Does NEPAD Revitalize or Contribute to Africa’s Diminishing Role
in the World Economic system? An Observation
By Asayehgn Desta, Ph.D.
Sarlo Distinguished Professor of Sustainable Economic Development,
Dominican University of California
July 27 2010
The Ethiopian Prime Minister Meles Zenawi should be congratulated for retaining New Leadership in the Partnership for Africa’s Development (NEPAD) in spite of challenges (Afrique en ligne, 2010). Recognizing the historic, colonial roots of Africa’s underdevelopment, NEPAD’s noble goals include making Africans the architects of their own development rather leaving them as benevolent guardians of the goals of western institutions. This was a noble mission. Nonetheless, as we have documented in our book entitled “The Saga of African Underdevelopment: A Viable Approach For Africa’s Sustainable Development in the 21st Century,” NEPAD was designed by donors from industrialized nations (G8) and does not put Africa’s development firmly on the global agenda. In addition, NEPAD fails to generate a new confidence in Africa’s ability to achieve an African solution to Africa’s problems.
NEPAD was largely imposed on some African heads of states, with it’s neo-liberal ideologies, championed by the World Bank, World Trade Organization, and the International Monetary Fund, that benefit only the upper classes of Africa. NEPAD’s primary beneficiaries do not seem to be the citizens of Africa but northern donors and institutions. As stated by Adesina, NEPAD is nothing more than a form of neocolonialism forged with the consent of African leaders (2002).
For example, without placing Africa within the global economy and undertaking a careful assessment of a future global economy, both NEPAD technocrats and the World Bank group estimated that Africa’s economy would need to grow at the rate of 7 percent per year, with a 2 percent to 3 percent African savings rate, in order to meet its development goals in 2015. The estimation was based on an assumption of mushrooming globalization, new technology, and direct foreign investments. However, the World Bank group’s estimates seem to be scanty. They were based on very few African countries. To forecast Africa’s economy in the 21st century, NEPAD should have used contingent scenarios such as high, medium, and low growth rates. In addition, it would have helped to forecast potential surprises, in order to anticipate important factors that could have far reaching consequences for the African continent. Also, the World Bank and NEPAD’s technocrats should have addressed the environmental effects of Africa’s export strategy which is based on primary products (Kofi and Desta, 2008).
Seventy-five percent of direct foreign investment flows into developed countries. Only about 2 percent is invested in Africa, because Africa is perceived as a high risk continent, especially with regard to its laws and property rights. Therefore, it would have not made more sense for NEPAD to anticipate that FDI would fill an annual resources gap of 12 percent of Africa’s GDP, create an increase in domestic savings, improve the public revenue collection systems, and a reduce Africa’s external debt (See for example, CODESRIA and TWN-Africa, 2002). As succinctly stated by Tandon: “It is sad to see how little mainstream economists who have drafted the NEPAD documents have learnt from history, or from the experience of other countries in the third world. There is even a degree of innocent belief that FDIs will really come true, that conditions of peace and security will be maintained in Africa” (NEPAD, 2002). Rightly so, for the last ten years, the envisioned direct foreign investment in Africa was a pipe dream that has not been realized.
To summarize, if NEPAD is to gain greater public support to transform the African continent of the future, discussions should not be limited only to government officials. The down-trodden masses need to be engaged also. However, if NEPAD is not restructured to meet Africa’s developmental needs, it will only contribute to Africa’s perpetual and diminishing global role. Therefore, instead of following the models of neo-liberalism and the Washington Consensus, the new leadership needs to design a coherent strategy so that NEPAD generates an economy that protects all Africans, including the poor.
Afrique en ligne, (2010). “Ethiopia’s PM retains NEPAD Leadership despite Challenge.” Retrieved July 7, 2010 from http://www. Afriquejet.com/news/Africa-news/
Adesina , O.J. “Development and Challenge of Poverty: NEPAD , Post-Washington Consensus and Beyond.” A paper presented at the Conference on Africa and Development Challenge of the New Millennium, Accra, Ghana, April 23-26, p. 6.
CODESRIA and TWN-Africa (2002). “The New Partnership for Africa’s Development (NEPAD) ,” presented at the Conference on Africa and Development Challenge of the New Millennium, Accra, Ghana, April 23-26.
Kofi, T. and Desta, A. (2008). The Saga of African Underdevelopment: A viable Approach For Africa’s Sustainable Development in the 21st Century. Trenton, NJ: Africa World Press.
Tandon, Y. (2002). “NEPAD and Foreign Direct Investment.” presented at the Conference on Africa and Development Challenge of the New Millennium, Accra, Ghana, April 23-2