of thought. This suggests that the solutions to the social problems plaguing African countries should be derived from the host cultures themselves, requiring an understanding and interpretation of surviving African cultural institutions, for the purpose of incorporating their values and prescribed ways of living into a
21

Bhekinkosi Moyo, Civil Society and the African Union Architecture: Institutional Provisions and Invented Interfaces, in The African Union and New Strategies for Development in Africa , ed. by Said Adejumobi and Adebayo Olukoshi. New York: Cambria Press (2008), 285. 22 Sally Matthews, Post-development theory and the question of alternatives: a view from Afr ica, Third World Quarterly 25, no. 2 (2004): 381.

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fundamentally unique development program.23 This alternative development paradigm is centered on the idea that civil society possesses the power to reduce the poverty affects resulting from neo-liberalism through the development of their social capital. For Ben Fine (2004), social capital is defined as, the idea that (inter) personal connections can be favourable for outcomes. He further argues that through the creation of formal and informal associations between people by non-market means, the development of social capital reveals a number of other organizations upon which can be used in a development capacity.24 These sources of social capital can include the institutions of families, communities, the public sector, ethnicity, and gender. The productive value of social capital, in regards to economic development, comes through the empowerment of local communities to realize the capacity they possess through their shared cultural values, norms and understandings, to achieve their collectively envisioned standard of living. In contrast to a market-led model advocated by NEPAD, a model that focuses on the accumulation of social capital on a smaller, more locally-based scale, sees the responsibility for development as stemming from the cohesiveness present in Africas diverse array of communities. A prominent example of a community harnessing the power of social capital to improve their standard of living is seen in the successes of the Hertzog Agricultural Cooperative (HACOP) in the rural community of Hertzog, South Africa. Established in 1994 following the election of the ANC government, the HACOP community has succeeded in coordinating their collective farming capacity to provide

23

Erik Berg, Post-Development Theory in Africa, Peace Review: A Journal of Social Justice 19, no. 4 (2007): 545-546. 24 Ben Fine, Social Capital for Africa? Transformation: Critical Perspectives on Southern Africa 53, (2004): 33.

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produce for local traders and markets while sustaining their own households in providing income through their crop. The cooperative has been prosperous enough to expand its farmland through a government lease, as well as secure financial and marketing assistance from an NGO consultant to expand their productive capacity.25 Etienne Nel (2001, et. al) attributes the success of HACOP to their prevailing strong sense of community, self-reliance and cooperation, as well as the availability of physical and human capital,26 a testament of success to a model of development driven by civil society that reflects the productive capacity of shared goals and personal relations. Opportunities for CSOs such as HACOP in South Africa, as well as other smallscale productive communities across the African continent, to consult with governing bodies at the municipal and regional levels must be allowed for an initiative such as NEPAD to fully realize its goals as a development strategy. NEPAD has the capacity to play an important role in supporting these communities from on a regional level in the African Union. Instead of facilitating the growth of capitalism through neo-liberal policies that place market liberalization at the forefront of economic development, the development priorities of NEPAD and the AU should be modified to focus more on building infrastructure in African states in order to support and empower the productive potential that these smaller African communities possess for socioeconomic growth. Conclusion The adverse impact of capitalism on African socioeconomic growth has revealed the cultural discordance between the Western belief in the free market and the productive

25

Etienne Nel, Tony Binns, and Nicole Motteux, Community -Based Development, Non-Governmental Organizations and Social Capital in Post-Apartheid South Africa, Geografiska Annaler 83, no. 1 (2001): 10. 26 Ibid, 6.

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capacity of African social capital as development paradigms. An examination of the role of South African leadership in the creation of NEPAD, as well as the response of South African CSOs to neo-liberal policies, reveals a number of criticisms about the implications this development initiative poses for the rest of the continent. While promoted as a breakthrough African-owned strategy, NEPAD has been criticized for clinging strongly to neo-liberalism through its focus on global integration and financial dependency on foreign donors, its strong advocacy of Neo-Liberal market-led development, and the lack of representative public consultation in the early stages of its birth. The limitations of the neo-liberal development model, manifested in NEPAD, call for a shift away from this externally imposed Western conception of development, and towards an approach that emphasizes the role of African civil society, culture, and values. The productive capacity realized through a strong sense of community and cooperation has proven to be successful in the case of HACOP in Hertzog, South Africa, providing a platform for discourse on the long-term feasibility of NEPADs neo-liberal approach to economic development.

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Mbaku, John M. NEPAD and Prospects for Development in Africa. International Studies 41 (2004): 387 409. McGregor, Sue. Structural adjustment programmes and human well-being, International Journal of Consumer Studies 29, no. 3 (May 2005): 170 - 180. Moyo, Bhekinkosi. Civil Society and the African Union Architecture: Institutional Provisions and Invented Interfaces. in The African Union and New Strategies for Development in Africa, eds. Said Adejumobi and Adebayo Olukoshi. 275 296. New York: Cambria Press, 2008. Nel, Etienne, Tony Binns, and Nicole Motteux, Community-Based Development, NonGovernmental Organizations and Social Capital in Post-Apartheid South Africa. Geografiska Annaler 83, no. 1 (2001): 3 13. Nnadozie, Emmanuel. NEPAD, APRM, and Institutional Change in Africa. in The African Union and New Strategies for Development in Africa, eds. Said Adejumobi and Adebayo Olukoshi, 207 244. New York: Cambria Press, 2008. Prempeh, E. Osei Kwado. Against Global Capitalism: African Social Movements, England: Ashgate, 2006. Prempeh, E. Osei Kwando. The Anticapitalism Movement and African Resistance to Neoliberal Globalization. in Neoliberalism and Globalization in Africa: Contestations on the Embattled Continent. ed. Joseph Mensah, 55 69. New York: Palgrave-Macmillan, 2008.

Robbins, Richard H. Global Problems and the Culture of Capitalism, New Jersey: Prentice Hall, 2011. Sahle, Eunice. African States NEPAD Project: A Global Elite Neoliberal Settlement. in Neoliberalism and Globalization in Africa: Contestations on the Embattled Continent, ed. Joseph Mensah, 135 254. New York: Palgrave-Macmillan. 2008.

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